In recent years, many larger brokers have been attempting to bridge the gap from broker to banker.  A key issue faced by these companies is the need to manage their loan data residing in their loan origination systems, and achieve a level of control not available in their internal tracking systems.  DataTrac™, from Del Mar Database, provides a total solution for managing the data involved with taking a loan from the prequalification stages of a lead to the final stages of mortgage banking.  It not only provides a total database structure accessible to all areas of the banking enterprise, it allows tracking and accountability of changes made to the database, providing that final control element that is missing from more basic tracking systems.

DataTrac’s™ database architecture is 32-bit based, scalable from a small office to a very large enterprise, and is specifically targeted at managing information relating to all aspects of a mortgage banking operation.  This capability includes underwriting, closing, secondary marketing, shipping, accounting, insuring, and sub-servicing.  DataTrac is also designed to manage the information coming in from a variety of sources, including brokers, escrow/title companies, appraisers, and other inputs that become part of a final mortgage transaction.

The DataTrac system is developed in Visual FoxPro, and provides several different database solutions, depending on the size of the associated enterprise.  For lenders who distribute their back-office lending functions across multiple offices, DataTrac can run over a shared server environment, such as Citrix or Terminal Services.  Another option for multi-office organizations is to use an enterprise version of DataTrac that leverages Microsoft SQL Server to expose the loan data over a wide area network.

DataTrac provides total control and auditing of data entry into the system, definable by user or department.  A “granular approach” allows access control of individual fields, reports, and functions at the user level.  Users can be granted full rights, read only, or no access to information, and those rights can change as the loan progresses through the lending process, ensuring maximum data security and integrity of the database.

Del Mar Database’s consulting group can help develop business rules, create custom reports, and assist with the configuration of the multi-level security system to provide a solution customized for each mortgage banking operation.

The reporting function allows near instant access of information through over 350 canned reports provided with the program. Additionally, lenders can easily add custom reports if needed.

Some specific areas managed with DataTrac include:

Underwriting:  Approval notices, submission stats, conditions management, suspense and denial notices, and HMDA reporting information.

Secondary Marketing: Lock confirmations and pricing, commitment positions, pools and securities, investor reporting, loan reconciliation, and overall impact on loan pipeline. Later this year, Del Mar Database will be releasing a version that automatically calculates the pricing adjustments for each loan.

Closing Documents:  Integrated with a variety of doc drawing programs to eliminate data duplication, reports on docs that have been drawn, manages fees and impound/escrow data, and exports data to outside document preparation services.

Funding:  Funding sheets, reports and statistics, and calculation of wire amounts and aggregate impound amounts that are so essential to this type of operation.

Accounting:  Broker and loan officer commission calculations and reports, 1098 and 1099 exports, trust account management, purchase advise reconciliation, and warehouse line management.

Interim Servicing:  Impound accounts, payment processing, servicer reporting, data export, first payment coupons, and delinquency reporting and account reconciliation.

Shipping:  Investor assignment and document packaging, loan status tracking, transfer letters and loan sale notices, and overall pipeline management.

Other:  Overall quality control and HMDA, legal document tracking, file room management.  The provided Business Intelligence reports give immediate access to the specific information needed, whether it be by specific branch, user, or particular loan.

DataTrac is a Windows based client/server application.  The program allows multiple users to update a single loan record simultaneously, while maintaining the ability to audit and track these changes.

DataTrac specifically interfaces with a variety of other parties to the mortgage transaction; allowing it to become the central data hub, while empowering the full use of these other products.  DataTrac should be seriously considered by any larger broker making that jump to mortgage banker, or any banker still not enjoying the power of centralized, secure data management.

Name:  DataTrac
Product Type: Enterprise loan-management tracking

  • A master database “of record” with auditing and security
  • Intuitive, easy to use interface
  • Extensive reporting capabilities

System Requirements:  Windows 2000 Professional, or Windows XP Professional for workstation, Windows 2000 or 2003 Server.
Price:  Starting at approximately $20,000, depending on licensing and configuration

They Make it a Referral Business

Many loan originators rely solely on referrals. They have been successful with other marketing strategies, including advertising, seminars, and direct mail, but subsequently developed such a loyal customer base that they no longer have to search for leads.

Of course, top producers work at creating an ongoing referral stream. It takes a commitment of both time and money to reach the point where past customers and Realtors routinely refer borrowers to you. The benefits are obvious. Not only do referral specialists receive a steady supply of potential customers, these borrowers are generally pre-sold on the originator.

Following is a look at what several successful originators are doing to create an effective referral business.

Starting Place
Nancy Deane emphasized that the time to begin asking for referrals is when you start originating. A former supervisor shared with her a basic but often forgotten strategy. “He told me to make a list of everyone I knew, including my hairdresser, attorney, dentist, doctor, and everyone else,” said Deane, a senior loan officer with Colorado Express Mortgage in Denver, Colo. “I started to talk to them about my new career and asked for referrals.”

Of course, loan originators and their teams realize the importance of the point of sale, the initial transaction with the customer. If the borrower isn’t sufficiently impressed with the originator’s product knowledge, attentiveness, reporting techniques, and, of course, emphasis on a speedy transaction, creative follow-up tactics most likely won’t help to generate future referrals.

Jim Schmidt, a loan originator at Poli Mortgage Group, in Northfork, Mass, believes that being willing to meet with customers at their home or workplace helps cement the referral relationship. “I meet with almost all of my customers personally, because I believe it’s essential for building trust and rapport,” he said. “We often have the closing for refis at the customer’s home as well (with the attorney present). I’ve found that by providing this type of service—in addition to an efficient closing—I have a stronger overall relationship with the customer, which makes it easier to ask for referrals.”

Originators also find other ways to make an impact. For instance, after borrowers return their applications, Deane sends them a flier answering “12 Commonly Asked Questions,” addressing such areas as the Good Faith Estimate, Truth in Lending, loan-closing timeframes, and other areas, which customers have found to be helpful. Prior to closing, she sends customers a thank-you letter, along with a copy of their appraisal and a pair of movie tickets. “I’m telling them how important they are to me,” Deane noted. “By providing these value-added items, I’m setting myself apart from other originators and the customer keeps me in mind when they’re ready to refer a potential borrower.”

John Bell, president of Citizens Trust Mortgage in Maitland, Fla., provides borrowers with a gift pack as soon as they’ve been approved. It includes coffee, crackers, and cookies, along with a card (from him and the Realtor) that thanks borrowers for the business and asks for referrals. The basket is sent to the customer’s office so that the customer’s peers will see it. “This generates interest among other people and we get more exposure,” he said. “I know that the gift basket and referral reminder—coupled with a timely closing—influences the additional referrals we receive.”

Referral Dialogue
The most successful originators have learned how to consistently solicit referrals without seeming desperate or pushy. They ask for referrals at the first meeting, once the application is completed, at closing, and various other occasions. Many referral specialists have a formal schedule for their requests. For example, Deane asks three times during her first telephone meeting:

1. At the beginning of the conversation, she asks who referred the borrower and states, “I work by referrals.”

2. During the subsequent discussion of the GFE, expenses, and related areas, she will ask “How do you think the process is going so far?” and then reiterate, “Keep in mind that I work by referrals and I’d love to roll out the red carpet for your friends and associates as well.”

3. When she’s done, Deane asks if there are any questions before she sends the application to the customer for review, and concludes with “I’d appreciate knowing anyone you encounter who is looking for a loan, especially if they have the same qualities as you.”

Deane emphasized that she’s never had a customer complain about being asked for referrals three times in one conversation. “Typically customers will see it as a challenge, wanting to give me referrals as soon as they can. They want to be on the team.”

Schmidt has his own routine for requesting referrals. “During my initial meeting with the borrower, I give them five business cards and explain how important referrals are to my business,” he said. “Then I say that if at the end of the process they are pleased with the way I’ve handled their loan, I’d appreciate it if they shared my name with anyone they know in need of a mortgage or refinance.”

Ongoing Visibility
In addition to asking for referrals at the appropriate time during and immediately after the loan transaction, you must stay in front of customers in the post-closing phase. The competition is approaching your customers on a regular basis, so you need to stay in contact with past customers, Realtors, builders, attorneys, and any others from whom you’re expecting referrals.

Rick Stern, president of The Stern Mortgage Company, Palo Alto, Calif., uses direct mail to remind customers of his quest for referrals. His mailings range from 4th of July and Memorial Day cards to humorous greeting cards and postcards that detail how loan products have helped clients achieve success. The referral reminders include:

“If you or anyone you know could benefit from our expertise, please tell them and tell us. We value your help and referrals.”

“Your referral of friends, family, neighbors, and co-workers is the highest compliment you can give us.”

“With each mailer we remind our client base that we depend on their referrals for our business,” he said. “Not only have our clients returned, they have referred their parents, children, friends, neighbors, business associates, and others. Referrals are golden, especially in a down market. It’s so easy to ask, and it always produces results.”

Deane sends a series of mailers, including a letter that highlights the referral process. It includes a definition of referrals and concludes with “As always, when you come in contact with friends, colleagues, or family members who are thinking of purchasing or refinancing a home and who would appreciate the same level of service that I provided to you, just give me a call with their name and number, and I will be happy to follow-up with them.” Deane added that, “This always gets a positive (referral) response.”

Originators also use the telephone to maintain contact and ask for referrals. “I will call many of my customers just to say hello and ask if we can do something for them, while also asking for referrals,” said Steve Hines, president/originator at Southern Capital Resources in Birmingham, Ala. “Unless you’re in contact with people like this, it can be ‘out of sight and out of mind.’ I’ve received many deals just by asking on the phone.”

Twice a year, Deane calls customers to make sure that her Customer Appreciation Program is still beneficial and to ask for their referrals. “It’s a great way to touch base with them, to ask how I can help and see if there is anyone they know who might need my service. Nearly 60 percent of them will say, ‘I was just talking to someone who needs a loan and I’ll give them your name.’ They become an extension of our team.”

Of course, e-mails can be an effective means of generating referrals. Lindsey Hall, a mortgage consultant with Alternative Mortgage Funding Corporation in Winter Springs, Fla., adds the following to her e-mails: “Oh by the way…if you know of someone who would appreciate my services, call me with their name and number and I will be happy to help them.”

John Weller, a senior loan officer with NexGen Lending, Denver, Colo., includes a similar phrase at the end of his e-mails: “If you know of anyone who is looking to buy, sell, or refinance a home, please call me with their name and phone number. I will be happy to follow-up with them and will honor the fact that you put my name to yours.”

In addition, business cards are a prime opportunity to get your message across. Michael Bischoff, president of Biltmore Financial Bancorp in Palatine, Ill., has the following note on the reverse side of his cards: “By Referral Only. Our company dedicates 100% of its energy servicing our referred clients. You will receive our undivided attention and dedication that you have come to expect from us. What this means to you is the highest possible level of service from us. In response to this we ask for your heartfelt endorsement to family, friends, and work associates.”

“The greatest compliment we can receive is a personal referral,” is the simple statement on the business card of Steven Marshall, president of Bellevue Mutual, Bellevue, Wash.

Enhancing Referral Networking Opportunities
Most successful originators are constantly seeking new opportunities to develop non-traditional referral relationships. Hines has established successful business affiliations with branch managers of large banks and private banking representatives. “Customers frequently asked us about car and equity loans and I would refer them to the larger banks. I saw the potential for forming mutually beneficial relationships,” he said.

Hines also has a referral network with financial planners and CPAs, which has been aided by his own background as a CPA. “We got to know many of the key people by participating in their organizations, attending monthly meetings, and speaking at luncheons,” said Hines. “To make this referral exchange work, there has to be a give and take, a sharing of referrals. It can’t be a one-sided situation.” However, Hines pointed out that the exchange doesn’t have to involve an equal sharing of referrals. “Sometimes, part of the giving can be acknowledging your appreciation of their efforts.” In addition, he noted that referring partners are also appreciative that their clients have been well served.

Larry Montani, a mortgage officer at First Interstate Financial Corp. in Shrewsbury, N.J., concurs that a reciprocal arrangement is essential, and has taken extra steps to ensure he is providing value. Montani has a file of business cards and brochures for all types of vendors that he distributes to clients. “I am constantly asked whether I can refer a mover, plumber, landscaper, financial planner, or accountant,” he said. He is adding a networking section to his Web site that will eventually have 50 vendors from 50 different professions.

Stern advised that originators shouldn’t overlook their community organizations when developing referral relationships. He has been involved in a number of different organizations and has seen first-hand the value of associations formed with other volunteers. “My relationships have been the cornerstone of my success,” he said. “Part of this has been the ongoing associations with stockbrokers, attorneys, Realtors, and others. I see them at events, on the street, and elsewhere and they refer me to borrowers. This has been very effective for me over the years. They’ll think ‘he’s a good guy (because of his involvement) and he’s also a broker I should call.'”

As these and many other originators would agree, it takes time to create an effective referral business. However, the payoff is substantial. Once the system is in place, originators often can dedicate most of their time to cultivating relationships with past customers and referral contacts. Deane stressed, “It takes a while to develop this program, but you’ll see amazing results.”

Stop the Leaks in Your Sales Pipeline

Turning prospects into customers:
How to increase your conversion rate

How many people do you talk with who actually become customers? While no originator converts 100 percent of their sales opportunities, some do far better than others. Some loan originators talk with dozens of people every week, yet at the end of the month, their closed loan results are poor. If there’s one thing that top producers have learned is that strong closing volume every month is the result of effectively managing your leads and your pipeline from start to finish. How do they do it?

When it comes to borrowers, there are three major stages in your sales pipeline, as illustrated below:

Prospects == Applicants == Closings

Prospects to Applicants
The first step in your sales pipeline is moving as many prospects to actual applications as you can. A prospect is identified as someone genuinely interested in home financing and is in a position to take action by either purchasing or refinancing a house now or in the very near future.
At each stage of the sales pipeline there is fallout. Not everyone who contacts you as a prospect will evolve into an application. Some don’t qualify, aren’t ready to take action, are “just looking” or go elsewhere to borrow money. It is not uncommon for many loan originators to convert only about 20 percent of their prospects into applications.

Your job in this first stage is to weed out mere contacts from real prospects as quickly and efficiently as possible. Time spent discussing the intricate details of buying and financing a home with someone who is just window-shopping is often time wasted. The same can be said for hours invested in attempting to help repair someone’s damaged credit or to help them find just the right property. I’m not suggesting you should be rude or unhelpful—I am suggesting that you are a professional mortgage loan originator, not a credit counselor, or a real estate agent. As high performers in our business know, the more time you invest every day in originating good quality loans, the more successful you will be and the more money you will make.

There are some effective “filtering” questions you can ask your prospects at this stage. Questions like: “What is your time frame for moving?” and “If we can lower your payment, are you ready to refinance now?” and “What is your current financial situation?” are great questions to help both you and the prospect decide if your services will be needed. If so, move the prospect forward quickly by recommending the next step of meeting with you, visiting your Web site, or getting pre-qualified or pre-approved to start the mortgage loan application process. Many top producers employ assistants or junior loan officers to take or make these initial contact calls. These assistants are well trained in screening prospects for you, thus freeing up your time to work with real clients as their trusted advisor and home financing expert.

Speed and diligence are critical here. Your skills in convincing a prospect that you have the best home financing solution will make or break your chances of getting him or her to apply with you. Some originators try to set up face-to-face meetings as quickly as possible, knowing that once they get the prospect in their office, they can sell him or her on their financing solution, their service, and their professionalism (and even their charm!). Others like to direct the prospect to their Web site to begin filling out the application right away. As one loan officer recently told me: “If I can get prospects to my Web site and completing the online loan application, I’ve given them the feeling we are already at work on their loan. That way they are less likely to go somewhere else and start all over.” These tactics, as well as things like follow-up letters, e-mails, or a brief phone message let the prospect know that you truly want his or her business and are ready and waiting to serve. At this stage, persistence and follow-up increase your ability to convert prospects to applications. Remember, if this is an interested and qualified prospect, he or she may also be talking with other lenders or might get a referral from a real estate agent to speak with a competing loan officer. They’re not your customer until they actually apply with you.

Applicants to Closings
Step two is moving loan applicants to closings. Unfortunately, not every application closes. Among the number of things that can keep an application from closing are appraisal issues, title problems, failed property inspections, or loss of employment. Some things like these you can’t control or predict. But there are some events that torpedo your potential loans that you can ward off. For example:

  • Get permission to pull the credit report before starting the application. If serious credit issues exist, you know about them before you invest time on an application that will likely never close.
  • Use alternative documentation processing whenever possible. Ask your applicant to bring in their W2s, tax returns, bank statements, and paystubs up-front. This saves time, effort, and surprises down the road.
  • Consider collecting fully applicable but non-refundable application fees. It’s a lot easier for a borrower to walk to another lender if he or she has no money down. Even $200 paid up front can keep your client from straying to the competition.
  • Move quickly! When an applicant feels that nothing is happening on his or her loan and is getting no phone calls or updates, he or she will start talking to other lenders.
  • Make sure your Good Faith Estimate is exactly that. Low-balling your GFE to get clients up-front can cost you a closing when they realize they’ve been bamboozled. Borrowers walk away from closings every day because of this. Make sure they aren’t walking away from yours.

Most loan originators I speak with say they average about a 75 percent conversion rate of applications to closings. That means that three out of four applications in their pipeline fund. Congratulations if your results are better, say 80 or 90 percent. If they are much worse, consider making some distinct changes in your application to closing pipeline process.

The Flow of Business
“Closings are everything!” a successful mortgage broker once told me. “That’s what we get paid for and that’s what the mortgage business is all about. If it doesn’t close, it’s a waste of everyone’s time.” With that good advice in mind, let’s do a little exercise to figure out the flow of business you need in your pipeline to get paid the income you want to earn.

Let’s again assume that you convert 20 percent of your prospects into applicants. Let’s also assume 75 percent of those applications actually close. From there the math is pretty easy.

If you talk with two prospects a day, that’s 10 a week and about 40 a month. If you are successful in converting 20 percent of those prospects into real applications, that yields eight new applications a month. If 75 percent of those applications actually close, you’ll close six deals a month. If you make $1,000 a loan, you can expect to earn $6,000 a month or $72,000 a year. In effect, to earn $72,000 a year you must talk with two people every day.

If earning $72,000 a year isn’t enough for you, then you’ll have to either: a) talk with more prospects every day, or b) improve your conversion rates of prospects to applicants, or c) improve your conversion rate of applications to closings, or d) all of the above. As you increase the amount of prospecting contacts you make every week and work to patch up some of the leaks in your sales pipeline where opportunities fall out, you can improve your monthly closed loan volume and substantially grow your income along with it.

User-friendly Technology

Seven technologies we could start using today to be more productive.

As successful originators, we are intoxicated by the arrival of new technologies that promise to revolutionize our personal lifestyles and professional workflows. However, things can move so fast that we don’t even stop and take advantage of the trends that have matured to the point that they are no longer “new” but are ready for everyday use. I want to highlight seven practical technology applications available today and encourage you to consider using some of them every day.

Speech Recognition in Word Processing
Only five years ago, this seemed like an idle dream, to be available in some future unknown time. The idea that one could dictate a document through a microphone and have that information turned into some semblance of intelligible text seemed laughable. The irony is that with so many false starts, the public is reluctant to even try this technology now, when it actually has reached some degree of usability. Microsoft Office XP includes this capability, and setup and configuration took me only half an hour when I tried it recently with a cheap headset on a two-year-old office PC. I was pleasantly surprised that I was able to achieve usable text output into Microsoft Word when I spoke at a comfortably slow rate, and found I could even give it standard commands such as to start a new paragraph, or to delete the prior word if I changed my mind.

The price of this capability is that users must train their particular copy of Word to the individual nuances of one voice, and use a headset with a boom microphone in a fairly quiet location to achieve reliable results of over 90 percent. Considering how slowly most people type, and the amount of mistakes that they make, this would appear to be a tool with a high degree of usability for many busy executives.

This technology has made remarkable strides in other areas as well. I am pleased with how well some customer service operations such as American Airlines and Sprint PCS use voice recognition, and how well it works. M.O.M.’s technology editor, Bruce Forge, has been reachable with an electronic attendant using voice recognition for several years, and I continually marvel at just how well his “receptionist” seems to understand questions and take notes, and how she never seems to have any attitude whatsoever.

Flat Panel Displays
Since my youth, I have heard promises of flat screen technology coming just around the corner and replacing the large, unwieldy displays that are based on 60-year-old vacuum tube technology—the lone holdouts in what has become almost exclusively a solid-state world (electronics based on silicon-based semiconductor devices). Unfortunately, it has proven generally impractical until very recently to replace these devices with thin, flat panels that take less space, weigh less, and offer breathtaking picture quality without any visible distortion. I was so impressed with these displays that a year ago I recommended to a major networking client that she replace all conventional monitors with LCD (liquid crystal display) monitors as normal attrition and growth occurred. Today, about half of our employees have LCD monitors, even though at $600 apiece, one could buy three or four conventional monitors.

These monitors are worth every dime; I bought one myself for the workstation where I do most of my writing and online activity. The flat monitors simply provide a more pleasing environment and offer less eyestrain than the older-style monitors. Considering how long a company may keep this type of device, I recommend that any new computer acquisitions automatically include an LCD monitor.

In the pure entertainment world of large screen television, we are probably still a few years away from a cost-effective phasing in of flat panel displays, but they are already very evident in small screen configurations for the bedroom or desktop. I would expect that we are only a few years away from seeing flat screen displays everywhere, but even now, they are completely viable for the average workstation in a mortgage company.

Office and Home Networking
All big offices have had local area networks for the past decade, and even a lot of small offices have acquired this capability. While it may appear more or less obvious to a lot of mortgage operations, it is really amazing how many smaller offices have yet to adopt this now very mature technology.

Networking two or three workstations together in a small office environment provides a multitude of capabilities that add to productivity. First, the wiring together of these computers will allow a single printer to be used by all of the computers in this so-called “workgroup” environment. If one user has files to share on his workstation, it is easy for other members of the workgroup to get access to review, modify, or print these files. A single Internet connection, high speed or otherwise, may be shared by all of the members of this workgroup. Most importantly, the loan origination system in the office can put all of the files that are active into one location.

The ability to put all of the files in one location is absolutely pivotal to the control of files in a mortgage office. Without a network, it is impossible to maintain good control over the “master” copy of a file. Having graduated from this situation to a network myself in 1993, it always amazes me just how important a step this really was in maturing beyond one office and effectively controlling the workflow.

This advantage even extends now into home offices, should you want to network several computers belonging to family members. The same basic rule applies: as long as you maintain a simple peer-to-peer workgroup (no dedicated server), a competent amateur or fairly low-level professional can be hired to set this up. You will want a professional networking person when you graduate beyond 10 machines into a server environment, which requires an entirely different level of hardware, software, and professional expertise.

An important corollary of all this is the recent arrival of wireless networking for both the home and office. Wireless connectivity is now inexpensive and allows the business user to operate a laptop in a truly mobile environment (in a conference room, for example) or to add new workstations easily even when additional wired connections are not available in the office. There are some security considerations that should be accounted for, however, and it is important to run encryption and be aware of the potential for eavesdropping from other individuals within range of these types of connections.

Backing Up Data
Unbelievably, a large percentage of small offices do not back up their data. There are only two kinds of mortgage offices: those that have already lost their data due to an equipment failure (usually the hard drive), theft, or fire, and those that are going to eventually lose their data. I learned this lesson the hard way when I lost an entire year’s worth of loan files by deciding to “learn” on my office PC without first backing up the data.

Several really great tools allow non-technical people to make daily or weekly backups of their indispensable data, usually loan origination files and key documents. A Zip drive is one great solution that allows users to insert a small diskette into an internal or external drive to be automatically copied. This can be done manually or with very inexpensive software, and it allows the office to move some of these backup files offsite to allow for the possibility of theft or fire.

The best all-around solution for the daily backup is to copy across your network from one drive on one machine to a different machine. This can be automated, is more reliable that other backup systems, and will allow for the restoration of data in the shortest time.

Instant Messaging
When I first used AOL’s text-based instant messaging feature a few years ago, I thought it was great fun but did not take it seriously. That was until I saw one of my major clients using it effectively in communications within her main and branch offices. I discovered that instant messaging is really the secret weapon for new communications technology on the Internet.

What is so unique about instant messaging (other than the fact that it is free) is its ability to allow what I call parallel communications: the user may carry on a phone call and still take important messages from the screen as needed. Since most of us cannot take two phone calls at once, we limit our accessibility during the work day by being unavailable for phone calls because it is a time-consuming, hit-or-miss process to get through when we need to. With instant messaging, we have the unthinkable in a communications system: instant access to others, complete control over whom we take messages from, the ability to filter recipients and callers at will, and above all, the ability to manage more than one session at a time.

In the last month I have been heavily involved with an online training program for a software company and have frequently been writing in PowerPoint while on the phone and taking several different messages from other key individuals around the country—all at the same time. I am completely sold on the overall benefits of the use of text-based instant messaging. I have even found the video and audio conferencing features, including online file transfers, to be of real value between two individuals if they have high-speed connections. However, only a dialup connection is required for online text chat. I have even used it from airports and in meetings while wired to the Internet with my wireless PCS phone-based modem in my laptop with a slow-speed connection.

Mobile- and Office-based Contact Management
I think the business world in general has missed a major productivity tool by not using contact management software more frequently. While I personally use ACT!, I have also used Goldmine and would highly recommend both. When you combine this type of software with two other tools that are available and affordable, some interesting possibilities arise.

Sprint PCS and other carriers now offer an integrated phone and Palm Pilot. While I have consistently stated that palm-top PCs are toys for the most part, I have also said that the one major exception to this rule is their ability to be used as portable contact management systems. If the device is synchronized with a desktop PC, users can carry a current copy of contacts and phone numbers with them at all times, a capability that is an absolute must for marketing and sales people who desire mobility.

When this Palm Pilot is integrated with the phone itself, a user can instantly dial phone numbers from the contact management software, and immediately dial that number through the mobile phone. Gone is the additional step of looking up the number and then dialing the phone, or of running a cable or infrared link between the two to make sure the phone has the latest phone numbers. Another worthwhile variation of this theme is the use of voice recognition technology to allow the user to call a phone number up by name from the portable phone, a solution that might appeal to many.

This is one case in which the user actually has several viable choices. My fundamental recommendation is to use contact management as a part of your workflow and integrate it into your mobile phone as you find convenient. I have a very light briefcase that I use when I leave the office; it holds my PCS phone and subnotebook (a small laptop optimized for light weight and size, with the ability to all on peripherals such as a CD drive and floppy disk drive). I run the subnotebook in hibernation so that I may restart it in only 20 seconds when I need to look up numbers or check my schedule. I then synchronize this laptop back in my office to the desktop PC with a wireless network connection.

Electronic Bill Pay
I have been a user of Quicken financial software for over a decade, and have used electronic bill pay on it for at least the last five years. I seriously question how any small businessperson without a bookkeeper can reasonably keep up with the demands of paying bills and managing accounts without the services offered by electronic bill pay.

While this service may have been pioneered by companies like Intuit, today most major banks offer a Web-based method of paying bills online. All of these systems allow the customer to schedule bills out to a predetermined date and to schedule regular recurring payments and set a fixed payment schedule. A key advantage of electronic bill pay is the ability to schedule out a payment for a day or two before it is due, for maximum use of your personal cash flow, while never worrying about actually being late in making a payment. Another advantage is the highly reliable trail of information available when you need to confirm payment and the details surrounding a transaction.

Paying bills by snail mail with the higher degree of human error involved, and the higher cost, and increased lack of security, makes absolutely no sense when one can pay electronically with the degree of security and convenience available with electronic bill pay.

If you look into one of more of these tools and start using them in your office, you can potentially increase your production while becoming more organized and improving communications with your customers. These individual pieces of the technology puzzle are readily available—why not see how one or more of them can help you?


Future Technologies
The following three technologies will soon hit the shelves and give you even more reasons and methods for improving operations in your mortgage business:

  • Document storage and retrieval—High-speed scanners, coupled with efficient cataloguing software, will integrate paper flow with loan files and eliminate the flood of copies that are routinely produced, while offering more rapid retrieval of indexed information, with the ability to generate “copies” as needed. Utilizing PDF files and high compression image formats will guarantee the integrity of scanned information, and the generation of documents that are for all purposes originals, not copies.
  • Alternative identification techniques—As advanced as we have become, we still rely on human signatures for verification of the authenticity of legal agreements and other written communications. It is only a matter of time before encrypted digital signatures, handwriting recognition, retinal and fingerprint scanning, and several other techniques replace the unreliable paperwork system that is still rooted in the use of a centuries-old system requiring a manual signature. Coupled with electronic document storage, we may finally see the reduction we have all long sought in the amount of paperwork generated in the typical mortgage company.
  • Completely automated software upgrading and repair—We all laugh at this idea today, as we undertake the hassle we know we are in for when we have to upgrade our computer operating systems and applications software. We are making progress into turning these machines into appliances. We can look forward to computer systems that automatically load updates, replace and remove modules as needed, and repair and renovate automatically without a Microsoft engineer having to be present every time. This goal is the longest term one that I suggest, but perhaps the most critical. In time, artificial intelligence and smart software will remove us all from our part-time jobs of computer technicians and put the entire repair and upgrade process into the background, where it really belongs.

Realize Your Goals

Overcoming the obstacles that can get in the way of success.

This time of year may seem like an odd time to be discussing goals. Most folks in this business talk about goals in January. But we all know that a lot of loan originators have yet to take action on the goals they set for themselves nearly four months ago. For example:

  • Jack set a goal to join his real estate association as an affiliate member and attend the functions to meet new Realtors. He has yet to make the phone call to get the sign-up forms.
  • Valerie set a goal to form a new strategic partnership with a CPA. It’s May, and she hasn’t set up her first appointment.
  • Kevin told his boss his 2004 goal was to get himself organized and create a better loan file flow system. Sixteen weeks into the year, he has still not done so.

Like Jack, Valerie, and Kevin, the same thing happens to the goals and New Year’s resolutions we set. We start out the year planning to lose weight, get in shape, spend more quality time with our families, and so on. Goals are easy to set, but take effort to achieve. Because of this effort, many never take action of any kind. Research has proven that the average number of times people take action on most of their goals is less than one. They simply never get started. Here are the three biggest reasons why:

The Fear of Commitment
I read a magazine story the other day about a 60-year old man who hiked the entire length of the Appalachian Trail, a 2,100-mile path from Georgia to Maine that takes about five to seven months to hike. Although many people have accomplished the trek, most of those who start out never finish. The magazine reporter asked the 60-year old man: “What was the hardest part of your 2,100 mile journey?” The hiker answered: “Taking the first step.”

The same is true with our goals. The first hurdle we have to overcome is our fear of commitment. That hiker knew that as soon as he took his first step on the trail he was committed to a goal and had to accomplish it. Let’s apply this to one of our loan originators mentioned earlier.

Our friend Jack set a goal to join his real estate association this year. Jack knows that if he signs up and pays dues to join the association, he must be committed to attending breakfasts, luncheons, and meetings. Jack worries about the time that will require, that he will have to actually have to go to these functions, try to meet new agents and talk with them. It means he will need to follow up on those meetings and schedule sales calls. He thinks about all of this and fears he won’t do it. Jack is afraid of commitment, and so, he hasn’t taken his first step.

The same fear of commitment can be seen when people don’t start their diet plans, don’t begin their new exercise routine, or don’t promise their families they will spend more time at home. They are afraid of committing themselves to action. So, the first step to get going on your goals is overcoming your own fear of commitment. No one can do this for you. You cannot read a book or listen to a tape that will change your mind. You must make the decision to put your fears aside and get committed to your goal. Only then will you take your first step.

The Absence of a Plan
The second thing that stops us from taking action on our goals is the absence of a written plan or road map. Valerie wants to form a new strategic partnership with a CPA, but she hasn’t acted because she doesn’t know where to start. The solution? Valerie needs to sit down today with a blank piece of paper. On the bottom of the paper she should write: Secure new relationship with at least one new CPA by June 1. Then, working from the top of the paper down, Valerie needs to list the steps of how to do that. For example:

  1. Make a list of possible CPA client prospects.
  2. Do basic research on each using the Internet and their Web sites.
  3. Draft and send an introductory letter to each CPA prospect.
  4. Follow up in four days with a phone call asking for an appointment.
  5. Hold discovery-meeting appointments with those CPAs who wish to meet.
  6. Prepare follow up meeting presentations on what I can offer them.
  7. Schedule and hold follow up presentation meetings with CPA prospects.
  8. Assess interest in working as referral partners.
  9. Initiate contact follow up campaign to cement the relationship.

Now Valerie can clearly see what it will take to reach her goal. Like any goal, it is achieved by executing a series of single action steps. All she needs to do now is take the first step, then the next, and the next. In a short time, Valerie will realize her goal of working with a CPA. Why? Because now she can see how to get there.

The Hesitancy to Change
The third thing that stops us from starting our goals is our own hesitancy to change. Most people don’t like change of any kind. Whether it’s a new funding procedure, a change to a different computer system, rearranging the office, it doesn’t matter. They see change as a negative thing. (Sometimes in my all-day training seminars I ask participants to change seats for the afternoon, just to give them a fresh view of things for the next few hours. You’d be amazed to see how many absolutely refuse to move! Even changing chairs frightens them!)

Setting new goals often means you are going to have to make some changes in how you run your business. From our earlier example, Kevin set a goal to get organized this year by creating a new loan-file flow system. The reason why Kevin hasn’t started out on his goal yet is his own hesitancy to change. His system may be ineffective and cumbersome, but it’s “the devil he knows” and is comfortable with. Although developing and installing a new and better loan file flow could mean time savings, a faster closing and a more organized process, Kevin will continue doing it the way he has always done it, and make up some excuse for his non-action.

If you find yourself not acting on your goals because of hesitancy to change, ask yourself why you feel this way. What are you afraid of? What’s the worst that could happen? Most importantly, what are the consequences of staying where you are?

Here’s a wonderful five-minute exercise for Kevin to help him move to action. Kevin should use a piece of paper or a whiteboard and draw a line down the center. On one side he should write “Current Process” and on the other “New Process.” Under “Current Process” Kevin should list how it is working. For example:

  • Too much repetition
  • Lost files
  • No order of process
  • Confusion with loan processor
  • Some missed closing dates
  • A few upset borrowers

Next, under “New Process” Kevin should list what an updated, more organized loan file flow system would mean. This might read something like:

  • Less stress for me
  • Things easy to find for status reports
  • Faster approval process
  • Better communication with loan processor
  • Fewer emergencies and problems
  • Happy customers

It won’t take Kevin long to see that action isn’t an option; it’s the only option. He may feel that changing to a new process is painful, but going through a little bit of discomfort now will be well worth it in the long run. He now stops looking at the negative points of change, but rather focuses on the positive results. If a hesitancy of changing to something new has kept you from starting out on one of your goals, this exercise will work for you too.

The only way we get anywhere in our careers and our lives is through the process of setting and achieving goals. The key is to get started. Perhaps you have some goals you set out to achieve this year that you have yet to begin. It’s never too late. They say the best time to plant a tree is 20 years ago. The second best time is today.