Deja Vu All Over Again

A couple of weeks ago we ran into a buzz saw in the MBS markets. We spoke about the five fake news stories that pushed the bond market lower and drove rates higher. This week we’re following through on solid gains the end of last week, and we hear that there is a possibility that a trade deal with China may happen “sooner than you think”, which sent the stock markets higher and bond prices lower! So pay attention to the markets the next few sessions to see if we keep falling lower, or we recover and start to retrace our steps. I still believe that the longer term trend is lower rates and continued volatility, but you do have to keep your eye on the stories and the trends and keep yourself and your people informed!

I was up in Indiana this week spending some time with a great group of mortgage professionals at Ruoff Mortgage. One of the things I really like about this group is there commitment to the customer experience, and to each other. It’s not often you see the operations team being committed to the sales team, understanding that the sales team is their customer. On the same token, the sales team and those managers watching over the sales team, working hard to do really solid preapprovals and submit really clean files into the operations team. This kind of mutual support helps everything work much more efficiently and helps provide a great experience for everyone involved. As the mortgage and real estate industries allow themselves to be taken over by the large internet and call center based companies. It will be those people, like the people at Ruoff, who work hard to be the true experts in their field and keep the person in the process!

The “Crossroads 2019” event on October 22nd is now posted on the website homepage. You can just go to www.IMTcoaching.com and register. It’s a free webinar that will be Tuesday, October 22nd at 1pm eastern. You should be sure not to miss it, and it may just be a good idea for you to invite some of your better Realtor® referral partners to sign in as well. Realtors and lenders are facing the same enemy! Together, we can continue to provide an exceptional experience for those who have real estate and real estate financing needs.

Special shout out to a couple of my newer clients who took the leap of faith and went live on Facebook Live®. For some people, it is really hard to get in front of a camera and speak. To make the choice to overcome those issues and make it happen makes me prouder than anything else I do as a coach! For another new client, his first video coupon resulted in four loan applications in the first 24 hours! As I have said all along, these strategies will work for you if you just try! So congratulations! You guys are the reason I continue to love doing what I do!

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

Part Three of the Six Efficiencies

I want to start out this week’s post by thanking all of you for the kind words and comments about the last couple of posts. It has been real fun for me to have the interaction with you and get to share some time with a few of you who are not clients, but followers of the posts. It’s always good to connect and share thoughts and ideas. This week we are going to talk about items four through six of the six efficiencies.

Item number four is your plan execution and service delivery. This is likely the place where it all comes down to really specific personalities, markets, and business make-up. This is where you have to drill down and understand your value to the client. What do you do? How do you do it? Do you connect through paper or in person? Is it email or text? Do you just pick up the phone and call? Will there be a face to face encounter? Having a great plan won’t yield the desired results if you can’t effectively communicate with your people!

Each step in your process has to incorporate the bigger picture of your overall connection plan. Database systems are nice, but a series of “canned” emails will not keep you connected to your client or referral partner as well as using all forms of communication will. In fact, email is the WORST way to stay connected. People are programmed to ignore email. People dump and block dozens, hundreds, maybe even thousands of emails a day, why run the risk that your ability to connect and communicate with your client and referral partners gets lost in that mix? What if you got into the habit of only using email to confirm or document some other form of communication? Use email as a support tool and not an engagement tool.

Item number five is so simple and effective it’s hard to believe I have to bring it up, but most originators don’t ever track results other than to see how many units they closed or their past dollar volume. This is the type of “rear view mirror” habit that helps support the “roller coaster” production that most originators fall victim to! Tracking your business by closed units and dollar volume after the fact only tells you where you have been and nothing to help you plan and project the future!

When you did your business plan, you set projections for referrals from all the potential sources of business. You list people and areas you were focusing your efforts on to attract the opportunities you needed to reach the performance targets you set for yourself and your referral partners. To not set aside time every month in the middle of the month to not only look at the prior months closings, but to look at new credit pulls, new referrals, size of your pre-approval pipeline, gestation period of those pre-approvals into closed loans, and the tracking of inbound referrals from all sources to be sure you are tracking the course you set is like leaving your map on the kitchen table when you head out on a trip! You need to schedule the time to track your results.

Number six follows all the others because you can’t make adjustments if you don’t do the first five things, and doing the first five things without making adjustments is a huge potential loss of time and money! Let’s be honest, sometimes we get things wrong! Sometimes things we thought would work don’t go as planned. Sometimes referral partners don’t refer as we thought. The other side to that coin is that sometimes things work BETTER than we thought, or that we find more opportunities and referrals than we ever thought possible!

The key is to look at the results and see what adjustments may need to take place. Sometimes the plan you have is fine and its outside forces like weather that get in the way. Sometimes things happen slower or faster than anticipated. And sometimes it all comes together! Being prepared to review the information and to make, or not to make, adjustments can really impact your bottom line. And remember, it isn’t always about the number of referrals, closings, or dollars closed that matters, it is also the balance of investments in time and money to be sure it is all worth the effort!

I hope you found this mini-series helpful. I look forward to your questions and comments: Mike@IMTcoaching.co

So Why Can’t We Just Do Our Jobs?

Anyone remember loan origination before the internet?

Anyone remember originators that would work the entire file from contact to closing?

Anyone remember originators that would turn over nice clean, complete files into processing?

Anyone remember originators that closed eight, ten, twelve, or more units a month handling paper files without an assistant?

How is it now that many originators think that they are doing five or less units a month, with automated LOS systems and needs an assistant?

Why is it that companies and managers spend money on these assistants in additionto the basic originator compensation?

Why are there so many “teams” of originators and assistants working together who jointly close less collectively than they did when they worked alone?

Technology has made the originator job far easier that it has ever been, so why does everyone need so much help? I’m not quite sure.

As I have stated before, an experienced originator should be able to generate opportunities, process those opportunities, convert those opportunities into clean and clear file submissions, work the files through the process, close the loan, and manage that client into the future, 8 to 10 times a month.

Adding an assistant should be at the expense of that originator, simply speaking, why would or should a company pay for the originator to do more loans? Aren’t they already getting paid? And if you do take on an assistant, shouldn’t production improveby five or more units a month for each assistant you have added to the team? Why wouldn’t it?

When you look at some of the “top producers” in the industry, they really post some big numbers. But what you often don’t see is the team of people and the overhead required to make that happen. Any team or group that can’t sustain a per person closing per month average of at least five to eight units per month has a problem with their systemand not a need for assistants!

So before you think it’s time to grow your business by adding an assistant, here are a few questions you need to ask yourself:

  • Have I closed an average of 8 loans a month or more for the last six months?
  • What am I going to give off to my assistant, or have my assistant and myself do to increase my monthly production by five or more units each month?
  • If I had to pay for this assistant out of my own pocket, would I still be looking to get one?
  • If I have an assistant or assistants already, are we averaging five to eight closed transactions per month for each member of the origination team?

If you have answered no to any of these questions, wouldn’t be better to improve your systembefore committing to an assistant?

Questions or comments: Mike@IMTcoaching.com

 

 

The Trend IS Your Friend

Time to really pay attention to a possible trend that could make for a big opportunity for you in the months to come; and that opportunity is REFINANCES!

Yes, I said refinances! If you follow the rate market, you will notice that interest rates are approaching significant levels compared to last year. In fact, if you look back at loans you closed between last March & December (2018), you will see that there might be some refinance opportunities to take advantage of? Clearly you have to be careful of EPOs and your company’s policy regarding any time restrictions you may have with your investors, but those opportunities might be out there for you to take advantage of. I’m not saying that it is time to abandon the purchase business, not by a long shot! The purchase arena is doing quite well for many of us right now and I expect a very solid first half of 2019, but part of your job is to manage these obligations over time and now might just be the time to take a good look!

The other trend we are seeing across the country is the power of explaining the rent vs. own analysis! In most markets across the country renting is not a great value! In fact, the effect cost rate on rent is 100%! No benefit financially, all the money is spent and is GONE! Owning has a number of advantages, the least of which is equity! Some of each payment is paying down principle and building wealth! The ongoing property appreciation is also a huge benefit and depending on your local rates of appreciation, it could be more significant than you ever thought!

February is a time for accumulation and execution of the strategies that push the beginning of the market. Use the tools! Take advantage of the strategies we are sharing. Get out in front of the market as a true mortgage professional and share many of the opportunity generating ideas with your referral partners! The possibility of some bonus refinance activity is great, but the strength of the purchase market building will depend on how you have positioned yourself!

Questions or comments: Mike@IMTcoaching.com

Team Size

Yes, size matters! So much of our industry has focused on volume that we fail to look into profitability. Posting larger numbers of units closed and sheer magnitude of loan dollar volume seems to consume the industry, at least those in the “Jumbo Tron and blasting music” arena, that we often forget to look and see what those numbers really mean.

Three originators are talking about their production, all doing the same type of business, and one states “I closed 120 units last year!” The next gets all puffed up and says “I closed 200 units last year!” Then the third speaks, almost ashamed and barely above a whisper, “I only closed 75 units last year.”

What wasn’t part of the equation were how many people where part of those closings? We all have processors, underwriters, and closers, so that is a company provided given, but how many total people were involved in acquiring the contact, talking to the client, structuring the loan, taking the application, submitting the application, and working the relationship through closing? When we drill down a little bit, something becomes obvious, numbers may not always be a good way of telling what kind of achiever someone is, and certainly isn’t an indicator of how much NET INCOME they had.

In this case, loan originator #1 has her and two assistants to handle the load. Well, that breaks down to 40 units per team member and a little more than 3 units a month per person.

Originator #2 has him listed as the “Team Leader” and a team of six people that are part of his process. That breaks out to less than 29 units per person annually and less than 2.5 units per person per month!

Originator #3 has a part time assistant that she shares with two other originators. That works out to an average of 56 units per team member or almost 5 units per person per month!

So to me, you have to be very careful about the size of your team and the average closings per person per team member. While there is no set rule on when to hire an additional team member, or if you start by sharing someone, I have always maintained that you should be able to close 8 to 10 loans per month for six consecutive months before thinking about hiring help. You should also plan that wherever you are in the production profile, you should clearly see how that new person was going to improve your production by five units a month.

While each situation is different and we all have different needs and uses for our time, the failure to clearly understand what you do and the experience you provide for your clients and your referral partners is a must! Bigger isn’t always better. Sometimes bigger is just bigger!

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