Giving Back

I am spending the week in Texas doing trainings and being part of a couple of mortgage free home giveaways sponsored by the people of Fairway Mortgage. I am so proud to have seen the project grow from a concept by one on my client’s Louise Thaxton, and brought to life by the CEO Steve Jacobson and the family at Fairway who pledge money each month to fund these mortgage free home giveaways. This was the fifteenth such event and by the time you read this, another mortgage free home will be provided to another wounded American hero.

The mortgage industry often is the recipient of negative press and a bad reputation by the general public. Some of this press and criticism is justified, but you can’t paint an entire industry with the same broad brush. While some have abused their positions of trust, many in the industry give back in multiple ways. As an industry, we need to do more!

Doing more to provide assistance for those in need, is not only the right thing to do, it is also good business. When the mortgage and real estate communities work together to help our returning American warriors integrate back into private citizens, you not only helping that veteran and their family make an often difficult transition, but you also provide for the future security of our own families and those generations to come.

As a country, and as a people, we can’t expect the government to take care of everything. First, because the government isn’t capable of doing everything, and second, the private sector can do it better and for far less money. Let’s be honest, anything the government touches it complicates, slows down, and over pays for. “We the people” need to take responsibility for doing the things that need to be done and in this case, help our American warrior’s transition back when they return from war. Not only is it the right thing to do, it helps insure future generations that brave men and women who are committed to serving the country, will continue to volunteer to protect and serve us all! Without them, none of us are free!

Louise Thaxton has become an example of a woman who felt the need and chose to make a difference. With the full support of her CEO and the other employees at Fairway Mortgage, Louise has been able to work with many different organizations to promote awareness of the challenges returning warriors who are having transitional issues. In a just a couple of years, the birth of a program for mortgage professionals and Realtors® to become certified in the needs of the returning warrior and their families, and how to communicate and assist those families transition into their new homes.

Louise has now trained and certified hundreds of mortgage professionals and Realtors® across the country, provided educational opportunities for thousands to gain important information about serving those who have served. In conjunction with local real estate boards and state authorities, Louise has been providing continuing education credit classes. This doesn’t happen in a vacuum. Local boards, branch managers and local Fairway employees, countless local sponsors, and some returning warriors like Sean Parnell, make it possible for these events to take place.

Sean Parnell (Army Captain and author of the book “The Outlaw Platoon”) is one of those retuning warriors who has seen the need and just like his courage under fire in Afghanistan, Sean has now seen fit to help returning warriors by traveling the country and sharing his story and the needs of those returning warriors who are trying to transition. You just have to read the book and hear Sean speak once to know that we all need to do more. We need to give back to those who put their lives on the line to protect the freedom we enjoy every day.

There will be more home giveaways in the months to come. If you would like to attend or participate in such an event, contact your local Fairway Independent Mortgage branch and ask if there will be an event in your area. If there is, see what you can do to support the event. If not, look around and see what you can do to help in your area. If you can’t find something to do, then go to and buy a pair of boots for yourself and a friend, and wear them proudly on Friday with something RED to Remember Those Deployed!

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“Breakfast with Benefits®”

Mortgage professionals and Realtors® have a real need to work together to improve opportunities for themselves and each other. Notice I used the word “opportunities” and not the word “leads” or “referrals”. I think too much time is spent looking for referrals and not near enough time spent getting in front of opportunities that can then work into becoming a lead or a referral. In the world of success made simple, we have to always look to make things as simple as possible while tracking toward the result we all want, closed transactions.

We have many conversations about the relationship between mortgage professionals and Realtors®, today I wanted to share a strategy that has been working really well for mortgage professionals to improve their relationships with Realtors®, as well as establish new introductions and potentially new relationships. I call this program “Breakfast with Benefits®”. It is a very simple strategy that can quickly help loan originators provide their current Realtor® relationships with real value and open the door to new relationships.

The basic premise is for the loan originator to work in conjunction with either a Title Company representative or local closing attorney to provide a monthly informational breakfast for specific invited Realtors®. Notice the word “invited”. This isn’t meant to be a huge gathering. This is meant to be a small group of ten or twelve invited guests to share breakfast and provide that group with specific valuable information by a professional guest like and underwriter, appraiser, attorney, home inspector, or insurance professional. Any related professional that can provide information and answer questions will work just fine.

In working with my clients, we have found that a smaller group works better and helps keep it controllable. Setting it up as a breakfast gets it done first thing in the morning so people don’t get wrapped up in their day and then miss the event. Breakfast is often less expensive than lunch or dinner so you reduce costs. Many restaurants would welcome a group like this and may provide a special location and price for you if you do it on a regular basis. Besides, even at $10 a person it is still a cost effective way for you and your Title rep or attorney to meet and speak to a good number of people and establish yourselves as experts.

Getting started is pretty straightforward:
• Find a Title rep or closing attorney to partner with.
• Create a list of days to have the breakfasts. Avoid holidays and other events.
• Find the location to have it, you may select multiple locations and rotate them so it makes it easier for people to attend from different parts of your area.
• Create a list of targeted attendees. Each of you can select five or six to invite at a time. Don’t invite all the same people each time.
• Only schedule one per month per location or area.
• Create a list of experts to speak and get them scheduled so you can promote it.
• At the first breakfast, ask the agents for other topics they would like covered.
• As you notice increased interest, ask that person to invite a “friend” to come with them and introduce them to the group.
• Be sure you RSVP and confirm so you are sure you have people coming.
• This is a nice breakfast meeting with a short 10-minute presentation by an expert and then let it to flow into questions and general conversation.

Building and maintaining quality relationships is the cornerstone of a successful mortgage practice. You can’t just hope your way into a steady referral based business; you have to work with all of your referral partners to help each other generate new opportunities. Working with you Title Company and/or closing attorneys to select the people you want to build a relationship with helps both of you provide value to those you know, and get in front of some you don’t!

“Breakfast with Benefits®” is a simple way to start the day by providing value and opportunities for those you currently work with, and to open the door to people you would like to work with in the future.

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As good as it gets?

Many conversations are going on around the purchase market and most seem to be focused on low inventory and the hope that the markets will get back to “normal” sometime soon. What if this is the new normal? What if the housing market is no longer built around large numbers of listed properties? What if the housing market is going to look more like the real time retail markets?

In times gone by, a store would be 25% showroom and 75% stockroom. Merchants would buy large volumes of goods at a good price, then; offer them to the public at a profit. As inventory would deplete, the merchant would lower his prices to spark interest in the remaining goods, then he would go back and order again and the cycle would continue. Today, bulk purchases are no longer needed as we can now rely on “real time” supply-systems. Stores are now 75% showroom and 25% stockroom. Goods are ordered at an already low price and a minimal quantity of inventory is needed because as each item is sold, the system just orders its replacement. The supply chain is faster and more efficient.

So what if the housing market is following that trend? What if we aren’t going back to large supplies of listed homes? What if every transaction is a multiple offer situation? How do we teach our clients to evaluate this new era in home sales? How do we get them ready to know what they want and be prepared to make a fair offer as the property becomes available? How do we change the thinking about making low offers and then negotiating toward a final price? What if there isn’t negotiation and the home just gets sold to the highest bidder in real time?

For those of you that think this may be just crazy talk, please think about the following information. Remember in 2010 when there was almost a panic around “shadow inventory”? “Experts” were convinced the housing market was in for another free fall because the banks were going to flood the market with all of these foreclosures and short sales? At the time, there were estimates of more than 3,000,000 homes that needed to be disposed of, and that this inventory was going to just crush the market. Well, it’s 2014, and there are an estimated 600,000 homes lurking in the shadows. Anybody scared? Heck, let them loose, we have buyers waiting!

It seems those homes were out on the market and sold. They sold but not many people were sellers looking to buy, because many were forced to rent. Now we are beginning to see the more traditional transactions. The old, “domino” system of buyer – seller – buyer – seller – buyer – seller, and so on from the past. Now we have people buying AND selling. Not investors, but people to people transaction of people moving because they want to and because they CAN! How about getting that extra bedroom and bathroom for less than the cost of you cable bill each month?

It’s possible you will read about the new big fear of the markets, the dreaded “Modification Reset”. Oh my, sounds terrible! What will happen when all of these loan modifications now turn to recast? Well, those that are back on their feet will get a new, still low payment. For those that can’t afford the new payments, many of those people will be able to SELL into an improving market! Yes, sell into an improving housing market! So you mean people will just sell their homes? Yes, that will be EXACTLY what they will do!

The other negative information out there is how loan volume is down. Well, that is true. Both purchase and refinance activity are down year to date, but what those numbers don’t show is that there is an elevated number of people who are already pre-approved out looking as we speak. The awful weather is past us and spring is on the way. Each weekend of nicer weather is bringing more and more houses into the market and the buyers are ready to offer and buy them.

So please don’t panic or feed into the fear. You have nothing to worry about if you are out WORKING each day and sharing the news. Homes and the money to buy them are right now likely to be far less in cost than what we are likely to see in the months to come. This may just be as good as it gets! If you are struggling now to find you audience, you need to change your activities or think seriously about whether or not you want to stay in the business? Many will leave the industry this year and that is as it should be. For those committed to our industry, we all must adapt to the new realities and gather up the business that is left behind by those who refused to make adjustments.

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Sharing the Options

The first quarter is now past us and we are hopefully heading into the spring buying season. For many, the first quarter saw many with numbers that were well below last year. Not surprising at all considering that the first quarter of last year we had 30 year fixed rates in the low to mid 3% range and a large number of available homes for those interested in buying a home. Heck, for many people, in the first quarter pipelines were full of refinances that consumed 60% or more of their total pipelines! Now, not so much. Rates are more than a full percent higher than last year and the number of refinance opportunities has fallen off quite a bit.

While there is a great deal of optimism about this particular spring market, many are concerned about inventory or lack thereof. As we talked about in prior posts, there is a real need for effective and factual communication with the local public about what their options are, and why now may be the best time for them to take advantage of selling a home and buying a new one. If people don’t know they have options, they aren’t likely to take advantage of them!

Each market is different. Each current home owner has a different set of needs and possibilities. As mortgage and real estate professionals, we need to work together to bring information, education, and options to those home owners that would truly benefit from selling their current home and buying a new one. The question remains, how?

First, the lender and agent need to sit down and look at the market and see where the activity is, and what is in demand. In other words, what houses would sell today if we only had them listed for sale?

Second, once we know what type of house that would instantly be in demand, we need to know, where is it likely the owners of this house move too? Remember, you need THREE options, trade-up, trade-down, and a lateral move to a specific area.

Third thing to consider is the approximate value differences between these properties so that you know how to explain or share certain financial information or cost analysis. When you can provide examples of what the monthly costs of the next home they might own could be, it allows them to see that getting that next home may be a much greater value to them than they ever thought possible!

Could the cost of an extra bedroom or bathroom only be a few dollars a month? Could I get the home I always wanted for less than the cost of my cell phone bill?

If you don’t have examples ready to discuss and to share, then it is difficult for the potential client to see and feel the difference. If you had examples of homes currently on the market, or properties that had recently sold, it makes the possibility much more real. When you combined it with financial options, it gives the potential customer options as to what is really possible.

Many people are excited about buying a home. Many other people would entertain selling a home and buying another one if they only knew what their options were. It is a giant series of dominos. One person has to list in order for someone else to buy. One person has to make an offer to buy so someone has the opportunity to sell. People are willing to list and sell right now if they knew they could, or knew what their options were. It is our job to share those options and help create the opportunity.

The way I see it, you have two options:
1) Complain about the lack of business.
2) Get out and create the opportunities needed to succeed.

Take your pick. Control your actions that lead to positive outcomes or; sit back and hope things get better. Speaking from experience, hope is NOT a strategy for success!

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