Looking at the CFPB’s “Toolkit”

First and foremost, have a great Thanksgiving with your family and friends! We all have a great deal to be thankful for, and please take a moment to reflect on those who won’t be home to celebrate as they serve us around the globe. I for one am very grateful for our men and women who serve our great nation.

The CFPB has published a workbook called “Your home loan toolkit” and everyone needs to take the time to review this and understand the issues and challenges presented when a government agency with no practical experience in the lending arena decides to tell people how to go about preparing to buy a home. The words “I am from the government and I am here to help” should scare the hell out of everyone!

This publication is 26 pages of just enough information to get the average consumer in real trouble. In fact, if you follow this plan, it is likely you will have a long, drawn out home buying process, full of setbacks, delays, and certainly you will never close on your home in less than thirty days. Clearly the CFPB didn’t bother to ask anyone how real life people go about buying a home, and how the very people who are there to serve them are now further handcuffed by silly regulations that clearly won’t improve the buyer experience!

If you go to my website, www.imtcoaching.com you will find a link to this publication, as well as my 45 minute webinar where I explain my issues with this publication. To be fair, there are some good things included in this publication, but the process given for people to follow is not only absurd, but when was the last time anyone had a loan rejected on a front ration above 28%? On what pricing sheets anywhere can you buy down a 30 year fixed rate loan for .375 points in cash for a .125% change in interest rate? It also contains one of the worst rate lock explanations I have ever seen.

The process given on how to go about getting a loan will certainly result in “The guess before the mess” and NOT “know before you owe”. Leaving the client to figure out how much they qualify for, finding the correct loan program to fit their needs, comparing product scenarios, determining pre-payment benefits, and certainly warning the public about pre-payment penalties and balloon payments are clearly best left to a licensed mortgage professional and not for a customer to go figure out for themselves.

I also don’t appreciate the “TIP” found on page 10 that warns the public “A loan officer is not necessarily shopping on your behalf or providing you with the best fit or lowest cost loan.” This is outrageous and the CFPB should be ashamed of itself for publishing such crap! The fundamental job of a loan officer is to work with the customer to find the balance between cost and comfort. In fact, if there are loan officers out there not doing this, why hasn’t the CFPB and the NMLS gotten  together to suspend, fine, and/or revoke the license of the offending loan officer?

The CFPB has really missed the mark here. In fact, TRID will not accomplish its intended goal of “know before you owe” because people aren’t going to do this work themselves, read all the disclosures, and yes, they will either lie about themselves or not really know the truth about their income, assets, employment, and credit history to make any of this possible. The fact is, had the CFPB sat down with real professionals and asked a few questions, they would have realized that it is the consumer that is its own worst enemy, and if they made a few simple changes to the process, everyone would have benefitted. Adding more paperwork and time doesn’t solve anything. People who want to borrow money will do or sign anything if they want the money bad enough!

If the CFPB is reading this, please feel free to contact me and I will be happy to come to Washington and spend as much time as needed at my own expense to explain to you the realities of the mortgage industry and how to take a few steps that would change the market in a real fashion while providing the consumer with real information so they could make an informed choice.

Have a great Thanksgiving!

Questions or comments: Mike@IMTcoaching.com

Tracking Time in the TRID Era

TRID has brought us so many things it’s kind of the gift that keeps on giving. Yes, I called TRID a gift! For all practical purposes, TRID may not work as the authors had intended, but as the laws of unintended consequences play out, for some, TRID will become a goldmine! How do I see that? Well, TRID makes some requirements that will either be dealt with in a professional and competent manner, or it will be handled poorly with delays and a great deal of drama. TRID will also not care who is the “bad guy” for not doing their job properly; mortgage professionals, Realtors®, title companies, attorneys, builders, insurance professionals, and just about everyone that comes into contact with a residential transaction, including the buyer and seller, are likely to become the target of blame when a transaction fails to come together. And trust me on this; it won’t be long before each local community will know who can, and who can’t close on time!

I have spent the past year or so getting my people ready for TRID and speaking around the country to anyone who cared to listen that TRID requires a plan and the ability to execute that plan to a timeline. When you begin with the end in mind and back out the timeline necessary to meet that closing date, it allows the originator to orchestrate the process and keep everyone on track and on time! This key function can only happen if you have mastered the art of setting expectations and holding everyone accountable to their timeline.

As the first TRID loans are closing, or not closing, across the country, people are starting to already take notice that some seem to be operating flawlessly and efficiently, and others are struggling to get their deals done. I am happy to say that many of my people have already been acknowledged by their local markets as experts and have had people they have never worked with before calling them to find out how they can work together to get deals done on time. Remember, you either know how to get deals done in thirty days or less, or you don’t. You either can get a deal done or you can’t. Either way, your market will sort it out and people will know!

My point is it might be very beneficial for you to start tracking your numbers. How long does it take you in the post TRID era to go from contract to clear to close? How long from contract to CD? What are your turn times at each step of the process so you can do a better job setting expectations and managing the timeline?

I already have people tracking these numbers and the average has been 22 days from contract to clear to close. The average turn time on issuing the CD from clear to close has been less than two business days. I expect that those turn times will continue to improve as everyone gets more repetitions in and gets more comfortable with the new process. One of the key areas that we have found is to be certain that the client acknowledges the CD the day it is sent. A few borrowers had to be reminded to open that email and acknowledge receipt!

My feelings are that tracking these numbers will be a great benefit to the originator and their team. Tracking the time frames of what is happening and when it happens can not only help the process and refine procedures, it can serve as a great tool to differentiate you and your process from others who may be having challenges navigating TRID through a thirty day or less timeline. And believe me; people still want to close in thirty days or less! Nobody wants to hear that TRID requirements are now demanding forty-five or sixty days to close. It just isn’t true. Many originators working for different companies in different markets all across this country have already successfully closed in less than thirty days. You should be one of those, and everyone around you should know it!

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

“Your systems serve as your filters”

One of the key points I try to make with my clients is that our business is pretty simple, it’s not easy, but it is pretty simple if you have your systems in order and follow the equation: “Process + Timeline = Outcome”. If you have a clear process on how you do your job, and how each contact goes from contact to closing and beyond, you have your system. When you put that system to a timeline, you are setting a clear expectation of what will happen and when. You also will know what didn’t happen and why, which may be even more important information!

Your systems act as a filter for your business. You either have a good system or you don’t. People either understand your system or they don’t. Your clients and referral partners either see the benefit to your systems and your timelines or they don’t! That is exactly the point; the people who like and understand your systems will enjoy them and share them with others. People who don’t aren’t likely to be your best clients or referral partners! The systems will serve as a filter for both prospective clients and referral partners. They will separate out who you should be spending time with and who you shouldn’t. Not everyone will like what you do and how you do it, that’s fine, because enough people will see the real value in having a clear system and a coordinated timeline process that those people will more than offset the ones who don’t. Remember, you don’t need every deal in your market, just the number of transactions you want the way you want them!

It works like a good movie or restaurant. People who really enjoyed it will tell others. Once hearing the glowing review, they will flock to it if they are interested in either going to a movie or a good restaurant. Even if they don’t, it is likely that they will recommend that movie or restaurant to a third party that may want that information. It’s like with me; I don’t like sushi. My kids love sushi. I know the really good sushi place near my house because it’s where my kids want to go when they visit. Even though I won’t go there, if someone asked about a good sushi place, I would be happy to recommend this place just because my kids have had a great experience and they love sushi!

The same thing happens in the mortgage business. We set an expectation for the customer of the full document pre-approval. We share with them the value in getting this done before they go looking for a house. Some people see the value; others just want a quick pre-qual so they can go out and shop. If my Realtors® won’t show them property without my full document pre-approval, they run the risk of that customer going someplace else and using a different agent. However, they know that not having my full document pre-approval means this customer may not qualify for a loan, or their offer may be seen as weak, or lose a house to a stronger offer. So while they may lose a customer from time to time, the transactions they do put together go much smoother and result in higher customer satisfaction. The same holds true for setting the standard of the full document pre-approval, you might lose some people, but the people who see the value in your system, will have a better transactional experience and are much more likely to refer you to other people who want that level of experience.

So let your systems serve as your filters. Have a great system the works every step from contact to post closing. Be certain you set forward the timeline to be sure everyone has the same set of expectations. When you do, your clients and referral partners will have a much more positive experience and refer you more opportunities of the very people you are looking for!

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

“The Black Friday Sale Plan”

One of the year end strategies I have shared with my personal clients has been the Black Friday Sale Plan. I wanted to share a simple outline for you to follow so you too could use this plan to increase your activity level, connect with more Realtors®, and identify more exceptional product and service providers in your area, so you can improve the value you bring to your market. The plan is simple; we are going to use traditional “Black Friday Sales” into a new area of residential property sales. We will take the popularity of Black Friday and use it to engage and generate opportunity and value.

First we select a few Realtors® we have good relationships with who we know are willing to do some work. We need our selected Realtors® to provide us with property listings that will be part of the sale. These listing must contain a significant price reduction from its current listing price to make it a true sale. The property could be an existing listing with a price reduction, or a new listing just coming out to the market. The obligation is to set the price of the property from Black Friday morning at 6am to the following Sunday at midnight. If a real offer is made at the sale price under acceptable closing terms, we have a deal. After midnight, the price can revert back or the sale may be continued as desired.

Once we have a number of properties secured for the sale, remembering to keep these properties secret until 6am on Black Friday, we begin the process of locating local product and service providers who wish to offer a significant value to our sale participants to be part of the sale. This must be a special discount! Try and collect as many as you can and shoot a 30 second to one minute video explaining the value. This “video coupon” will be an important part of the strategy. Don’t forget the discounts you are giving, as well as the real estate, title, inspector, and any other associated discounts you can put together for this sale in addition to the general discounts.

Now we put it all together. Go on Facebook® and secure a page that describes you event like “Jonestown Black Friday Sale”. You may have to try a few different combinations, but it won’t be too difficult to get something that works.

Record the “rules” of the sale. All prospective buyers need to have your full document pre-approval to participate so we know that the offer is real. We also need to explain that starting on the Monday prior to the sale; you will be releasing a number of “video coupons” each day so they need to keep checking to see what they are, so they must “like” the page or they won’t see the coupons!

Then you need to record a Mortgage Coach® total coast analysis for each of the featured properties and work on any other promotional video you want to share during the sale. Interviews with sellers or neighbors are often great to tell people why they love the neighborhood.

On Black Friday morning at 6am you release the property information to the already registered buyers, those that you have already pre-approved by email. At 9am they can start seeing property and making offers, at noon, you can post all the property information and supporting video content to the page as well as everyone in your database. Again, the more you connect and share, the more impressions you make! Be sure your agents are also “liking” and “sharing” the information. Every time you share or someone shares the information, you exponentially increase the total number of impressions!

As the sale ends, make sure you follow-up with everyone to be sure they have taken full advantage of the opportunities and special values. You may want to record any video testimonials from the people who found a house or made a sale! Remember, it’s the actions and the activities that are important, not just the numbers of properties sold that counts. Even if you don’t sell a single home, you have made a great effort, differentiated yourself from the others, and many of these people will go on to complete a transaction down the road with you if you keep connected.

The outcome is worth the effort! Use the tools and techniques on the website to help you complete the tasks. The strategies on the website will also help you and your Realtors® find properties to list and buyers to buy. But all the great ideas and strategies can’t work on the website if you don’t get up, get out, and make it happen!

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