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Trend Spotter: The other 50 percent

Gibran Nicholas
Jun 30, 2009

It is estimated that more than 50 percent of American homeowners are either in or near a negative equity situation. My question is: What systems do you have in place to consistently find and motivate the other 50 percent of homeowners and home buyers that actually qualify for financing? According to the latest statistics by the Federal Reserve, American homeowners still have more than $8 trillion of home equity remaining—even after the record plunge in home sale prices. Furthermore, American households still have an aggregate net worth (assets minus liabilities) of $56 trillion. In other words, there are still a large number of Americans who can qualify for financing right now. Among this group of individuals who need you and can qualify for your services, you will find business owners, executives, real estate investors, retirees, senior citizens, first-time home buyers and others. Believe me, these people do exist! The only question is where are they? How can you find them and what value do you deliver that attracts them to do business with you? Where do you find these people? I was recently giving a speech to about 50 CPAs at an event hosted by the CPA association in my state. At least a half-a-dozen people in the audience came up to me afterwards and wanted to refer me business. You see, more than 50 percent of all mortgage originators have completely left the industry. All of these CPAs and financial advisors have been abandoned by our industry and they don’t know whom to work with and where to send their clients. In fact, 61 percent of all financial planners surveyed by the Financial Planning Association indicated that they want to meet and work with qualified mortgage professionals. Not only that, but 81 percent of investors surveyed said that they want their financial advisors to provide them with advice on more than just investments. I’ve got to tell you, if you want to meet the other 50 percent of homeowners who are not underwater, you really need to start networking with CPAs and financial advisors. In fact, I recently spoke to a group of 75 mortgage originators in southern California at an event hosted by the California Association of Mortgage Brokers. As I was interacting with the audience, one of the things I asked them was whether anyone in the audience was involved with their local CPA association. Not a single person raised their hand. I then asked if anyone was involved with their local Financial Planning Association. Again, not a single person raised their hand. What exactly is the problem here? Why are so many people in our industry complaining about lack of qualified borrowers when they are all fishing in the wrong ponds? Now, let me ask you. Are you involved with your local CPA or financial planning associations? Why not? Yes, I know funding sources are pulling their funding, Fannie, Freddie and the Federal Housing Administration (FHA) are having an identity crisis, lenders keep changing their guidelines, the unemployment rate is double what is was two years ago, and everybody thinks that mortgage brokers should just all go out and shoot themselves. But in the meantime, these CPAs and financial planners are just waiting for someone like you to stand up and be a hero for their clients who can qualify for financing. Where are you and why are you hiding? This is your time and place. You have been chosen by your destiny for this very moment. What do you say and how can you attract these clients and their financial advisors? I was flipping channels on my television one evening in late 2008 and came across that classic show, Jeopardy! Two of the categories in this particular show caught my attention. The first was “The Financial Crisis,” and the other was “Shakespeare.” One question being posed to the contestants from “The Financial Crisis” category was, “Who is the current U.S. Treasury Secretary.” I was taken by surprise when not a single contestant even attempted to answer this question. I thought to myself, how could these people not know Hank Paulson when his name and picture have been appearing on almost every channel, newspaper and Web site every day and night for the past several weeks? The next several questions came from the “Shakespeare” category. Ironically enough, all of the contestants were clamoring over each other to answer every one of these questions. These smart people seemed to have memorized all the works of a dead poet that lived hundreds of years ago, and yet not a single person could name the man who was responsible for the largest government intervention in our markets’ in recent memory. Right then and there, something dawned on me: These people are living in a different world than my world. The things that seem to be important in my world are not even on their radar. Not only that, but life goes on and these people are living their lives, enjoying Shakespeare and all the other things that life has to offer, even in the middle of a financial crisis and deep recession. The moral of the story here is that in order to attract people to do business with us, we need to live in their world and speak their language. There are more than 300 million Americans who are continuing to live their lives even in light of the current downturn. People will always need a place to live. People will always get married, have children, care for elderly parents, deal with health issues, get divorced (unfortunately), etc. In order to do business with these people, we need to first understand our role in their life story, and then communicate our value to them and their financial advisors. It’s really a two-step process: Step #1: Acquire unique knowledge and skills that are valuable to this target audience. You need rock solid answers to questions like these: ◄ What mortgage strategies will best empower me to fund my child’s college education now that student loans are so hard to come by? ◄ What should I do if I own my home free and clear, don’t want to sell it right now in a down market, but still want to move into a new home with little or no mortgage payment? ◄ Is this a good time to buy a home or should I wait for four percent interest rates? ◄ What strategies can I implement immediately to profitably invest in the turbulent real estate markets? ◄ And the list goes on … Step #2: Communicate your unique value in a way that differentiates you and your communications from all the noise bombarding these people. Only by implementing this simple two-step process can you transcend the unfortunate circumstances of today’s market realities and find and do business with the other 50 percent of homeowners and buyers that need you and can qualify for your services. Gibran Nicholas is the founder and chairman of the CMPS Institute, which administers the Certified Mortgage Planning Specialist (CMPS) designation. The CMPS Institute has enrolled more than 5,500 members since its founding in 2005. Gibran is also the chairman of Published Daily, a customizable online magazine, newsletter and marketing service that helps professionals transform their clients and prospects into a referral-generating sales force. He may be reached at (888) 608-9800, ext. 101.    
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