Fourth of July Opportunities!

We are approaching the Fourth of July holiday and for those of you taking off from Wednesday through Sunday, enjoy your time off!

For the rest of you, here are some things you will want to do to improve your opportunities at the business the others are leaving behind.

First and foremost, be clear on your availability! You need to know when you are prepared to work and how to communicate when you will be available or when you will be checking in. You don’t need to accessible 24/7, but you do need to have a plan as to how you will be in contact.

The second thing you have to do is communicate with your clients and referral partners what your plan is and how to best connect with you. Be clear and specific that you are working and how to best manage the communications and when you will connect.

Third item of opportunity is to speak to each pre-approval client and update their pre-approval to reflect current rates and be sure their agents have a copy!

Fourth, speak to each of your referral partners and determine if they are working, or who is covering for them if they are not!

Fifth, and most often missed, is to visit or call each working referral partner at least once over the weekend to see how they are doing!

Last but not least, if you are working, be sure you follow your schedule and take advantage of all the potential opportunities that those who are taking off are missing! Visibility only helps you during a holiday weekend!

Holidays are great but far too many people hit the holidays without a real plan of action to gather all available opportunities. Take some time this weekend to plan. Use Monday, Tuesday, and Wednesday to connect with clients and referral partners to set the stage! Get out and be visible on Friday, Saturday, and Sunday; even if for just a couple of hours each day to show that you are engaged!

If you are going to take off, then take off! But if you are going to work, have a plan to do the work that will generate a maximum number of opportunities for the effort!

As always, questions and comments:

Know What Is Going On!

As mortgage professionals we are obligated to have a wide range of knowledge about a wide variety of topics. Some information like product and program guidelines and specifications are expected, while other more detailed information maybe on a case by case basis depending on your specific market. It is important that we all understand the national, regional, state, and local communities in which we serve and how ALL kinds of information could, and may very well, impact our customers and our business.

National changes like program changes in lending limits, MI rates, credit scoring changes, actions by HUD, FEMA, USDA, and the Federal Reserve are just some of the national forces we need to stay on top of. Some of these items may have a huge impact on your market and others may not. The example of the FNMA limits changing comes to mind. In a market that does most of its business at the lower price points, a hike in the FNMA lending limit means virtually nothing. In a market where the average loan amount is within a few thousand dollars of that limit. A change could be very impactful! The same holds true for local issues. Bond programs and DPA programs are often very local. Changes in those programs could be very important to some while ignored by many!

As true mortgage professionals you need a big picture of what will impact your market and what any changes may mean to your clients and referral partners. I have had clients who saw big opportunities in these changes and were able generate a great deal of interest. Obviously when the FED moves interest rates it is big news and creates opportunities, but many seasoned people are not even aware of the FED meetings, what the information was, how any information may push rates in one direction or the other, and if the public is even getting the right information? Seriously, how many of us have clients in the past that heard that the FED cut rates by some amount and think their mortgage rate automatically went down by the same amount!

The impact of news is not always as it seems! People sometimes get the interpretation of the information wrong. Your job as a professional is to be aware when information is going to be published and get a clear view of what that information will mean to the customers and referral partners you serve!

Keep in mind, not all information impacts all people and markets equally! FEMA changing the flood map may mean nothing to you, but it might be a huge tool for those whose areas are impacted! You are expected to know the information, when the information is available, and how it may impact your specific market!

So how did the FED meeting yesterday impact your people?

Questions or comments:

Stories From The Street

Purchase loan business has been brisk in many areas, and refinances move higher every day. We have talked about the falling rate environment and the strategies to be used and many have taken advantage of these to improve loan volumes. Here are three stories from the street this week.

One originator making calls to past closed clients had things align just right. After talking a bit about the client’s situation and discussing the “Forever Home Strategy”, it became clear that while saving a couple of hundred dollars a month was attractive; this couple thought that keeping the same payment and reducing the loan term to 20 years instead of the remaining 27, or new 30 year loan.

They had a strong desire to retire in 20 to 25 years and wanted to do so in the home they loved, and with that home not having a mortgage. Reducing the term by seven years while keeping the same payment accomplished that goal and saved them more than $250,000 in loan payments!

Another originator calling closed clients who were high LTV/DTI/Marginal credit, had an interesting call. The client expressed a great deal of thanks for the originators help getting them into the home and how much it meant to them that they stood by them to get the deal done. Then they went on to explain that a few weeks after closing, the borrower’s work supervisor left to take a new job, and he got a HUGE promotion with a great deal more money. In the year or so since the closing, they managed to pay off all of their debt, and thanks to a bonus, put away a nice chunk of money into savings.

As the conversation came around to how they could improve their situation further with a better credit score and a lower rate market, the borrower asked if it might be possible for them to buy the home they really wanted but couldn’t afford the last time they were out looking. After some information gathering it was clear that they could sell their current home and buy the home of their dreams. A quick call to the Realtor® and their current home was listed and they were off to buy the house of their dreams!

The last story is a personal favorite. My loan originator was following the plan to update all of her pre-approvals that were more than a few weeks old. As she updated each client, she noted the higher purchasing power for the same payment, or the lower payment on the same amount of money. She would then email the new letter to her client and immediately call to let them know about how current market conditions had improved and that they could take advantage of better purchasing power or a smaller payment.

While making one of these calls, the client remarked that the new higher loan amount would open the door to a group of homes that before were out of their budget. The client asked the originator if she could call their Realtor® and send them that information as well; the originator did so. That weekend a house was found and an offer was accepted! After a number of failed attempts, being able to offer more money for the home they wanted made all the difference!

Doing the work, works! All of the strategies are on the website to review for our subscribers. A special refinance segment was recorded and is on the site under “Monthly Coaching – June 2019” and the speakers notes are in a PDF file under “White Papers” so you can be sure you are clear of what is possible! For those of you who aren’t subscribers, you can purchase “ACCESS” for just $59 a month directly from the website!

Questions or comments:

The Reality of Refinances

Welcome to the first post of June!

While the purchase market remains strong and steady, the continuing pressure of downward rates has opened up significant refinance opportunities. I think, and have always thought, that refinances were the “overtime” or “icing on the cake” of a real mortgage professional. I believe they are an important part of managing the relationships you have established, and most of the time they happen during the annual review, sometimes they require additional attention. However, when we see the market drop significantly in a short period of time, we need to step back and look at our database and engage it with the information, opportunities, and options that this lower rate environment provides. As an expert your job is to provide all of the information it’s not just about rates!

There are some simple rules I like to follow and I will go deeper into each of these on the website in the next few days, but the key points are:

  • Never lead the discussion about refinancing by email!
  • Never post anything about refinancing on social media!
  • Be proactive with your past clients in specific groups!
  • Be sure you start the conversation about the opportunities!
  • Know that the best option may be to sell and move!
  • Rates are just one portion that may provide benefit to your client!
  • You can’t save the client money if the client doesn’t have a plan to save the money!

Originators make common mistakes that can cost themselves and their companies tens of thousands of dollars or more by not following these simple points!

Being a mortgage professional requires situational awareness! Do I set myself up to win on multiple levels? Do I benefit the client and my referral partners when I explain all the options and opportunities my clients have?

So as you work on connecting with past clients and referral partners about the potential of refinancing, make sure you are aware of all of the potential benefits beyond just the rate on the loan.

Also, the jobs report this Friday morning at 8:30am eastern time will potentially impact the rate market. You need to know this and pay attention to the news.

Look for the video on refinances on the website in the next few days; it will contain all the specific information and strategies to maximize your potential on this important topic.

Questions and comments:

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!

Questions or comments:

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.

Questions or comments: