It is rocket science!Joe Cornoreferrals, FHA, interest rates, Fannie Mae 1003
It tires me to see articles expressing how simplistic the
mortgage business is. In fact, with the recent Federal Housing
Administration changes and underwriting restrictions on various
other programs, the matter becomes an education and study on how to
do business all over again. This industry is always adjusting and
changing, so it is important to stay ahead and on top of it.
I do not believe in the standard rate alerts that notify your
client base when rates take a turn. I do not believe in marketing
on rates at any time. I never market on things that I do not have
any control over. If someone out there has control over interest
rates please e-mail me and explain how you do it.
Many well-known published authors and trainers in our industry
train principles that fail. When these individuals claim that your
client base will remember you and refer you to others, they are
delivering a false precept. The borrowing consumer, your client
base, typically does not remember you or refer you. You need to be
exceptional and atypical with your customers in soliciting
referrals.
I was once asked to take the Fannie Mae 1003 loan
application and evaluate how many opportunities it empowers an
originator to solicit additional business from the borrower. It
took me a few days, but I came up with 63 opportunities to market
for referral business while taking an application. I have a
thorough breakdown of the application description and have written
29 pages to document the impact of completing an application
correctly. It is a science to build the application and loan
package up to becoming a cohesive map for the underwriter, showing
customer compliance and qualification.
I once received an e-mail from an originator. She stated that
out of five applications and loan packages that were submitted to a
lender, only one of them actually received approval and funding.
She requested that I recommend lending sources that perform as they
say they will.
This request seemed interesting to me since, in reality, the
lender is only responding to what was submitted to them. Moreover,
they are responding to what was not submitted to them. Complete,
accurate and legible applications and loan packages are critical in
the industry today. They have always been important, but we
previously had volume to compensate the mistakes and errors in poor
applications and loan packaging.
I am not belittling the originator in this scenario, nor am I
claiming to be some master guru of authority. I am, however,
suggesting that because only one out of five received approval and
was funded, perhaps the originator should consider reviewing the
application and packaging process. It is a science to become
familiar with and package exactly what will lead an underwriter to
accept and approve a loan. I, in turn, will do my part to help this
originator by recommending lending sources and offering my
assistance to help her and her company understand the loan
application and packaging process.
Both proud and pious personalities have written on credit scores
and how to improve them easily. It is not easy to impact credit
scores unless you know the system that each of your lending sources
is using. Simply arguing and debating entries does not repair
credit, nor can one argument be applied universally with regard to
the credit scoring systems for each and every lender an originator
may use.
Any originator who has submitted the same loan file to multiple
lenders can attest to this. Each lender probably had different
scores and different credit issues with the loan because their
particular system and matrix varied from the others. Lenders know
and understand the improvement made by paying off a debt, or paying
down a balance, and it is a 90-day short-term fix.
It is yet another science project to become educated on
long-term improvement on each scoring method that a certain lending
source utilizes. This education can be limited to those lenders
that you dedicate and commit to. Should we develop and send out
newsletters on credit improvement and rate predictions? No! Wasn't
there a well-known public speaker and trainer teaching about the
non-existent housing bubble? Now, that same individual is traveling
and teaching how to survive after the burst of that non-existent
bubble. How would any professional, in any industry react to such
presenters?
It is a science to track and measure what the industry writers,
presenters, trainers and gurus have been producing. Their
newsletters make them income. I suggest that you do not pay for
anything that you can look up for free. Be sure to monitor what
various industry professionals have taught previously before you
pay for misinformation today.
When you have a timeline of ongoing successes, no matter what
the market may be experiencing, then you have found a trainer who
knows how to stay ahead of the trends. Some past mathematicians of
the industry, entering logarithms on future values, neglected to
equate being able to pay the mortgage when values decrease.
I have saved each and every past article and training manual
electronically so that I can send them out today. The concepts used
to train in the past remain valid because they incorporate the
current market. This article is for the market of the future and
applies to those who will be in the industry in the future. After
all, those who pay for poor advice and learn systems that fail will
almost certainly not be around to learn, or pay for the true and
correct principles.
The word "easy" does not apply to the mortgage business. It is a
difficult and traumatic industry to survive in. No pod cast, e-mail
blitz or mailing campaign will gain you the control to master your
business. It is rocket science that enables you to launch yourself
into an environment where you have performed the research,
understand the market needs, located resources that will satisfy
the needs and penetrated a market share that will launch you into
stratospheric revenue.
This is not meant as a satire about poor trainers. It is meant
to encourage you to dig in, do better, wake up earlier, serve
better and make your own path. Yes, seek out true principles and
tools that will assist you, but do not blame the presenters that
taught you wrong principles. Come up with your own original
thoughts.
Joe Corno is president of Utah-based We Be Consulting and
Seminars. He may be reached at (801) 836-2077 or e-mail at
[email protected].
