Satisfied Customers Are Not Enough

Follow these steps and you will surpass your borrowers’ expectations.

As a consumer, you are a customer. In the course of a normal week you might buy gas, shop for groceries, sign up for a new cellular phone service, or purchase a sandwich at a deli. At each buying event, you become one of three types of customers: dissatisfied, satisfied, or extremely satisfied. The experience you have determines whether you will return again and/or recommend that company to others.

As a mortgage originator, you have customers. In the course of a normal week you might deal with a rate shopper, pre-qualify a prospect, take a loan application, make a sales call, or attend a closing. At each encounter, you create customers who are either dissatisfied with you, satisfied with you, or extremely satisfied with you. Your entire business and livelihood depends on what type of customers you create.

It is obvious that none of us want dissatisfied customers. We know that dissatisfied customers either don’t buy from us, or if they do, don’t come back. We also know that dissatisfied customers talk, and if they have a negative experience with us or with our company, what they say can damage both our reputation and our business. A recent consumer research study showed that 92 percent of customers who say they were dissatisfied with a company or buying experience will never be heard from again.

Most companies, and for that matter most mortgage loan originators, shoot for “satisfied” customers. They feel that if they can get a borrower from application through closing with a minimum amount of problems, life is good. If the post-closing customer survey is returned with the word “satisfied” circled, they feel they have done their job. The fact is they have failed. Statistics say that two out of every three consumers who say they were just “satisfied” with a company will never return. In the customer’s mind, they expected to be satisfied. You have done nothing special or memorable. All you have done is met their expectations, and you’ll never see two out of three of these borrowers again.

So what does it take to get a customer back for their next refinance or purchase loan? What is required to secure an endorsement to their family or friends? Nothing less than extremely satisfied customers. The vast majority of people will not return or refer companies where they did not experience an extremely satisfied buying event. Research shows that of consumers who rate their reaction to a company as “extremely satisfied” 85 percent will return again or recommend at least one other person who will buy from you. Think about yourself as a customer. What restaurants do you recommend to a friend? One that you feel okay about or one where you had a great dining experience and know they will too? Do you return to hotels or vacation resorts where you would say you had a “good” experience or a “great” experience? We are all customers in one way or another, and we frequent and recommend services and companies where we are more than satisfied with what we get.

Many years ago I remember working with a sizable group of young loan originator recruits at an office of a large mortgage company. I told them that their mission was to get to the point in their careers where they would never have to prospect for business again. The four step plan was to:

  1. Build a strong base of great referral clients (Realtors, builders, and others.)
  2. Provide an incredibly positive experience with every borrower.
  3. Ask every borrower for referrals.
  4. Keep in touch with borrowers down the road so they would remember them, come back, and refer their friends.

Correctly followed, this plan would ensure that in three to five years, these originators would have built such a loyal following of customers that they would be done prospecting for life. No more sales calls, no more donut deliveries to real estate offices. In five years, they would have an army of extremely satisfied customers that sold for them. Like a pyramid scheme, this base of customers would potentially double every year. Unfortunately, most of these loan officers didn’t follow the plan. They chased down deals, got them processed and closed, refrained from doing anything special, and created “satisfied” customers. Most of them are long gone by now. Those still in business today most likely continue to beat the street every day looking for their next deal.

One originator took the plan to heart. He bought into the “wow factor” of customer service. He tried to make each borrower experience special. He made personal follow-up phone calls. He sent out handwritten thank-you cards. He showed up at closings with gift baskets. He so impressed every borrower that within just a few years he had hundreds of people out selling for him. The last time I saw him, about three years ago, he was still in the business, as one of his company’s top producers, and making a fortune. He told me he doesn’t prospect much anymore. He doesn’t have to.

So if we know that 85 percent of extremely satisfied customers will be a continual stream of referrals, loans and income, why doesn’t every originator try to create them? The answer may be one or more of the following:

  1. I don’t have time.
  2. I think it’s unnecessary.
  3. I don’t know how.

Let’s tackle these one at a time.
I don’t have time. The fact is you do have the time. As Steven Covey, author of “The 7 Habits of Highly Effective People” states: “We always will find the time to do the things we feel are important.” Chances are you work 40 to 60 hours a week. You have plenty of time for a personal follow-up call (one minute) or to write a thank you note (two minutes) or stop by a closing (30 minutes). You choose not to do these things because (and this may sting a little) you don’t think these things are important. Some originators are so busy chasing down loans and putting out fires, great customer service takes a back seat to their busy work. The fact is you don’t have time not to provide great service! Perhaps if more of your customers were “extremely satisfied” you wouldn’t have to be out prospecting so much, giving you the time to take great care of all the referrals they are sending you.

I think it’s unnecessary. Some loan originators think they are above giving great service. They feel the customer owes them, not the other way around. The concepts of a personal phone call to a new buyer asking how they are enjoying their new house or a Christmas card to the family are for someone else. That’s too bad, because these originators are missing the point. As a test, think about when you are a customer. Think about a time someone went out of his or her way to ensure you had a great buying experience. How did you react? Did you think it was corny, silly or unnecessary? No! Did you feel it was unprofessional? Certainly not! You loved it. That’s how your customers would feel if you started providing them with an extremely satisfying experience too.

I don’t know how. Perhaps you are into great customer service but are unsure of what you can do to create the “wow factor.” First, remember that the wow factor isn’t created with one big thing, but often a multiple of little things. A great experience at a restaurant is the product of an attentive valet, a welcoming hostess, a knowledgeable and helpful waiter, a clean dining environment, and a wonderful chef. To create a similar great experience in your business, ask yourself: “If I was a borrower, what would really impress me? What would a loan officer or mortgage lender do that would make me one of their raving fans?” Draft a list of what you would like to experience, and that’s probably what your customers want as well. Once you have your “total customer experience” mapped out, integrate those actions and little touches into your system. For example:

  • Thank you for applying card goes out 24 hours after application
  • Personal welcome call from the loan processor is made in 48 hours
  • Gift basket sent to place of employment on day of approval
  • Congratulations card mailed one day after closing
  • Magazine gift subscription started 30 days later

Everything is easier, even customer service, when you have it built into a system.
Think about how many borrowers you will help this year. Perhaps it will be 50, 100, or more. What if everyone, because of their fantastic experience, sent at least one friend to you next year? Theoretically, you could double your volume without any more prospecting. You might even have more business than you could handle. What a wonderful problem that would be.

By Douglas Smith

Originators Search for New Lead Sources

Loan originators discuss various strategies they use to develop new leads.

Many loan originators insist on developing a referral-only business rather than seeking leads from unknown prospects, some of whom will undoubtedly be unwanted rate shoppers. These originators believe that ongoing referrals from loyal Realtors, builders, and past customers are the best source of business and they tend to avoid new lead generation strategies. However, numerous other originators look for diverse opportunities to obtain new leads to supplement their other marketing techniques. Of course, they are aware of the challenge involved. Unlike referrals, which are based on established relationships, leads are often just names obtained from a seminar registration list, newspaper advertising, Web site, or other source. In most instances, originators still need to sell these prospects on doing business with them. But the successful ones are able to convert these often cold leads into closed loans and long-term customers.

Following is a selection of lead generation strategies that top producing originators have found to be effective:

Lead Lists
One of the fastest ways to obtain potential leads is to acquire them from a list supplier or compile your own new prospect database from various sources. Jeff Lazerson, president of Portfolio Mortgage Corp. in Lake Forest, Calif. and author of “How to Make a Fortune in Loans Without Leaving Your Desk,” has purchased a number of lists for his marketing letter campaigns, which complement his other origination sources. “If I’m busy with referrals and other activities, I most likely won’t purchase a list,” he said. “When things slow down, it’s often more appropriate.”

Lazerson noted that based on his experience, a mailing of 1,000 pieces should result in an initial response rate of seven to 10 prospects. “When you consider how inexpensive direct mail is, this can be very successful,” he said.

Lazerson stressed the importance of data integrity. “One key to ensure success is making sure that the list you acquire is reaching the right target audience,” he said. “You need to ask for the list company’s references and be comfortable with what they promise you.”

Sharon McCormick, an originator with Prime Lending in Dallas, Texas found a unique way to form a new database. When she first began originating, McCormick used a reverse phone directory to create a list of refinance prospects. The directory indicated when homeowners obtained their telephone line, which told her when they moved in and the approximate interest rate. “I pinpointed some of the largest houses in the area and found their phone numbers and then began calling prospective refi customers,” said McCormick. “I made as many calls that were necessary to get some loans and I had a good response.”

McCormick noted that this strategy might not be as effective today because many homeowners have phones with caller identification, and they screen out calls from salespeople. “But even though this might not work as well now, it does demonstrate how you can do something different to stand out,” she said.

It’s easy to overlook the most basic lead generation tools, including fliers and personal brochures distributed at various locations. Sue Woodard, an originator with Hometown Mortgage in Maple Grove, Minn., uses her brochure to reach new clients and past customers as well as prospects. Her brochure is distinctive because it opens like a greeting card and has the following phrase: “The greatest good you can do for another is not just to share your riches but to reveal to him his own.”

Woodard and her staff distribute the brochure wherever possible. “I use my brochure as a business card and hand it out at events, Realtor meetings, and other gatherings,” she said. “A personal brochure has more impact than a business card and is more likely to remain on someone’s desk or in a resource file longer than a card,” she said. Woodard cited a recent instance where her assistant was at a restaurant when the waitress overheard him speaking about the mortgage business. The assistant handed the waitress one of Woodard’s brochures and they started to discuss the potential of homeownership. “By the time dinner was over she was ready to meet with us and she’ll soon be a customer,” Woodard noted.

Adam Slade’s brochure includes company and personal background information, along with a pre-approval form for customers to complete. Slade, president of U.S. Mortgage Network in Wexford, Pa., provides the brochure to Realtors, builders, financial planners, and others. “We often get calls from people wanting to know something about us, and the brochure takes care of that. It’s a great lead generation tool.”

Advertising is an effective strategy for increasing company/originator visibility as well as producing immediate leads. Byron Webb, president of Webb Mortgage in Boca Raton, Fla., has advertised in as many as 50 newspapers throughout his state. The ads include his 800 number, which is popular with prospects who have been shopping rates, regardless of their distance from his office. He also advertises in his local daily newspaper, including an ad in the business section that draws more affluent readers. Webb’s ads will often feature a special offer, such as a coupon for $200 off closing costs. He also has his name and company logo imprinted on the plastic bags that cover the newspapers. “That is really the best advertising I do. If someone doesn’t open up the paper, they won’t see your ad. But everyone sees my ad on the plastic bag.”

Webb is a strong advocate of advertising as a lead generator. “We’ve had great response from our advertising,” said Webb. “During a refinance period, approximately 40 percent of our new business came from new sources, as a result of this newspaper lead activity. During an average period, it will be about 25 percent of our business.”

Billboard advertising is a more unique ad strategy, one that Ed Naworol has employed for the last several years. Naworol, an originator with SunTrust Mortgage in Belair, Md., typically rotates four billboards in different parts of his market at a cost of $500 per board per month. The copy of one board reads, “Need a mortgage? Building, buying, or remodeling? Call Ed today…”

“It’s definitely one of my top lead generation sources,” he said. “This is great name recognition; thousands of people see the boards every day. This is something that very few originators have done.”

Naworol also advertises on local restaurant placemats. “I position my business card ad and photo toward the top or bottom right of the placemat and include a coupon for $100 off the customers’ closing costs.”

Dennis Duncan, manager/originator at JP Morgan Chase in Blacksburg, Va., has tried a different type of advertising—the ValuPak coupon book program. He has included a coupon for $100 off for refinancing, which he said has been quite effective. “Appearing in the book costs about $1,600, but it reaches 30,000 people,” he explained.

Renter-to-Owner Program
Several originators have tapped into the apartment renter market. They collect immediate leads of apartment residents ready to purchase, as well as future potential customers. For instance, Jim Bane initiated a co-op marketing strategy with a major builder in his Ft. Worth, Texas market. Bane, an originator with WR Starkey Mortgage, arranged to have door hangers placed on the outside of apartments. The headline reads “Why pay rent?” and the copy explains how the renter can save money by owning a home. “This is a great technique because you don’t have to secure a mailing list or pay postage,” he said. “We’ve received a few calls from this and others will hold on to the hangers until they’re ready to buy.”

Nancy Davis, originator/manager at Mortgage America, Inc., Melbourne Fla., has taken a slightly different approach. Davis identified apartment complexes of 100 to 300 residents and obtained their names and addresses from a title company. She sent three different mailings to encourage them to consider homeownership. Davis noted that her past mailings have resulted in an initial flurry of calls, with additional prospects contacting her a year or more later.

Special Events
Some originators hold a barbecue, holiday gathering, or even a weekend loan-closing event to attract prospects. Pam Eaves pointed out that her company’s weekend same-day refinance closing event in 2001 resulted in substantial initial business as well as an ongoing stream of leads. Eaves, an originator with First Reliance Mortgage in Salt Lake City, Utah explained that the company advertised on radio and newspaper ads that promised low interest rates and one-day closings. “We started getting calls the minute the radio ad went on the air,” she said. “On Saturday morning, we had people lined up at the door waiting. We closed about $2.5 million that weekend and figured we got maybe another $3 million in residual business, as a result of the advertising. I was recently doing loans for contacts we had made a year ago.”

Eaves suggested two critical keys for converting leads to customers. “Certainly the first thing is to promptly follow-up with the leads you obtain,” she said. “Then make sure that you stay in contact with them over a period of time, keeping track until they’re ready to do business with you.”

Seminars and Fairs
First-time borrower and other seminars offer another cost-effective way to attract a group of new contacts. Naworol conducts weekly seminars for custom home customers. He has a database of 5,000 lot owners and invites different groups to attend the seminars that he holds in surrounding counties. He estimated that approximately 50 percent of those who have attended his seminars during the last five years have become customers and many others are waiting to design their home or purchase a lot. “This is an unbelievable way to attract customers,” he said. “Those who attend see the seminar as a chance to get educated about the custom home process and they appreciate the one-stop shopping—because the seminars include myself, builders, attorney, Realtor, and an inspector.”

Joe Siau has made quarterly first-time homebuyer presentations to such groups as Consumer Credit Counseling Services and the Association of Community Organizations for Reform Now (ACORN). “We get 15 to 30 people at each session and then we’ll follow up with them (using a list of attendees),” said Siau, an originator with Chase Manhattan Mortgage in Roseville, Calif. “Over a year’s time, we convert about 10 percent of the attendees to solid leads.”

In addition, Siau has participated in local street fairs for Asian communities. He sets up a Chase Manhattan exhibit and then distributes promotional materials as he discusses homeownership opportunities with visitors. Siau averages three shows a year, with approximately 50 people stopping by each time. He estimated that slightly over 5 percent are converted to customers. “It may not sound like much at first, but it’s well worth the effort because they eventually make referrals to other borrowers, so the base grows.”

TV and Radio
Highlighting your message on radio and television is yet another method to gather prospect names. For example, Aaron Jernigan, an originator with The Bank in Springfield, Mo., has appeared on a local TV program to provide homebuying information. It has helped establish him as a mortgage expert in his market and he has obtained a number of inquiries from potential borrowers. “After each show, I would receive about five to 10 phone calls from people who had watched,” he said. “It has definitely provided good visibility.”

Jernigan noted that because he hasn’t yet started to track the leads, he doesn’t know how effective the TV appearances have been. However, he’s confident that the exposure has been worthwhile. “I know that we get calls after the shows and I’m sure we’re getting business as a result,” he added.

Kevin Ruby has been successful with a unique radio promotion. One of his choice builders has held remote radio promotions, having a radio station set up its broadcast booth at a weekend open house or other event. This allows Ruby a chance to speak to the crowd about his company and their loan programs and to collect names and phone numbers of those interested in obtaining a mortgage loan. “All I have to do is show up with my laptop and prequalification forms for a couple of hours,” said Ruby, executive vice president/originator with Community Mortgage, Cordova, Tenn. “I get leads from the people who attend the specific development and others from those who are looking elsewhere but stop by because they hear me on the radio and are interested in talking about a loan.”

Ruby believes the remote promotions are definitely worthwhile. “Generating leads from the radio remotes has accounted for about 10 percent of my annual business in the past, but it doesn’t take much time to make such valuable contacts. I reach new people with whom I wouldn’t have otherwise come in contact.”

Internet Connections
In recent years, more originators have turned to the Internet as a proven means of obtaining prospects. Even though many site visitors are rate shoppers, originators have found that an effective Web site that includes an application form can result in a steady stream of closed loans. For instance, Dave D’Aprile of Coast to Coast Mortgage in Austin, Texas, considers his Web site to be a significant lead producer. He noted that approximately 50 percent of the customers doing business with the firm have “touched” their Web site.

D’Aprile boasts a closing ratio of 25 to 30 percent of his online leads. He devotes a portion of his marketing budget to listings in various portal sites and advises originators to take a cautious approach with such advertising. “You’ve got to check cost versus return,” he noted. “You never know, in the first month you may not get anything.” D’Aprile suggested that originators check to see what other originators are already advertising on specific portal sites, track the results, and drop the sites that don’t work.

Slade has also benefited from his company’s Web site. He said that the site is good for generating basic visibility and borrower calls. “Initially, we advertised rates, but we no longer do so,” he said. “We’ve learned that the site is an excellent avenue for people to pre-qualify. We get five to 10 Web-based pre-quals a week and are able to convert close to 40 percent of those to completed loans.”

He noted that a key to his online success is highlighting the Web site address in his Sunday newspaper advertisements. The ads feature company information and interest rates and prominently display the Web address. “We usually get our Web-based applications on Mondays after people have read the Sunday paper,” he said.

More Lead Strategies
Here are some other lead generation techniques to try:

  • Advertise on the outside of a truck or bus. One originator stated that he’s received a number of calls from the ad he placed on a friend’s delivery truck.
  • Use a 24-hour hotline service, which includes a phone number on Realtors’ property signs, enabling borrowers to call for a pre-recorded guided tour and other information. You’ll develop a list of prospects to qualify.
  • Ask the human resources director at local companies if you can insert an informational flier into their employee paychecks.
  • Prepare a refinance (or other) flier to be inserted in your city newspaper’s zoned editions.
  • Make sure your Web site is listed with all appropriate search engines.
  • Exhibit at a bridal, home, or other consumer show. You can hold a drawing for a TV and get the phone numbers of the attendees. Later, you can follow up with these prospects.
  • Distribute fliers and other information at Realtor caravans and builder open houses. One originator created a small house-shaped pop-up display to hold his business cards.
  • Advertise your services on movie screens.

There’s no question that referrals are the lifeblood of top producing loan originators’ business. However, it’s wise to keep an open mind concerning lead generation strategies. As the originators in this article have emphasized, new leads can be a positive addition to your pipeline, especially during those periods when refinance business disappears.

By David L. Robinson

Surviving the End of Refinance Periods

The refinance period is over, how is your business going to survive? You should pose this question to yourself now if you haven’t already. Not because there aren’t plenty of refinances in our environment, but rather because the time to plan is in advance of the event and not after it has already happened. Many loan originators get caught on their heels and have a very difficult time rapidly transitioning into new markets. About two and a half years ago loan officers didn’t position themselves accordingly through database management and customer retention to take advantage of this refinance boom. Only the originators who had planned ahead were able to jump on the opportunity and fill their pipeline immediately once refinance mania hit. The planning that needs to be done now entails positioning yourself to take advantage of a market that is without refinances.

Simply pose this question to yourself…what if interest rates went up one full percent over the next 60 to 90 days? What would happen to your existing pipeline? How many of the loans that are in that pipeline would be wiped out if in fact rates were at 7.5 percent? How are you going to compensate for that falloff in your pipeline to make sure that you can continue to maintain the lifestyle that you have become accustomed to over the last 24 to 36 months? Make no mistake about it: there will be business available when refinances go away. It’s just that the business will be wearing a different face and you will need to identify it quicker than your competitors.

The purchase business will always be important in a non-refinance boom. The typical sources of purchase business are real estate agents, financial planners, CPAs and other types of affinity partners. Many loan officers have been successful in dealing with the Internet and leads that are created for potential buyers through that venue. Others have flourished in constructing a very efficient for-sale-by-owner campaign. Whatever plan you choose to put into place, you will need to get very specific in your plan of attack.

Let’s first examine a campaign to develop affinity partner relationships with accountants, financial planners and real estate agents. The most effective way to develop a relationship with these types of sources is to have a compelling unique selling proposition (USP) which is why someone would want to do business with you. You need to understand that your unique selling proposition is and always will be in direct accordance with how you feel about yourself The higher the level of confidence you have in yourself, the more profound your USP will be. Therefore, it is of the utmost importance that you start to build your confidence and one of the best ways to do this is to make sure that you are a master of your craft. You must understand the nuances of being a great loan officer, embrace and become an expert on the essential components of lending, know your guidelines and start studying them now if you have not already, and make sure that you know how to put together every single type of a loan that could be run across your desk whether it be subprime paper through “A” paper, first time homebuyer and super jumbo loans.

Jane Floyd, an originator at Diversified Home Mortgage, Tampa, Fla. said that her unique selling proposition with real estate agents, accountants and financial planners is the fact that she will get any loan done and will never commit to doing a loan that she cannot do. She knows exactly what it takes to make loans happen but there’s more to it that we need to understand that something more profound occurs here. The more that you know about your trade, the more confident that you are going to be in yourself. A unique selling proposition is all about selling your product. What is it that makes you unique?

Remember, there is an inverse to this USP. Why would the referral source want to put their trusted client in your hands? Why if they are a real estate agent would they want to put their paycheck in your hands? The reason is because they have faith in you because they know that you are the best person for the job. You need to be able to look across the desk at any of these people and tell them exactly that—that they can trust you and that you are the best person to handle that loan.

The action plan is simply this: Make sure that you are blocking out two hours of time each week for the next 90 days to study this business of which you are apart. Remember that you are in the money business and that the more you know about money, the more you are able to help people, the more they are able to trust you, the better off you will be.

If you want to launch a campaign that exposes you to leads of potential purchasers through some type of direct marketing vehicle such as the Internet or the purchase of leads from other sources, you need to be well scripted. Nine times out of 10 that someone engages in dialogue with you for the first time it’s done verbally with no visual aid whatsoever. They have nothing else to judge you by in making their decision as to whom they want to work with other than the words that come out of your mouth. It is critically important that our presentation skills are at a high level. Many loan officers fail to evolve in their presentation skills and therefore don’t put themselves into a position to where they can take advantage of a down market.

Remember, in a down market your conversion ratio from lead to close loan is critical. In addition to that, it is very important that you start to bring more values to these relationships. In a non-refinance market, if you are doing fewer loans, you will need to have bigger margins to make up for that downfall.

The only way that you are going to be able to justify making more money per loan is if you truly take the time to be a financial consultant that specializes in mortgages, that brings more value to that client and saves them more money than they would be able to save if they were to work with someone else. Make sure that you are putting yourself in a position to where you have all the tools necessary to be a financial consultant that specializes in mortgages. Tap into the wealth of resources that are offered within your industry that will expose you to these opportunities. There are many products available in the marketplace that can help you be a better-trusted advisor.

If it is a for sale by owner (FSBO) campaign that you want to launch, keep in mind some very important points. Your target market in this case is an individual who is trying to save money or they wouldn’t be trying to sell their home on their own. Their perception is that they don’t need a real estate agent or anyone else to give them advice especially if it is going to cost them anything. It is for this reason that your campaign must expose them to their lack of knowledge. You need to pose questions in your marketing material to make them realize that this isn’t as easy a process as they thought it would be and you need to offer a significant amount of value that will cause them to look at you as a viable resource that they should be utilizing.

One of the things that I have offered in my FSBO campaign is access to escrow officers and title companies for the purposes of selling their home. Listing brochures and sign boxes that you can put on their front lawn, and call captures 800 services also work very effectively. These should all be apart of your marketing package when trying to forge a relationship with a seller who is trying to sell on their own.

In addition, you should make sure that you impress upon them the importance of your pre-qualifying every single buyer that comes through their home. It is from this exposure to potential buyers that you can then turn around and align them with real estate agents. This referring of potential buyers to real estate agents could be greatly helpful in forging relationships with new Realtors; ones that you will need in this down market.

Remember, the time is now to think one step ahead. If you are conducting your business without one eye on the future, when the future gets here, you won’t be ready for it.

By Tim Braheem

Market Makeover – Getting Customers

Editor’s Note: This month, a novice originator seeks guidance on increasing his customer base and earning his first paycheck. Our contributors are Vicky Frontiere of United Capital Mortgage and Michael Brown of Atlantic National Mortgage.

I’m a junior loan officer who has having difficulty getting customers. I have
gone to open houses, mailed fliers, and handed out my cards to everyone
I meet. How long does it normally take for someone to get their first
paycheck? I’m trying to be patient.


VICKY FRONTIERE is a loan originator with United Capital Mortgage, Las Vegas, Nev.,

I am relatively new to this business myself, and I know it can seem almost impossible to get going. I have a strong belief in just showing up every day and learning all you can about your field prepares you for when the phone does start to ring, and it will happen if you just stick to it. It took me two months to get my first paycheck, but I’m sure it differs for everyone. Working for straight commission can be a scary thing but having no limit to.
How much I can actually generate each month is the exciting part.
In our office, we have “floor-time.” Three days a month it’s my turn to simply receive any calls that come into the office. It is a great way to get business, and I constantly tell the receptionist that I am available in case the loan officer whose turn it is doesn’t show up.
I have tried all the different things you have, like going to open houses, mailing fliers, and constantly handing out my cards. All are good ways of bringing in business. However, finding Realtors who will do business with you is the one key to getting a flow of constant business, and getting those big paychecks. There are thousands of Realtors out there and four or five is all you need. I know it can be difficult walking into real estate offices. Most have preferred lenders and getting past the receptionist seems next to impossible, so start out with some of the smaller offices that seem much more appreciative when you walk in carrying a box of doughnuts.
Make sure you let the agents know you are available by cell phone on weekends to pre-qualify their buyers. Realtors appreciate that since they advertise in the newspaper and get calls to show property most weekends. They want to know from a lender that the buyers do have some chance of receiving a loan before they waste their time. When I would find a Realtor who would talk to me, I would offer to split some advertising costs with them. This not only impresses the agent that you are serious about getting business, but shows other agents where to find you.
When my first loan was approved, I took the time to call the selling agent and relay the good news so she could tell her clients. That alone was an impressive move since it is not common to put anyone on the selling side in the loop. She ended up becoming my second Realtor because of that one phone call. When the final docs were drawn I brought them to the title company and stayed for the closing. I learned a lot just being there and it really impressed my clients.
I have a quarterly newsletter that I send to past clients and Realtors that seems to generate more business. Last year I even purchased a billboard for myself that has brought my name and face out to people daily.
When I finally got my first loan, I spent a lot of time with the processing department and learned all I could about processing and what I might have done wrong during the loan application. The loan officer puts the loan in motion, and if mistakes are made on the front end, the loan can go from bad to worse.
Knowledge is power—I can’t stress that enough. Every day I tried to learn more about the loan programs my company had to offer. I spent time with our underwriters and our closing department. Being a successful loan officer does not mean simply being able to bring in business. You have to know what to do with it once you get it and how to change directions if the loan is not meeting all criteria for a certain program. All this of course, while smiling to the client and appearing to be in total control.
At United Capital Mortgage our slogan is, “Where Service Makes The Difference!” I knew at my signing that those words were so true. I even went one step further. When the loan recorded, I found out the day my clients were moving in to their new home. I showed up that afternoon with two pizzas in my arms. The new homeowners were tired and hungry and once again, totally impressed with my service. I still get referrals from this couple and recently helped them to refinance their current mortgage.
I closed one loan my first month, two my second, three my third, and by the end of the year, United Capital Mortgage presented me with a “Rookie of the Year” award. Every day I continue to learn something new and my business still comes from five Realtors.

MICHAEL BROWN is an originator at Atlantic National Mortgage
What distinguishes me from my competition is my willingness to give 100 percent of myself to all my referral sources 24/7. My real estate brokers know that when they are trying to put a transaction together over the weekend or in the evenings they can reach me on my cell phone or home number and I will be there for them. They are confident that I know all the guidelines of all the products I offer. This stands out in their mind and forms the partnership that benefits both of us financially and creates strong friendships. Always be there for your referral sources.
Remember “patience is a virtue.” Everyone wants to make the big bucks now, However, it takes time. Building a pipeline of loans takes months, even years. Planting seeds is the most important thing you should be doing and it seems you are. Making friends and contacting everyone you know and letting them know what you do for a living is a basic idea, but a very important one. Most of my top referral sources started out as friends but over time, they became very vital lifelines to my success.
I try to include my contacts in my activities. My hobbies are golf, fishing, cooking, and most sports. Take them to play golf, tennis or go shopping with them find out what they like to do and share your common interests.
The problem with most new originators is they don’t ask for the business. You can’t assume that because you feed them lunch, the business will roll in. With a smile tell them you want them to send you all of their clients. Public open houses are another way to build relationships with Realtors. They are there all day bored and probably hungry.
Spend a Sunday afternoon with different brokers, find out what they like and pick up a sandwich for them. Hopefully you’ll be able to qualify all the people who walk through. Even if the Realtor doesn’t work with everyone who visits, you might be able to. It becomes very personal and you should be able to have a great conversation. When I do Realtor open houses, I will always say “I’m glad you enjoyed my company and thanks for coming, but please share your referrals.” I always ask them for business by letting them know to “put me on your list and give me a chance. I am great at what I do.”
I rarely hand out rate sheets, most Realtors throw them away without even looking at them. You have to give them things that catch their attention, do something different like, handing out your recipe for success. Include a brief comment, like “call me any time.. I’m always available.” Include a recipe for cookies or a cake, then deliver it with the baked goods to the top real estate and attorney’s offices in your area. By doing this, you’ll soon build a relationship with even the most difficult brokers.
Get involved with your community organizations. I give discounts to police, fire and EMT personnel. I waive the appraisal and credit fee. I have a flier up on the bulletin boards at most companies with the same discounts.
Once you get the client, don’t try to make a home run. It may be a great pay day at first, but you may one of the many with a bad reputation as a gouger. Make it fair for the client and for you. You worked very hard or your client expects you to get paid. Keep happy so they will always refer you.
You can expect to get paid in about two months on a purchase and in about 30 days on a refi.
Send them a thank-you card or gift, always go to your closings, and thank the Realtors for the client.
Make sure you keep in touch with your clients after they close. Follow up with them on one month, six month, and yearly intervals.
By doing all of these things, you will be able to build strong relationships and big money.

The Power of Networking

Networking is one of the most basic and effective origination strategies.

In our personal relationships with friends and family to business relationships, networking is essential to social involvement on any level. And certainly, the ability to network is an essential ingredient to success in mortgage origination.

In an issue of M.O.M., I wrote one of my very first articles dedicated to networking entitled, “Spheres of Influence.”   Networking, then and now, is still the heart and soul of the mortgage origination business.  It is a loan officer’s most important activity and one that must be done every day.  Meeting people will not result in immediate business, but will pay off in the long run and it is essential not to get too discouraged in the beginning.

Networking is an excellent way to build a “sphere of influence,” that is, a strong customer base.  These people must recognize you as an expert in mortgage finance.  They must think of you when they consider refinancing, building, buying a new home, second home, or investment property.  Because almost everyone is a potential customer, it is sometimes more important that your customers see you as their “friend in the business.”  A person they can trust and respect enough to refer their friends to you…your spheres of influence.

My Networking Story 
When I began selling real estate I was slightly older than 21.  My sphere of influence was minimal because no one I knew owned a home or could afford to buy one.  As a result, with the help of my sales manager, I developed a four-pronged marketing strategy designed to help me become my client’s “friend in the business.  My slogan at the bottom of my business card was “your friend in the business” and inside each card was a spot for three names, or referrals.   Just for the names, I offered a small gift or a free market analysis, and if the referral became a customer, perhaps listing or selling a home through me, I offered them a referral fee, clearly a RESPA violation at the time.

My plan was divided into four spheres of influence: personal contacts, potential customers, organizational opportunities and targeted referrals.  Today, I would probably add the Internet and a Customer-for-Life component.  Once the pact was agreed on, we developed a list for each category.  Here’s what mine would’ve looked like:


  • Spouse
  • Significant other
  • Friends
  • Acquaintances
  • Relatives
  • Co-workers
  • Church members
  • Country club affiliates


  • Appraisers
  • Architects
  • Attorneys
  • Bartenders
  • Beauticians
  • Builders
  • Board members
  • Chiropractors
  • CPAs
  • City or County managers
  • Counselors
  • Choir directors
  • Doctors
  • Dentists
  • Dermatologists
  • Escrow Agents
  • Electricians
  • Fashion Consultants
  • First-time buyers
  • House cleaners
  • Hair stylists
  • Insurance agents
  • Loan officers
  • Ministers
  • Managers
  • House Movers
  • Optometrists
  • Psychologists
  • Realtors
  • Supervisors
  • Superintendents
  • Small Business Owners
  • Teachers
  • Tax Preparers

Organizational Opportunites

A wise sales professional once said, “when choosing to belong, select only causes and groups you have passion for and want to give your time to!”
Attend the meetings regularly. Approach the organization as if it was your own business and let people know you are in the real estate loan business and want to help them achieve their dreams of owning a home.

There are a number of organizational opportunities, including:

  • Association of Professional Women
  • Fraternal: Masons or Rotary Clubs
  • Welcome Wagon (In fact, now owns the entire Welcome Wagon organization)
  • Social: country club, tennis club, athletic club, runners, Parent Teachers Association (PTA), Little League, high school and college boosters, alumni organizations
  • Fundraising: arts, symphony, church and synagogue, local colleges and universities
  • National Association of Home Builders (NAHB)
  • Local Real Estate Board of Realtors, national and state associates

Target Accounts or Referral Sources

  • Previous customers
  • Surveys and focus groups

A referral is what networking is all about. It is a loan officer’s dream or recurring nightmare. A solid base of satisfied customers is our ultimate goal and this begins with one testimonial from a satisfied client. In fact, as my career marched forward, I had a notebook full of “thank you” cards and letters stuffed into a leather bound journal. I initiated each new application with a short presentation about my business and how important each person was to my career. I started each sales call with, “You will always be glad you took action with me today. I don’t believe you will find anyone who will work harder or more professionally to help you achieve your real estate dreams. I want you to think of me as ‘your friend in the business’. Friendships don’t come along everyday. I know that. That is why I have dedicated myself to earning my customer’s appreciation and respect. If I do that, I have earned a new friend. Does that make sense to you?”

Expand Your Network
In addition to supplying you with repeat business, satisfied customers are a wonderful source of new target accounts. Along these lines, with the new RESPA regulations allowing referral fees to both licensed and unlicensed individuals, you may want to offer standard referral fees to some “key” movers and shakers who have the potential of offering your name to lots of new people in the community you choose to serve. I did. In fact, when we started our brokerage business we discovered that the best source of new business came from our employees. Our “$250 Club” was the talk of the company for many of First Franklin’s early years. We developed a gold embossed “$250 Club” brochure offering a fee of $250 for any person referred to us who ultimately closed a loan at our firm. For example, for a new receptionist making less than $1,000 salary per month, this was huge. All the person had to do was fill out a card listing the potential customer’s name. We did the rest. Our experience found that this was the best way to expand our customer base. Why? Our employees and their friends and families already trusted us because their son or daughter already trusted us. Some of our early teammates earned upwards of $5,000 per year simply offering names. Inside our “250 Club” brochure we used the acronym: “REFERRALS”:

  • Repeat business
  • Employees
  • Friends
  • Earn their business
  • Relationship
  • Respect
  • Affinity
  • Last impressions last
  • Selling the invisible

This was an awesome program.  Also inside the booklet was a section called “Who Do You Know?”  In this section we simply asked them questions like:

  • Who sold you your pool?
  • Who sells you gas, tires or fixes your car?
  • Who delivers to your home?
  • Who sold you your appliances?
  • Who was your best man or maid of honor?
  • Who teaches your children?
  • Who took your family’s latest photos?
  • Who painted your home?
  • Who is your interior designer?
  • Who is your house cleaner?
  • Who watches your children?
  • Who leads your church? School? Lions Club? Kiwanis?
  • Who is expecting a new baby?
  • Who bought a new home?
  • Who owns your local Kinkos?
  • Who is on your school board?
  • Who is your family doctor? Dentist? Optometrist? Druggist?
  • Who is your lawyer? Insurance agent? CPA?
  • Who runs you local deli? Bakery? Bagel or Coffee shop?
  • Who arranges your local theatre?
  • Who appraises real estate?
  • Who sells real estate?
  • Who sells you shoes?
  • Who is your best luncheon friend?
  • Who serves you lunch?
  • Who styles your hair?
  • Who heads your bank?
  • Who does your dry cleaning?
  • Who is your florist?

The list goes on and on. Word-of-mouth, friends and relatives, belonging to organizations, and referrals, all serve to create a growing networking customer base of “friends in the business.”
If you think more broadly and deeply about networking yourself, you will figure out dozens of better ways to contact potential customers and grow your business.

A Final Thought
I recently was left speechless after I told a mortgage broker, “The first step to networking is making a good first impression. The second step is getting the service right. So find out if you have it right. Survey your clients…Ask.”
I wasn’t ready for her response. “I don’t want to do that,” she said. “I’m afraid to hear what they might think.”
A basic principle in life applies to surveying clients: even your best friends won’t tell you, but they will talk behind your back.

Make it so your new clients can talk behind your back, and that you can learn what they’re saying. Have your clients complete surveys. If you can, have them compiled by third parties. Your customers will appreciate it. They will see that you are trying to improve and it gives you another great reason to stay in contact with each of them.

  • It gives you an opportunity to sell something else or make a new offer
  • It keeps contact with your clients
  • It lets you learn from your mistakes
  • It helps you flag possible problems that can create new selling opportunities
  • It keeps you from coasting
  • It tells your customers what business you are in, and what folks are really buying.

Networking is really the oldest, simplest, and generally the most effective way to generate business. It is the best way to ensure your long term future in the lending industry.

By Bill Dallas

The Target Compass

Following is a good primer for new and “still learning” originators and a reminder for veteran loan originators.
My secret to marketing directly to consumers is my unique “target compass.” It has allowed me to enjoy a generous income over my past 15 years in mortgage banking while building a residual income for my future.
As with any directional compass, mine has four essential components:

Target Market:
Identify your target market and learn everything you can about that target market. People who live in apartments with children who are paying $1200 a month in rent in a certain zip code who would save $2500 – $7500 in taxes is a great example. Some examples of target markets that I use:

  • FHA Buyer
  • VA Buyer
  • First Time Buyer
  • Credit Problem Buyers
  • Recently Divorced
  • Specific Professions:
  • Doctors
  • Nurses
  • Dentists
  • Teachers
  • Police and Security
  • Government
  • Firefighters
  • Financial Planners
  • Business Executives
  • Pilots
  • Local Business Owners
  • Specific Geographic Areas:
  • Cape Cod
  • Martha’s Vineyard
  • Nantucket
  • Vacation areas
  • Specific names of towns or communities
  • Brides and Grooms
  • Students (College)
  • First Time Homebuyers
  • Renters – Apartment and homes
  • Move Up Buyer/Seller
  • Move Down Buyer/Seller
  • Corporate Relocation
  • New Construction
  • Rehabilitation
  • Refinance Borrowers
  • Corporate Buyer/Seller
  • Executive Buyer/Seller
  • Resort Property Buyer/Seller
  • Parent’s of Children Going To College
  • Investment Buyer/Seller
  • Second Home Buyer/Seller
  • Vacant Land
  • Lakefront Property Buyers
  • Zero Down Buyers
  • Low Down Buyers

Target Time:

This is a critical navigational tool for creating a constant flow of new customers. For example studying the timing of brides and grooms and their buying habits, clients that bought their first home with you and researching when they will possibly be moving up. Taking the time to research each of the above target markets and their appropriate timing is a critical piece of your journey.

Target Medium:

Selecting the right medium is a fun part of the trip. A client may call you because they received a flyer on their card which had one of your strategic business partner’s on the back offering a “free pizza.” Some of the examples of the media that I use with great success are:

  • Flyers
  • Home Magazines
  • Newsletters
  • Yellow Pages
  • Inserts
  • Business Cards
  • Stickers
  • Post cards
  • Seminars
  • Workshops
  • Client Celebrations
  • Direct Mail
  • Classifieds
  • Free Publicity
  • News Stories
  • Personalized Clothing (Sweaters, Shirts, Jackets)
  • Personalized Jewelry (Watches, Pins)
  • Personalized Pens
  • Buttons with Messages
  • Display Advertising Pizza Cover
  • Telemarketing
  • Popcorn Boxes
  • Strategic Business Alliances
  • Ad Bench
  • Bill Boards
  • Magnets (Refrigerator)
  • TV
  • Radio
  • Poster Notes
  • Door Hangers
  • Weekly Shopper
  • Church Bulletins
  • Welcome Wagon
  • Restaurant Placemats
  • Area Maps
  • Bulletin Boards
  • Toll Free 800 HelpLine (Automated Prospecting System)
  • Videos

Target Message:

This is a huge piece that must be mastered—and here are some ideas that have worked well for me:

  • Daily automated home searches (value added service for your pre-approvals Home Finder Service (Valued added service for your pre-approvals)
  • Zero Down Payment
  • Toll Free
  • House Payment the same as Rent Payment
  • Huge Tax Benefits
  • Low Down Payment
  • Free Information
  • Free Money Savings Ideas
  • Free Reports
  • Recorded Message
  • Call 24 Hours a Day
  • Free MLS Link (Value added for your pre-approvals)
  • Consumer Awareness HelpLine
  • Best Buy Hotlist
  • Dream Home Hotline
  • Check your Credit Free
  • Free Home Seller’s Marketing Kit
  • Home Loan Service HelpLine
  • Select-A-Loan: 599 Home Loan Programs
  • Fire Your Landlord
  • Free HomeLoan Finder Service
  • Limited Time Offer (Create Scarcity)
  • Free-Recorded Message
  • Special educational reports

Like any navigational tool, it must be used with fine precision in order to gain the outcome that you are looking for. It takes research, focus and extreme dedication. If your marketing is presently not compelling your prospects to call, you may have a problem with your target, your time, your medium or your message or a combination. When you balance all four areas—you will create a wonderful flow of new customers that with continued work will turn into “advocates” of your service and be your residual income in the future.

by Cindy Worrell

Finding New Ways to Show Customer Appreciation

Auto races are won by margins as close as milliseconds, with the victory being held for those who demonstrate incredible teamwork through precision, speed, and creativity.  Just as mechanics and other teammates make repairs and refuel in a matter of seconds for their driver, our industry sees similar success belonging to mortgage professionals who have surrounded themselves with a winning team and marketing approaches that are designed for keeping “the edge.”   The following are some consumer-direct strategies that have been effective for me, and that could work for you as well.

Special Client Celebrations
Hosting special events for past clients including their children, extended family, friends, and neighbors is effective because it helps develop and strengthen our relationship in a non-business environment, while being hosted at our business office.    Annual events that we have hosted include:

  • Holiday Magic Show in November — We hire a magician to entertain past clients, business suppliers, families, and friends.
  • Family Gingerbread Making Day in December — We invite customers and their children to make gingerbread houses, from material we provide.
  • Annual Fall Fest in October — Sponsored jointly with our local farms, we offer pony rides, pumpkin  selection, apple cider, and Vermont cheeses.
  • Money Day – Spring Showcase — In January we offer mini workshops with a tax accountant, financial planner, attorney, home inspector, and appraiser.
  • Puppet Shows in February/March — A professional puppeteer entertains customers’ children.
  • Other successful events are Family Movie Night at a local theater, Summer barbecue with games, Holiday Egg Hunt, and Wine-Tasting Evening.

Hosting Clients at our Office
First impressions last forever, so we try to pay attention to this very important detail.  Some suggestions are:

  • Soft baroque music playing in the outside entrance to the office.
  • Prior to the client’s arrival, have a welcome sign, including their name.  It doesn’t take long to print one on your computer.  Also, make sure the receptionist greets your client by their name.
  • Clients are served a delicious cold beverage such as Nantucket Nectar.
  • Upon completion of my presentation, clients receive an “Advocate (past clients who have referred two or more clients during the last year) Worry-Free Teddy Bear” that is holding a scented candle and a small package of jelly beans with a note reminding them of the importance of their “advocacy.”  The material is attractively wrapped in a see through decorative wrap.
  • Each client also receives a “Motivational Journal” to take notes and pictures of their homebuying journey.  We include an instant photo of them.
  • Clients are given their own personal “Homebuying Resource Package” that is filled with valuable information including: homebuying and financing resource books, Strategic Business Alliance Directory (businesses offering discounts and free gifts for my clients), “Congratulations on Your Purchase” letter, “75 Types of Turbulence that I will be managing for you” letter, our mission statement, referral postcard and letter, and “We Need Your Help” Postcard.

Client Surveys
The feedback from your customer’s perspective is like gold.  Here is how we do it:

  • We call a random selection of clients within a few days of the application and ask how their experience has been so far.
  • During our initial meeting, we mention that their feedback is critical to our continued commitment to improvement and we will be asking them to “Take Our Temperature” and we would value their honesty.
  • At the end of the transaction, a written survey (complete with self-addressed, self-stamped envelope) is sent to our client, the listing real estate agent, the selling agent, and the closing attorney.  We use two different surveys.  One is for our direct client and the other is for our business partners who were part of the process.  An important part of the survey is asking for their permission to use any of the comments that they shared; these pieces can be very helpful as “third-party endorsements.”

Sponsor Youth Sporting Events
Sponsoring little league baseball, football teams, basketball teams, softball and soccer teams is a great way to give something back to the community.  But it is also a good way to get to know the parents of your players.  They will see the team jerseys, banners, programs, and will attend the banquets.  This allows you plenty of opportunities to get to know the parents-your future clients and advocates.

Stickers and Business Cards
Promote special loan programs, your website, your 800 help line service, workshops, and client celebrations with unique stickers (flashy colors, shapes, designs, lettering) and individual business cards which can be designed very inexpensively at office supply stores or your local printer.

As mortgage banking professionals, we all know that details make the difference.  Hopefully some of these marketing ideas will provide big payoffs for you.

by Cindy Worrell

Market Makeover

“A quarterly loan update has proven to be the single most important marketing effort that I have created and distributed to my clients.”

My partner and I have a small mortgage company with two full-time employees and five loan officers. I have been an originator for about 10 years and this is my third attempt at getting a mortgage company off the ground. We’ve been in business for nine months now and things are going alright, but I need some advice on how to push my business to the next level and how to do it on a low budget. My partner and I had a mortgage company two years ago and at that time we had two loan officers. We tried to get it up and going, but we struggled due to a lack of marketing capital and unforeseen equipment outlays. The business folded and I went back to working for someone else. I had a couple good years with them and decided to strike out into business ownership again with my partner.

Our company’s niche is foreclosure loans. We solicit people in foreclosure to refinance and we have several investors who are willing to finance these types of loans, if conventional refinance routes are unavailable to the borrowers.

I would say that right now our business is 70 percent foreclosure refinances. Another 20 percent is derived from debt-consolidation, seconds and only about 10 percent is purchases.

We want to become more diversified and add more markets. I know the regular marketing techniques — newsletters, telemarketing, advertising — but I need some advice regarding low-cost marketing and ways in which I can get some cash infusion into my business. Are there any small business loans out there that could provide financing, so that we could leverage ourselves to do more advertising?

We’ve tried the gamut of marketing. We even tried outside telemarketing. We contracted an out-of-state company to do the job, and they failed to complete it, and we received very few calls from the work that they did. Now we can’t find the company to get them to finish the job that we paid them to do. We spent money on things and it’s just money that’s lost. I really want this business to survive and I truly believe that the third time is a charm. Any recommendations would be appreciated.
DW in California

Brian Farley
Pride Mortgage Incorporated, Provincetown, Mass.,

I admire your desire to own and operate a successful mortgage company, since this is your third crack at it. I’ll give you a bit of my background, followed by some suggestions that I hope will assist your effort. I had a 15-year banking background when I went to work for a small mortgage company as a full time originator. I carved out a niche in financing second homes located in resort areas, basically an “A” credit, conforming lender.

After a few years, I decided that I wanted to work for myself. I began by contacting all of my clients and referral sources. They overwhelmingly supported my decision and pledged allegiance, and I convinced my processor to come with me.

I incorporated my company and I applied for the necessary licenses in the state where I was to operate. I employed an attorney to review all loan forms and documents to ensure my compliance. I chose a loan operating software system (Calyx) that would work best for my company. I wanted to take advantage of the technology in the marketplace (very important!) so I solicited investors that participated in FannieMae’s Desktop Originator and FreddieMac’s Loan Prospector programs. I found a small, inexpensive office space and purchased used office furniture from a local distributor. I paid cash for all the start-up expenses, about $25,000. I was up and running and my total focus was to originate loans.

Broadcast fax is a great, inexpensive way to communicate to Realtors, and other referral sources. I sent announcement cards to all of my clients. The referrals started to come in. We closed the first loan during the first week. When the year ended, I was proud to say that I doubled my production, and I was honored to be included in the Mortgage Originators Magazine Top 200 Originator list.

It takes a lot of hard work to start your own company. You have a 10-year history in the originating business. The first thing to do is contact each client that you’ve done business for and let them know about your enterprise.

I made a decision not to hire loan officers in the beginning, because I had confidence in my own ability and I did not want to baby-sit loan officers. Although I do not know the strength of your origination team, I believe that starting a company with five loan officers is very tough. Many company owners think that they must have a few loan officers to ensure a steady stream of business. Absolutely not! You spend so much time managing and assisting them, the time when you should be originating. Do what you do best — originate.

I see that your niche is foreclosure and debt-consolidation loans in the subprime area. I agree with the need to diversify. Try to pump up your purchase market. Many subprime shops do not think of Realtors when soliciting for loans. It is amazing how many Realtors do not know that buyers can actually buy property when they have troubled credit. Teach the Realtors in your market. Send out some broadcast faxes about your special programs; offer to teach them about the certain types of purchase loans that are available to buyers. You may be surprised with the response. Let real estate attorneys, CPA’s and financial planners know that there are programs available for their clients. Do not assume that they know what is available in the mortgage industry.

Focus on the service that you provide, I cannot stress that enough. Be sure that you are establishing long-term relationships with your clients. You may present a future-conforming, loan-refinancing option to clients. If you provide them great service, they will want to continue to do business with you. If you have a 10-year history in the business, I believe that you have a gold mine in your database.

Continue to read M.O.M. each month; it contains a wealth of origination ideas. Attend seminars and continuously look for investors in the market that can provide unique programs.

The Small Business Administration may offer low-cost business start-up loans. Contact a local office of S.C.O.R.E. (Service Corps of Retired Executives) to help evaluate how the SBA can help. I certainly hope that the third time is a charm!

Daniel B. Smith
Senior Vice President and Regional Manager
Republic Bank, Plymouth, Mich.,

I hope the third time is a charm for you and your partner, but suspect that you will continue to have problems if you don’t change some of your mindset and business fundamentals.

You indicate that you have either worked for, or owned, four different mortgage entities over the past 10 years. You had a couple of good years while you worked for someone else and have struggled with self-employment. Have you considered that your “chronic migrations” to different companies may be affecting your “client retention strategies,” and their ability to recall whom their lender was when you originally wrote their loan? I believe that your moves and a lack of a solid retention plan are costing you considerable money, which could be used to fund additional marketing ideas.

You state that you have tried all kinds of ways to bring in leads to your sales force, such as newsletters, telemarketing, media and print advertising. All the loan officers in my office are required to participate financially in any marketing endeavor we undertake. Basically, because I’ve learned that when you give someone something, they don’t value it. You need to put more reliance on your loan officers to go out and make things happen, instead of investing (and even borrowing) funds to pursue an elaborate marketing strategy.

While marketing is important, it does not require a large budget. A simple business card and a sincere smile are powerful marketing concepts that do not require monetary infusions. I call this the “Shoe Leather Campaign” – get out of your seat and put your feet to the street. The least expensive marketing tool is always a satisfied past customer. If you want true success, you must make it a mandate to stay in close touch with your customer base at all times. I have found “ACT! Database Software,” at a cost of $129, to be extremely helpful in doing just that. It can track every one of my past clients, and it allows me to document each and every contact I have with them.

If you don’t already have it, acquire ACT! Use it to send mailings to remind past customers that you still exist and are available to help them with their needs, or the mortgage needs of their friends and family. I send a mailing once a quarter to all my past customers. It doesn’t matter what it is, as long as it has my name, phone number, and face on it.

Another low-cost strategy is to simply pick up the phone. Call your clients. Almost everyone knows someone who is thinking about buying, or who is buying a home. Ask for those referrals, or just call and say, “How are you doing?”

With regards to your niche, I think that having a focus and expertise in one or two areas is not a bad thing. I would suggest that you diversify your business into a broader base, which should include some Realtor contacts. You could take advantage of your background in foreclosure lending to route business to select Realtors, who would no doubt be grateful and send you some business in return. For instance, when you discover a foreclosure situation, for which you can simply not fund a loan, send that prospect to a favorite Realtor. If your homeowner can’t get a new loan on their property, they will need a Realtor, and quick, in order to liquidate it. Also, use your customer base to offer refinance or purchase options to former foreclosure borrowers. Track your loans, and 12 months down the road revisit those people and pull them out of a bad loan (high interest rate) into a good one. Play on the fact that you kept a roof over their heads when they were down and out, and ask for their referrals as well.

I would caution against borrowing funds, unless it is for operational expenses related to starting up your business. In that case, you may be a candidate for a Small Business Administration loan. However, borrowing money, when you can’t afford to pay it back, is the kiss of death in business. I would not advise you to take on additional debt to fund a marketing endeavor, when the methods discussed above can be employed at a very low cost and can result in high returns. To me, the mortgage business is very simple – take good care of your customers, stay in touch with those customers, keep them informed, and go to the bank.

Starting a mortgage operation involves considerable financial risk and tenacity and I applaud your efforts. Please use my response as a third-party endorsement to urge your loan officers to take responsibility for generating their own leads. I believe you will become effective when your sales force becomes effective.

Outdoing the Competition

“One of the most costly things a business can do is throw money down the drain on an ad budget that’s too anemic to be effective. Make no mistake, there’s a bottom line that must be met to get noticed.”

Advertising is a basic cost of doing business. You’ve probably accepted that. But, keep in mind, it’s also a shoot out — a place where you face competitors daily to conquer and defend valuable territory. The battle that’s fought here, if it’s to be worth fighting, is expensive. There are, however, ways to compete economically with companies that spend more than you can afford, and still profit from the investment. Listed below are 10 ways to get the most bang for your buck from your ad budget.

Spend Enough
One of the most costly things a business can do is throw money down the drain on an ad budget that’s too anemic to be effective. Make no mistake, there’s a bottom line that must be met to get noticed. If you can’t cross that line, you might as well spend your money on office supplies. Take the time to research your competition, compare ad budgets, and determine the cost per prospect you’re comfortable with. Then develop a realistic budget with measurable goals. Now you’re funding an investment rather than paying an expense.

Give your campaign time to work. As with any investment, the cost of a constantly changing course almost always outweighs any potential gains from sudden shifts in strategy.

Insist on an integrated campaign, carrying one unified message across all your communication platforms. This lets you develop all of your materials for trade shows, collateral, direct mail, print advertising, promotions and everything else as a package (think package deal) and saves you time and money spent controlling the process.

It also allows each piece to pick up where the last one left off, effectively multiplying the communications productivity of everything you develop.

Be Selective
Be selective with your market and start out with a smaller piece of the pie. Concentrate on reaching only the people from whom you stand to gain the most. You can use the growth from that market to fund your marketing efforts to others.

Market Inward
Target your existing customers to promote growth and up-sell products. Also, your own office, lobby or building can serve as a valuable advertising medium. Banks and retail merchants are constantly using the space they already have to display promotional materials. You can do the same, indoors and out.

Try Timelessness
Good marketing materials are expensive. Don’t spend a fortune on collateral that will be quickly outdated and need to be reprinted. Invest in timeless designs that are easy to update without enormous expense.

Trim Production
Extravagance has its place and purpose in advertising, but you needn’t rely on Hollywood effects or celebrity photo-shoots to deliver your message. Often, simplicity is the hardest worker you have. Keep in mind, however, that your message and image are critical factors in this contest of persuasion and any effort to cut costs should only follow careful consideration of the potential risks and results.

For instance, stock photography and graphics can save a great deal of time and money, but run the risk of being used by others in the same industry. Likewise, a big, bold headline can stand-alone and save even more, but it also needs to be a good headline to be effective.

Place Creatively
You want to appear to a select group as though you are everywhere, all of the time. If you work with an ad agency, it should be able to get some terrific package rates and long-term discounts from the media that will benefit everyone involved.

Consider the size of your ads as well. For instance, junior-page ads and half-page spreads can save you money while maintaining dominant impact. If television is on your menu, then consider local cable, market by market. With costs as low as $25 a spot (sometimes lower) cable can be a very cost-effective way to carefully target individual markets.

Don’t look a gift horse in the mouth. Many companies sponsor co-op ad programs to provide funds to local advertisers in exchange for a logo or mention. If none of your current partners offer such a program, you may want to try developing strategic alliances of your own.

Go Online
The Internet is an invaluable resource for business that should be exploited. It allows you to research and evaluate scores of solutions without the expense of additional staff or outside services. It also enables you to broadcast lengthy, detailed, and persuasive information to a global audience in a format that’s easy to customize and update.

You can develop even more suggestions on how to compete on a less-than-level playing field. Even if you don’t have the high ground, you can still take the hill with a sound strategy and some clever creative ideas. The worst thing you can do is go unnoticed while someone else takes the prize — simply because they tried.

by Chris Brantly