During my 37 years in the mortgage lending industry, I have seen many economic swings that have stimulated both dramatic increases and decreases in mortgage lending volume. I live in Albuquerque, N.M., and our volume of purchase money lending opportunities in 2008 were only 35 percent of what they were at our peak in 2006.
Fortunately, historic low mortgage interest rates have stimulated refinance opportunities; however, we are challenged with credit and property value issues along with a continually shrinking list of available loan programs. Therefore, what should have been a landslide of opportunity has been tempered by the new realities of the mortgage industry.
So, many of us have re-read Who Moved My Cheese?, and are reading of other success stories as we desperately try to re-invent ourselves and find a more productive approach to our business. An old guy like me suggests that you glance over your shoulder and take a look back. What was old is once again new. Dust off your old flyer from The Loan Tool Box, illustrating the “Pyramid of a Complete Loan Originator,” and focus on the first three levels: Essential Knowledge, Selling and Presentation Skills, and Personal Marketing. These three skill sets can be instrumental in helping you kick start your production. Remember, the Lord giveth and taketh away. These low interest rates can be gone in a flash, so take advantage of the current refi revenue opportunities to invest in rebuilding your referral network and mining your relationships.
We are all originating the same five or six loan programs. The days of a competitor finding a new, funky, no qualification program that you don’t have, and stealing your deal, are over. If we all have the same products, how are we going to differentiate ourselves in our market? Simple. We need to know more about Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and conventional conforming products than anyone else. We need to know how to “tell the story” on a full doc loan with additional documentation and notes to the processer and the underwriter. We commit to always turn in our loan files with a memo to the underwriter. Remember, no one but you has had the time with the client to get the whole story. Relate the story to all concerned and get more loans approved. Thorough knowledge of agency underwriting guidelines and product descriptions is just the start. We also need to be well-versed on the additional overlay underwriting criteria that most investors are now adding to the basic agency regulations. We need to time block to read industry information. Start every day reading and use the information to become an authority in our market. This publication is one of the best and should be on our “must read” list every month.
Selling and presentation skills
We must be sharper here than ever before. Why? Because we are going to get in front of fewer people. If we have fewer selling opportunities, we must close a much higher percentage of them if we hope to earn as much this year as last, or to enjoy a raise. Practice selling scripts and dialogues. Make certain that we have an “elevator” response to the commonplace mortgage questions that always ends in an offer of assistance and the setting of an appointment to provide it. We need to take off the headset, stop answering every insipid e-mail that comes our way and get out among them. Here are five things that I think we need to focus on in this level of the pyramid:
1. Start every day with 30 min. of reading industry publications
We need to be the source of accurate mortgage information to our professional network and our market. A daily regime of reading and gathering timely industry information will contribute to our becoming an authority.
2. Set a fixed time every morning to answer e-mails and then get on with our day
Send them out during the day as we need to, but stay away from that e-mail time alligator as much as possible. Keep our calendar up on our computer screen so that we can continually see how few appointments we have and how much time is available for prospecting.
3. Never eat alone
The best way to work a referral partner and prospect database is in person. The best way to meet in person is at breakfast and lunch. There are 22 work days in a month, with 44 opportunities to have one-on-one personal, productive sales calls with our referral partners and prospects. We should schedule half of our appointments for protecting and half for prospecting. I dare say that most of us do not make 44 meaningful sales calls in a month. We will, if we schedule two each day at the morning and afternoon meal.
4. Get active in the local board of Realtors
Join a committee. Scour their roster for familiar names. Make a prospecting list from this roster. Then take them to breakfast or lunch.
5. Stop in and visit our referral partners and prospects
Very few of our competitors are. The art of the personal sales call was lost in favor of technology somewhere along the way. Call a referral partner or prospect and schedule an office visit. If we make regular visits, we will run into a deal that someone else in the office needs help on. Go where your competitors are not. And there is no one making office calls these days.
Branding yourself is more important than ever. Mortgage companies have come and gone. We each have an opportunity to stand out in our market, just by still being here. Let everyone know you’re still here. Focus your marketing efforts towards tapping into these principles of ethical influence as taught by Dr. Robert Cialdini:
Be the first to give. Trigger the time-honored social principle of reciprocation by giving of your time, your talent and your knowledge with every contact. Never leave a prospecting or protecting meeting without leaving a well-written, personalized article, leaflet or booklet. Use personalized scratch pads as a giveaway. Business cards regularly get trashed. No one throws a scratch pad away.
2. Authority: Showing and knowing
Establish yourself as the mortgage authority in your market, again, by providing timely, accurate information that is well-designed and personalized. I use The Loan Toolbox and Mortgage Market Weekly to disseminate information to the local media, as well as my network, and in so doing, brand myself, get published and called upon when the media needs accurate mortgage information.
3. Consistency: The starting point
When we determine our course of action, commit to six months and stay on track. Set our calendar and fill the blank spots each day with prospecting and protecting. A regular routine of communication, visits, calls, etc. will become more and more noticed and appreciated once the recipients of our effort realize that we can be counted on. This is an uncertain time. We can become the certainty in the professional lives of our referral partners and prospects by being consistent.
4. Liking: Making friends to influence people
I try not to court those who I would not want to invite to my dinner table. So, I do business with my friends and make friends of those I do business with. Like my buddy Tim Braheem always said, “The loan originator with the most friends, wins.” Life is too short to work and rely upon people that you don’t like enough to invite to your home.
5. Consensus: People proof, people power
Announce every success. Attend every closing and survey the borrower, listing agent and selling agent. Share every positive borrower survey with both agents. Don’t forget the listing agents, as they will likely be the selling agent on their next deal and you want to wow them and woo them to earn that referral. Share every positive listing and selling agent positive survey with their respective sales managers and broker/owners. This strategy alone gained me “in house” lender status at four real estate companies. After years of sending those positive surveys out, they reached out to me and offered the opportunity.
I’ve covered a lot here, so please consider giving this another read and making a list of those ideas that you like and will consider implementing. Failing to plan is planning to fail. There’s no substitute for good, old fashioned, belly-to-belly selling. People have been looking for shortcuts for years. Some work for a time and then the cheese gets moved and it’s back to basics.
Greg Frost is president of Frost Mortgage Lending Group, a PRMI Company. Greg has a proven track record as the first billion dollar producer. Greg’s Albuquerque team regularly originates more than 800 loans each year. Last year, his team originated financing for 5.5 percent of all re-sales as reported through the Albuquerque Board of Realtors, which translates to one out of 19 homebuyers in Albuquerque, N.M. alone.