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NAHB: Builder sentiment retreats in October

National Mortgage Professional
Oct 17, 2008

Announcing a whole new client for life”strategy for lendersBrent Houstonclient for life, business strategy, underwriting guidelines, sales leads, time management For years, great businesses have seen increased profits with a "client for life" commitment, and by quickly identifying that 20 percent of the customers create 80 percent of the revenue. Focusing on those core "client for life" customers allows you to build a solid bottom line. Over the last few years, with many lending businesses, the bottom line started coming before the relationship with the client. If you are a lender and want to continue to grow and be in the market as it changes, get a hold of the strategies below and understand the Pareto Principle (also known as the 80-20 rule or the law of the vital few) for building a solid business and, more importantly, solid relationships. In order to survive in today's climate, Mortgage Brokers need to adopt a true "client for life" philosophy. No longer can a broker simply view each customer or lender as a simple transaction. Brokers must conduct a new way of thinking that has been true in the most successful businesses for generations. It's no wonder that the majority of lenders are getting out of the wholesale business and marketing directly to the retail customer. Over the past decade, excess flow of capital, loose underwriting guidelines and pressures to meet investors funding demands created a culture within the broker community to focus on solely obtaining new transactions and not repeat business. This eventually led to the collapse of the securitization market, as well as the downfall of the Alt-A and sub-prime markets. The credit crunch, following the collapse of the sub-prime and Alt-A markets, has created challenges and uncertainty for many Mortgage Brokers and lenders. Only those brokers who can adapt to a new paradigm that strategically aligns their interest with the interests of lenders and customers will survive the next generation way of conducting business within the mortgage space. It's the times of greatest uncertainty that offer some of the biggest opportunities for professionals. For brokers to ensure their survival, they need to be more focused and implement a strategic "client for life" code of conduct. The following 10 strategies are needed to help you transform a world of chaos and negativity into a field of opportunity. 1. Create new strategies Forget your complaints, and focus on new strategies to keep you in business. Complaints only bring your attention to all of the negativity and block your ability to strategically come up with a new and improved business model. You will need 100 percent dedication to formulating this new business strategy, and you just don't have time to waste on negative thoughts. Make a conscious effort to look and listen for what is going right, daily. 2. Focus on the present Forget about the way it was in the past, and focus on how the environment is today and tomorrow. Yes, the past can teach us valuable lessons, but what we do know today is that the way business was conducted yesterday didn't work. You need to focus on what is needed today, which will lead to your ultimate survival. Get a hold of what is working in other businesses. Too often we focus on what others do wrong instead of looking for their competitive advantage. 3. Focus on solutions Forget about the difficulties, and focus on the solutions. Inventors didn't create new gadgets, philosophers didn't create new ways of thinking, and adventurers didn't discover that the world was round because others told them their way was impossible. You need to get yourself away from the herd mentality to find solutions for today's climate. The herd will continue to support the limited belief. Remember that newspapers would not print the original success of the Wright brothers because man had proved he could not fly. Fly! 4. Focus on opportunity Forget about the losses, and focus on the opportunities. Negativity creates further negativity. By simply focusing on all of the opportunities life has to bring us, we will create more opportunity. Don't let this business pass by you. Be among those that survive. Look for survivors, and find out what they are doing. 5. Create value Forget about the sales, and focus on how you create value. A salesman needs to sell others on your idea, but creating value brings customers who will refer other customers needing your services. Value creates word of mouth marketing that no television ad could ever create. According to studies, we are bombarded with more than 3,000 advertising messages daily. Only those we trust get their recommendations and referrals through to us. 6. Help others Forget about yourself, and focus on helping others obtain their goals. By putting others first, you will show others that you care for their well-being. Customers deserve to be held with the utmost respect, and you will be nicely rewarded for it. 7. Strengthen relationships Forget about the transaction, and focus on strengthening your relationship. Establishing relationships helps close the sale without even selling a product or service. Become the expert amongst your peers, and you will see your business prosper. When people know that you are a resource of knowledge, they turn to you. They see the value that you bring to the table. Delivering value to your relationships helps strengthen them; therefore, transactions no longer exist. 8. Time management Forget about being reactionary, and focus on time management. Customers want to deal with professionals in high demand. Use your time wisely by having set times to check voicemails, return calls, schedule meetings with your clients (so you may interview your client without being interrupted) and schedule set marketing programs (so you are consistently in the mind of your customers). The best leaders and business builders always respond, and responsiveness requires good time management. 9. Become a partner Forget about how your lender can help you, and focus on how you may become a partner with your lender. In today's volatile marketplace, lenders feel more comfortable when their interest is aligned with their clients (i.e., the Mortgage Broker). Let the lender know that your philosophy is alongside with their philosophy, and that you will remain in constant contact with the client throughout the life of the loan to ensure that the loan performs. This requires stepping away from the old turn-and-burn mentality of the industry. It requires a complete overhaul of your values and beliefs, and, most of all, it requires your commitment to become your lenders partner. 10. Be a mortgage planner Forget about simply being a Mortgage Broker, and focus on how you can make a lifetime change in your client's life by being a professional mortgage planner. Clients' financial situations continuously change due to job loss, inheritance, marital status, or even a death in the family. Becoming their life planner will ensure a lifetime of business. While everyone else is going out of business or trying to revitalize files, separate yourself by being your clients true assettheir professional mortgage planner. Adhering to these 10 simple strategies will lead to life-long relationships, thus creating business opportunities and surviving these turbulent times. Most importantly, it will allow you to maintain good quality of life standards. It is important to bring more professionalism within the mortgage business, and customers are counting on you. As most great business owners, salespeople and leaders know: People work with people they like. We are attracted to people like ourselves and people that care about our welfare. Take the time to listen to your clients, build trust and allow them to see that you are in it for the long-term. When you get a feel for all that is necessary to live life to the fullest, you will build great relationships which will harvest new opportunities, rewarding you with repeat business and an abundance of referrals. Creating "clients for life" is not a business philosophy, but a way of life. Enjoy your new beginning. Brent Houston is chief operating officer and co-founder of Woodland Hills, Calif.-based Bridgelock Capital. He may be reached at (818) 206-0657, ext. 1008 or e-mail brent@bridgelockcapital.com.
Published
Oct 17, 2008
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