Using credit reporting tools to increase your FHA businessJeff MifsudFHA, credit reporting, government, Phil Cataldo, CDS Mortgage Credit Reports
Whether or not the government continues to require credit scores
for Federal Housing Administration (FHA) loans, this much remains
true: Most lenders currently require, and will continue to require,
minimum credit scores for FHA loans.
One item that the legislators and FHA seem to agree on
(hopefully making this safe to commit to ink!) is the allowance of
a credit score derived from alternative credit histories. The
masses of potential buyers out there with no scores or low scores
mean huge opportunities for loan originators to partner with real
estate agents to tap into this market, to everyones benefit. I'd
like to show you how.
I recently did an interview with Phil Cataldo of Atlanta-based
CDS Mortgage Credit Reports Inc. We spoke a lot about the FICO
scores derived from alternative credit. The key point I took from
the interview is the huge FHA marketing potential of this type of
credit score product.
Do you need more loans in the pipe?
If you're looking for a way to establish relationships with real
estate agents, then pay attention to the plan I'm about to present.
But first, I must alert you to the fact that the loan officer who
will successfully implement this plan requires these three skills:
Knowledge of FHA loans; the ability to effectively communicate with
people; and good follow up skills and systems.
If you have these skills and create the focus, you can create a
solid stream of FHA buyers. By way of example, a Michigan loan
officer had so many leads that he created a credit division in his
mortgage practice to assist potential homebuyers with their credit
challenges. He was originally doing this for his sub-prime buyers,
but when the market shifted, he turned to FHA. Now he is delivering
even more value to his clients and more loans into his
The objective of this plan is to target homebuyers that have
little or no traditional credit and need to have a sufficient score
to buy a home. According to Community Financial Services
Association of America, more than 50 million Americans lack
traditional credit! As a result, many creditworthy Americans are
unable to qualify for a home loan. Based on my experience, the
average buyer agent comes across a lot of people with thin file
credit reports, and this is one reason why agents are having a hard
time selling homes. This is where you can step in and help all
involved parties, including yourself!
Are you ready to act and implement?
• Get in touch with your credit reporting company and find
out if they offer the FICO Expansion score.
• Ask them if they have a product that produces a plan
that can help your clients improve their score.
• Create an internal follow-up system for keeping in touch
with your clients that will enter into this credit score program.
This system is essential for the success of your marketing
• Create three consecutive, 10-min. presentations
regarding: the use of this product, the system you have designed
for converting these people into buyers, and how it can benefit
real estate agents. You now have a three-part series about your
program! (Note: I recommend using PowerPoint and printing the
slides for the presentation.)
• Create a series of six short e-mails (50 to 75 words)
drawn from ideas in the presentations you created.
• Practice speaking about the program (not in line at the
bank) with co-workers, family, etc. until you've internalized the
message and are scripted to talk about it at will with passion and
• If you have existing real estate agent relationships,
call each office and offer to do a 15-min. presentation on your
credit builder program, explaining how it can help each of their
agents sell an extra two homes within the next six months. If you
have to call offices cold, then be sure to get the manager/broker
on the phone, introduce yourself and your program, and ask them
this question: If I can present your agents with a proven tool that
will help them close an extra two homes in the next six months,
would you give me 15 minutes at your next meeting? If, after
describing the program, they still don't get it, then move on to
the next office.
• You have a presentation scheduled! Your goal at the
meeting is to: (1) generate excitement about this credit builder
program; (2) get all the names, numbers and e-mail addresses of the
agents; and (3) schedule part two in the series. If they schedule
it, that means they liked what they heard. If they dont schedule
part two, then the message was not compelling, and you need to get
feedback to help determine what you need to change.
• Once back at your office, enter the contact information
for all the agents in the office into your database software, and
create a schedule to send one of those abovementioned e-mails every
other week over a 12-week period. In the weeks they dont receive an
e-mail, follow up with a phone call or a visit and ask for the
buyers that would be suited for this program.
• Follow up, follow up and follow up.
If you're feeling slightly overwhelmed by the thought of this
plan, just remember, Rome wasnt built in a day, and neither was a
successful marketing plan! Take a breath, step back and attack this
project one action item at a time. It may take you a month to get
you to the point of implementation. If you look at nearly every
successful loan officer out there, or anyone successful at
achieving any goal for that matter, they have a plan written down.
Although I've written it for you, I suggest you write it out for
yourself in order to internalize the plan and make it your own. It
will help you with your focus and help you stay on the path to
achieve your goal.
And then do what Michael Jordan says: "Just play. Have fun.
Enjoy the game."
Jeff Mifsud founded Mortgage Seminars LLC in 2004, has been
an FHA originator for 12 years, is a contributor to LoanToolbox.com and is a
former FHA underwriter. Jeff may be reached at (877) 342-9100 or