Category: Cover Article

Loan originators share their techniques for establishing relationships with CPAs, financial planners and attorneys.

While many loan originators consider Realtors and builders to be the prime sources of referrals, others have turned elsewhere to seek profitable “partnerships.” They have established mutually beneficial associations with attorneys, CPAs, financial planners and others.

Following is a close-up look at what several successful originators are doing to market to and with these affinity partners.

Financial Planners
Some originators have experienced a gradual entrée into the affinity marketplace, resulting from their already established customer base. For example, Gina Jackson, Cornerstone Mortgage, Dallas, Texas, realized that a core part of her customer base was tied to a group of financial planners. “Working with planners started as a result of having a large percentage of high net-worth clients, many of whom used the same financial planning group,” she said. “I met the primary planners, did many of their own loans, and then they began referring customers to me. When they started a professional networking group, I became the mortgage person.”

Jackson subsequently joined the Dallas chapter of the Financial Planners Association as an affiliate member/sponsor and attends their regular events. “I was recently able to make a brief presentation at one of the luncheon meetings. In addition, I have access to the association’s membership and plan on sending an e-mail regarding my services.”

Steve Hines approached planners on an individual and corporate basis, introducing himself as a “no-frills” potential business partner. “I tell them that their customer is going to be happy (with his service) and that is what they want to hear,” said Hines, Southern Capital Resources, Birmingham, Ala. In their meetings, he (and company vice president Janie Hannah) evaluates his comfort level with them, as well as his perceived value as a referring partner. As he expanded his contacts, Hines hosted luncheons for North Alabama’s Financial Planners Association, enabling him to make presentations about his services, with an emphasis on the mortgage-related educational courses. “This was a way for them to develop a comfort level with me and my credibility as a mortgage consultant. I also suggested that I could refer clients to them, and they to me.”

Hines eventually took advantage of combined marketing efforts. For example, he has written articles for the association’s monthly newsletter and includes some of their writing in his publications. However, he has refrained from distributing mass mailings to financial planner clients. “I think that clients respond better to an individual contact, where the planner has referred us.”

Brian Comer, Advanced Mortgage Services, Norwell, Mass. got started by working with financial advisors at an American Express office. “They were easy to approach; they wanted to use my database as much as I did theirs,” he explained. “I met with a few planners and we discussed the potential of working together. We’ve done some joint marketing through each other’s database. For example, one planner has included a letter of introduction to me to their clients.”

Comer subsequently expanded his financial planner connection, by offering monthly seminars on reverse mortgages. “We developed a university style training room to provide seminars and hired an originator who specializes in reverse mortgages,” he said. “We help planners better understand what reverse mortgages are and how they can help their clients by showing that reverse mortgages can be an effective estate management tool. We’ve had a great response to the seminars, with a number of referrals recently.”

Marc Brinitzer, Big Valley Mortgage, Roseville, Calif., has taken the financial planner association in a slightly different direction, partially based on his own experience as a planner. He initially capitalized on his financial planning background by advising customers on their long-range housing/finance goals. He cultivated relationships with other financial planners as well. “I sent letters and met with them to explain our interest in developing a mutually beneficial referral arrangement. Most planners (and CPAs) believe they don’t get much business from originators; they’re more concerned with providing their clients with recommendations for other quality professional services.”

Brinitzer eventually took the next major step by adding a financial planner to his office. “This was someone who had previously counseled some of my borrowers and I thought there was a good fit so I put him on retainer.”

CPAs
While he no longer focuses on such affinity relationships, John Hicks previously developed a successful working relationship with his CPA at American Express Financial Services. He created a marketing piece to present to them and offered to combine it with their own for a special mailing. The CPAs incorporated some of the information from the piece with the company mailing and introduced Hicks, who subsequently contacted clients from his CPA’s database, asking if they would like to receive e-mails, rate updates or newsletters. His name was already familiar to the clients, setting him apart from other LOs. “The conversion rates from these leads was probably 50-60 percent, as I was strongly recommended by someone they already have a relationship with,” said Hicks, M&I Bank, Maitland, Fla. “To maintain the reciprocal nature, I let them know what I was mailing each month and offered for them (CPA) to include something. It is not just about a network—it is about becoming growth partners.”

Scott Mazur, Professional Mortgage Partners, Downers Grove, Ill., got started with this niche after handling a few loans for CPAs, during which he assessed their client types. “If it (working with their clients) seems it might work out, I mention what kind of service I can offer, and try to arrange a lunch meeting at the CPA’s office (which he provides), where we can get together and discuss mutual areas of interest, rather than just ask for referrals,” said Mazur. “It’s a way to get acquainted with the CPA. Then we can go from there.”

He emphasizes his customer-centric service, such as same-day approval. “I offer to send the good faith estimate to them and their customer, showing that I was confident in what I could do for them,” he said. He also provides amortization schedules and other value-added material and sends periodic updates to show CPAs how he can help clients. “People love it when you tell them they can save $100,000 over 15 years and their CPAs also appreciate that,” he said. “It helps when you’re fresh in their minds, having received something from you.”

Mazur emphasized that it’s important to select the best referral sources at CPA and other firms. “You want to be meeting with the principals or others who are involved in the daily contact with their clients and more likely to give you referrals, rather than number crunchers who are in the backroom offices,” he said. “Overall I’ve found this to be a good niche, and more refreshing than working with real estate agents.”

Jack Lieberman stressed how basic the referral relationship concept can be with CPAs and other affinity partners. Lieberman, USA Mortgage, Austin, Texas, encourages the originators in his office to take a simple yet effective approach. “We follow the concept of developing a network, partly by surveying prospects to find out who their CPA, financial planner, attorney and other advisors are, so that we can subsequently contact them,” he said. “When we started, I was constantly on the phone introducing myself and stating ‘We have a mutual friend and I promised I’d call you. I wanted to see if we can help you now or in the future.’ Of course, I’d ask permission to call their CPA, attorney and others. This is how we expanded our database, which is the foundation of our business.”

Lieberman noted that when he speaks to CPA (and attorney) groups, he makes sure to provide a value-added message, devoid of self-promotion. “I talk about what will be of importance to them and their clients, such as home equity, credit issues and building their own practice through referral marketing,” he said. “I never talk about what I can do for them. I’ve had a great response (with referrals).”

Attorneys
Forget the attorney jokes, these business partners can be a valuable source of leads. For example, Comer learned that attorneys are especially receptive to referral working relationships, depending on their specialty. In addition to receiving referrals from elder care attorneys who attend his reverse mortgage seminars, he has benefited from contacts with divorce attorneys. Following initial meetings to discuss the potential of working together, he discovered another referral tactic. After receiving a customer referral from an attorney, Comer suggested to the borrower that he should consider taking the attorney to their closing. “Of course, customers are often nervous during the closing and having an attorney they know and trust can make them more comfortable,” said Comer. “And the attorneys appreciate the opportunity to be there.”

Mazur built a growing base with divorce attorneys as well. “There will always be situations where couples are parting ways and need a new home purchase or a need to refinance the previous property,” he stressed.

Roy Meshel, State Mortgage, Scottsdale, Ariz., has forged an informal network of attorney referrals through everyday contact rather than a targeted campaign. “I take a soft-sell approach,” he said. “I’ve established contacts with attorneys through a variety of ways, including social settings and my own personal experience. These include divorce, real estate and labor attorneys, the latter working with business owners and executives. Attorneys also introduce me to others at their law firm. The referrals we get are usually high-end loans.” Meshel noted that attorney referrals are especially valuable because the customers usually aren’t shoppers. “Clients trust their attorneys and typically take (their suggestion for) referrals without question.”

As these originators have illustrated, affinity referral relationships can be developed on an elementary scale or a more sophisticated approach. While the specific actions can vary, the end result is usually the same—a steady stream of customers who will continue to generate business.

By David Robinson

“Esprit de corps provides people with a desire to focus their attention on creating success for their profession as a whole, rather than just doing their work in a corner.”

The mortgage origination industry has been taking a lot of shots lately. Big company settlements for consumer abuses make big headlines, and each day more mortgage broker fraud cases are made public. All of them reflect on the mortgage business in the perception of the public—our customers. Even though the bad apples comprise an appallingly small percentage of the origination community, the taint rises odiously from the bottom of the barrel and touches all in the industry. From the 5,000-foot view, it seems to come down to a sense of cohesion. The mortgage origination industry needs more esprit de corps to keep itself glued tightly together.

By definition, esprit de corps is a military concept, forged by those who faced death together on the battlefield. Leaders throughout history have understood that esprit is the intangible spark that enables people to prevail over seemingly impossible odds. How else could Caesar’s 55,000 legionaries triumph over almost 300,000 Gauls at Alesia, or Alexander’s 40,000 Macedonians defeat 250,000 Persians at Gaugamela? Tactics play a role, but esprit de corps makes a tremendous difference.

The mortgage origination industry’s sense of esprit is in the development stage. The industry is fairly new, only two decades old, really. But there are other factors slowing the growth of professional pride. For one, the industry is somewhat fragmented, with originators working for banks and mortgage bankers, as well as independent mortgage brokers. Among the brokers, there are also many working under the shingle of a net branch provider, sometimes co-branded with their own name and sometimes not. There is also vigorous competition from retail and Internet-direct lenders who are certainly mortgage originators, but are well outside the realm typically associated with the term. It’s tough to build a sense of community, of “brotherhood in arms” when there are so many component members. Another factor is the level of activity that is required to be successful in loan origination. It’s beyond a full-time job when you’re building a company; it’s absorbing to the point of leaving little room for other activities, no matter how constructive.

These impediments do not diminish the importance of esprit, given the current climate of suspicion and rhetoric about originators in general and mortgage brokers in particular. The NAMB is working hard to build solidarity among its members and to grow its membership. They understand there is strength in numbers and are doing much to increase those numbers—and along with them the odds of maintaining dominance at the all-important point of sale. The education initiatives are also headed in the right direction, but more people need to get with the program NAMB has put in place, which calls for a “drive for designation” on the part of management. Oftentimes, this sort of aim needs to be driven at the grass roots level, which happens locally if the esprit factor is to exceed the hassle factor when there are loans to be funded.

Creating esprit de corps in an entire industry has to start somewhere. The central value, according to military leaders, is integrity. “Integrity is the foundation of leadership and the key to building organizational esprit de corps,” according to comments by Air Force Wing Commander J.R. Tillery. “At the heart of integrity is a consistent value system that promotes respect and trust.” This is certainly a good place to start when it comes to your own shop. If you are a leader in your business, you can readily demonstrate this value. Col. Tillery steers us to “The Art of the Leader,” by Maj. Gen. Bill Cohen, who advises, “If you want to build esprit de corps, you must demonstrate integrity and if you do, it won’t be long before everyone in your organization knows that you can be trusted, that you say what you mean and you mean what you say. The members of your organization will demonstrate integrity in dealing with you, and each other, and the esprit de corps in your organization will soar.” If this is too simplistic for the industry at large, it certainly carries huge validity for your organization. As a core value, integrity is, well, integral.

What are some other ways to add esprit de corps within your business and within your industry as a whole? Consider some of these suggestions:

• Band together. If you’re not a member of your local chapter, change that. Get involved with the national organization. NAMB and MBA are working hard to unite the industry. As a single originator or as a single origination business, you’ve got about as much clout as a letter to the editor. As a member of a profession that touches two thirds of the mortgages originated in this country, you’re somebody, but only if you speak as a single voice.
• Get active. Once a member, participate actively in your local industry association chapter and in the NAMB or MBA. It’s like a love affair: you’ll get out of it what you put into it, so it’s no time to sit back and not pull your weight. You either have a stake in your long-term success or you don’t. Offer to serve on committees to strengthen your chapter. Teach classes, organize seminars, do whatever you can to increase the professionalism of your association’s members, because they reflect on you.
• Rock the vote. Bring others into the organized sector of the industry; too many brokers out there are content to let others do the heavy lifting. Be a recruiter. Or better yet, be what the computer industry calls an “evangelist.” An evangelist is someone who visits user groups and talks up the product, pointing out the advantages of using, say, a Macintosh over a windows machine. They take the message directly to the people who will benefit and point out the advantages of the product—in this case, industry involvement. There are even benefits apart from the obvious ones by participating in NAMB’s Medallion Program.
• Get educated. Professional designations bring you closer to your ‘band of brothers’ and sisters. NAMB has created good programs to boost the cachet of their Certified Mortgage Consultant and Certified Residential Mortgage Specialist designations. There are several hundred CMC and CRMS designees; there need to be thousands. Several colleges and universities have introduced MBAs in real estate finance. Industry associations should work with institutions to make these programs as meaningful for their members as possible. While they’re at it, these organizations can lend instructional expertise and co-brand the program with the college in the process. This would certainly boost the prestige of the association, and by extension, its members.
• Run for office. It’s high time for more mortgage industry representation in government, both local and national. More senior executives in lending and brokering are already giving back by serving in national association offices. We have a lot of highly intelligent people in this industry, and it would be nice to have more intelligent people in government. Imagine, for example, if NHEMA’s Debbie Rosen, the MBA’s John Robbins, and NAMB’s Jim Nabors were representing us on Capitol Hill? The industry continues to suffer, especially at the state level, from legislation that seeks to protect consumers but ends up making life impossible for lending. Having more industry-experienced people in those state houses could help a lot—and boost the esprit of the industry in the process.
• Meet the minds. It’s a good idea for leaders of the major trade organizations to support each other’s gatherings. By making themselves available for roundtables at industry conventions, they would be making meaningful contact with all points of the process, from the point of sale to the point of investment. Imagine, for example, if Rosen, Robbins, and Nabors were available for panels together, talking about the salient issues affecting each of their associations’ members. Great for the associations, great for the listeners, great for the press, always looking for stories and quotes, and great for the business of mortgage origination, which would gain knowledge, prestige and esprit.
• Show the colors. The industry will never have a fellowship of the ring as powerful as that of the United States Naval Academy. But you can always wear the pin of your local and/or national organization. As the industry gains prestige the pin will grow in esteem for wearers and customers alike. Use the logos of your associations in your print and Internet advertising, for two reasons: it will raise the public’s awareness of the existence of the organizations and it will show that you care enough to meet the professional standards required to belong. Think of it as the Health Department’s “A” placard in the window of a restaurant. Many people don’t dine without the sign.
• Think locally, act globally. Build integrity in your own organization and you plant seeds that will grow beyond your sphere and into the industry as a whole. This is a slow but irrevocable process that the Mortgage Bankers Association has already experienced. Their CMB designation, for example, had little cachet 30 years ago, even though it was harder to obtain then. The group has considerable clout across the halls of congress and in the financial community. Members and associate members alike proudly display the MBA’s placard in offices, in exhibit booths and in their advertising for the simple reason that they represent professionalism.

The NAMB could have even more name/image recognition success for a simple reason—their members have more access to consumers by virtue of controlling the point of sale. As the association’s prestige increases, so does the esprit of its members.

And what, exactly, would the benefit be of increased esprit de corps for the business of mortgage origination? How about additional consumer confidence, less government persecution, decreased competition by virtue of obsoleting those who can’t deal with raising the bar for admission to the business, and increased market share. The other big gain would be increased respect among regulators and Wall Street, along with a place at the table when decisions are made that affect the business at street level—product design, as an example. It’s not a small thing.

By James Hennessy

Top producers share their best consumer-direct ideas.

While acknowledging the value of working with Realtors, builders, attorneys, and other strategic partners, many originators prefer to go direct to the consumer in search of new loans. This helps ensure that they aren’t overly dependent on outside sources; they eliminate the “middle man” in the referral process.

Most consumer-direct marketing strategies are the standards, albeit with the originator’s own variation. In addition to implementing marketing techniques learned from magazine articles and seminars, originators can also consider surveying past customers.

“See Originators First” Mindset
In recent years, the National Association of Realtors (NAR) has promoted its “see an agent first” concept–encouraging members to advise prospects to meet with a Realtor before an originator. Of course, this puts them in the enviable position of making referrals to the originator. However, an increasing number of originators make a point to emphasize that house hunters should get their financing in order before meeting with an agent. For example, Bill Haines, president of Rainer Pacific in Renton, Wash., strives to educate borrowers and agents as to the importance of meeting with an originator early in the process. “In our training of new real estate agents, we tell them that the first question they should ask their new customers is ‘Have you met with a lender for a pre-approval?’ In addition, most of the agents we work with say they won’t take someone in their car until they’ve been prequalified.”

Marc Brinitzer also stresses the importance of communicating the “see an originator first” message to prospects and others. “In our letters to customers and prospects and in telephone scripts we always advise that ‘If you know of someone (interested in home financing), have them give me a call first and then we can refer them to a good agent,'” said Brinitzer, a senior loan officer with Big Valley Mortgage, Roseville, Calif. “We want to be in control of the situation. We take every opportunity to tell prospects to call us first.”

Niches
Niche markets are a major part of many basic consumer-first campaigns. They enable originators to develop productive growth areas that aren’t dependant on agents or builders. One key is to find a niche that isn’t over marketed. Suzi Toadvine, an originator with National City Mortgage in LaPorte, Ind., has found ministers to be a receptive audience. “”I have received several referrals through various loans I have done for ministers,” she said. “They have passed the word through various states and referrals have arrived from all over. It was suggested that I write a letter and send it to several different databases that they are a part of. I did that and have received not only first mortgage loans but also sizeable commercial mortgages.”

Some originators develop niches with specific ethnic groups. For instance, Georgette Mooneyham established a bond with the local Jewish community. The originator/vice president with BancMortgage in Atlanta, Ga., arranged loans for a few rabbis who later suggested that others in their temples work with her as well. She also supported fundraising events and advertised in synagogue directories. Mooneyham receives 10 to 20 loans a year from Jewish borrowers. “It’s definitely been a good relationship,” she said.

Tyler Ford’s experience as a bicyclist helped him develop a valuable niche. He sponsors three cycling teams of approximately 200 riders who wear jerseys with his name and Web site and compete in various road races. “It’s a great moving billboard that covers the Tucson and surrounding areas, similar to the moving van we have (with company identification),” said Ford, a loan originator with Long Mortgage Company, Tucson, Ariz. They do about 30-40 loans a year as a result of this select niche. “We get many borrowers from within the cycling community, which continues to expand because of racing’s popularity.”

More: Other possible niches include athletes, entertainers, college professors, bankruptcies, FSBO sellers, coaches, mom and pop business owners, union members, and policemen.

Specific Origination Strategies
There are a wide variety of specific marketing techniques aimed at capturing the consumers’ attention. For example:

Brochures—Some LOs have developed their own brochure as a personal introduction to borrowers. Scott Shafman, an originator with Pinnacle Financial Services, St. Louis, Mo., has created a brochure for friends, referral sources, and others. On the cover is a picture of the Grand Canyon that says “Creating Your Own Destiny,” and the bottom reads, “Scott Shafman knows it doesn’t happen overnight.”

“The brochure tells my story and how the path I took led me to the career choice of becoming a mortgage consultant,” he said.

More: An electronic brochure to provide to consumers.

Postcards/Other Mailers— Newsletters, postcards, and other “snail” mail items need to be distinctive so they’ll be read. Brooks Grasso, mortgage director at The Columbia Bank, Baltimore, Md., typically distributes bimonthly mailings to a list of 2,000 apartment residents. One of the color postcards highlights a no-money down program of potential interest to renters and the other invites people to one of his regular seminars. Grasso cites two reasons for his consumer-direct mail success: a compelling message and consistency. “You have to get your point across quickly,” he stressed. “We’ll use ‘$500 down’ or ‘no money down’ as key phrases. This sparks their interest.” In addition, unlike some originators who will send an occasional card to apartment complexes, Grasso has been sending residents in his database two pieces a month for over a year. “They see my name a couple of times a month and eventually they’ll respond.”

Cindy and Jeff Worrell, originators with Orchard Mortgage, Raynham, Mass., also have a different slant for a popular mailer—the customer/prospect newsletter. It’s not the typical glossy paper and color photos version, but rather an easily produced, multi-page newsletter printed on colored paper stock and featuring a series of tips and loan product updates, homeowner resources, and general news, along with a listing of free reports. It has a friendly, family flavor that appeals to their ever-expanding base of past and future customers. “We continue sending and eventually they’ll become a customer,” she said.

More: Free reports, e-mail newsletters, cards for unusual holidays, calendars, and seed packets.

Community Web site–Brinitzer found a way to create a special visibility–a neighborhood Web site. Provided by a special service, it offers a forum that enables the originator and other hosts to focus on specific neighborhoods, by adding regular updates of special events, resident announcements, vacation photos, and more. He acquired a domain name that covers several adjoining neighbors. By placing own banner ads within the site, Brinitzer is increasing his recognition with current residents/customers as well as potential borrowers wanting to move into the area. Because it took more time to update the site than he expected, Brinitzer eventually plans to co-host the site with an agent. “It’s something of value for the neighbors/community and provides great visibility,” he noted.

More: An online virtual tour for of area homes for prospects.

Advertising—Some effective ads are found in small, underused publications, including church bulletins, PTA directories, and weekly newspapers. For example, Gina Jackson places a small ad in elementary school publications, including district phone directories and fundraising programs. “It’s a great way to get my name and picture in front of student’s parents, while also showing that I support the school,” said Jackson, senior vice president and originator with Cornerstone Mortgage, Dallas, Texas. “The school also sends regular e-mails to parents and allows businesses to place a banner ad in them.”

Jim Rademann, originator with R&R Mortgage in Orangeville, Calif., runs weekly ads in his community newspapers, which is more cost effective than placing them in major daily papers. “This ad is resume style and doesn’t focus on rates, but rather is aimed at showing our expertise.” He noted that ads highlight their services—how they can help borrowers with their services. “We try to distinguish ourselves as an expert.” Rademann added that unlike rate ads that are aimed at generating a more immediate response, his ads have a longer-term goal. “”We’re looking for longer term relationships, with business on a more consistent basis. Of course, you need to run this type of ad for several months before you can expect it to pay off.”

The radio talk show is sometimes a hybrid of the normal radio advertising. Some originators pay a fee to have their own call-in program, which often includes additional commercials. For example, Brinitzer has co-hosted such a local talk show with an agent. They answer real estate financing-related questions and this generates a lot of calls and produces direct leads and enhances his credibility. “Radio allows you to reach out to consumers with enhanced credibility,” he said. “They recognize you as an expert. If they call you then or later for advice, they tend to accept it. They’re not shopping. Radio programming has generated good business for me.”

More: Church bulletins, billboards, sandwich boards, hot air balloons, infomercial, and grocery store shopping carts.

Publicity—One of the most overlooked consumer strategies is publicity, in which LOs and their teams seek coverage in print and broadcast media. Robert Moulton has learned the value of publicity as a way to expand his visibility, through frequent appearances and other mentions on various business news programs. For example, he has served as a finance resource for CNN, CNBC, Bloomberg, Reuters, and other media outlets “I’m viewed as a credible source. They’ll ask about home sales trends, interest rates, and related areas. I’ll go out of my way to stay in touch with various media people, to see if I can help with a story they’re working on. I write a lot of mortgages in the financial services area and these customers watch the programs and read the publications, and I end up with more referrals.”

In addition, Veronica Phillips, American Home Mortgage, Tucson, Ariz. has contacted her local newspaper regarding developments that might be worthy of coverage. “This has resulted in us being featured in our local, most read newspaper a minimum of five times within a year,” she said. “This includes a feature of our president in the business section. We still get comments from that article. We have had other publications contact us to write articles.”

Certainly a key to success with publicity is making sure that prospects are aware of it. Steve Rockefeller, an originator with SunTrust Mortgage in Virginia Beach, Va., writes a column for the local real estate section of his Saturday newspaper. “I created a mail out card that includes a photo of the newspaper on the front, along with a copy of a recent article. I send this postcard to help establish a relationship with customers and clients. It’s immediate credibility.”

More: A series of news releases on your company’s personnel announcements, special events, and other developments.

Seminars— With so many seminars being offered, the challenge is to find a least one different aspect that will help generate interest. For Grasso, it’s the location of his monthly homebuyer seminar for first-timers, many of whom are apartment residents. He holds them at the Baltimore County Chamber of Commerce. “The meetings are in the board room, so that everybody sits around a conference table,” he said. “It’s more personal that way.” Grasso said that he averages two closed loans a month from the seminars, with another five people who indicate their interest for the future.

Jayne Bolton, Peoples Bank, Bridgeport, Conn., has developed a program workshop geared towards women. The Women Talking Homeownership: Single By Choice, Single by Change, theme focuses on key issues that women need to know. “I discuss financing options that may be attractive to single women,” said Bolton. While she includes an attorney, real estate company rep, and Home Depot rep in the program, Bolton is in control of the program. “The seminar is advertised with fliers distributed via our branch system and posted in businesses, along with newspaper ads and fliers within women’s organizations,” she added.

Distributing informational booklets and other value-add items can also enhance the success of seminars. John Paluck, branch manager at Allied Home Mortgage Capital, Rockville, Md., has distributed a DVD that covers first-time buying issues, along with a free report on “how to buy with no money down” to seminar attendees. The CD includes a sticker asking borrowers to return it for a $100 discount off closing costs to entice prospects to exchange and meet with him after the seminar. “I’ve had about 10 borrowers come in to apply as a result. I see this as another way to generate interest and convert prospects to customers.”

More: Seminars for military personnel, custom homebuilders, move-up and jumbo buyers, and ethnic audiences.

Events—Athletic and other events are an ideal opportunity to introduce yourself and ask for referrals. The Worrells have created a series of events that have appealed to past customers and new prospects alike. They have included Fall Fest, with pony rides and pumpkins; a ginger bread making demonstration; barbeques; and magician day. A key to success is that most of the events are family-oriented. “This helps ensure it is a fun event for everyone and helps create an even stronger relationship with the parents,” said Cindy Worrell.

Al Lucas, president of Allsales Mortgage Corporation in Tampa, Fla., has proven that sometimes the most effective events are those that don’t entail great preparation or cost. Two of his favorite venues: professional football games and cigar bars. “I’ve set up a tailgate at Tampa Bay Buccaneer games, sometimes when I don’t even have tickets,” he said. “I talk with everyone around me. I’ll tell them what I do and hand out my cards. This can be especially effective with out-of-town visitors, who may be looking for second homes. In addition, I’m a cigar smoker and have often visited cigar bars or tobacco stores. Even though most people don’t smoke, I’ve made hundreds of thousands of dollars by meeting people this way and telling them that I’m an originator. Both of these tactics are examples of cheap marketing that don’t cost anything.”

More: Chili cook-off, ice cream truck delivery to work place, holiday receptions, street fairs, and car wash.

Certainly there are many more consumer-direct marketing ideas that can help you generate visibility and new prospects, and not have to depend on a Realtor, builder, or other professional partners. Create a list of your own favorites, modify them enough to be distinct from other originators in your marketplace, and begin implementing them this year.

By David Robinson

Are training programs keeping up with the fast-paced mortgage industry?

Is your mortgage training an “after the fact” initiative or a proactive and ongoing process used to teach your organization’s visions, values, and strategies? Is it an emergency exercise summoned to address the problems of the moment (compliance and fraud), or is training used to placate your management team who feel they must have a training program to be competitive? Disney’s training of an 18-year old, would-be jungle boat driver far surpasses the training many mortgage companies provide their sales and operations teams, which begs the question: Has the role and prominence of training in the last 10 years equaled the tremendous evolution within the mortgage industry?

The following real life example provides an answer: During a recent mid-west annual conference a branch manager told me he had a loan originator who did not know what “CLTV” was. How does a loan officer succeed without knowing exactly how to calculate combined loan to value ratio? When the offending loan officer was queried, he replied that the “computer did it.” The following day, I asked originators about the upside potential and downside risk of an interest only ARM. One individual could tout all the sales advantages of the product and yet, had no concept whatsoever of the long-term implications to the borrower nor alternative products that may also address the borrower’s needs. Another loan officer knew all the ins and outs of tweaking the data in loans submitted for automated underwriting approval, but unfortunately did not understand the possible consequences of an audit. Both of these individuals present an operational and financial risk to their organizations. They also represent a training need.

Although the spectrum of available training is greater today, the days of “here’s the desk, here’s the phone, now go to work” still seem to exist. This article will examine the multiple sources of training available and how both managers/training directors and individual originators can best utilize each.

Trends
Available training has been significantly impacted by industry professional standards and licensing requirements. Certification requirements have also created a wide range of industry specific training. There are multiple sources of training for those willing to search. Web-based training through CampusMBA or NAMB are just two examples of a wide assortment of online and self-study programs. Regional, state and national conferences are great for educational opportunities. Seminars conducted by mortgage professionals such as Mortgage Originator’s “Superstars 2005 Tour” Series are additional opportunities for quality learning. Of course, there are also a number of individual professional trainers, many who have been successful loan originators.

National lenders such as Wells Fargo Home Mortgage have also recognized the value of training brokers with whom they work on a wholesale basis. One example is seen on NAMB’s Web site in Course Listing #0006 Reverse Mortgage (provided by Wells Fargo). “The rationale and value behind this effort is simple,” stated Jeffrey S. Taylor, vice president, Senior Products Group, Wells Fargo Home Mortgage. “Today’s loan officer must have a thorough knowledge of the programs and products they represent, this is especially true for reverse mortgages. We recognize the success of this program is dependent upon how well loan officers understand the nuances of a reverse mortgage. We have therefore made available to NAMB a course specifically designed to help loan officers recognize the ways in which a reverse mortgage could be another opportunity for additional business. We have sponsored and conducted this course for two years and it has proven to be effective.”

Quantification of training is always a critical issue, but bottom line results are difficult to refute. Today Wells Fargo Home Mortgage generates one of every three reverse mortgages written in America. These results document and support the value of training, specifically for those new to mortgage lending.

One of the industry’s more demanding concerns today is filling the holes of new hire needs. Individuals who have been salespeople in another industry are often not the “salespeople” they profess to be. Sales training involving automotive products or even basic retail floor sales for example, will include developing skills in detecting a valuable prospect from a weak lead that would cost time and money. Fair lending laws prohibit many techniques used in other industries to discourage, ignore or handle differently an unwanted prospect. It takes a lot of work to re-train someone who is not used to the concept of helping someone with complete mortgage information, equally and under all circumstances.

“This scenario is most dangerous when loan originators do not understand the specifics on what constitutes fraud and fair lending,” says Jan Wetzel, CEO, Wetzel Trott, a national quality control firm. “Originators very often feel that all liability rests on the borrower, not realizing they have perpetrated fraud by ‘making the paperwork easier’ for the borrower. Automation has built a generation that is a wiz at using the technology but have not worked for a supervised lender to understand how highly regulated origination is.” Wetzel continued, “The most critical training need in today’s market is not sales training, it is fair lending, fraud detection, and prevention.”

As a sales trainer for over 20 years, Wetzel’s perspective did not meet with my immediate support, until she mentioned the following: “I understand that without sales, none of us have a job, but some sales are not worth the price to be paid. Take the recent case where several lenders incurred losses, due to one loan officer, totaling over 20 million dollars in 30 days on seven homes with five mortgages on each property. Fill the fraud training hole and you can save your organization a lot of money.”

Identify Training Needs
To protect against some of the risks cited above, lenders will try various approaches that can range from a hiring revolving door to a full menu of training programs that cover every base, twice. The former is not a good business model and the latter is potential overkill. “The solutions depend upon on a few simple factors; are you trying to identify holes in a potential new hire, a candidate for a promotion, career planning, or is there a performance problem?” stated Alice Alvey, president of Mortgage U, Inc., a mortgage training and consulting firm. “To find a specific hole in a person’s mortgage knowledge before it becomes a problem in a file, lender’s should include both open and closed book testing. An open book test that can be retaken multiple times, allows the student to self-determine the areas of their responsibilities that need attention. The administrator of the test should expect the student to eventually attain a 100 percent score. Then, by following up with a closed book test that allows only one attempt on the same topic, the employer can identify what information has actually sunk in.” Alvey reminds us that before testing the lender must make sure equal employment opportunity requirements are followed.

According to Fortune magazine, the top 100 best places to work in America, averaged 40 hours of training per year for every employee last year. Although there isn’t a magic number of hours that guarantees all mortgage holes are filled, personal training plans for each employee will help insure effective and targeted education.

Basic Plan
A basic skills development plan provides education specific to the employee’s goals, strengths, and weakness. A customized education plan can be designed for each employee using the following elements as an outline:

• New employee orientation
• Selling skills
• Soft skills development
• Technical skills development
• Mentoring

When building an education plan, decisions should not be based solely on cost and convenience. The content, goals, and student’s learning style must be factored in as well. For example, selling skills training works best in a live environment in order to create the energy and motivation most people seek. If the topic requires frank discussions about subtle vs. overt discrimination, a classroom environment is only successful if students feel it’s a ‘safe environment’ in which to speak freely. You need a solid instructor to handle this topic and Web-based training just can’t reach the participant at the same level. On the other hand, many technical skills work great in a Web-based format such as FHA and VA loan programs. Alvey added, “Everyone grasps the information at different speeds and an Internet based class allows students to move forward when they are ready.”

Training Recommendations
Unfortunately, training today is too often perceived as a “have to” and not a “want to.” Branch managers are often less than enthusiastic to take their production team out of the field for any period of time, for fear of “lost production,” never mind the potential HUD fine. If you have lapsed in the training department, the following key steps will help you to get back on target:

1. Assign responsibility to an inside coordinator to identify the multiple resources available.
2. Develop a predetermined training regimen to be completed by all personnel within a specific time frame of hiring—exceptions not allowed.
3. Start an internal library. Industry publications abound—use them wisely. Grab a few file folders and allocate specific labels for each. As you see articles that fit the subject matter you have chosen, tear them out and insert into the correct folder. Soon you will have your own subject-specific, cost-effective library. Download the same and keep a file internally that all personnel may access online.
4. Pre-determine the percentages you will allocate to your various training resources, for example 30 percent in-house, 30 percent external seminars and courses, 30 percent web-based training, 10 percent bring in an outside professional mortgage trainer.
5. Identify the competencies required for each role within your organization and design a training plan most closely aligned with those competencies.
6. Re-evaluate your investment in skill development and make sure your training regimen specifically addresses those skills.
7. Complie a list of 52 different weekly topics that you can discuss for ten minutes during your weekly meetings. Sales meetings are an additional training opportunity, not simply a reporting exercise.
8. Regularly quantify all training attended. This is a step that is often totally missed. When you send a loan officer or processor to training, whether internal or external, you should always predetermine the areas of the course most beneficial and even more importantly, discuss the course with them upon conclusion. This is a manager’s responsibility. How will you know the training was successful if you do not discuss with the attendee what they learned?
9. Make your training fun. It does not have to be boring and dogmatic. It is actually possible to learn and have fun at the same time, even with the most mundane of topics.
10. Do not make the mistake of saying you are “too busy” to address your internal training needs—stated more succinctly, you have just chosen to make other things a higher priority.

There is no shortage of quality training opportunities. Exist is one thing. Identifying and maximizing is another. Make the commitment today to re-examine the manner in which your company is accepting the training responsibility. Doing so is well worth the effort.

By Bill Evans

Get out of a business slump by examining these six factors.

If you’ve been in the mortgage business for any length of time you’ve seen both peaks and valleys in your loan production. Those highs and lows can be caused by a number of things, including market conditions and new competitors. Sometimes business is good, and at other times we find ourselves in a “slump.” A slump is defined as a sudden drop-off in volume and a noticeable decrease in inbound loan activity. I’m meeting many loan originators now who tell me their business is off and they are in one of those slumps. What about you (or your sales team)? Are you in a slump? If so, it’s extremely important that you work yourself out of it right away. The longer you stay in a slump, the harder it is to climb out. Here are some things to think about:

Maybe it’s you. The first place to look for the reason you are in a slump is at that man or woman in the mirror. Sometimes we create our own slump. Your motivation and attitude determine your drive and enthusiasm for success. Maybe you’ve having trouble with things around the office or perhaps you just lost a major referral client or a big loan. You get depressed and down on yourself. Your grim outlook finds more reasons to worry. Since misery loves company, you seek out other originators who are also having a hard time right now. Their slump confirms your slump and it becomes a self-fulfilling prophecy: I believe I am in a slump…therefore I am.

If you’ve talked yourself into a slump recently, it’s time to talk yourself right back out. Our thoughts create our actions and in sales, our actions generate our results. It’s important that you begin a shift of mindset toward the positive as fast as you can. Talk it out with someone you trust. Take an inventory of what’s going well in your business and your life. Take a few days off and get away. Read an inspirational story or book. Listen to upbeat music. Most importantly, admit that your slump is your fault, and that you are not the victim of any influences other than yourself. Get your head back on track and your business will quickly follow.

Maybe it’s your clients. “There’s no activity right now,” one real estate agent tells you. “Nothing’s moving,” says another. Just because your real estate agents (or other referral partners) are slow, that doesn’t mean everyone is slow. A sample survey of two Realtors does not accurately represent the other 2,000 agents in your market, nor does it measure the total demand for housing and mortgages in your city. Be careful not to let inactive or low-producing real estate agents skew your outlook for business. While one Realtor’s activity may be off, another agent working 15 feet from her in the same office might be closing 10 transactions this month.

Good loan originators are diligent in tracking their sources of referrals and the number of leads from every referral client. If you find that you have aligned yourself with low volume real estate agents or referral partners that send you only a few leads every so often, change partners. Remember that their business creates your business. Remember also that their lack of business does the same to you. Re-direct your focus and start to approach the better quality agents—those who are advertising, showing buyers around town, and writing contracts. Even in market slumps, high volume real estate agents are still hustling and making sales while low volume agents drop to near nothing. Don’t let someone else’s slump create yours.

Maybe it’s your approach. Every originator has an approach. Some approach Realtors, and some builders. Some approach refinance opportunities, others debt consolidation loans, first-time buyers, or investment-property clients. While having a niche is good, so is a willingness to change that niche if it slows down or dries up. For example, if you have predominately been working the new home construction market with builders and the building in your community slows down because of over-saturation, you will quickly find yourself in a slump. You need to diversify your approach toward a new target or a new clientele.

It’s not that difficult to locate what’s hot in your market. A quick look around and asking a few people where they see the most activity will yield you some great and useful information. Brush up on some new products you can use to penetrate that hot market and get out there and start selling and marketing with a new and different approach. Selling the same thing the same way to the same people can get boring and put you in a mental slump. Try something new. Do something different.

Maybe it’s your sales and marketing activities. Many loan officers have spent the last two or three years in the office writing refinance loans. I recently spoke with one originator who told me he had been in the business for eight months writing nearly a million dollars a month and has seen only three purchase deals. Now his business is in a slump. The refis have dwindled away and he’s not making any money. He needs to ramp up his sales and marketing activities for purchase business or he is going to struggle, and he knows it.

Maybe that’s what’s causing your slump, too. Perhaps you need to look at just how much sales and marketing you are doing today and increase it as quickly as you can. Make sure prospecting activities like phone contacts, presentations, seminars, sales visits, advertising, and database marketing are a part of your daily disciplines. If you are going after purchase loan business, you’d better leave your chair and go get the business, because it’s not coming to find you. When you increase the amount of sales and marketing you are doing every day, you will increase the volume of calls and leads you get.

Maybe it’s your selling skills. Perhaps you are engaged in a number of sales and marketing activities, yet your ability to convert prospects to clients is poor. You visit busy real estate agents and have nice conversations, but come back with nothing. You advertise to make the phone ring with potential buyers, yet they never seem to call back or go with you. I have always believed that selling is a skill, and like any skill it has to be learned, practiced, and perfected.

There are a number of ways to improve your selling skills. There are great books, CDs, tapes, coaches, and wonderful seminars in the mortgage industry that can teach you how to sell better. You may be fortunate enough to work with a top-producing originator who will share valuable tips and suggestions for converting prospects to loans. Seek out these resources and don’t be bashful about asking for help. That’s what they are there for. Sell your way out of that slump!

Maybe it’s your market. There is always some mortgage loan activity going on in every market. However, some markets, are more active than others. With the same economy and interest rates, some markets report as many as 100 home sales a week at the same time other markets report only 10. Market demand drives any business. Let’s face it—you’re going to have much better luck selling umbrellas in Seattle than your competitors are in Phoenix. Not because you are a better salesman, but because you are in better market for umbrellas!

Are you in a good market for what you sell? Has your market matured? Has new construction slowed or stopped? Have major job layoffs in your city brought housing sales to a halt? Do seasonal slow-downs last months on end? It happens, and it could be the cause of your current slump.

It’s a big, bold step, but I have met a number of dedicated mortgage lending professionals who have uprooted their families and moved to a new city. Sold on the profession, it was their desire to find a strong market that can sustain a good living for someone in the home financing business. Perhaps it’s a last resort, but it’s worth thinking about. A positive attitude, good referral clients, the right approach, and effective marketing activities are all moot if you don’t work in a market with a lot of people buying and selling homes. That’s just the way it is.

Slumps happen. And just because you are in a slump right now doesn’t mean you are a failure as a loan officer. It just means you need to re-adjust your game plan to get back on track as quickly as you can. There’s plenty of business out there. Top loan originators I meet are producing as much as $3 million, $5 million, even $10 million a month. You could be too!

By Doug Smith

Your path to Superstar status will be easier if you follow these six steps.

First, let me warn you. This is not an article for the faint of heart. In the next few minutes, you aren’t going to read about how to survive this year or how to find a few more purchase loans from Realtors this month. This one is very different. This story is about reaching superstardom in the mortgage business. It is for $30 million to $60 million producers who are ready to take that giant leap into the record books. It’s for strong, seasoned home financing professionals who aspire to be counted in the top one percent of the loan originators in their market and even perhaps in the United States. So, if the idea of originating a minimum of two new mortgage loan applications every working day of every week for the rest of your career scares you, you might want to skip this one. However, if the prospect of achieving greatness isn’t intimidating, what I am about to share with you is going to excite you. Read on!

There are four classifications of loan originators in our business. First, we have our “Low Performers,” originators funding less than $10 million a year. These are either new originators just starting out and working their way up the ladder of success or they are veteran loan officers who generate only marginal business for themselves and their company. Look at it this way, if you fund $10 million a year with an average loan amount of $200,000 that’s 50 loans a year or about four loans a month. I would hardly call a salesperson who closes one sale a week a solid performer. Would you?

Next we have our “Producers,” those originators generating between $10 million and $30 million a year. They are consistent, steady, and dependable, and represent perhaps 70 percent of most sales forces. Producers make this business run.

Above Producers we have the “Stars.” To be a star in most companies and most markets, you need to be at a production level over $30 million. Most companies and branch managers want and need stars on board to set the pace for the rest of their sales team. These originators close on average between 12 and 25 loans every month. They enjoy receiving local recognition and company awards for their incredible achievements year after year.

At the top of the pyramid (and it is a pyramid by the way, the number of members gets smaller as you reach the top) are the “superstars.” By today’s standards, a loan originator needs to be closing in excess of $75 million a year to be considered a superstar. While many loan officers well surpass that mark, funding $100 million, $200 million, even $500 million a year (yes, these people really exist), I consider $75 million to be the rite of passage into the realms of superstardom. These top producers are icons playing at the top of their game; the Tiger Woods, Mia Hamms, and Shaquille O’ Neals of the mortgage business. They command our attention and respect because of what they have achieved. This club is reserved for only a few hundred in the entire country. It is the pinnacle of success in our industry.

So, are you ready for this level of success? Do you think you have what it takes? While so much goes into becoming a superstar in this business, I’d like to share my observations over the last twenty years of how most LOs got to be superstars.

1. To achieve Superstardom, you must get your “soul” into the business. Superstars play the game at a completely different level. They live, eat, and breathe the mortgage business. To them, this is not just a job; it’s not even an adventure. It is an absolute passion. This is what they will retire doing. Superstars are immersed in their business in every way. They read magazines on mortgage origination, they buy books, listen to CDs and tapes, attend seminars, hire personal coaches, and more. They get up every morning actually looking forward to going to work. To them, work is exciting, challenging, and an absolute blast. It’s one thing to be dedicated to a career and have your head in it. To be a superstar, you must grow beyond that. You must have your soul in it as well. Dedication is a start. “Devotion” is a whole different level.

2. You’d better have some skin in the game. I know a $100 million-a-year producer who spends over $50,000 a year in advertising alone. I know another superstar who spends $2,000 every summer on a client appreciation picnic complete with live entertainment. Some superstars with huge databases will spend as much as $3,000 to $5,000 a month in newsletters, postcards and various means of client contact. Why? Because superstars see this as “their” business and are willing to invest big bucks in their futures. I’m not talking about a few boxes of donuts or some color copies here; I’m talking about investing from 5 percent to 10 percent of your monthly income back into your business to fund a massive personal marketing budget. It’s no wonder you see these people’s names and faces on billboards, magazine ads, TV spots, grocery carts, and many other places.

To play in the big leagues, you have to play like a big leaguer. And that means being vested in your business and your success in every way. If you were closing $80 million a year, you’d be making a lot of money. You’d also be spending about $40,000 to $80,000 in personal marketing. Can you handle that?

3. You have to let go. As some point in their careers as superstars moved up from being a “Producer” to becoming a “Star” they learned that you can’t originate high volumes of business all by yourself. If you are thinking about getting to the level of a superstar, you’d better start letting go of things…now. What are you doing that you shouldn’t be doing? What could you pay someone else to do for you at a lower cost than what your valuable time is worth? Imagine originating $100 million in mortgages a year and still delivering packets around town, chasing down loan file conditions, mailing out postcards, providing loan status updates, and making copies. It can’t happen.

First, you’ll need to let others be responsible to do their jobs. Let processors process, underwriters underwrite, closers close, and let your manager run the operations. Your job is to originate new mortgages and keep your $100 million business moving along. Second, you’ll need to hire on a staff to support your tremendous volume of inquiries, applications, and sales activities. And when it comes to hiring an assistant, don’t think about what you are going to do with your first assistant, think about what you will do with your third! Many superstars have two, three, even five full-time assistants and personal loan processors working on their production exclusively. These aren’t just minimum wage secretaries or $2,000 a month employees. Some superstars pay their assistants as much as $50,000 to $100,000 a year. One top-producer I met recently paid his number one assistant $175,000 last year. Is that something you are willing to do?

4. You need to be better than 99 percent of everyone else. Think about that. To be in the top one percent of your profession, you must out-perform, out-produce, and out-sell the other 99 percent of your peers and competitors. To accomplish that feat, you’ll need to be smarter, faster, and better than them in every way. Are you prepared to invest $3,000 or more a year in a personal coach? Are you ready to drop $1,500 to attend a mortgage Superstar sales seminar? Can you find the time to read books, listen to tapes and CDs, and hop on a plane (at your expense) to visit other superstars around the country to learn how they run their businesses? You’d better be.

That’s what superstars in this business do. They have the best technology, the best training, the best ideas, and the cutting-edge knowledge that keeps them ahead of the pack year after year. They are product experts, they are real estate savvy, and they are students of the sales profession. As a matter of fact, at a recent seminar I spoke at, one Superstar in the audience just spent $10,000 to hire a consultant to construct a new Web site for his business. Why? Because to stay the top producer in his market, his Web site has to look better and be more effective than 99 percent of everyone else in his market.

5. You need a mortgage lending “machine.” Superstars pretty much run their loans through the same process as everyone else. The difference is they run it faster, smoother, and with more consistency. Every step is well defined. Every move is calculated. Every loan moves along within a set procedure. Think about this: If you originated $90 million a year at an average loan amount of $200,000 that’s 450 transactions or 37 loans a month, every month. The only way that kind of volume is going to get done in an accurate and timely way is with an iron-clad system. If the 10 to 12 loans you now originate each month are impeding business and causing problems, what would happen if that number was tripled? Chances are, your current system couldn’t handle production at that level. If that’s the case, to become a Superstar, you’ll need a new system!

Superstars will tell you that the key to a smooth running application to closing machine is consistency—it’s no secret that being inconsistent is the downfall of many loan originators and it could be what is holding you back from that next level. Exceptions should be extremely rare, not the norm on every file. If superstardom is in your future, start rebuilding your loan approval system from the bottom up…today!

6. You have to start thinking huge. Don’t look at what is possible in your future, look at what you might consider to be impossible. Five assistants? A $40,000 a year marketing budget? Producing 600 loans a year? What may seem impossible to some is being achieved by others. To grow big you must start thinking bigger that you have ever thought before. Don’t set your goals and standards on what others around you are doing. Most likely, those other originators around you are not Superstars. They are nice people and they may be your friends, but they are probably low performers and producers. Keep from using their results as a measuring stick. Instead, seek out one or several superstars in your company or across the country and use their success as your measuring stick. If the top producer in your office is now funding $30 million a year, it’s easy to use his or her results as the ceiling for your own goals. Don’t! Set that mark as your first step to achieving superstardom and then move beyond that. Big thinking leads to big moves, big goals, and big results.

If you are serious about achieving superstardom at some point in your mortgage lending career, it will happen with a plan and with a relentless devotion to achieving that plan. The road to superstardom has been laid out for you by others who have reached that level of greatness. Seek out these incredible men and women of our industry. Ask a lot of questions. Find out how they think. Feed off of their energy for success. Before long, they will inspire you to join their elite group. To reach the top one percent of any profession is an amazing accomplishment. Here’s hoping you have the genuine desire to take that journey and the motivation to get there as soon as you can.

SuperStardom Review

As you assess your current or future prospects for reaching the SuperStar category, you might review the following strategies. The more of these guidelines you answer in the affirmative, the closer you are to excelling as a top producer. Add your own yardstick measurements to this list and grade yourself on an ongoing basis.

• Have a formal, written business plan (with annual production goals), and a long-term perspective about the business. Make the appropriate adjustments throughout the year.
• Know the daily/weekly actions necessary to reach key financial objectives. · Have contingency plans ready for when business slows.
• Rely more on purchase business than refis.
• Work for a company that has an excellent reputation, align yourself with top professionals.
• Stay abreast of industry trends by reading books, listening to tapes, and attending industry conferences and seminars.
• Be current with essential tech tools, such as laptop origination, AU, and database management.
• Seek out a mentor or coach to help reach the next level.
• Have an assistant or plans to get one.
• Provide special incentives to my support team to ensure their ongoing commitment.
• Try new and innovative marketing ideas.
• Spend at least 50 percent of my time every week talking with customers and prospects.
• Develop niche markets to expand your marketing reach.
• Evaluate my competitor’s marketing efforts to gain and implement new ideas.
• Maintain a database of form letters for typical customer contact occasions and stay in touch with past customers.
• Approach new markets and new business sources every year.
• Have a strong work ethic and a highly developed multi-tasking ability.
• Have a passion for the business; with a desire to win and a drive to excel.
• Invest in your own marketing efforts; don’t wait for the company to do this.
• Have an entrepreneurial attitude; I consider this to be my own business.
• Have a formal plan for asking for referrals at several different stages.
• Create a memorable/positive impression with first-time customers so that they will be enthusiastic about referring you to others.
• Initiate brainstorming sessions with originators at seminars and other opportunities.
• Create an informal/formal mastermind group.
• Have the necessary patience, knowing that SuperStardom won’t be achieved overnight.

Seven successful originators discuss their strategies for maintaining a purchase-based business.

What should originators do to make the transition from a refinance to a purchase market?

Jim Bane, Branch Manager, WR Starkey Mortgage, Ft. Worth, Texas
Be visible. Loan officers have probably just been sitting in their offices for the past six to eight months waiting for the phone to ring. Now the phone is not ringing off the hook. You need to be out in front of Realtors/builders weekly. Set up appointments with top Realtors and builders you are targeting, and take them to lunch. Have new Realtors and builders meet your support staff. This is important so that they feel they know your team, and you can avoid you making all the phone calls back to them on your own. I am constantly trying to add new Realtors and builders. I am meeting with non-profit organizations and corporate accounts. I am trying to reach consumers before they even get to Realtors and builders. You need to have a business plan that is realistic and stick to it, and you should monitor it monthly to see how you are doing.

Kim Nelson, Vice President, Sun America Mortgage, Atlanta, Ga.
The best advice I can give a loan officer is to never forget the Realtor! Refinancing has never been my primary focus. In 2002-2003 refinancing represented less than 20 percent of my total volume. Throughout every refinance boom you should maintain your Realtor contacts and add new ones. Purchase business should be your “bread and butter.”
I would recommend to a loan originator making the transition to choose 15 Realtors to call on for a 30-day period. At the end of the 30-day period, delete the five Realtors that you do not connect with, and only focus on the 10 you do connect with. Your marketing strategies might include meeting them for lunch, dinner, or happy hour. Offer to make 100 percent interest only financing fliers to help them move their listings. (No money down and low monthly payments!) Go to your purchase closings to both meet Realtors and add new contacts!
Another recommendation might be to mail all past refinance clients a “thank you for the business” letter and ask for a referral of a friend who might be looking to purchase a home and need a mortgage.

Shawn Portmann, Loan Officer, CitiBank Mortgage, Puyallup, Wash.
To any good lender the refinance business should have just been an extension of their purchase business. Refinances should have come from past clients and Realtors. Ninety percent of my refinances were past clients, therefore, in a business plan it is also the same, and this is future business for my Realtors. I referred out over 200 listings this year back to the original Realtor who referred me business in the first place. So, the refinancing craze was the best advertising I could have for my business. Now as we go into winter and a purchase phase, I have not only kept them happy, but also increased their dollar volume and my own.

Rodney Anderson, Division Vice President/Branch Manger, CTX Mortgage Company, Plano, Texas
It is key that during a purchase market loan officers truly understand who controls the transactions. In the past, Realtors controlled the buyer and referred them to the lender of their choice. Over the past several years with the changes in technology, there has been a shift in power. Consumers have access to a vast network of information and are continually subjected to various marketing materials for financing options.
I think it is important for loan officers to do a great job for people, whether it is a purchase or refinance transaction. Just remember, customers that refinance also buy homes down the road. Creating a database of all of the past customer’s refinance purchases is your annuity for the future.

Julie Teitel, Vice President, IPI Skyscraper Mortgage, New York, N.Y.
As we shift into a purchase business, I think that you need to focus on being great at what you do. You need to shine on any deal you have, you need to show all parties involved –real estate brokers, attorneys, and customers –that you are smart, resourceful, and diligent; you return phone calls; and make every one’s job on the deal easier because you are involved. When you can prove that to current clients, they automatically want to refer you on further purchase deals. This market will push the better mortgage originators and start to get rid of the not so good originators.

Janelle Carver, Vice President, Cornerstone Mortgage Company, College Station, Texas
I have been in the mortgage industry since 1983 and have seen numerous refinance booms throughout the last 20 years. In the past I have seen Realtors, builders and referrals from previous customers get pushed aside when a refi craze takes off. The reason behind this (from what I understand) is that the refis are “easy money” for a loan officer without having to deal with a little competition, which is typical on most purchases. I personally don’t understand this reasoning because nothing can last forever and I feel that you must utilize all of your leads sources each and every day, regardless of where the largest demand on that particular day, month, or year may be. Being consistent and diversified with your business plan will enable you to withstand a downturn in any one part of the industry. During 2003 my monthly transactions have been well over 50 percent purchases, and it is usually closer to 70 percent. With the demand being so high for refinances, I couldn’t do all of the refinances at the same time as purchases (and keep my team’s sanity) without making adjustments in my strategies.

Chris Washburn, Senior Loan Officer, FNMC, a division of National City Mortgage, Greenbelt, Md.
In the market that has consumed us the last several years, you couldn’t make a move without finding a willing, ready, and able buyer to purchase, or more likely refinance. Entering a purchase market you have to go out and prospect for referrals. To succeed your referral source must like you and trust you. They have to trust that you will call them right back. Trust that you will deliver on what you promise. Trust that their client will have a smooth and pain-free transaction. If they don’t like you, you’ll never get a chance to demonstrate your trustworthiness. Make them like you and then you must deliver on what you promise.

What is your most effective purchase marketing strategy?

Jim Bane
We send out weekly campaigns to our pre-quals that talk about the loan process, appraisals, insurance, and other topics. Realtors and builders get a fax and a follow-up phone call when an appraisal is ordered, and they receive the same on title work, and also when a loan is approved and docs are sent to title company. Loan officers need to be getting referrals from title companies on for sale by owners –ask title companies to tell you who is doing business with them and ask if they can help you get an appointment with that agent. Also, have your title companies be “tattle tales,” when a closing goes bad, have them call and see if you can fix the loan and close it quick. Even if the other lender closes it but things did not go well, have the title company tell you the agent’s name and phone number, and then you can appear at their office the next day, or make a call to them. You do not tell the agent that the title company told you the closing went bad. Eight out of 10 times the agent will bring it up and at least visit with you or give you her next deal. It’s all about timing and if you are the first person they see after the lender they have been using dropped the ball, you might have a better chance in getting that agent to start using you.

Kim Nelson
My most effective purchase-based marketing tool would be full-color financing fliers that demonstrate how one can buy a particular home at a specific sales price with zero to 20 percent down. I use Excel spreadsheets to show a total monthly payment and total cash needed at closing. A buyer will pick up the flier, like it and then call you for more details! My Realtors/builders e-mail me their FMLS listings with all of the data needed to create a full-color flier with a digital photo of the house. I then prepare the Excel spreadsheet and e-mail it to our marketing person to create the artwork and insert the spreadsheet. We print and deliver them to the Realtor/builder, who then places the fliers in the home so that we can market direct to the consumer.

Shawn Portmann
Hopefully, the originator has kept their purchase business up through the refi boom. It is essential to maintain builder, Realtor, and customer relations during the refinance boom. Purchases should always come first. I give good Christmas presents and have Thanksgiving turkey give-aways. I just bought passport cards as gifts for all my Realtors, which are two-for-one dinners at 500 restaurants in our area. These help to get the job done. As things slow down, the importance of deals goes up. Never forget that they are handing you a paycheck. Give it back and as soon as possible.

Rodney Anderson
I have taken my business to another level through direct response advertising. Our primary media is the radio. We refer to this as the “radio ministry.” The radio has allowed us to take our business from closing $100-125 million to over $280 million, and from 800 units to over 1,800 units per year. We are currently on seven different local radio stations and have a weekly radio talk show. The radio had been a powerhouse for us. The leads we receive on the radio are referred out to local Realtors, and have in turn increased our realtor transactions tenfold. Local builders share in the pie also. We allow them to participate on our radio show and refer pre-approved borrowers. Direct advertising has opened the doors for us in ways we would have never imagined.

Julie Teitel
My most effective marketing strategy is word-of-mouth and reputation. You are only as good as your last deal. Furthermore, I would say to contact all people on prior transactions for the past year and ask them if they were pleased with the service you provided and kind of put the thought in their head that you could help them on future deals. Make a niche for yourself, something that separates you from everyone else (example: co-op expert, pick one building to market, go after your hobby. By that I mean if you like to horseback ride, advertise in riding magazines, or at competitions.) Mailers always will drum-up some business, but you can tailor to a specific building or to a hobby.

Janelle Carver
With my team’s motto “building clients for life” we have created a strong referral base from previous customers and repeat customers when they are moving or ready to refinance. Based on our lifetime commitment I advise my previous customers that are wanting to refinance that we will be more than happy to assist them with refinancing their home, however, I also have to ensure that the purchases currently in process get closed on or before the date in their contract. I request that they allow us a 60-70 lock-in period, which gives us ample time to spread the refinances throughout the purchases without hurting anyone. I know that they appreciated us making sure they weren’t homeless and that they would want us to do the same now for someone else. I did not have one refinance customer walk out because of the extended lock in period, and of course exceptions were made on a case-by-case basis, if necessary. By allowing more time to get the refinances closed I was able to take care of my agents, builders, and previous customers and build new “clients for life” by getting them closed within the parameters needed for their family. I can also say that I have never lost one of my agents or builders during a refinance period because they felt like they were being neglected, and just as we have seen during the last few months, refinances will not last forever, so adjust your priorities and strategies to take care of everyone just as you would expect to be taken care of yourself.

Chris Washburn
My Realtor marketing strategy is a program that constantly strives to get me in front of an identified client (Realtor or builder). I believe that I can help them grow and succeed if they use me. The struggle is to get them to notice me and, if successful, convince them that I’m the one. Each Realtor/builder has their own type of “wall” that you have to overcome, but once conquered, you either have what it takes or you don’t. I have several strategies, but the primary method is the old-fashioned one, calling on Realtors. I try to see each office three times a week, and I always ask for business.
Once I have a good relationship with a Realtor and we have done several transactions together, I ask them to tell their colleagues about me. At first, this was uncomfortable but after doing it for the past 10 years or so, it’s gotten a lot easier. I tell them that I need to continue to grow my business and the best way is to have them refer my name to any colleagues who they think would be a good fit for me. I ask if they know someone now who I should contact. I take that name and immediately try to set up an appointment to show them how I can complement their business. This approach has helped my market share in each real estate account grow, especially over the last several years when it seemed Realtors had not been getting the best service for their clients.

Roundtable Participants:
Jim Bane, Branch Manager, WR Starkey Mortgage, Ft. Worth, Texas; Kim Nelson, Vice President, Sun America Mortgage, Atlanta, Ga.; Shawn Portmann, Loan Officer, CitiBank Mortgage, Puyallup, Wash.; Rodney Anderson, Division Vice President/Branch Manger, CTX Mortgage Company, Plano, Texas; Julie Teitel, Vice President, IPI Skyscraper Mortgage, New York, N.Y.; Janelle Carver, Vice President, Cornerstone Mortgage Company, College Station, Texas; Chris Washburn, Senior Loan Officer, FNMC, a division of National City Mortgage, Greenbelt, Md.

It’s possible to work hard, close hundreds of loans, and have a balanced life.

Are you one of those people who have been so busy you’ve not had time to enjoy life? The warp speed growth of the mortgage industry and related services within the last 24 to 30 months has created the greatest disillusionment, frustration, and employee burnout I have seen in 23 years of mortgage consulting. The tentacles of “production at any and all cost” are powerful and the fear factor of low production is exceptionally taxing. The disconnect between production-driven cultures and “lip service” concern for quality of life is not a new phenomenon. However, the frequency with which employees must make personal choices that are often diametrically opposed to their corporate culture has changed. This article will examine the costs of “forgetting to make a life” and what steps loan originators can take to bridge the gap of professional and personal balance.

The costs of losing perspective and valuing work over everything else can lead to increased stress, frustration, high blood pressure, ill health and eventual burnout. Are you really more productive if you don’t take vacations? Are you really more productive if you continue to make some of the same mistakes on the phone you have made for years? Medical science has proven there is value, both physical and mental, for maintaining a balance of core values in your life. Unfortunately, this is a difficult sell for thousands of originators and wholesale account executives. However, there are exceptions.

For example, Ashley Valentini, Synovus Mortgage, Columbus, Ga. recently said, “About four years ago I realized that a key core value for me was my family, so I do not work weekends. I do not come in on the weekend, to get caught up or take additional applications. Weekends are the only time I have with my family and friends. I realized that to reach my core value goal I had to become more organized and work smarter. Therefore, I try hard to get all the information up-front. This enables me to get the loans processed with less hassle because I am not always scrambling for additional information. My core value goal actually drove the change in my behavior.”

The Workaholic
Valentini runs her business. Do you run your business, or does your business run you?  Are you a workaholic? “Workaholism” is defined as having an addiction to work. This does not necessarily imply success at work. In fact, the workaholic is likely to be an under achiever because of his/her obsessive tendencies. The workaholic is compulsive about work. Generating loans is more powerful than anything else. The workaholic wastes time and energy on insignificant actions. Often a victim of the “only I can do it syndrome” in their drive for efficiency and getting a lot done, the workaholic neglects to ask whether he/she is being effective getting the right things done. Workaholics lack specific goals. This person puts off self-improvement because he/she is “too busy” with current undirected activity. The workaholic undervalues his personal life. They cancel out on social occasions and disappoint their children and spouse. They make work the “religion” of their life and consider it important above all else. If you recognize yourself in the above description, it is time to take stock.

Get a Life
Following are some key steps you can take to help avoid mortgage originator burnout.

Draft your “team.” You are not generating mortgage loans all by yourself. You must add onto your internal and external teams the people who can best help you reach your goals. If you are assuming that you are the only one involved in the process, you are working too hard and generating a minimal return.

Cut your losses quickly and move on. Production time is wasted when you continue to make sales calls on unproductive sources.
Build, maintain, and regularly mine your database. You are your own business. You are your own profit and loss statement. It is imperative that you maximize the investment you have made in past borrowers to generate ongoing referral business. Note: A typical business spends six times more to attract new customers than it does to keep old ones.

Maximize each call you make. If you are going to make the time to enter an office, why limit your call to seeing the one or two people who may be your buddies when there are over 20 others there? You should also have a specific call objective. What do you hope to get out of the call?

Establish a system of priorities. Make sure your priorities are in line with what you have determined to be your key core values. Review and revise at least monthly and hold yourself accountable to those priorities in allocating your time and energy.

Formulate a weekly written plan and break it down to a daily plan. Within that plan, analyze the total hours you are working and the changes you would have to make to increase your volume while decreasing your total time commitment.

Share expectations with your customer base. Do a better job up-front of sharing expectations. Explain that, “Here is what you can expect from me and here is what I expect in working with you.” Becoming more committed to this action step will save you countless headaches over a year’s period of time.

Be more proactive. Most loan officers are reactive. This approach limits their performance and success. What five things are you doing today to increase your volume 8 to 18 months down the road? Most loan officers reply “Just leave me alone, I am just trying to make it through this month.” Long-term goals will help you identify the actions you must take today for a successful tomorrow.

Eliminate “fire-aim-ready” approaches to your job. Many loan originators are so driven that action, in and of itself, is a measurement of success. Every move an originator makes should be designed to fit within a personal business plan with both short-term and long-term goals. “Fire-aim-ready” is not an effective long- term approach to success.

Make time for yourself . This business takes a lot out of you. Expectations of what you can deliver are high. In addition, absolutely everything within a mortgage loan is date driven and urgent. It is therefore easy to fall into the rut of always serving others at the expense of making time for yourself.

Look at it this way. Imagine life as a game in which you are juggling five balls in the air. Brian G. Dyson, CEO of Coca-Cola states: “You name them work, family, health, friends, spirit, and you are keeping these all in the air. You will soon understand that work is a rubber ball. If you drop it, it will bounce back. But the four other balls: family, health, friends, and spirit are made of glass. If you drop one of these, they will be irrevocably scuffed, marked, nicked, damaged, or even shattered. They will never be the same. You must understand that and strive for balance in your life.”

Making time for yourself or your family does not mean that you are not a team player. Maintaining balance, both in your personal and professional life, does not mean you are not a committed member of your team or company. Quite the contrary. People who feel good about themselves are usually more fun to be around, (and more productive) than those who are so driven they drive you nuts just by being in their presence.

The real fun in life is continually bridging the gap between where you are and where you want to be and from who you are to what you want to become. Only you control this journey. When you get so busy making a living that you miss life, it may be time for a reality check. Start yours today.

Six steps for stronger customer relationships.

Most loan officers are trained to sell mortgages by quoting loan programs, rates, and fees rather than using consultative sales process. The difference between the two is more than semantics. It can mean the difference between having a short-term relationship with a customer and a long-term relationship valued at thousands of extra dollars of income to you. It can also be the difference between losing business because you look like most other loan officers and winning more business because of effectively setting yourself apart from your competition.

Have you heard of the phrase, “You’re only as good as your last loan?” This is actually a true statement for most loan originators. You are only as good as your last loan if you’re merely quoting rates and fees, working the loan until closing, then moving to the next loan. In this case, your business will live and die by what interest rates do. But it doesn’t have to be that way. You can do something that causes the above phrase to be false.

If you are serious about your mortgage business, it’s critical to become a trusted advisor or mortgage planner. Instead of just quoting rates and fees, quote total cost. Show your prospects and borrowers the long term impact of one loan vs. another. Show them what happens if they have a mortgage pre-payment plan, paying additional principle payments each month. Show them the tax benefits of each mortgage loan presented to them. Show them all of these numbers in writing by giving them a detailed loan analysis or presentation. If you do this, the phrase that will be true for you would be something like, “You’re only as good as the relationship you can build with your client.” Or, “You’re only as good as the additional services you provide above and beyond the average loan officer.” Or, “You’re only as good as the education, information, and value you add to your clients.”

Research has clearly shown that those loan officers who were consultative in their practices had significantly higher incomes than those who were product-oriented. We found that approximately 82 percent of independent mortgage loan originators earning net incomes greater than $150,000 used a consultative delivery system. Not a single advisor earning less than $75,000 used a consultative approach—100 percent of these advisors were transaction-based.

Consultative Selling Creates a Competitive Advantage
This chart shows us that out of 250,000 loan officers nationwide, only 36,470 of them have a consultative approach to their business. This is only 14.59 percent of the loan officers in the United States. You’ve probably heard that the top 20 percent of the loan officers are doing 80 percent of the business. This study proves this to be pretty accurate. It also shows that you better find a way to elevate yourself to becoming a trusted advisor to survive and thrive in the competitive mortgage origination game.

Fortunately, there is a proven process that will place all the work you do with your clients within a consultative framework. The mortgage consulting process enables you to consistently deliver a high-quality client experience that will clearly differentiate your practice from the competition.
This process is based on a series of meetings and customer touch-points:

1. The Point of Sale – You need to establish rapport, ask great questions, and listen carefully.
First impressions are critical to establishing yourself at a higher level. Beyond the obvious of having a professional image as far as dress, body language, eye contact, and being articulate, the most important factors are your knowledge, your credibility, and your caring. It’s like the old saying, “They don’t care what you know until they know you care.” So, during the first meeting or phone call you must establish trust so the prospect will want to proceed to the next step with you. You must determine the priorities and concerns of the prospect, so that you can present a mortgage plan that not only meets their needs, but provides them with strategies that create life changing impact. A trusted advisor loan originator must go beyond quoting rates and fees by showing the power of prepaying a mortgage and/or investing the savings. The most immediate strategy to differentiate you during the first meeting is to ask a few questions that demonstrate a trusted advisor approach. We recommend that you start your questioning process with: 1] Ideally, how old do you want to be when you home is paid off? 2] Based on your current situation, how old are you going to be? Not only do these questions position you as a trusted advisor, but they also create a problem for you to solve, given that most people want to have their home paid off sooner than their current situation. Now, you have created a customer experience in which you are different that other loan officers and you are sharing solutions to problems your clients didn’t even know they had. Other trusted advisor questions are: How long do you plan on living in the property? When do you plan to retire? What is the approximate value of your investment assets? These are the types of questions that show your clients that you are interested in getting them the best mortgage(s) and helps them see the big picture. This causes them to view you at a higher professional level.

2. The Presentation—make an impact by sharing life changing insights and advice.
If you have conducted a strategic first meeting or phone call, the presentation will be straightforward and well received. There are two key elements to a trusted advisors presentation. First, you must present solutions above and beyond quoting interest rate. You will cover the interest rate options, but more importantly you present life changing strategies, explain the power of prepaying a mortgage and the leverage of investing the savings of one program vs. another into an asset accumulation account. Second, you must provide your client with visual presentation of your recommendations via phone, e-mail, fax, or in person. Again, if you want guaranteed trusted advisor impact, you must present a visual presentation that clearly explains all the options and recommendations in a comprehensive format. This means giving them something more than just numbers on a legal pad. You must create professional reports that clearly spell out the impact of their mortgage decisions.

3. Your Follow Through—be proactive and reactive.
This is critical to showing that you’re on top of things and that you care about the client. Be proactive by e-mailing, faxing, or calling your borrowers and referral sources on a regular basis to keep them informed of the loan process. If you don’t personally call, have someone call on your behalf. I work with many of the most successful loan originators in the nation and their responsiveness is incredible. As busy as they are, they return phone calls because they know that’s what got them to where they are. It’s unacceptable to not return phone calls, period. It’s also required if you’re going to be viewed as a trusted advisor.

4. The Post Closing
The focus of this meeting is to make sure that all of your clients needs have been met, or
better yet exceeded. By going the extra mile after the loan has closed, you have demonstrated that you are more than just a loan officer…you are a trusted advisor.

5. Monthly Market Reports
Now it’s time to start building a long-term relationship. Doing a great job of closing the loan is just the beginning if you are a trusted advisor. We recommend sending a monthly newsletter and a proactive statement that keeps your client up-to-date on interest rates. It is important that your clients always have a detailed understanding of how their current loan compares to the marketplace. Again, a trusted advisor goes beyond closing a loan; he or she provides ongoing value over time. You can create a huge service benefit by monitoring and tracking your borrower’s mortgage loan for them. Because very few loan officers do this, you gain the upper hand and the competitive advantage.

6. Annual Reviews
At these meetings you will ask about changes to the client’s personal or financial situation. You will want to review and explain current options, and answer any questions your client may have. Many advisors are hesitant to schedule regular meetings with their clients. Not only do they miss the opportunity to assist their clients in keeping their plans on track, but they also lose the chance to expand their business through referrals.

If you consistently execute these six recommended steps you can be assured of a constant steady stream of referrals from past clients and other referral sources. Not only that, you’ll put yourself in the top 14.59 percent of loan originators in the nation and make a lot more money as well. Also, consider the alternative. If you don’t elevate yourself into becoming a trusted advisor loan officer, will you be able to compete with those who do?