Memorial Day Makes Big Impact

It’s been a long time since I have seen this level of activity coming out of a Memorial Day weekend. The sheer numbers my clients are reporting of new inquiries, pre-approvals, and contracts in the first two days back from the weekend are really incredible! Granted, my clients are but a small subsection of the loan origination universe, but over the last 15 years I have never recorded these kinds of numbers. So based on the numbers from my originators, here are a few takeaways:

  1. The average of new contacts over this weekend has been right about 2.3 per originator from Saturday to Monday. This past weekend it was 3.1
  2. The average number of pre-approvals issued Friday through Monday was just short of 5 and this past week it was 5.8
  3. The average number of new contracts hitting on Tuesday before noon was 2.2. This week it was 3.2.
  4. The real shocker came in contracts arriving after noon on Tuesday. It had been about .4 and this week it was 1.5.

That is an increase of about one entire unit in each category! That was 2.5 more contracts dropping per originator over this weekend! Now I know all markets are different, but also know that in some parts of the country there was severe weather that may have reduced some of that possible activity. The pull through this week will tell us more, but the purchase market is really moving along well in the areas my people are serving!

This group is 42 originators working for different companies or banks from New Jersey, Ohio, Pennsylvania, Virginia, Indiana, Illinois, Michigan, Missouri, Kansas, Texas, Arizona, Florida, Georgia, and Oregon. They are pretty diverse in their business in general, but they cover 14 states in a variety of markets and average closing 127 units a year. So these are solid people and production activity can always be seen arriving in spurts; but I make a point of tracking holiday weekend activity and this past weekend was HUGE!

So prepare yourselves for a good bit more activity than you might have thought this season. We aren’t at peak yet, but as more and more schools end for the year we get closer and closer to when we see the crossover of pre-approvals and contracts. The good news is, we saw a bigger than usual build in pre-approvals so far this year so be sure you stay connected and help everyone find that home they desire and be sure those that do buy, use YOU for that loan. Pre-approving the borrower is 90% of the work with none of the pay. The last 10% of taking the deal from contract to closing gets you ALL THE MONEY!

Use the tools and the strategies we have talked about and take advantage of a great market!

Questions or comments:


Share Perspective

As we get closer to the peak of the home buying season, it becomes more and more important that loan originators maintain connected and share prospective of their current market. While markets may be similar, most people only hear about national numbers when they look for mortgage and real estate information. The news media and other online information sources may quote the national trends, but that information could have little to nothing to do with their specific market.

The best example I see is that national reports are sighting that housing inventories are growing and that sellers are no longer in control of the market. Interesting story for sure, but to those living in tight markets, those very markets that see multiple offers and offers well above asking price, those number don’t apply. Imagine the buyer who reads this story who lives in that tight market and demands that his agent present an offer that is significantly below asking price? Trying to get a “deal” on a house under these conditions will likely result in that buyer missing out on some really good homes!

Perspective and local knowledge is a major advantage to those who understand and track the local market. Knowing that information and then sharing and preparing our clients is the true sign of a local expert that most online lenders or call center players can’t possibly share! One size doesn’t fit all, and eight minutes may not provide for a great experience if getting into the market with the wrong information.

The best example is that the poor people who are being caught in multiple offer situations time after time. They keep looking and losing bid after bid. They can become frustrated and start to give up on the dream of getting a house. Now is the time to support them. Share other experiences where client were in the same position but kept going and eventually got the house of their dreams.

It’s also important to help your referral partners remain strong in the same way. Low inventory can be a problem, but help them find the homes they need by sharing some of the strategies we have talked about. Be committed to keeping them positive and active when it would be easy for them to bail out and walk away.

People who succeed are often the very people who kept after it when others quit. They made one more call, knocked on one more door, spoke to one more homeowner or asked for one more opportunity to make something happen.

Nobody cares about the thousands of light bulbs Edison made that didn’t work; they just remember the one light bulb that did! Share your local knowledge by sharing your perspective. Use your strategies and be willing to do the work the other people won’t do and you will do better every time!

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Why Do We Support those Trying To Put Us Out Of Business

It almost seems like a joke, nobody would really support anything that has a sole purpose of putting you out of business would they? You would think that would be true, but as I have been talking about for the past few years, Realtors® and lenders alike are doing just that!

Zillow has announced record profits. Yes, they also announced that they are opening up offices to List, Sell, Buy, and provide financing for real estate in the following cities:

  • Austin
  • San Diego
  • Tampa
  • Los Angeles
  • Sacramento
  • San Antonio
  • Minneapolis/St Paul
  • Nashville
  • Orlando
  • Portland Oregon

They join current locations in:

  • Phoenix
  • Las Vegas
  • Atlanta
  • Denver
  • Charlotte
  • Raleigh
  • Houston
  • Riverside
  • Dallas
  • Miami

So with all of this going on, and the increasing expansion into more and more markets, when do you think people will begin to wise-up and think about what it is they are doing?

As I said before, you are either transactional or relational; if you continue to focus on transactional lending by buying leads, understand that you are supporting people who are looking to end business as you know it.

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We Get to do Mortgages

As often happens, the inspiration for this week’s blog post comes right from one of my coaching calls with one of my clients. As it usually goes, I start the call by asking each client about how their week went and what kind of activity they were seeing. This call was no different. The answer however, caused me to take a moment and try to stop a process of thought that I see far too often from loan originators, almost an attitude of being bothered by having too many opportunities.

I know it sounds strange, but you can see it happen with people who have been in the business a while and are pretty productive. This originator was exactly that, a veteran who has experienced a great deal of success in his career that had a pretty busy weekend with new preapprovals and current preapprovals that found properties and went into contract. Now for many of us, that kind of weekend would be greatly appreciated and we would be happy that we were on the receiving end of all of this good fortune! It is in fact why we prospect and manage all of these relationships, so that we gather new opportunities and convert those into applications and closings; but as it sometimes happens, too much success can sometimes be taken for granted and even feel like an imposition!

In an effort to remind this originator of all the hard work and investment he has made to establish himself and nurture all of these relationships that provide this wealth of opportunity, I found myself trying to find a way to refocus my client and get him back on track, when I thought of a scene from a movie I once saw called “The Rookie”. Actor Dennis Quaid portrays the true story of high school baseball coach who motivates his team by agreeing to try out as a major league pitcher!

As fate would have it, his team goes on to win the championship and coach is now forced to honor his pledge. With a wife and children, he manages to be invited to play minor league baseball and a chance at the majors! Well life in your thirties at the minor league level isn’t easy, and the challenges grow to the point he wants to quit, when he sees some small kids playing the game and enjoying the pure joy of baseball!

Jim Morris, once again excited with his love of the game, showed up the next day with all the passion to play, connects with a future star who seemingly is just going through the motions and utters the line, “You know what we get to do today? We get to play baseball!” Jim goes on to get called up to the majors and plays a couple of years living the dream of being a real major league pitcher!

This is what I reminded my client. Today you get to do mortgages! You get to work with great people, earn their trust, help them accomplish their goals, and make a damn good living in the process! So when you get to a point where all the activity feels like it’s too much. When you are feeling pressure to do that next preapproval or enter in that next contract; take a moment and think to yourself that this is exactly what you have spent your entire career trying to make happen!

“Today, you get to do mortgages!”

Questions or comments:

Was it REALLY a BAD Month?

When you have the opportunity to coach as many loan originators as I do that cover a big cross section of the country and all possible housing markets, you often get different views of the same type of information, but you also find some things that are absolutely the same. Today, I want to have a conversation about originators who have a “BAD” production month. In most cases, the word “BAD” is used to describe a month in which the total number of loan applications, closed loans, and/or closed dollar volume was below a predetermined threshold. Many companies and originators use these measurements when calculating production and often publish these numbers and have award programs based on these numbers. I agree that this is a good thing, but it often pushes people to think they might have had a “BAD” month when they really didn’t.

Let me explain. Selected units of measure and time frames in which they are measured are often a great indicator of performance and usually are reliable to show the quality of work and how well someone is performing. However, sometimes the items measured are NOT a great indicator of what is really happening, and originators and their managers need to look a little deeper!

In my business I use five units of measure to follow the business flow of my clients on an ongoing basis, not just use a set of numbers from any given month. I like to keep focus on the “ongoing business” not just the results in one month or another. I find looking at units or closed loans in any month as helpful, but not by themselves the best way to see what is going on. In fact, some originators may have had a “Bad Month” with closings or applications according to the system that only measures those things, and be left feeling disappointed or upset that they didn’t do well, when by a broader measure, they may have had a really good one.

Since nobody benefits from a depressed originator, and since we are in a business that flows month to month and year to year, I use five units of measure to track what my people are doing because I feel it provides the best overall picture. Those five areas that I track are:

  1. New contacts
  2. Credit pulls
  3. Preapprovals
  4. New Applications into processing
  5. Closed loans

When you track all five areas and the relationship between them, you get a better picture of an originators business. If an originator closed more loans or has put more loans into processing by depleting their numbers of total preapprovals out looking and with little or no new incoming business, it’s likely that the following months may not be so kind. On the same note, if an originator doesn’t close many loans or may not have put as many loans into processing as they would have liked, but their new contacts, credit pulls, and preapprovals are rising dramatically, they are looking at better closing months to follow.

So take a good look at more numbers. Sometimes certain numbers don’t really tell the whole story. I have found that tracking these five areas and the relationship between them helps provide a much clearer picture of the business flow and overall production.

Questions or comments: