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: Mike@IMTcoaching.com

 

Build vs Depletion

For those that have followed this post for years, here is a reminder of something I have shared before. For those recent followers, here is an important concept that you need to be aware of and how to tie it into what is my ongoing reminder about tracking your numbers.

As we head forward into the spring buying season it becomes more and more important to track and follow your numbers. Just like we compared our first quarter numbers year over year, and how they measured up as a percentage of our total business, we also have the second quarter well under way!

If we are accurately measuring our contacts, credit pulls, pre-approvals, and gustation periods of our borrowers; we need to understand the “BUILD” in the number of pre-approvals in our pipeline. Spring is the time we are likely to see the biggest build in those numbers, and Easter weekend is generally the time that the real spring buying season begins in earnest!

As we are tracking our numbers we must pay strict attention to our pre-approved borrowers so we don’t “leak” any of those people away to other originators! Preventing leakage is just as important if not more important than generating the new contact in the first place! So keep those weekly tracking calls at the top of your Thursday priority list!

The other part of this model is to understand that the longer you continue to grow your pre-approval pipeline over the number of new contracts, the longer the wave of productivity in your buyer’s market will continue! Pushing that wave further and further into the summer will result in a longer buying season for you and your referral partners! Once the number of pre-approvals falls below the number of new contracts, you have begun your “DEPLETION CYCLE” which signals the end of your peak buying season.

Pushing that cycle as far as possible can result in a serious number of “extra” transactions for you to close! For example, if your average monthly number of loans is 3-5 units a month, and your “peak” number is 8-10 units, pushing that wave, even for just one more month is an extra 5 or more units! That is like getting an extra month of production  FREE!

Tracking your business and following your momentum is an important tool in improved production. Those extra few deals also bring a few extra sets of contacts and future referrals! It’s important that we look at our business like a business. Tracking your numbers and understanding your business flow and conversion rates are a part of making the most out of each and every opportunity!

Questions or comments: Mike@IMTcoaching.com

First Quarter Review

It’s the middle of March and now is the time to do our first quarter review. Now is the time to pull out the business plan and compare projections with the results. It’s always important to calculate our results as percentage of business as compared to same percentages quarter to quarter. Since all four quarters of the year are never the same, we need to look back and see what the total percentage of closed business or opportunities as compared to the entire year and quarter to quarter. Most of my originators average between 9% and 18% of their total closed business in the first quarter. So get clear when comparing numbers that you check your actual math.

All the indications are that we are going to see a really robust spring market. I am seeing that my clients are carrying about 30% more pre-approvals than the same time last year. We are also seeing higher numbers of listings entering the market in many areas, so that bodes well for higher numbers of transactions. Just be certain to stay well connected to those you pre-approve, and monitor your conversion rates. We don’t want to leak away transactions we are already invested in. Those weekly calls are important!

Interest rates are also very friendly to us at the moment. Remember, last year at this time rates headed higher. Paying attention to an improved rate market can lead you to more total transactions, both purchases AND refinances!

This time of the year it’s a good business to work with some of our Realtor® referral partners on using the “Forever Home Strategy” to generate new listing opportunities.

Last but not least, we need to remember to prospect from the process. There are all kinds of prospecting opportunities from the loan process. Realtors®, Accountants, Financial Planners, Attorneys, Insurance professionals, and all kinds of other opportunities right inside each file you close.

Now is the time to update your numbers and look at the information carefully. We are heading into the spring with many favorable conditions for the housing market. So update, communicate, and don’t  PROCRASTINATE! Opportunities are plentiful to those that Just do the WORK!

Questions or comments: Mike@IMTcoaching.com

Off to the Races

Before I get started, let me take a moment to acknowledge my wife MJ’s birthday today. None of what we do here at IMT Coaching would be possible without her and we all know it! So HAPPY BIRTHDAY MJ!

We are just completing the first full week of 2019 and by all accounts, you guys are really off to the races! I anticipated a strong start to the year, but I really wasn’t prepared for the sheer size and scope of the loan volume we are seeing across all markets. If this first week is any indication of what is to come, the first quarter of 2019 is going to be something to talk about!

Some of the volume is certainly due to the fact that people kept working through the end of the year and found a solid audience for their message. I know that the recent drop in rates also helped push some people off the fence and maybe they brought along some friends. All I know is it is a very exciting time and I can’t wait to see how it plays out.

For those of you spending a good deal of time working with Realtors®, now is a good time to help them navigate some strategies to help them jump start their spring seasons. We have a whole section on the website called “Power Partnerships” that will help you share the possibilities of things you can do together to improve the number and quality of opportunities.

So if your people are looking for buyers, there are simple strategies to help with those opportunities. If your agents want to focus on generating listings, there are number of strategies to help make that possible. All it takes is for you to share the information and let the video tutorials bring each concept into focus! Terri Murphy and I explain everything in detail and all the support materials are attached to each module so you can easily download what you need. All you need to do is watch the introductory video to see if the strategy is something you want to try, if so, just watch the supporting webinar. If not, move on to another strategy on the list until you find one that fits your needs. It only takes a two hour commitment once a week to make things happen!

As always, if you have any questions or comments: Mike@IMTcoaching.com

The Work, Worked

Welcome to 2019! It’s so gratifying to close out 2018 with such great results in December and huge momentum going into this year. Despite all the calls for people to just go away and come back when the market picks up again, a solid group of mortgage professionals ignored those calls and went out and had their best month’s ever! Not just the best December; but the best month ever!

I get all the nonsense you can hear from the “experts” all over social media explaining that the housing market and real estate is dead, but a group of professionals have ignored the self-serving hype and remained committed to connecting with people, building relationships, creating joint opportunities, and providing a great customer experience; which continues to prove to the customer that it matters who you choose to do your loan.

It was amazing to see the number of lenders that wouldn’t or couldn’t schedule closings on 12/31. Some sent their staff out and said that you close by Friday, or wait until next year. Others complained that their title companies wouldn’t or couldn’t schedule a closing so that was that! Seriously, you can’t work at all on Monday the 31st? So to all those professionals who made it possible for all the builders, sellers, and buyers out there who needed to close on the 31st, thank you for showing that we ALL work for our customers and being a professional that values  the quality of a customer’s experience with us is the number one reason to be in the business.

Also special recognition goes out to all of those mortgage professionals who made themselves available this past weekend to serve those who needed help. The count is still ongoing but there were already people letting me know they had wrote contracts and pre-approved borrowers over the weekend that made offers that turned into contracts! Bravo for working the plan!

Another item that keeps popping up is the consistent conversation about a declining housing market. I am not exactly sure why people believe that a reduction in total price appreciation represents a declining housing market? 2 to 3% growth is still growth! Just because property is selling for less than asking price, doesn’t mean housing prices are declining. My suggestion is for you to get the specific area information for your MSA and keep on top of your rent vs ownership costs. Since each market is different, you need to be on top of your information. While national news is fine, it’s local expertise that makes you the expert!

As always, questions and comments: Mike@IMTcoaching.com

End of the Year Momentum

We have talked all fall about pushing hard to end the year and begin 2019 with momentum. Many of you have really done well and are seeing solid closing numbers for December and good pipelines for January and February closings, as well as a number of new referral partners; so job well done! The key here is not to let your momentum slip away by easing up this last weekend of 2018. Just finish the journey by making one last round of calls to your referral partners letting them know your availability this weekend. Connect with your pre-approvals and let them know that this coming weekend may bring a great value in home shopping before the January rush when those who wanted to wait until the holidays were over to begin shopping!

You also must be really clear within your own company about the rules you need to follow during the government shut down. Some of you may not be affected at all, and others may face significant challenges with certain loan products. Since too many possibilities exist from location to location and lender to lender, PLEASE get very clear on what your specific policies and procedures are before confirming or denying anyone. Remember, your rules maybe different than others. Avoid making statements about what may or may not be possible OUTSIDE your own company policy!

Check for open houses this weekend, there may be more than you think or none at all! You do have to look! Check any files still left to close this year and be sure all the little things are done because it may be a challenge finding help on Monday the 31st!

Last but not least, complete any loose ends on your business plan and schedule. Make any little adjustments or tweaks so that next Wednesday the 2ndyou can hit your mark and begin the year strong. 2019 is going to be a great year for you if you have done the work and are prepared!

Have a safe and Happy New Year! As always, any questions or comments: Mike@IMTcoaching.com

 

“Becoming the solution is your business evolution!”

Forget what anyone ever told you about the mortgage originator being a salesperson, it’s not the case! While basic sales techniques are certainly part of the business of an originator, you can’t “sell” your way to great relationships! You can try and sell rates and service, but who is going to believe you any more than the other fifty people they saw in the last month saying the same thing? I have argued in the past you might even be better off by telling people you didn’t have great rates or great service, at least they might see you as honest?

My thought process has always focused on being a solutions provider. Locate a challenge and provide a solution. Find a problem, and offer a solution! Build long term relationships by providing answers to questions and solutions to the issues found in your market! It’s as simple as that. Tight market and trouble with listed inventory for qualified buyers; get out and work with your Realtor® using any of the success strategies to generate new listings! Having an issue with lack of down payments; master USDA loans along with possible grant and down payment assistance programs. Not sure you know what the issues are in your market; go out and talk to the people and ask them!!!

One of my clients in Louisiana was new to the business and had no idea where to start. I told her to go out and share 50 business cards a day and just talk to people and see what they say. She found out that many people wanted to buy homes, but they lacked down payments. She looked at her area and saw most of it was eligible for USDA financing. She took some time, learned the program, and went out and shared the solution. At first, many people were cautious because prior lenders had issues getting these loans closed quickly. Working with her underwriter, she went deeper in the pre-approval stage so that once in contract, these files were quickly ready to underwrite! She also kept in close contact with her local USDA group to monitor turnaround times so she could keep everyone aware of the timing of each deal. In less than a year, she became the number 2 USDA lender in the country!

That same originator lived in an area that was overcome by a flood. Many of the homes were damaged or destroyed. Even her own house and office were flooded by more than four feet of water! Working from her assistant’s kitchen table, they closed the loans they had on the unaffected properties in their pipeline, and then went to work mastering rehab loans! Imagine learning new loan products, working from your assistant’s kitchen table, trying to supervise the rebuild of your office and your own home, while living in a trailer and the second floor of your flooded house? And close more than 175 loans in the process?

Our ability to solve problems is what humans are all about. See a problem, find a solution! To build lasting referral relationships, you need to show your people that you are more than a salesperson, you are a solutions provider! Use the tools and the strategies inside the website to help you identify and solve issues. If you need help working with your Realtors®, invite them into www.rlppnow.com and share the Power Partnerships modules and show them proven solutions to their challenges!

“Becoming the solution is your business evolution!” If we don’t evolve we die off! Use the tools and technology to help you in your professional evolution! If you need some help, look into the “Fast Start 180” program as a way to get started.

Questions or comments: Mike@IMTcoaching.com

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