Making Money on the Net

“You must have an Internet presence in order to take advantage of available online marketing opportunities.”

It’s already a couple months into the new millennium, and you don’t have a website. Or you do, but you know you’re not maximizing your site’s potential for success and profitability. If you find yourself in either of these situations, it’s time to develop your online strategy for this year and beyond.

First you need to determine your online focus. You will either want some combination of making money, branding your website’s name, or simply having an online presence in order to generate credibility with your clients and professional relationships. If you don’t have a website, your focus should be on developing one. You must have an Internet presence in order to take advantage of the available online marketing opportunities.

Those who don’t have a website need to consider the development options. You can either purchase a canned, off-the-shelf website or you can have a site custom-created for you. The choice you make will depend on your budget and the kind of functionality you are looking for on your website. A canned website can cost you anywhere from $300 to $5000. A custom site can cost anywhere from $3,000 to $500,000. So understanding what you want first will help you determine the route that makes the most sense for you.

To fully understand the profitability of your website, you need to recognize and understand the ongoing costs involved. This will allow you to start creating a budget for the future and to look at your costs in order to increase your profits–not just as overhead.

One fixed cost is the monthly fee you pay to a company that hosts your website. Typically, the cost is under $100 for most mortgage broker websites. A variable cost is what you will have to spend money on advertising your site. Most of these sites charge a monthly fee for your banner advertisement or listing. The fee ranges from a few hundred to several thousand dollars depending on the amount of traffic you are trying to generate. The other variable cost is based on upgrading your website, which you must do from time to time.

To be profitable, it is important to try to match your variable cost to the amount of business you want to close. If the market is doing well and you want to go out and get more business, you should increase your variable cost by advertising more. If you have enough business and cannot handle any more, reduce your advertising. If for some reason your website is not generating business, you have two choices. You need to either reduce your advertising to minimize your variable costs, or increase your advertising to see if you can generate more business.

Whether your website is new or you’ve had it for a while, it’s time to take a look at what you are doing in order to assess your site’s current profitability.

Your website should have an easy to find and easy to fill out application or pre-qualification form. The site should also have your company’s contact information readily available, a feature that will encourage someone to bookmark your site, a daily market update and updated rates section, and concise content.

So now you have a website that is ready to generate leads. The first area to look at is how you are responding to the inquiries received through your site. In general, you can expect an average direct-marketing response rate of anywhere between 5 to 10 percent of all visitors. You need to make sure that you’re ready to respond quickly to these inquiries. Part of a quick response is based on a quick retrieval of leads from your e-mail box or from your website. Make sure you have a constant online connection. This means that you are ready to be notified the moment a message is sent to you. Look into providers that offer a constant connection such as DSL, frame relay, or to a fractional T-1 line. If you are able to respond quickly to your leads, you can expect higher conversion ratios from inquiry to loan file.

Early on, you need to choose an online business model. Two basic business models are the “low cost leader” strategy and the “local mortgage broker and banker” strategy.

The first option involves emphasizing lower rates and overall costs. A company that has been successful with the low cost leader strategy is ( The margins have been from 0.5 to 0.75 points over wholesale. succeeds by making it easy for potential customers to make buying decisions through its website. They do this by clearly displaying rates and locks in periods or closing costs. As a result, customers typically apply through the website.

The companies often use loan consultants to work with clients. The strategy’s focus is to recruit business people who have good credit and want to save money. It will not work as well with consumers who are not organized, who need a lot of handholding during the loan process, or with customers who have complex situations. These companies are working on a high volume and slim margin basis. They expect the customer to be organized and to provide documentation quickly on request.

The idea behind the second strategy is to target borrowers in a specific geographical area and create a local originator image. There is a greater emphasis on service than price. This can be done by advertising in local newspapers and regional websites and also by creating affiliations with Realtor partners or other related industries. A company that has been successful with the local mortgage broker and banker strategy is Dalton Mortgage at Dalton Mortgage’s site clearly explains that this is a local, family-owned business that has links to websites in the Cleveland area. The site is friendly and provides up-to-date rates, loan products, calculators, and other helpful features.

You can also use the same approach as a subprime broker by not putting rates on the site and by stressing that you can handle difficult situations and borrowers who have been turned down before.

To further enhance your profitability, you will want to explore different marketing strategies. Aside from the conventional online advertising avenues, such as banner ads and directory listings, there are many other opportunities available in order to generate more business to your website. Areas to consider are partnerships, permission marketing, and affiliate programs.

A number of lenders have developed unique partnership arrangements in order to expand their online business and increase their profits. For example, Chase Manhattan Mortgage Corp. recently announced its agreement with, a multilingual homeownership website. An initial pilot program will focus on both Spanish- and Korean-speaking communities in the southern California area. will help Chase Manhattan Mortgage reach a greater minority audience through the partnership program. and introduced their strategic partnership last year. It will involve creating a multi-functional co-branded mortgage center that will provide visitors of the website with online home financing services. Homebuyers visiting the site will have direct access to’s mortgage information, rate comparison, and online loan application. Links to the mortgage center are placed throughout the site.

Permission marketing focuses on converting visitors to leads. If your current conversion rate from surfer-to-inquiry is between 5 to 10 percent, instead of focusing on driving more traffic to your site, look towards increasing your site’s conversion ratios.

Seth Bodia is considered to be one of the world’s foremost online marketers. He says of permission marketing that, “Every commercial website should be set up to accomplish one goal. Your website should be 100 percent focused on signing up strangers to give you permission to market to them.” He argues that permission marketing is more efficient than interruption marketing or media advertising.

The goal is to develop and deliver relevant, valuable, and judicious information to consumers who have given you permission to do so. One of the more common ways this is done is through a newsletter or interest rate registration on a website. When someone signs up for this, you have successfully received permission from the visitor to market to him or her in the future. Your job now is to be sure to deliver what you’ve advertised. Now, your chances of acquiring business is greater because you’ve “broken the ice” by offering valuable and relevant information.

Affiliate marketing is also a powerful marketing tool. By making affiliations, you can earn money from visitors who may not ready to do a mortgage with you. You can create an affiliate program to generate traffic to your site. You can also market other companies’ products, services, and web addresses on your site and get paid based on traffic the affiliates receive from your website.

When generating traffic to your site, you want to create relationships online with business partners. You should target sites that offer similar products or that reach a similar demographic of people. Two good examples of affiliations a mortgage company can make include automobile and Realtor sites. The affiliation with a car dealer’s site could be a simple arrangement. You might place a mortgage advertisement in a prime place on their site and pay them for every visitor you receive through that ad.

You could set up the same arrangement with Realtors as you did with the car dealer’s website but, since you have more important ties with the Realtor industry, the way you structure the affiliation will probably be more involved. You could harvest relationships with Realtors by offering them a free link to their website, or by offering them a realty section on your site. The goal is to establish a strong online relationship with business partners that is a win-win situation for both parties. Be sure to follow the appropriate RESPA guidelines.

The area of affiliate marketing of product and services is showing tremendous potential. The basic premise is that not everyone that comes to your site is looking for a mortgage. A person needs a mortgage once every five to seven years, so you need to determine if you can cross-market to them while they are at your site in case they are not ready for a mortgage. If so, make sure you are cross-marketing related products.

An example of a site that uses the strategy effectively is E-LOAN ( E-LOAN offers both car and credit card loans on their site, which is a good way to make additional income from those visitors that don’t get a mortgage.

The drawback to this kind of marketing is the potential to lose business by the distraction of other offers. Don’t clutter your site with different offers. Choose products and services carefully and make sure that your competitor does not advertise on any site that you recommend to your clients.

Despite the growing competition of mortgage companies online, there are many way to run a profitable site. Pick a strategy that meets the goals of your company. Make sure your site includes the basics such as an online form and application. Respond quickly to all inquiries because your online customer expects swift replies. Understand your site’s cost structure so you can calculate your cost per lead and eventually your cost per closed loan. Find a niche in your local market including partnering with Realtors, creating affiliations with other online companies, purchasing niche advertising in mortgage malls such as or, and getting permission from visitors to your site in order to continue marketing to them. You are now on your way to running a successful and profitable online campaign.

by Lovina Worick


Pulling teeth, death, public speaking, and getting a mortgage – some of life’s greatest pains, and greatest fears. The first three will be with us forever, but that last one can be conquered with an understanding of the inside workings of the mortgage process.

Every hour, of every day, an applicant for a mortgage is lied to, poorly serviced, generally abused on rates, and many times forced to take a loan they really don’t want. As one who spent twenty years providing mortgages to borrowers, and as one who is retired and therefore has not any other motive for writing this article other than the removal of consumer abuse, I am going to give you a few “secrets” of getting a loan that if you use them, will help in getting the mystical “Best” loan for your clients.

“BEST LOAN SYNDROME.” Everyone, in fact it is virtually “The American Way”, wants to pay the lowest price for anything they buy. But in the world of mortgage finance, with rates and fees that change almost as often as a new-born baby’s diaper, searching on the basis of “What is your rate and fees?” is the most dangerous method of getting the best loan. With rare exception, most providers of mortgages access the same source of ultimate financing – Fannie Mae and Freddie Mac. Loans of $202,300 and below most certainly fall into this category, and the quotes given to you should be close to each other based on competitive factors in your marketplace. RULE #1: If you are quoted a rate and fee significantly lower than all others – Run, don’t walk, away from that company. There is a strong probability that they are “Bait & Switch” artists!

“DO YOU QUALIFY?” One of the greatest abuses that takes place is where a borrower applies for a loan and weeks later is told they don’t qualify – often after they have made a financial investment in an appraisal and credit report. If you have all your income, liability, and credit information available, and you are dealing with a knowledgeable individual, then you will experience RULE #2: You can find out in one day, in writing, if you qualify for a loan!

“RATE & FEE LOCKING POLICY.” The saddest abuse in mortgage finance is when after a borrower has given the financial version of an ounce and a half of their blood to a mortgage provider, apparently have climbed the mountain of the approval process, but are then confronted by closing documents that do not resemble in any way the quote that was the basis for their making application. The choices are to start over with someone else or close the loan, with most using the “life is too short” concept and closing the loan. RULE #3: Get in writing, at application, the mortgage provider’s policy concerning the locking of the rates and fees!

“WHAT’S THE BEST PROGRAM FOR YOU?” The advent of hyper-inflation in the late 70’s brought with it the evolution of a multitude of mortgage products. Fifteen year and thirty year fixed rate loans have been joined by “30 year amortization, Due in 5 years”, “30 year amortization, due in 7 years”, “10 year fully amortized fixed”, “20 year fully amortized fixed”, – each with a virtually unlimited variations of fee structures! Then, of course there are the wide variety of Adjustable Rate Mortgages (ARM’s) – also with unlimited fee structures. The “Best” one for you can only be determined by answering and obtaining professional counsel to some key questions, including the following:

  1. “Do you expect to remain in your home more than __ years?”
  2. “Is your primary motivation to pay off your loan or to lower your payments?
  3. “Is your income fixed, stable, or will it be increasing?”
  4. “Do you have an accountant or tax advisor?”RULE #4: Any mortgage provider that does not ask you any of the above questions in all probability does not possess the experience necessary to provide professional mortgage consultation. Keep dialing till you find them!

“THE TRUTH ABOUT LOAN FEES”. Noted economist Milton Friedman gave us all the first rule of economics: There is No Free Lunch. Nowhere is that validated more than in the concept of loan fees. Loan fees are supposed to be prepaid interest charges, so the concept is very simple: THE LOWER THE LOAN FEE THE HIGHER THE INTEREST RATE. The ultimate example of it today is the so-called “No Cost Loan” where by raising the rate a mortgage provider will “pay” all your closing costs. What is often never explained is that these closing costs, which may average over $4,000, are added to a higher loan than you would normally need, and in the case of a 30 year mortgage, would cost you an additional $9,600 in interest that must be factored into any lower rate scenario that is being considered. RULE #5: Obtain at least three fee samples from your mortgage provider on the selected loan program showing the total of payments, total interest paid, and loan balance after a selected life of the loan, (e.g. 5 years, 10 years, etc.)

“WHO DO I GET MY LOAN FROM?” Like loan programs, the choices of who to get your loan from have increased as well. The current favorites for providing loans are: Mortgage Brokers, Mortgage Bankers, Savings & Loans, Banks, and Credit Unions. Ideally, one should obtain referral of three lending sources from real estate agents who are involved daily with the mortgage industry, and it is in their best interests to only do business with mortgage providers that perform consistently and professionally. Otherwise, one should talk to at least six possible sources from advertisements that are readily obtainable. Regardless, one should always remember RULE #6: The “entity” is not important. The individual that provides information you requested in a timely manner, that communicates a genuine interest in being your mortgage consultant and not just say “I’ll get you the best loan”, is the person who you should entrust your mortgage needs to.

As surely as the sun will come up tomorrow, there will be those that will continue to shop for the best loan on a “What are Your Rates & Fees?” basis. And as surely as I have no financial gain from providing you the above, you will get the “BEST LOAN” if you follow the blueprint provided, leaving the abuses that will be suffered to the rate and fees shoppers who do not possess the vision to understand that shopping for a mortgage requires real professional consultation. AN ENJOYABLE MORTGAGE EXPERIENCE IS NOW YOURS FOR THE ASKING!

By Chris S. Salazar

Brooks Grasso

Previous Profession: Dairy salesman

Primary Marketing: Marketing includes monthly mailings to over 2,000 past clients (recipe postcards), Realtors, and builders (loan program/other marketing fliers); monthly homebuyer seminar at the Baltimore County Chamber of Commerce; two monthly mailings to apartments (one highlighting no-money-down programs and another inviting people to a monthly seminar); and instructing continuing education courses once a month at Greater Baltimore Board of Realtors.

Most Effective Marketing: Mailings to past clients. “I have been doing this for five years, and when I started I noticed a 20 percent to 30 percent increase in business,” said Grasso. “This brands me as the person to call and or refer to when it comes to real estate and mortgage lending.”

Niche: First-time homebuyers and builders. “One of our marketing campaigns is directed at first-timers. There will always be a market for people who want to buy their first home, regardless of rates. If you treat them right, they may buy two to five homes during their lifetime.”

Teamwork: An assistant, two processors, and one junior originator who is being trained to develop and maintain his own production and referral sources. “While in training, he will also help me by meeting with customers to sign loan applications, talking to potential clients on the phone if I am out of the office. By keeping everyone well informed through our loan commitment letter and preliminary HUD-1, we cut down a lot on the reactive work that can come with this profession.”

Key Ingredient for Success: “Motivation and desire to be successful. If you enjoy your occupation (which I do), you’re willing to put in longer hours necessary to maintain larger production. I’ll do whatever it takes to get the job done, including working six or seven days a week.”

Achieving Work/Personal Balance:  “Effective time management. I have several systems in place that reduce the reactive time spent in the office. This allows me to be proactive and develop more business, while the existing business is flowing smoothly through the pipeline. I also delegate any responsibilities that I can in my personal life, such as cutting grass, painting the house, and landscaping. It’s more cost effective for me to pay someone to do it, so that I can maximize my time originating more business, and also the time spent with my family.”

How to Hire and Retain Good Loan Officers

How much is a good loan officer worth? How much does a bad loan officer cost you? When you think of “how much” with each question, don’t just think in financial terms. Money is a big concern, but it’s important that you consider time, energy, stress and “fit” as well. How much time are you spending with high-maintenance loan officers? How much energy are they costing you? How much stress? Do they “fit” within the culture of your company? Are they aligned with what you’re trying to accomplish? If you don’t put some thought and work into these questions, you’ll find the path to mortgage success very bumpy indeed.

Recruiting, hiring and retaining talented people is a difficult job. The first step toward success is to understand the nuances between recruiting and hiring. Recruiting to seek out talented players who will support your business’s outcomes, getting them onboard, and aligning their personal outcomes with those of the company is the trick. You may have someone in your company who is excellent at recruiting yet falls short in the hiring process. In the restaurant business they have a saying, “Get ’em in…get ’em out… get ’em back!” We certainly don’t want to take that approach in the mortgage business. We could say, “Get ’em in… get ’em going… keep ’em!”

If you invest and commit to a recruiting effort, you must also invest and commit to the implementation of the hiring effort as well. I have seen many mortgage companies make great decisions, while falling short on the implementation process. This has a tendency to remove most of the value of a great decision. While managing, mentoring and keeping talented mortgage originators are important to success, the purpose of this article is to “Get ’em and get ’em going.”

Have you ever wondered why some managers always seem to attract talent? Some managers seem to attract top achievers like a magnet. When you look at the manager and the leadership, isn’t it sometimes difficult to see at first glance what makes the difference? If you look at the internal makings of a great leader, you will find that they are effective communicators, have an incredible work ethic and are masters of managing themselves. In addition to that, they are skilled at connecting the dots of any plan; the dots of getting from point A to point B. These traits must exist in order for any manager or company to recruit and retain top people.

I recently had a mortgage-banking president ask me how to recruit because his company was having a problem landing good people. After I asked a few questions, I immediately saw the problem. I told him that the first step toward expanding his organization was to commit to and invest resources into its growth. A decision and a commitment both in time and money must be invested to get the kind of players who can do the job. You can’t expect to attract top producers to your organizations if you’re not deliberately and diligently seeking them out and tracking your results. Define what you’re looking for and go after it, then track and measure the results you’re getting. The following steps will guide you through an effective and proven recruiting strategy.

1. Profile your ideal candidate. Write a job description. What are you looking for? What type of loan originator? What volume level do you want person to achieve? The more details you have about what you are looking for, the more accurate your end result will be.

2. Develop a hiring plan. Once you know what you’re looking for, you can develop a plan to achieve your desired outcome. This plan must include a timetable for your outcome, the personnel involved in this recruiting process, an all other aspects regarding territory, type of originator, and so on. My recommendation is to have three different recruiting plans. Plan one is for recruiting new loan originators. These would include, but not be limited to, college graduates, UPS drivers, sales route drivers, real estate agents, title company reps, medicals sales reps, insurance sales reps, or anyone else you would approve to train. Second, is a plan to recruit mid-range originators. These include all mortgage originators with some experience and background in mortgage lending, i.e., hard money background, minimal mortgage background, minimum productions background, and other such areas. Plan three would include medium to top mortgage originators who are currently active in the marketplace. These are the players who have existing production and can hit the ground running when they transfer to you company. It’s important that you have completely developed systems for all three plans to ensure the successful integrations of the new hire with your company.

3. Develop a source list. Sourcing is a process of identifying as many probable targets from which you can draw candidates. To make good decisions on hiring the right people, it’s critical to have several sources to contact for leads. To get the type of candidates that you’re looking for, you need as many leads as you can get.

4. Work your leads. Maybe a better way to say it would be “networking your leads.” By networking both your sources and candidate leads, you give yourself a solid foundation of planting the kind of seeds that will reap a great harvest. You’ve got to be out in the marketplace talking to Realtors, builders, and other in order to originate mortgage loans.

5. Interviewing the candidate. Up to this point, all of our efforts have been toward recruiting. The “hiring” aspect comes into play at this stage. While we are still recruiting and selling our value, we are now focusing on making sure that this candidate will benefit our particular team. In addition to that, keep in mind that the candidate is interviewing you as well. It’s important here to establish a rapport by making the candidate feel comfortable. Ask a lot of questions and then listen, listen, listen. You will also want to have the candidate interviewed by other company staff. It’s wise to put a candidate through this because it will give you a more detailed and accurate profile of the candidate.

6. Checking and confirming references. Here is where we want to conduct an investigation to find out the good, the bad and the ugly. Even if you’ve taken the candidate through four different interviews with four different people, it’s important to check references and confirm information.

7. Extending an offer. This is where some negotiating talent never hurts. The toughest types of questions usually revolve around money. Before you make a firm job offer, you should know clearly and specifically what expectations the candidate has about the compensation plan. It’s important to discuss the candidate’s past and current compensation plans and how they want to improve them.

8. Setting the stage for your new hire’s success. Now that you have successfully recruited your top choice candidate, you need to conclude the process by completing the administrative details. You owe it to your newly hired superstar to have all of the paperwork to get him/her started correctly and promptly. Let me emphasize the importance of taking care of people every step of the way. One of the reasons I’ve been so successful in recruiting is by simply practicing “the golden rule.” Respect everyone and treat them the way you want to be treated and it works. I also hold another cardinal rule: If I receive a phone call or receive a resume in the mail, at that point I am doing business with that person and I treat them accordingly. Remember, people always appreciate communication. They will remember and appreciate you for being honest and considerate with this process. This will create a tremendous long-term benefit for you and your company. This takes the old saying, “never burn bridges” to a new level. This new level might read, “Always build bridges.”

Now that you have closed out the process of recruiting and getting the candidate on board, it’s time to really show them that we both made the right decision. You can do this by celebrating their arrival. Make sure that they have a proper place to work with a phone, pager, business cards and office equipment. It’s critical that you set some time aside on their first day to introduce them to the office personnel, show them around, show them how to work the office equipment, and make sure that they get settled as soon as possible. The quicker they get settled and aligned with you and your company, the quicker the loan productions starts rolling in.

By following these eight steps consistently, you will be able to expand your mortgage business in a deliberate and controlled manner. The key word here is consistency. Consistency rules; never stop recruiting. The successful managers at the top are always looking for talent. Make recruiting an ongoing part of your business. Once you master the art of recruiting, you’ll be rewarded accordingly.

Recruiting and hiring talent, managing and motivating talent and getting ordinary people to do extraordinary things are all critical to a manager’s success. If you want great sales people, be a great manager.

Deb Klein

Deb Klein – GMAC Mortgage


Favorite Quote
“If you can dream it, then you can achieve it.
–Walt Disney

With several years under her belt as a successful Internet salesperson, Deb Klein decided it was time to reconsider her career path. With a demanding schedule and even more demanding sales quotas, Klein felt that her efforts weren’t rewarded enough on a personal level. “I wanted to control my own destiny,” she said. She ruled out financial planning because both her husband and mother work in the field and she wanted to do something different, but was drawn to similar careers. “I love analyzing numbers and working with finances.” After a conversation with her neighbor and friend who is in the mortgage business, Klein thought she may have found the perfect fit. “Originating seemed that it would offer me the flexibility I needed with three children, the income potential I was looking for, and it would allow me to make a difference in people’s lives.”

With personal ties to GM (several family members live in Michigan and either work or worked for the automobile arm), Klein, had always had a preference for the company. Coincidentally, her neighbor worked for the mortgage division of General Motors Acceptance Corporation (GMAC), and spoke well of her experience there. Klein interviewed with GMAC in Tempe, Ariz. and was soon after headed for a six-week mortgage-training program in Atlanta, Ga. (sponsored by the company). Upon her return, she received some additional training from the company regarding systems and product developments, but according to Klein, “training is never over; there are always things to learn and ways to do better.”

Initially, she made her new career known only to select people, including previous co-workers, neighbors and some of the agents in the Keller Williams office (with which GMAC has a joint-marketing agreement). Slightly trepidacious, Klein waited to promote her business high and wide until she had established confidence with the loan process and her support team, and was comfortable with the amount of business she could handle. “Looking back I should have had more confidence in the beginning,” said Klein, “but it was so new to me, and I was more afraid of making an error on a loan for someone in my immediate sphere of influence than anything else.” Her first loans came in from a few agents she had made an initial connection with and from floor calls. “The first 10 were painful—I was detail-oriented to a fault and was so nervous about something going wrong.” Nothing did, and Klein was on her way to a rookie year volume of over $14 million on 92 loans.

In the beginning, she also turned to her financial planner husband for some guidance and contacts in various areas of the professional world, but found that it was completely up to her to develop her own reputation as a skilled originator. “I was able to make contact with some builders and CPAs and present my services, but there were no givens when it came to generating loans from them,” said Klein. “I had to earn my way by a proven closing record and an ability to establish trust with them and their clients.”

Klein sends a rate-watch letter to her database, especially those who may be ready for a refinance, and also a quarterly newsletter, but remains skeptical of the success of mail pieces and other print marketing. “I think we are all so overwhelmed with mail that such things just tend to get lost in the shuffle,” she said. “I also placed an ad in the local paper during my first six months and I put my name on a four-color flier that was passed out at the grocery store—the first one generated one call and that was it,” said Klein. What she does believe in, however, is the value of a simple phone call. “I completely believe in the importance of ‘personal touch.’ I call clients on the year anniversary of their mortgage, on their birthday and if I notice that their loan may be worth refinancing,” she said. “These calls remind them of who you are and often generate in a refi on a second, or at the very least a referral to a friend.”

During her first year, Klein found the biggest challenge to be managing her pipeline. “There are so many peaks and valleys when it comes to this business,” she said. “Everything’s coming at you at one time and then all of sudden there’s a lapse and you want to relax, but really that is the time you should be up out of your seat and prospecting.”

With an Executive MBA from Arizona State University and having grown up “entrenched in [the] financial planning ‘speak,’ of her financial advisor mother, Klein considers educating clients one of her specialties. “I find that the more time you spend explaining how to increase their overall wealth, the more likely you are to develop a repeat client,” she said. “Client retention is about so much more than just quoting rate and term. Becoming a trusted advisor also creates more referrals in the end.”

Now well into her second year, Klein hopes to surpass her goal of $24 million in volume—and she’s sees the key to success as prospecting. “I have a tendency to be in the office too much, and I notice that getting out of the office and meeting with people literally makes the phone ring,” she said. “I have also learned that you cannot work with everybody. My goal is to target top agents and be smarter about who I work with. It is important to work with people whose value systems matches your own.”

To establish new contacts, Klein has begun reviewing purchase contracts for the listing agents and then targeting those she knows are top ranked in her area. “If I spot one of those agents, I make an extra effort to “wow” them during the transaction and then I ask for 15 minutes of their time once the loan closes” said Klein. “They usually have been so impressed with my diligent updates, they are open to meeting with me.”

Having established a balanced workweek and a manageable pipeline, Klein is now able to spend more time with her three children and husband. “I am so happy,” she said about the choice to pursue originating. “The best thing about this career—you create your own road to success.”

–Gretchen Lees

The Merits of Multitasking

You know what business is like—the best plans don’t always work out. Unexpected issues arise, requiring midcourse corrections. New opportunities pop up but there’s no time to pursue them. Does this sound familiar? We all see and experience it. We also see people who make things happen despite all the chaos, time commitments, and obstacles. Some folks even make it look easy. How do they do it? There are hundreds of theories and books about how to better use time, how to overcome obstacles, and how to better exploit opportunities. Many of them can work. But whatever theory followed or techniques used, there is an element often missed. It’s the ability to accomplish multiple things at once. It’s being able to multitask or, as one ad campaign put it, it’s the ability to walk and chew gum at the same time.

However we develop and execute our business strategy, none of us can afford to have an unclear vision about where that strategy is taking us. A lack of clarity wastes time and squanders resources. We must know what we want our business to look like today and tomorrow. The possibilities are endless, which is exactly why we need a vision to guide us and our team members so everyone knows exactly where we are going.

Let’s assume we know where we want to go. Our vision is the starting point; it’s the ante if we want to play in the game. But, we must be prepared to execute each element of the plan sequentially and each element of the plan simultaneously. Sounds easy enough, but several interrelated activities must work together effectively, including an abundance of preparation, focus, organization, and accountability. Let’s consider each of these elements.

Preparation: It makes sense that the bigger the investment, the more preparation required. But whether we spend a few hundred or a few million dollars, the effective accomplishment of any task or initiative requires preparation. If the initiative or action is important to your business, write-up a brief one-page description of what you want to happen. Too often we see failure because we were not clear on what we wanted to do and what was required to make it happen. If you cannot get down on one page what you want done, then you don’t really know what you want. Bigger goals may need more detail, but too often what you really need is to be very clear about the objective or opportunity, the obstacles or significant points to consider, the basic steps to get it done, who will do it, and when.

Recently, I read a terrific book written by retired Army General Tommy Franks that had an unexpected benefit. A Soldier’s Story is about the General’s life, starting as a Private, and what he learned as he faced his growing military responsibilities. The unexpected benefit was a tool he discovered following a devastating helicopter crash, killing key members of his team for which he felt personally accountable. He decided from that day forward to write down on a 3” x 5” card the five most important issues and the five most important opportunities he faced that day. He wanted to be prepared for the most significant events he thought he could encounter. He used this daily technique for the rest of his career and over 5,000 cards later, he remains convinced that it was crucial to his success.

Preparation is the key to executing each element of our strategy. Make sure everyone knows what is expected, why, and when.

Focus: The benefits of adequate and thorough preparation are huge, especially when it comes to focus. The one-page document suggested will help the team zero in on what needs to be done. The devil is always in the details, and without a clear understanding of the direction and what is expected, it is difficult to focus on the necessary human and financial resources to get initiatives accomplished.

It is important to focus clearly on four areas to drive results: people, processes, systems, and money. Just like the one-pager, being focused doesn’t need to be too complicated. If the task is important, you need to ask yourself if you have the people to get it done; what operational processes are impacted (and do they need to be changed?); if systems or technology are involved will they do what is required and if not how can we change the system; and what will we need for investment and where will we get the money? If you cannot answer these basic questions satisfactorily, don’t move forward until they can be answered.

If you are able to focus on the people, processes, systems, and money needed to achieve the expected results, you are well on your way to successful execution of important strategies.

Organization: Potentially terrific ideas often fail because there is simply not adequate organizational support to get them done. Once you are focused enough to know what it takes to make a key initiative or opportunity happen, you must make sure there is proper organization to achieve the expected or anticipated results.

Sometimes, because we talk about what needs to get done, we think it will happen—it doesn’t. It takes specific actions properly scheduled that bring together the required people, processes, systems, and money. These required actions need organization and organizational commitment. It sounds simple enough, but it takes creating an action plan. It requires at least a simple set of steps to be followed. Write it down, and make sure everyone knows what needs to be done and when.

We need to create specific action plans that clearly spell out what needs to be done and when. If it is important, write it down.

Accountability: The best-laid plans require accountability. Even if well-planned, those plans must hold people accountable to deliver. You may think that a new assignment can’t be all that hard, so you just add it to your or someone else’s other jobs. It might work in some cases, but often it doesn’t. You can assign individual team members specific assignments, but you must hold someone accountable for the results. It doesn’t have to be their only job, but if it is really important, perhaps it should be.

Accountability for results requires both monetary reward and recognition. The reward must be meaningful and important compared to other compensation.

We can accomplish more when we set stretch objectives. Don’t be afraid to undertake concurrent projects. We can do more things simultaneously if we are smart about it. It requires first a vision and direction, and setting priorities for what’s important. Then, with preparation, focus, organization, and accountability, meaningful results can happen.

Success May be Just an HOV Lane Away

Roger Staubach was the featured speaker at a university sports luncheon I attended recently.  He is more than just a Heisman Trophy/all pro ex-jock.  Staubach  heads a highly successful national commercial real estate business.  In his remarks he described two football teams he played on that had both been at pivotal points in their respective seasons.  One team was at the Naval Academy and the other was when he was with the Dallas Cowboys.  Both turned out to be championship teams, but neither season started out that way.  Apparently, too many players were approaching the season as though it was all about them personally, and the team was secondary.  The teams had a lot of talent but it was not a “one for all” environment.

How many times do we see this in business?  In striving for excellence, individuals focus on their own success and do little or nothing to improve the team or teamwork.  The view can often be that a branch’s monthly production volume may be “interesting” but how everyone else is doing, from producers to support staff, is not my concern.  I celebrate my own success.

Staubach went on to say that after the poor initial start to the season, some of the leaders got the team together to have a real heart-to-heart.  We can imagine the frank locker room conversations that probably took place.  I doubt it was a Knute Rockne “let’s win one for the Gipper” speech.  They demanded renewed thinking about the team, teamwork and team-focused effort.

Staubach’s message was that football, like business, is a team activity and everyone must be with and on the team.  He said it was just like entering the HOV lane on the expressway: every car needs passengers.  When someone is going it alone or is in it for just himself or herself, even a team with abundant individual talent can’t win.  We have to get everyone on board and take them along for the ride, just like in the HOV lane, so everyone gets to the destination.  He also meant that if people are not prepared to execute as required and ready to maximize each individual’s performance, then we need to grab them and bring them along.

Getting people involved and taking them along for the journey helps create the spirit of teamwork necessary to turn what could be mediocre performances into unforgettable ones. As we think about this simple HOV analogy, there are at least five possible actions that come to mind.  It starts with managers and concludes with the idea of raising the bar.

Start with Managers: It should be logical that managers or leaders need to first recognize the importance of teamwork and making sure everyone is on board with a clear understanding of the game plan.  Every once in a while the leadership must take an assessment of how well things are working.  From time to time we need to ask the questions about what is working and what is not, and take an objective look around.  At times we all forget the interdependency that exists within a mortgage branch or sales team and the connection to other parts of the company that support them.

This interdependency must be clearly recognized and understood.  Clear expectations must be set for behavior and results.  The leadership must continually work on resolving issues or removing barriers that get in the way of allowing everyone to be prepared and be able to do the best they can.

Stars are Included: It should also be reasonable that everyone must understand the vision, plan, and direction, and be an active and proactive part of it.  This means everyone, including the star performers.  Most superstars are good because they understand the importance of working with others.  They may want to “over-control” because they want nothing to go wrong.  In time we hope they learn that they can do even better when they help train the team and set clear expectations for others to focus on their own key roles and become freed-up to be even more successful.

But, there may be some superstars that can’t or won’t get this important message.  If they are disruptive to the team and limit the ability of the whole team to be successful, then management and leadership needs to make a decision.  Sometimes it is better to take a step backward in order to leap forward.

Identify Weak Spots: Everyone on the team is important.  Everyone’s role is there for a reason.  If that is not the case the position is not necessary.  You cannot afford to have anyone on the team streaming down their own personal HOV lane oblivious to what is going on around them and what is required.  Managers, leaders, and superstars need to identify every area requiring improvement and focus on fixing it.

This does not have to be a negative or disruptively critical exercise.  But, it must be focused and must be done.  This is not a “hey you, stop screwing up” message, but when you see someone struggling or someone not using a “best practice,” you need to help them get better or change the process.

The focus is to not allow poor performance or poor practices to persist, simply because it is “not directly my job” or you are “too busy with my own stuff.”  Take the time to explain thoroughly how to make things better or right, and have learning sessions where the A-players are coaching others how to do the job better.  We also need to set the right expectations so that everyone has a clear understanding of the performance level required.

Changes May be Necessary: Sometimes people have to leave for the good of the whole. There are predominantly two reasons for change.  The easiest to understand is when the employee either can’t or won’t do the job properly.  It may be skills, motivation, or personal issues, but if after training, support, and expectations have been clearly communicated the performance doesn’t measure up, then a change is necessary.

The other reason for change, which can be difficult, is when the person performs well but their approach or style is divisive and disruptive.   Some people are too negative and so self-interested that they adversely impact the team and teamwork.  It takes too much management time to the detriment of others.  When this occurs, sometimes the only solution is to make a change.  It may seem like a step back because of the individual’s performance, but results after the change is made are often surprising.  Others on the team usually blossom and the overall team results improve substantially.

When the team really starts functioning as it should, it is time to raise the bar and set expectations higher.  Chances are pretty good that until we really start getting into the HOV lane we do not know how good we can be.  Once we have identified weaknesses, both with processes and people, and energized everyone to make changes and have the patience to wrap their arms around the people who need support, the effect on the team and overall results can be 25 to 50 percent, maybe even 100 percent.  The power of a team committed to teamwork and excellence is a substantial force.

Technology Consultant David Reed answers your questions

Dear David,
How do online meetings work? We have several offices, some of them big and some of them small and I was thinking of doing our training and meetings using Microsoft’s new product.
Diane S., Dallas, Texas

You’re talking about Microsoft’s Live Meeting application.  They have a competitor called WebEx, and they essentially accomplish the same thing.  What you are doing is having a meeting and reviewing the same information, but instead of getting in a car or plane you’re logging onto your computer and watching the meeting instead.  It works like this:

The presenter, or host of the meeting sends out invitations in the form of an e-mail.  In the e-mail is a link that takes you to a site where you log in with a specially provided ID and password.  When you get logged into the site, you’ll see the presenter’s computer screen.  If you’ve gone to a seminar and watched someone make a presentation on a big screen that projects what their laptop is doing, then you’ve experienced this technology.  Whatever the presenter does on his or her computer, you’re watching along in real time.

For example, you want to go over last month’s origination numbers and look at forecasts for the next quarter.  You also want to show your ales staff a new software application and a PowerPoint presentation.  Instead of loading everyone in the car and driving to the meeting, you send out e-mail invitations.  Your “attendees” log onto the LiveMeeting console and watch their computer screens as you show them the presentation that you created on your computer. What you do is what they see.

You can log onto the Internet and take them on a tour of various Web sites, open a PowerPoint slideshow, or anything that you would normally do with everyone in the room—except this time you’re doing it only on your computer while everyone else watches.  It’s really pretty neat.

One thing that Microsoft doesn’t do, however, is provide the audio.  Your personnel can log onto the LiveMeeting site but they won’t be able to hear you. They’ll only be able to see your mouse move across the screen and whatever else you do during the presentation. All sight and no sound.  So you need to provide your own audio conferencing. Why Microsoft set it up that way is beyond me, but I’ll be they’re working on an Internet-based phone service to accommodate.

LiveMeeting can cost about $300 per month if you have three to five users, but can be more or less than that, depending upon your usage requirements. Whatever it is, it’s probably a lot cheaper than hauling everyone in for a meeting.

For audio capabilities in the mean time, you need to provide audio through a telephone.  If you go to a company called Data Concepts Teleconferencing Services, you can set up an account for the audio portion as well, and it works with LiveMeeting. Essentially, you provide the time and date that attendees should call in, and Free Conference does the rest. It doesn’t cost you anything.  Actually, it costs those who dial in the for meeting.  The telephone number provided by Free Conference is a standard toll call, which charges regular phone rates.   Free Conference buys phone time at a huge discount, then your attendees pay retail for it.  It works just like your wholesale lender in that regard.

Dear David,
What are some criteria to consider when choosing a cellular phone plan?  I have 12 loan officers and I was thinking of how best to analyze cellular phone plans.
Mark H., Buffalo, N.Y.

You and about 235 million others. It’s so confusing that it’s hard to make a comparison, in my view. It’s very much like the lending business, don’t you think?  Lots of terminology consumers don’t understand, we have the ability to raise rates and lower fees or raise fees and lower rates.  We can also quote prepaid and non-prepaid costs and maybe even throw the annual percentage rate to clear things up a bit.

I know I’m getting a little off-topic, but comparing cell phone plans is very similar to what a consumer does when he or she tries to compare lenders.  It’s almost impossible, so usually what happens is you close your eyes and throw at a dart board. With that in mind, try making the comparison the same way you would suggest to your consumers to compare loans.

Determine your requirements. How many phones do you need, and what features are available under the plan? What types of phones do they offer? How much time is used during the day versus the night and weekends?  Do you get charged when calling each others’ numbers or is it free?  I would take that first written quote then show it to the next cellular phone company. Then the next one. Do it the very same way borrowers do when they show you your competitor’s Good Faith Estimate. Put very simply, the only way to find the best plan is to shop and compare.

Maximizing Your Lead Conversion Rates

Whether you’re generating leads from a direct-mail campaign, or purchasing them from a lead generation company, the same general rule always applies: to get the highest conversion rates from your leads, you’ve got to be prepared.

You’ve likely invested considerable time, effort, and expense into the lead generation process.  By following a few critical steps, you can ensure that these efforts are not wasted, and that you obtain the highest return on investment possible.

Handling Your Incoming Leads
The first step in many lead generation programs will be getting your office ready for a surge of incoming calls.  Some lead generation services provide you with pre-qualified leads—customers that meet your loan qualifications, and have already defined their interest level in a certain program.  But if you’re not dealing with that sort of a program, or have developed your own lead generation campaign, you’ll need to set up a qualification process for your incoming leads.

The first thing to decide is who the best people are to handle your incoming calls,  and what they’re going to ask the consumers. This is going to vary based upon the type of leads you’re dealing with. Let’s assume you’ve placed an advertisement in your local newspaper.  In the case of this unqualified lead, it might be appropriate to have a secretary or junior staff member qualify consumers on the initial call. You’ll also need to develop a script for these team members to properly handle the customer’s call. Develop a loose script, or list specific questions that will allow these team members to determine a base interest level, qualify the consumer, and gather contact information for a more experienced loan officer to return the call.

You’ll want to take a very different approach, however, if you’re receiving leads that have been pre-qualified either from an inside telemarketing department, outbound telemarketing service, or a lead generation company.  These leads have already been partially qualified or “heated up” by the telemarketing service, and should probably be sent to a more senior team member who can provide specific product information. You must also adequately prepare your loan officers for this, or other, incoming leads—if they aren’t ready to properly handle these “hot” leads, they can easily flub the incoming call.  The best way to go about this is to hold regular strategy meetings with your loan officers to discuss what types of leads they’ll be receiving calls from during the upcoming the week, and the best ways to handle each lead source.

Another critical step that cannot be overlooked is setting up a 24-hour/7-day answering service to handle any calls that come in outside of normal business hours—you’d be amazed at how many people want to learn about refinancing at 10 a.m. on a Sunday morning. And if a consumer can’t reach a live person, and is directed to a voice-mail, the chances are high that they’ll simply to go one of your better-equipped competitors. An answering service is a worthwhile expense that will help increase your return on a lead campaign.

With any sort of incoming leads, the best idea is to sketch out a brief “workflow” diagram that traces a lead’s progression through your firm.  While this is a straightforward exercise, it will enable you to visualize who exactly will be handling the leads, and develop appropriate action steps for each step.

Getting Organized
If you’ve developed your own campaign—such as a direct mail piece or a radio advertisement—you’re going to need to keep accurate records of your incoming calls.  Be sure to develop a spreadsheet or note-taking system for whoever will be handling incoming traffic; the worst thing you can do is not get complete information from potential clients.  It’s probably easier to take this initial step before inputting any information into your CRM software of choice—this way you don’t clutter your computer with those leads that look unlikely to pan out. If you’re purchasing leads from a reputable supplier, your leads should ideally be delivered into some form of contact management system, eliminating the headache of dealing with the spreadsheet process.

In order to convert the largest number of leads, it’s also crucial to keep track of your leads diligently and take frequent notes. Organize your leads by their level of interest or status of any loan application to easily send effective follow-up communications based upon their status.

Needs-Based Selling

When it comes down to it, the easiest way to sell a loan is simply to understand your client’s needs, and then provide a solution to meet those needs.  Once your lead-based call has gone through an initial qualification, try implementing the following needs-based selling concepts instead of your usual sales pitches to drastically improve your conversion rates:

Keep It Conversational: Use your initial call to introduce yourself to the potential client, and feel out their reasons for getting in touch. Unless a lead expresses a real level of urgency, you shouldn’t press for the sale on this call—doing so will only turn your leads off, and cause them to look elsewhere for their loan

Ask The Right Questions: Avoid open-ended questions, such as “Why did you call about refinancing?” or “What are your needs?” Instead, ask the client specific questions about the type of house they want to purchase, their current mortgage payments, their current income, or if they’re looking to do home improvements.  Questions like these will help you truly get to know your client, enabling you to offer them a product that can best meet their needs.

Plan for The Future: An alternative to ending your initial call by going for a close, is simply trying to get your lead to the next stage in your relationship. If you’re handling the client strictly over the phone, tell them you’ll run some loan scenarios to find out specific information, and then call back to try and set up a time for an appraisal.  If you’re in more of an outside sales environment, try to set up a time to meet with the client to discuss their options.

Sell Your Service, Not Rates: The first question that many consumers will ask is “What’s the rate on that loan?” Unless you know for sure that you’re going to be the lowest in the marketplace, you don’t want to get into that battle. The best way to handle this type of question is with a “pivot” technique—one where you answer the consumer’s question, and then ask a question to shift the focus of the conversation.  An appropriate answer might be:

“The rate varies between five and seven percent, based upon a variety of factors.  When we get together, I can explain exactly how your rate might be determined, and what your payments will be.  Let me ask you something, are you thinking of doing any home improvements?”

In doing this, you’ve answered the consumer’s question, set-up the potential of a future meeting, and allowed yourself to shift the topic of conversation. Based upon the consumer’s answer to your “pivot”  question, you’ll be one step closer to providing the loan ideally suited to their needs, ensuring that you come across as a knowledgeable mortgage originator.

Following-Up With Your Leads
 So, now that you’ve organized your leads, made the initial contact, and sold to their needs, how can you maximize your return-on-investment by converting as many leads as possible? If you get a meeting with a prospect and they still “need to think about it” before committing, your follow-up will be the most important step toward capturing this customer.

Follow-up is the key to success with any lead generation program. The easiest way to follow-up with your leads is by taking the time to create a suite of re-usable communication pieces.  Remember when we talked earlier about lead status? It’s important to create a set of materials that deals with each particular type of lead, and begins to overcome any objections this lead may have. For example, you would send one type of letter or e-mail to those leads that you have simply held an initial conversation with, and a completely different type of correspondence to a lead that has already gone through the appraisal process.  A lead that has been “dead in the water” for three weeks would warrant a very different letter from one that is about to close on a loan.

You’ll need to develop several effective forms of communication for each stage in the loan conversion process. If your firm has the resources, you can also consider producing professional postcards or flyers that can be sent to your leads.  If not, it’s perfectly acceptable to use direct mailing and emails to stay in touch.  Whatever the medium, make sure that you’re regularly following up with all of your leads – even if they aren’t ready to close the loan. Potential clients will be impressed with your commitment, and will have you in mind when they are ready to move ahead.

There are some basic rules to keep in mind when crafting an effective follow-up letter:
· Remind the lead who you are, and the status of your interaction: “Thank you for calling me last week about your loan refinance. I’ve had the chance to come up with some great options for you.”
· Communicate the value of your services: “Please feel free to contact me for a free analysis of your situation and to see if we can start saving you money.”
· Explain how you/your firm is best suited to meet their needs: “At Company Z, we have access to over 1,000 different refinancing programs, so I’m confident that we can find the perfect one for you.”
· Create a time-sensitive response: “Rates are changing daily, so be sure to contact me as soon as possible to secure the best possible deal.”
While the telephone is also an effective way to follow-up with your clients, don’t overlook the potential response to a personal letter or email.  It conveys an old-fashioned, personal touch that your clients will appreciate.  When using the telephone to follow-up, be sure to follow the “needs-based selling” concept. It’s important to be aggressive in following-up with your leads – but you also have to take care to not be annoying or irritating.  It’s a fine line to walk.

Using Your ROI
The bottom line for any lead generation campaign is, of course, your return.  As your campaign progresses, be sure to keep a careful eye on any associated costs, and track the income that you bring in from closed loans. While a positive return is essential, the degree of your return is also critical.  Depending on your initial investment, the difference between a 20 and 30 percent return can easily be thousands of dollars. By running multiple types of lead generation campaigns and purchasing leads from different services, you can determine which sources are generating the highest returns.

You can also easily boost your return on investment through some careful marketing techniques.  It’s almost guaranteed that some of your leads will have relatives or friends who are also in need of home financing services. By using your existing leads as a referral base, for example, you have the potential to vastly improve your conversion percentages. When you a close a loan, send each customer a thank-you note and gift – and specifically ask them to refer anyone who could also be helped by your services.  Many people overlook this basic, common-sense step. By doing so, they’re giving up the potential for thousands of dollars in referral revenue.