172 Hours

We have all heard the phrase “time is money”. We have also heard people explain to us how “busy” they are. But rarely do we see people make the connection between the two. Being “busy” isn’t always being productive. In fact, many of the “busiest” people I come across don’t make a lot of money. They are constantly in motion, but they are not focused or consistent with almost no system, schedule, or accountability.

If we all concede for a moment that we all use a forty hour work week as a standard, and there are 4.3 weeks in the average month, that works out to about 172 hours each month to do what we do and earn what we earn.

Mortgage loans are a result of generating an opportunity and converting it into a closing. How do we measure up? How many combined hours do we work to close one loan? How many hours does it take for our “team” to close a loan? I have found, if we back the numbers out, it changes the vision of what we do and how long it takes. More importantly, when we start looking at a random group of loan originators, we can see huge differences in the time the process takes.

Example, if a loan originator is closing an average of five loans per month, they are consuming 34+ hours of their monthly time for each closed loan. Imagine that? I would venture to say that if you asked a dozen originators, how much time it took to generate a loan opportunity and get that opportunity through their system, none of them would say it took more than 34 hours to do. In fact, depending on most of my observations, the average time it takes to move a client from first contact to closing is about five hours. So if it takes five hours to do that part of the business, could it be that it takes the average loan originator twelve hours to generate a loan opportunity? Well, that can’t possibly be true because the average originator barely spends ten hours a week prospecting. That translates to about nine hours per closed transaction. Really; nine hours to generate the opportunity and five hours to close the loan still only comes down to a total of 14 hours. What happens to the other 102 hours per month? Ah, that must be where the “busy” comes in!

You see, when I track my best people. The ones that close ten to fifteen loans per month, by themselves, month after month, some very interesting patterns begin to appear. First, all of them take and submit outstanding loan packages. The less trailing documents, the less time spent on the file. Second, they double check everything before submission and include a specific cover letter explaining the transaction and attach it to the file. Third, all communication is documented in the file. Every call, email, or message is in the file for everyone to see. Fourth, they schedule their work time free of interruptions. They turn off the phone, ignore their email, and close their doors. They start and finish then schedule the next follow-up task. Last but not least, they do a real good job setting expectations up front. They get everyone on the same page and structure set communication times, establish due dates, and hold people accountable to that schedule. When things are set to a schedule, it is easy to keep on track.

Those “busy” loan originators, the ones scurrying around the office flailing papers, and whining about things, are the one’s losing time working on things that should have been done at the beginning. Taking a few extra minutes up front on a file will save you HOURS on the end of a deal!

Working smarter not harder is something many people talk about, but few people actually do. By looking at your time and activities as they relate to the number of loans you close will provide you with a valuable perspective. So here is the question: How many loans can you close in your 172 hours each month? If you don’t track that number, it will never improve! The best of the best close a loan about every nine hours. What if you are only half as good as the best of the best? Then you would be closing almost ten loans per month.

We all get the same 172 hours in a standard work month. What you do with that time and what the results are can vary widely. You need to seriously look at what you do and how long it takes before you can even attempt to improve. Once you do, productivity can grow exponentially!

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Fourth Quarter Business Assessment For Mortgage Bankers and Loan Originators

Something about today’s date just begged for a blog post about being more organized and on target. So in honor of 10-11-12, let’s do something today that really does improve our tomorrow.

All of us should be following our own written business plan. You can’t be working in your business if you never work on your business. A written business plan is critical for you to setting your goals and achieving them. For those of you who have never done a formal business plan, you can go to my website at the address below and buy the business planning ebook for $9.95.  If it has been a really bad year for you and you don’t have the money, just write me an email explaining your challenges and I will send it to you free.

If you have your business plan in writing, now is the time to take a few minutes and compare your goals with where you are now. With only one quarter of the year left, now needs to be the time you look at every task, relationship, and activity to see if they are providing the amount of business you had hoped for. If not, it is time to make adjustments.

Every referral partner on your list should have had a target number of referrals you had in mind for them. Check the numbers and see how close the projections are to reality. If you have Rachel Realtor in your plan for twelve referrals this year and you have only received five through September, you might be in trouble. Even worse, Rachel Realtor may be in trouble! By having a targeted number of referrals for each referral partner, you can keep track as to how well the relationship is living up to your expectations. Better or worse, you need to know.

You also need to track each area of marketing you are doing. Each should have had a target number of responses and you should be tracking to see if the response rate is better, worse, or at the projected levels. If it is worse, you need to find out why before you waste any more time and money on it.

Finally, we need to track the balance of your referrals. What percentage of your business is coming from which areas of “The Referral Triangle”, balance is important. Without proper leveraging of each partner and referral into the system, you are losing opportunities to generate more business for you and your partners; and value for everyone.

It shouldn’t take more than an hour to sit down and assess your situation. Doing it now can help drive home a great year, or save a year from not being all it could have been. You are in control of your actions and activities. You alone can make yourself aware of where you are in relationship to where you wanted or needed to be. You need to take the time to locate your position in order to determine if any corrections or adjustments need to be made so the year ends where it was supposed to be. Waiting until January to find out you didn’t reach your goals or potential in 2012 isn’t going to help you. You need to do it now while there is time to make any needed changes.

“Do something today that improves your tomorrow” is my company motto for a reason. You can’t do anything about the past except to learn from it. I am here to help you do just that.

If you have stories you would like to share or have any questions you would like answered, please just email us at:


Fall Strategies for Mortgage Bankers and Loan Originators

Summer is over and we begin to transition from the lazy crazy days of summer into the final full season of the year. Of all the seasons, fall is the single most important time there is. We reap the harvest of all of our activities and begin to plan for the end of this year and the beginning of the next. Less than 90 days until 2013 finds us, and without a plan we are likely to miss out on a number of significant opportunities.

First thing we need to do is take a few minutes and compare our third quarter results to our business plan and see where we are ahead and behind on our projections for the year. Waiting until January to realize that you didn’t do as well as you would have liked is not an option. Waiting to get your W-2 form to see how you did will likely cost you thousands. You need to assess every referral partner, every business and referral source against your projections and be certain you are on target. If not, make some needed adjustments and get to work!

Fall allows us to start speaking about the year-end strategies. As we spoke about before, October is the last chance to file taxes for those with an extension. It is the very last chance you have to put together a deal for a short sale that can close before the next year and have any loan forgiveness not be taxed as income. October also opens the door to many community events and gatherings. Large numbers of final outdoor activities like football games, harvest festivals, hay rides, are great places to get in front of people and help in the spirit of community.

Don’t forget community volunteer efforts. Many public service organizations and nonprofit groups look for people to help raise money and do the work needed to support their efforts. Get involved, become engaged; select a place to become active and alive in an organization. Become a doer. Do the work. Become known as someone who does the action rather than someone wo talks about action. When you stand up and do, you stand out! Become the standout person in your favorite organization. Not just a figurehead, but someone that does the work that needs to be done to support the efforts of the others.

Halloween represents the last holiday before Thanksgiving and all the holidays of December and the end of the year. With an early Thanksgiving, and with Christmas and New Year’s falling on Tuesday’s this year, we will see a very early end of the “work year” by many people. You need to gather yourself and your goals, and have a final push setup for the last sixty days of the year, and nothing can help kick that off than a Halloween celebration. Think about starting or supporting an event where you can drive your friends, family, coworkers, referral partners, and your clients to enjoy themselves before the pressure of the year end celebrations begin.

Rent a farm and have a pumpkin pick. If you don’t live near a farm that grows pumpkins, contact a supplier and look into the cost of bringing in a truckload and make your own. Often you can band together with your referral partners and share the costs of such an event that includes games, face painting, contests for the children and some warm apple cider for everyone.

Organize neighborhood clean-ups for the elderly and disabled homeowners who could use some help raking leaves and securing their property before the winter. Many times you can work with nonprofit groups and even local schools to spread the word and find those in need and those willing to help.

In the fall, it is all about the people. No email. No ads. Just get out and meet the people. Just do the work and let that be enough. People will come to know you as more than just a mortgage professional. They will see you as a person that does the work and cares about others. Even if it doesn’t lead to a single transaction (that would be very unlikely) you would have positioned yourself as someone that cares enough about others to have stepped up, and got involved. Besides, you will feel better for having done so!

Please share your success stories! If you have any questions or would like more details, please just stop by the website and leave a message: www.improvemytomorrowcoaching.com

October Tax Filings

Every October we reach a critical date, the day when all of those people who requested an extension to file their taxes are now obligated to file. Yes, it has been almost six months since taxes were due, and for most people it is just a memory. However, to a significant group of people, those mostly self-employed, it is at the very front of their minds as they get the final paperwork to their accountant to meet the deadline.

So why is this important to mortgage professionals? Well, from my point of view, it is a very significant opportunity to do more business and build strong relationships with important referral partners. Since many of those now filing their returns are amongst those who have complicated returns to complete, with many schedules and a multitude of deductions, now is the time to have a frank conversation about income.

We all know that “stated income” and “no ratio” loan products have all but vanished from the markets. The old term of “common sense underwriting” is also in very limited use. So now those self-employed borrowers that used to use those products to finance their home purchases are left either putting significantly more money down, or they are not buying the homes they otherwise would be buying because they can’t qualify for a larger loan. My point is the word “qualify”. We all realize that the single largest determining factor of income for qualifying purposes is a borrower’s tax returns. We all need to examine, review, and calculate income based on what a client’s tax returns say. So important are these returns that we not only have to provide them, but we need to verify them with the IRS to be sure that what we have actually reflects what was submitted.

So why is October so important? Well, since so many have yet to file, they have an opportunity to declare income; taxable, qualifying income for 2011. By declaring more net income, these people are able begin the process of establishing the two years of income required to qualify for a mortgage loan. The fact that they can file their 2012 returns early in 2013, gives them an opportunity to have two years of documented income for loan qualification purposes in just a few short months!

Clearly I am not suggesting that anyone misstate their income or pay taxes on income they didn’t generate. What I am suggesting that sometimes looking at a situation where a person’s income has change substantially in the short term, that there might be a benefit by working with your accountant and financial professionals as to how and when certain incomes are declared and other deductions taken. This simple bit of planning could make a huge difference in the amount of money a potential home buyer would qualify for, and the price they would have to pay to borrow it.

Situational awareness is often a sign of a true professional. Having this conversation with your accountants, financial planners, and self-employed borrowers gives them an opportunity to look at the big picture and see how these circumstances could result in a net lower cost of ownership. As a mortgage professional it is your job to share information with your clients and referral partners so they can make an informed choice about what they do and what their options may be. October provides a choice for a few people to think about their home financing strategy, either to purchase or even refinance. Your ability to share this information may directly increase the opportunities you have to work with certain professionals and their clients.

Information, education, and options are our business. We are more of a solutions provider than a salesperson given the current environment. October tax filings represent an opportunity to engage in a conversation with people who have the ability to refer you and use your services. Don’t miss the opportunity!

If you have questions or comments, please feel free to share! You can always visit our website: www.improvemytomorrowcoaching.com and see how we can help you “Do something today that improves your tomorrow!”

QE 3 – What does it mean to me?

Federal Reserve Announces QE 3

1) $40 BILLION a MONTH in MBS purchases

2) Indefinitely

3) No hike in rates until 2015

4) Future bond purchases to continue

My instant reaction was that was much more than anyone could have imagined. The pure shock at the size and scope of such a program has instantly caused oil prices to go higher, as well as gold and silver prices. The Stock Market up over 200 points in a few hours was part of the boost the FED is looking for to create a “wealth effect” so people will start spending money and spur the economy. After some quick movements, we saw over a 100bps move in the mortgage bond market, how that trend carries over into the weeks to come are unclear.

My short term thoughts were quickly:

1) What is the media take on all of this?

2) What are the general perceptions of people?

3) How quickly will mortgage rates respond?

4) Will we see a 2% 30 year fixed rate?

As professionals we have to be prepared to answer questions. Will entire pipelines of processed refinances all need to be renegotiated? Will customers simply walk away from transactions to shop for a better deal? You need to be prepared and ready to offer solutions.

My long term view is to look at some basic issues that caught my attention:

1) This is $480,000,000,000 a year in purchases.

2) This is about $4,247,787 per licensed L/O.

3) Can it solve the problem; it hasn’t so far so why now?

4) Were there better options to spur housing recovery?

5) Fixed rates will benefit; what about adjustable rates?


Success Strategies

1) You must have answers to the likely common questions.

2) You have to be confident and honest, not defensive.

3) You must be proactive with information for your clients and your referral partners.

4) Remember that information and knowledge are useless without implementation to a plan.

5) You must have a clear policy about loan locks.

You must inform the client about lock extensions and renegotiations. A little time spent up front about your policy will save a lot of discussions, and possibly a few relationships! Always explain that rate locks are like insurance policies, they protect against bad things happening. If rates don’t go up, they don’t get their money back. Besides, this current policy is likely to pressure rates down of the long term. People can close their current loans and refinance down the road if rates are seriously lower.

In my opinion, if it isn’t in writing it doesn’t exist. You must put your plan in writing so your responses will remain consistent. With the election seven weeks away, ANYTHING IS POSSIBLE! This may just be the first of more surprises. A REAL budget resolution would do more to spur the economy and support the housing market than if the FED bought ALL the MBS available. Besides all of the talk, rates can only go so low. Sooner or later mortgage rates will run into the floor. If a 30 year treasury is around 2%, a 30 year mortgage security can’t get there. Since all rates include a certain amount for servicing, not to mention the risk of non-performance.

It is time to step up to the plate and SWING! True professionals see opportunity and seize it. When the markets are moving, so are the real professionals. Know what is going on and be sure to share the SUBSTANCE of the reality, not the SIZZLE or the hype! Do the work! You must keep yourself informed. 100% of the truth 100% of the time is something that has never been more important than now. Documentation beats conversation EVERY TIME! Get the facts and share them.

Questions or comments:

Be sure to visit our website at http://www.improvemytomorrowcoaching.com