Seven successful originators discuss their strategies for maintaining a purchase-based business.
What should originators do to make the transition from a refinance to a purchase market?
Jim Bane, Branch Manager, WR Starkey Mortgage, Ft. Worth, Texas
Be visible. Loan officers have probably just been sitting in their offices for the past six to eight months waiting for the phone to ring. Now the phone is not ringing off the hook. You need to be out in front of Realtors/builders weekly. Set up appointments with top Realtors and builders you are targeting, and take them to lunch. Have new Realtors and builders meet your support staff. This is important so that they feel they know your team, and you can avoid you making all the phone calls back to them on your own. I am constantly trying to add new Realtors and builders. I am meeting with non-profit organizations and corporate accounts. I am trying to reach consumers before they even get to Realtors and builders. You need to have a business plan that is realistic and stick to it, and you should monitor it monthly to see how you are doing.
Kim Nelson, Vice President, Sun America Mortgage, Atlanta, Ga.
The best advice I can give a loan officer is to never forget the Realtor! Refinancing has never been my primary focus. In 2002-2003 refinancing represented less than 20 percent of my total volume. Throughout every refinance boom you should maintain your Realtor contacts and add new ones. Purchase business should be your “bread and butter.”
I would recommend to a loan originator making the transition to choose 15 Realtors to call on for a 30-day period. At the end of the 30-day period, delete the five Realtors that you do not connect with, and only focus on the 10 you do connect with. Your marketing strategies might include meeting them for lunch, dinner, or happy hour. Offer to make 100 percent interest only financing fliers to help them move their listings. (No money down and low monthly payments!) Go to your purchase closings to both meet Realtors and add new contacts!
Another recommendation might be to mail all past refinance clients a “thank you for the business” letter and ask for a referral of a friend who might be looking to purchase a home and need a mortgage.
Shawn Portmann, Loan Officer, CitiBank Mortgage, Puyallup, Wash.
To any good lender the refinance business should have just been an extension of their purchase business. Refinances should have come from past clients and Realtors. Ninety percent of my refinances were past clients, therefore, in a business plan it is also the same, and this is future business for my Realtors. I referred out over 200 listings this year back to the original Realtor who referred me business in the first place. So, the refinancing craze was the best advertising I could have for my business. Now as we go into winter and a purchase phase, I have not only kept them happy, but also increased their dollar volume and my own.
Rodney Anderson, Division Vice President/Branch Manger, CTX Mortgage Company, Plano, Texas
It is key that during a purchase market loan officers truly understand who controls the transactions. In the past, Realtors controlled the buyer and referred them to the lender of their choice. Over the past several years with the changes in technology, there has been a shift in power. Consumers have access to a vast network of information and are continually subjected to various marketing materials for financing options.
I think it is important for loan officers to do a great job for people, whether it is a purchase or refinance transaction. Just remember, customers that refinance also buy homes down the road. Creating a database of all of the past customer’s refinance purchases is your annuity for the future.
Julie Teitel, Vice President, IPI Skyscraper Mortgage, New York, N.Y.
As we shift into a purchase business, I think that you need to focus on being great at what you do. You need to shine on any deal you have, you need to show all parties involved –real estate brokers, attorneys, and customers –that you are smart, resourceful, and diligent; you return phone calls; and make every one’s job on the deal easier because you are involved. When you can prove that to current clients, they automatically want to refer you on further purchase deals. This market will push the better mortgage originators and start to get rid of the not so good originators.
Janelle Carver, Vice President, Cornerstone Mortgage Company, College Station, Texas
I have been in the mortgage industry since 1983 and have seen numerous refinance booms throughout the last 20 years. In the past I have seen Realtors, builders and referrals from previous customers get pushed aside when a refi craze takes off. The reason behind this (from what I understand) is that the refis are “easy money” for a loan officer without having to deal with a little competition, which is typical on most purchases. I personally don’t understand this reasoning because nothing can last forever and I feel that you must utilize all of your leads sources each and every day, regardless of where the largest demand on that particular day, month, or year may be. Being consistent and diversified with your business plan will enable you to withstand a downturn in any one part of the industry. During 2003 my monthly transactions have been well over 50 percent purchases, and it is usually closer to 70 percent. With the demand being so high for refinances, I couldn’t do all of the refinances at the same time as purchases (and keep my team’s sanity) without making adjustments in my strategies.
Chris Washburn, Senior Loan Officer, FNMC, a division of National City Mortgage, Greenbelt, Md.
In the market that has consumed us the last several years, you couldn’t make a move without finding a willing, ready, and able buyer to purchase, or more likely refinance. Entering a purchase market you have to go out and prospect for referrals. To succeed your referral source must like you and trust you. They have to trust that you will call them right back. Trust that you will deliver on what you promise. Trust that their client will have a smooth and pain-free transaction. If they don’t like you, you’ll never get a chance to demonstrate your trustworthiness. Make them like you and then you must deliver on what you promise.
What is your most effective purchase marketing strategy?
Jim Bane
We send out weekly campaigns to our pre-quals that talk about the loan process, appraisals, insurance, and other topics. Realtors and builders get a fax and a follow-up phone call when an appraisal is ordered, and they receive the same on title work, and also when a loan is approved and docs are sent to title company. Loan officers need to be getting referrals from title companies on for sale by owners –ask title companies to tell you who is doing business with them and ask if they can help you get an appointment with that agent. Also, have your title companies be “tattle tales,” when a closing goes bad, have them call and see if you can fix the loan and close it quick. Even if the other lender closes it but things did not go well, have the title company tell you the agent’s name and phone number, and then you can appear at their office the next day, or make a call to them. You do not tell the agent that the title company told you the closing went bad. Eight out of 10 times the agent will bring it up and at least visit with you or give you her next deal. It’s all about timing and if you are the first person they see after the lender they have been using dropped the ball, you might have a better chance in getting that agent to start using you.
Kim Nelson
My most effective purchase-based marketing tool would be full-color financing fliers that demonstrate how one can buy a particular home at a specific sales price with zero to 20 percent down. I use Excel spreadsheets to show a total monthly payment and total cash needed at closing. A buyer will pick up the flier, like it and then call you for more details! My Realtors/builders e-mail me their FMLS listings with all of the data needed to create a full-color flier with a digital photo of the house. I then prepare the Excel spreadsheet and e-mail it to our marketing person to create the artwork and insert the spreadsheet. We print and deliver them to the Realtor/builder, who then places the fliers in the home so that we can market direct to the consumer.
Shawn Portmann
Hopefully, the originator has kept their purchase business up through the refi boom. It is essential to maintain builder, Realtor, and customer relations during the refinance boom. Purchases should always come first. I give good Christmas presents and have Thanksgiving turkey give-aways. I just bought passport cards as gifts for all my Realtors, which are two-for-one dinners at 500 restaurants in our area. These help to get the job done. As things slow down, the importance of deals goes up. Never forget that they are handing you a paycheck. Give it back and as soon as possible.
Rodney Anderson
I have taken my business to another level through direct response advertising. Our primary media is the radio. We refer to this as the “radio ministry.” The radio has allowed us to take our business from closing $100-125 million to over $280 million, and from 800 units to over 1,800 units per year. We are currently on seven different local radio stations and have a weekly radio talk show. The radio had been a powerhouse for us. The leads we receive on the radio are referred out to local Realtors, and have in turn increased our realtor transactions tenfold. Local builders share in the pie also. We allow them to participate on our radio show and refer pre-approved borrowers. Direct advertising has opened the doors for us in ways we would have never imagined.
Julie Teitel
My most effective marketing strategy is word-of-mouth and reputation. You are only as good as your last deal. Furthermore, I would say to contact all people on prior transactions for the past year and ask them if they were pleased with the service you provided and kind of put the thought in their head that you could help them on future deals. Make a niche for yourself, something that separates you from everyone else (example: co-op expert, pick one building to market, go after your hobby. By that I mean if you like to horseback ride, advertise in riding magazines, or at competitions.) Mailers always will drum-up some business, but you can tailor to a specific building or to a hobby.
Janelle Carver
With my team’s motto “building clients for life” we have created a strong referral base from previous customers and repeat customers when they are moving or ready to refinance. Based on our lifetime commitment I advise my previous customers that are wanting to refinance that we will be more than happy to assist them with refinancing their home, however, I also have to ensure that the purchases currently in process get closed on or before the date in their contract. I request that they allow us a 60-70 lock-in period, which gives us ample time to spread the refinances throughout the purchases without hurting anyone. I know that they appreciated us making sure they weren’t homeless and that they would want us to do the same now for someone else. I did not have one refinance customer walk out because of the extended lock in period, and of course exceptions were made on a case-by-case basis, if necessary. By allowing more time to get the refinances closed I was able to take care of my agents, builders, and previous customers and build new “clients for life” by getting them closed within the parameters needed for their family. I can also say that I have never lost one of my agents or builders during a refinance period because they felt like they were being neglected, and just as we have seen during the last few months, refinances will not last forever, so adjust your priorities and strategies to take care of everyone just as you would expect to be taken care of yourself.
Chris Washburn
My Realtor marketing strategy is a program that constantly strives to get me in front of an identified client (Realtor or builder). I believe that I can help them grow and succeed if they use me. The struggle is to get them to notice me and, if successful, convince them that I’m the one. Each Realtor/builder has their own type of “wall” that you have to overcome, but once conquered, you either have what it takes or you don’t. I have several strategies, but the primary method is the old-fashioned one, calling on Realtors. I try to see each office three times a week, and I always ask for business.
Once I have a good relationship with a Realtor and we have done several transactions together, I ask them to tell their colleagues about me. At first, this was uncomfortable but after doing it for the past 10 years or so, it’s gotten a lot easier. I tell them that I need to continue to grow my business and the best way is to have them refer my name to any colleagues who they think would be a good fit for me. I ask if they know someone now who I should contact. I take that name and immediately try to set up an appointment to show them how I can complement their business. This approach has helped my market share in each real estate account grow, especially over the last several years when it seemed Realtors had not been getting the best service for their clients.
Roundtable Participants:
Jim Bane, Branch Manager, WR Starkey Mortgage, Ft. Worth, Texas; Kim Nelson, Vice President, Sun America Mortgage, Atlanta, Ga.; Shawn Portmann, Loan Officer, CitiBank Mortgage, Puyallup, Wash.; Rodney Anderson, Division Vice President/Branch Manger, CTX Mortgage Company, Plano, Texas; Julie Teitel, Vice President, IPI Skyscraper Mortgage, New York, N.Y.; Janelle Carver, Vice President, Cornerstone Mortgage Company, College Station, Texas; Chris Washburn, Senior Loan Officer, FNMC, a division of National City Mortgage, Greenbelt, Md.