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Beating the big boxes

Joe Corno
Jul 10, 2009

My more provocative articles appear on Web sites and e-publications. It is difficult for the magazines to get their advertisers angry at them, but if the industry is going to improve upon past experiences, we need to address the impact of the big box companies. I hope the magazines can clearly see that some of the advertisers are not making business better. Back in the day, when Countrywide was Countrywide, the reps would come by my small broker office and claim that they were going to “compete” me out of business. With their retail centers offering better products than what they wholesale out to brokers, it appears that the philosophy may be correct. I decided way back then not to sell anything to them. Remember; that was then, this is now and things may be different and they care about the broker. Is that the reason that their in-house loans take a third of the time that a brokered loan takes to process? Yeah, they can trust their own originators better than an independent broker. Okay; I give them a week for the trust factor! I am an equal discriminator, so the others are not any better. If you are getting tired of the fees and the lack of service, then; find sources that will build you up and serve you. Your local banks, credit unions, savings and loans, (S&Ls), can work with you at less cost and better turn times. Start utilizing atypical sources for loans and let the big boxes, destroy each other. When I made a conscious choice to not associate with big boxes, I developed relationships with local banks, credit unions, S&Ls, and such. In California, I found that banks would do construction lending. The S&Ls would do permanent financing at less costs and credit grade. I would send my FHA to small lenders that would retain the servicing. Such companies are still around and want to do business. Seek out compassionate small financial institutions that want their community to improve and grow. I remember going to a local S&L, for the buyer of my own home, because they had a recent bankruptcy within a year, but had 100 percent repaid it. None of the big boxes at the time would give them a good loan. Salinas Savings and Loan financed a good loan for the buyers and I moved to Utah with my family. With the savings from less add-ons, built-ins, and re-payment of the mortgage industry lunacy, you can compete with better rates and fees. You would have unique loan products that the typical big box slaves would not have. At one point, I approached one of my local lenders and submitted a loan concept that is built like FHA, but with Fannie Mae loan limits. The credit unions have such a product that they use for “first-time” buyer programs. I got the idea from former U.S. President Bill Clinton because he stated that he was going to raise FHA loan limits to conforming limits. It never happened nationally, but it worked locally for me. I had the product guidelines, limits, underwriting, and Bill’s statement. I banked many years having a product that my competitors scratched their heads at and told potential buyers did not exist. I made more per loan than selling to a big box and it cost the buyers less. You need to be innovative and creative. When the big boxes “charge for service,” it always intrigues me to “give it away.” Let us use credit protection for an example. The big boxes offer the service, for a fee. As a broker, you can train your clients to place a “freeze” with each repository prohibiting any creditor, or new credit inquiry, to be processed unless they call into the repositories, or be contacted, to un-lock or un-freeze their credit file. In fact; you can have the forms available, for them to complete and sign, so that you can send it to each repository. Any future inquiry, application for credit or credit purchase must be verbally authorized by the borrowers. They can unlock, unfreeze or open up their credit, for the single transaction and have their credit locked up and protected until they verbally authorize it for future transactions. It does not cost your borrower anything and you lock out every one from their credit file. They are in control of their credit file at no cost to them. The big boxes could not send them pre-screened and pre-approved letters because they could not view the credit history. This excites a transplanted Californian like me. What about unlisted phone numbers? Years ago, we wanted a non-listed number at home, but we did not want to pay for unlisted service. Why should it cost you to not list a phone number? Some way, some how, mostly from big box checking accounts, marketers obtain the unlisted number eventually. I figured it out in 1980. We got the kids together, asked them to pick a girls’ name and a boys’ name. We put the two names together and instructed the phone company to list the number under that name. We paid the bills with our real name, but the number was in the phone directory under a completely different name. Anyone calling for the listed name was a salesperson. The kids had a ball. If I picked up and was asked if “Margaret” was there, I would hand it to a toddler and say: “It’s Grandpa!” As the kids turned into young adults, they developed their own deterrents: “Who is this? Do you think you are funny? Margaret died last week!” The calls for Margaret faded, and within about two years, salespeople stopped calling. Our family missed the entertainment. When we moved to Utah, it started up again and we even faked our caller IDs. When we would call someone, Margaret would show up as the caller. Margaret started receiving opportunities for extended credit in the mail. We had created a fictional character that had creditors wanting her business. It was fun and educational for the children, and did not cost us anything to not have our real names assigned to our number. Why not give creative, innovative and atypical, service to your customers? The big boxes would send the fictional Margaret offerings of credit, including mortgages. The big boxes would not have your customers’ real names. Now; if we could learn to do the same with phone surveys and exit polls, life would be wonderful and complete. The folks out there, figuring out my sign, can rest assured. I will let you know my sign. It is: “No Parking.” Joe Corno is president of Utah-based We Be Consulting and Seminars. He may be reached at (801) 836-2077.  
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