“Is it worth the time?”

I ask this question a great deal, “are you busy, or are you productive?” Busy isn’t good enough. Busy doesn’t make you money. Busy will likely COST you money in the lost opportunities because you were occupied being busy!

Working with all kinds of loan originators I have discovered that many don’t have a real connection to their time. If you ask originators how many hours a week they work, you will hear all kinds of number like, “fifty or sixty”, in some cases I have people tell me they work twelve to sixteen hours a day, six or seven days a week! Seriously; doing what? What about what you do takes so long? How many deals are you doing each month and how much time do you spend from first contact to loan closing? Surprisingly, most originators don’t have a clue. Ask them to document what they do and how long things take, and you will be SHOCKED at what you get back. One originator told me he worked sixty to seventy hours per week. When I asked him to track his time and document what he did, we discovered HUGE gaps between actual effort and activity. We also discovered that this originator has no set times to do anything!

It has always been my opinion that originators have very little time structure in their lives. No set time to go to work. No set time to end the day. No requirements on how much time they spend doing certain things; and clearly a limited understanding on how long things they do every day take to accomplish. Now much of this is because nobody ever asked them to track it. Never in their careers did anyone ever tell them what to do, when to do it, how long it should take, and what the result should be! Not once ever!

So I have always shared the analogy that your work should be much like your high school experience. Understand the layout of the building so you can find your way around; then have a schedule of all the things that need to be done, the time allotted to do them, and the expectation of what the accomplishment is supposed to be!

If you feel you are working more hours than you should be working for the results you are getting, try tracking the work and the results. Do it for a week or so. When do you go to work? What did you do? How long did it take? As a result of what I did, was I able to track results of those actions? Did I talk to current clients or referral partners? Did I enter new people into my database? Did I pull credit? Did I issue a preapproval? Did one of my preapprovals move into contract? And if any or all of these things took place, what was the time consumed to do it and how many of each was there?

You see, without a schedule of activities you spend too much time thinking about what to do next instead of doing it. Without an expectation as to how much time it should take to do something, it will often take longer. Without tracking the actual results of the efforts, you don’t really know for sure if what you are doing is resulting in what you want!

Try for yourselves. Before you start, ask yourself how many hours you spend “working” each week? Before you start each task, ask yourself how long should this take? At the beginning of each day, project what you are trying to accomplish in what period of time; and at the end of that day chart the results. I guarantee some of you will be very interested in the results!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://improvemytomorrowcoaching.com

Panic & Confusion

And so it begins…the calls are already coming in by Realtors® who are getting the “news” about the changes coming in August. I have shared some of the stories with  my private clients and they are already prepared, but I can’t believe that so many people are already in “panic mode” of the coming changes.

Major real estate companies and even some lenders are already telling our Realtor® friends to start writing 45 and 60 day contracts beginning in June, because the new changes will cause delays in closing. Really? Because the new rules require the customer to see the final CD (formally the HUD-1) three business days prior to closing, the solution is to require more time to do the job correctly? I don’t think adding more time to a poor process is the way to go, do you?

I have one client in Colorado who has been delivering “three day numbers”, Guaranteed, for about five years now. In fact, if my notes are correct, 936 of 938 closed loans two years ago had firm HUD-1 numbers three business days prior to closing, not because it was the law; but because it is just good business to guarantee your work! Do you think that client is going to run around Colorado telling agents to get longer-term contracts in such a busy market? I don’t think so; in fact, I think he will be sharing the news that they are open for business and will close every loan in thirty days or less, and sit back and watch the business pour in!

Christy Solar, a client of mine in Louisiana, does a very high volume of USDA loans. Even with the turn times at USDA going two weeks or more, she is still getting files closed in thirty days and delivering numbers well in advance of closing because her systems are designed to get it done that way! In fact, she had a Realtor® just email her about what he had heard at a regional meeting for his real estate company, and they told him to get ready for the big trouble coming in August. Her response to him I will share with you exactly as she sent it. (I would have called attention to the fact that the HUD-1 will now be called the Closing Disclosure, but you get the point).

Here is her reply:

The new HUD changes will mean the HUD has to be approved and cannot change 3 days before closings.  Our company is being proactive and making internal changes so that this will NOT affect the closing times we have presently.  Keep in mind that it will require lenders to be quick on the front end and for all parties to realize that NOTHING can change after the HUD is approved or the 3-day clock will start over.  For instance, having termites or any seller costs added the day of the closing to the HUD will not be allowed.

Our team is preparing for this change and hope to be implementing this internally by the first of April…we are doing this now to make sure we are ready in August.  Just as many lenders made a big deal about CFPB, Rural Development changes, and all other changes over the last 3 years…they are making a big deal out of this.  Those lenders who do not prepare early or do not set realistic expectations with borrowers and realtors will be the ones that have the problem.

We, as always, are committed to closing files on time and as quickly as possible…this has not changed NOR will change in the future.

Tell them to just keep getting business and keep using TEAM SOLAR and there are no worries…LOL

I think Christy did a good job explaining the situation and providing a clear solution to the challenge. Realtors® are going to be given information and it is your job to be sure that you get your solutions in front of them early. If you haven’t put together a plan on how you are going to be ready and get your loans closed in thirty days or less, you need to get your systems and plans in place by the end of May, so you can make any changes or adjustments that are needed so your loans continue to close on time!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://improvemytomorrowcoaching.com

“Explaining Value”

We often have prospective customers asking about rates and fees. Many do a fine job answering specific questions, but don’t do a great job educating their people as to why prices are what they are and what causes prices and fees to change. Some have a real challenge with this part of educating the consumer and others avoid the conversation at all costs, and may even be less than honest about everything involved. We have discussed “range based pricing” in the past and I am still a believer that this is the best way to share information with the customer, especially when we have such rate volatility. Let’s be honest here, we have come to expect thirty, forty, and fifty basis point swings in MBS market as if it were a daily occurrence; and lately it seems like it is.

With this in mind, many honest originators are quoting rates and fees that are here today but gone tomorrow. We all know it happens, but when a client feels like they were “bait and switched”, it hurts us all. So my suggestion is to be clear in this conversation. Use some charts or graphs to show people the range of rates we have seen in the past few months, and be certain they are very clear about the connection between rates, points, and fees. If you fail to share this information up front, it may make for a very unhappy conversation down the road.

The first thing you need to do is share accurate information. Know your numbers and show them in writing the connection of costs, as well as what happens when the market moves in either direction. Example, we have seen the price on the FNMA 30yr 3% range on 12/24/14 @ 100.30 to 1/30/15 @ 105.50 and we have bounced around everywhere in between. Now since pricing varies between lenders, products, and programs; it important for you to make the connection between YOUR pricing and fees, and how it has followed the market. Again, you must compare YOUR pricing as it connects to the market or you can’t make a valid case for your customer to follow.

One of the ways you can explain the relationship between rates, points, and fees, is to show them how you can move the rate/payments with adding and subtracting the cash required for closing as represented by points and fees. If one point in cash buys the rate down .25% in rate, show them the cost of that point in dollars, and the change in monthly payment. Same thing in reverse, higher payment, credits for closing costs. Many people will see the connection, but some won’t. So here is a tip I have shared with my clients to help illustrate the point. Imagine you were buying a car. You had your car all picked out with all the options you wanted and were just about settled on the price when the dealer asked you about a “gas mileage option”. The “gas mileage option” is a mythical option but works like this; the customer pays $1,000 and the car can be set to get ten miles to the gallon of fuel more. Again, this is a mythical option we are using for demonstration here!

When faced with this option, the customer could then do some minor calculations. If I get ten more miles to the gallon, how many miles would I need to drive in order to make my money back? Well, that would certainly depend on the price of fuel during the calculation. Second, if we see the value in this option, can we afford to pay the $1,000? If not, would we give up some of our selected options and get the “gas mileage option”? The only way to know is to let the customer choose what the best value is for them!

Sometimes it’s about the rate, certain rates have greater psychological bearing than others, 3.875 is a bigger deal to 4% than 4% is to 4.125; same eighth, huge difference in perceived value. Same holds true for points and closing costs. Some people will see the benefit in paying points or higher fees; they just can’t spend the upfront money. So be clear about the connections and be clear about the market. While you don’t control the market volatility, you do control how you explain it and set the proper expectations!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://improvemytomorrowcoaching.com

“All about Perspective”

I was on a coaching call this past week with one of my clients, a twenty year plus veteran and a two year coaching client, who has really been challenges with consistency. We have planned and scheduled and success would be available to him, but for only a few months at the desired levels and then he would slide back into the abyss of the old bad habits and we would find ourselves back to where we started. This was clearly a frustrating situation for both client and coach.

When this clients production began to decline last spring after once again getting to monthly numbers that were his target for success, I fought to find the words of warning or to find out how to share what I was seeing and how, once again, he was falling out of the “success pattern” he had scheduled himself and was headed for another fall. The more I tried to find a way to show him what I was seeing, the more resistance he had to stepping back and seeing himself from my vantage point. I knew if I didn’t find a way to show him how and why he was going to fail once again to sustain his improvement, we would soon be back to where we all started.

Despite all the efforts and strategies I could bring to the table, the old habits once again returned and we were quickly heading down hill and by late summer we were back to sporadic activities and even softer production.

As a coach, nothing is more frustrating than knowing someone can be successful and not being able to find the way for them to see what you see, believe what you believe, do what you know will work, but as soon as they get close to really mastering the skills, they stop working at it and think that they have it all; but quit pushing right before the point where they would truly have mastered their craft. If you have ever coached or tried to teach someone, you know the responsibility lies with the coach or the teacher to find the way to communicate the message so it resonates, not just to keep saying the same thing over and over again and expecting a different result. Coaching and teaching is about the plan, the message, the schedule, and quantifying the result so you can either succeed, or make the needed adjustments so you can succeed.

As the numbers fell off, my client began to realize he was heading down again and fought to believe that this result was not his destiny. He wanted to be successful and in fact, NEEDED to be successful for himself and his family. If for no other reason than that he now knew that being successful took less time and energy than being unsuccessful. And this was the moment I knew he was now open to succeed, and prepared to LEARN the process of success by learning how to improve himself, his philosophy, and his systems, so he could schedule his success because he knew he could succeed, he was now prepared to learn how to remain successful!

So what triggered this change? Believe it or not it was a movie I asked him to watch called “Groundhog Day”, a 1993 classic directed by Harold Ramis, staring Bill Murray and Andie MacDowell. I am sure most of you have seen it and if you haven’t, please do so. In the movie, Bill Murray plays a weatherman who is sent to Punxsutawney Groundhog Day Festival and becomes trapped in a loop where every day he wakes up and it’s the same day, over and over. At first, the reaction to this loop is destructive and frustrating. Knowing that there is virtually nothing he can do to wake up in the morning and move on with his life. The actions become more and more self-destructive, until at one point, he realizes that this loop may just offer a solution; by knowing each day is going to be the same, he can improve the outcome of each day by improving himself in the situations he finds himself in. The move goes on, his character evolves, and ultimately he finds a new person in himself that is a far better version of himself, and he is rewarded with love and new and improved skills to truly enjoy his life. Once this is done, his life is allowed to move forward.

My client made the connection that self-improvement was the path to sustained success. Instead of going through the motions, he was learning why the motions where important, and how each motion was connected to every other motion. Each and every action generated a reaction and a result. This awareness has created a perspective that has allowed this person to fully understand that long term success is a destination and not a goal. It is a place you go and grow. It is by having the perspective on how one must be as a successful person, not just what one must do to become successful. Anyone can become successful; fewer learn from the journey and remain successful. To me, much about remaining successful is about the perspective you have about what is your idea of success, and what you are prepared to do so that you evolve into a successful person.

Watch the movie and see if it resonates. Ask the question, is my current perspective aligned with the success I seek? Will it get me to that destination? Once there, will it keep me there? Does what I do and how I view it allow me to evolve into the success I see for me?

Questions or comments: Mike@IMTcoaching.com or visit us online at http://improvemytomorrowcoaching.com