“Size Matters”

There has been a great deal of conversation about “price compression” and “shrinking margins” in the industry lately. Companies, managers, and originators are seeing increasing competition from all angles, and generally what happens is the weaker will do more for less in an effort to stay around. We are also facing outside pressures that are pushing competition:

  • Originators who were buying leads and pounding refinances are hitting the streets and competing for purchase business. Since they have no track record in successful purchase business, they focus on price.
  • We also see that many large financial institutions are reducing or eliminating retail sales, forcing even more people out into the street. Once again, no track record, price is all they have.
  • The large internet lenders who spend millions on marketing and TV commercials. Since many agents won’t accept their pre-approvals, they must push price.
  • Mortgage companies themselves are spending time and money growing wide instead of deep, putting pressure on their own people.

The next factor is that many originators have chosen not to do the work in their own business and have resorted to hiring assistants to do the very job they are hired to do. While assistants certainly have a place in loan originations, managers and originators need to focus on scale and value. There is only so much money in origination. The breakup of that money between the company, branch, and originator has to be addressed because you can’t lose money on every deal and make it up in volume! So you must get clear on what is the real value in a loan origination and what part of that goes to the originator?

The next important piece is what “work” is required by the originator or originations team to have earned that money? This varies widely from place to place and even originator to originator. In my book, the originator is responsible for all the tasks needed to take the loan from contact to file fully ready to process; then support any communication from the processing/underwriting/closing/post-closing team if needed. That is what “top commission” is worth in any format. Now, managers and companies may want to reduce that obligation to the originator, or the originator may want to hire help so they can go on and produce more opportunities. That is fine, as long as all of that support is being paid for out of the total commission set for the origination of that file. It can’t work any other way. There is only so much money to be paid out!


The other key area is when do we look to get help? To me, a fully commissioned originator needs to be able to close 8 to 10 loans a month for a minimum of six consecutive months before entertaining bringing on help. The reason for this is you need to develop your systems and skills over both time and volume. If you don’t, you have to keep hiring people to cover for a poor system. That is a waste of money and doesn’t provide for a great customer experience. So rule of thumb is 8 to 10 loans a month, then you will hire on one assistant for each additional 5 to 10 loans a month in volume depending on the types of loans you are doing and your market.

Many originations “teams” or overloaded with people. Instead of organizing themselves and perfecting their system and schedules, they just hire more people! In the past, you might have been able to get away with an excessive number of people, but as margins compress, companies are going to have to think about how they spend their money.

Size matters! Your system matters! Your income matters! If you want to hire people so you can generate more opportunities, that’s great! But you have to be real with what your expectations are. Growing your team should mean:

  • A better customer experience
  • A smoother loan process
  • Higher quality loan submissions
  • Increased volume!

So look at your process and the systems you are using. If you have a team working with you, do you meet the monthly volume requirements? If you have grown your team and your loan volume isn’t growing at a minimum of 5 additional closings a month for each team member after the first 8 to 10 for the team leader, then your systems need to be addressed as well as your compensation!

Questions or comments: Mike@IMTcoaching.com

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Questions or comments: Mike@IMTcoaching.com

“Black Friday Sale in Action”

Every year I push my originators to focus on making a real effort the last couple of weeks in November and into December. So many opportunities to generate transactions and find new relationships, that it seems almost too simple not to succeed. One of the things I really like to push is the “Black Friday Sale”. There are two versions, one that includes your Realtor® referral partners supplying a number of their listed properties and holding a special sale over the weekend, and the other just simply having the originators offer a video coupon discounting closing costs or providing a lender credit for people who go into contract and complete the loan application process by a specific date.

This year did not disappoint. Response to both strategies was pretty strong, and for those who have been doing this for a few years now, they have really begun to master the process. A few have even “extended” the sale to include the last possible date they can accept a transaction that will close this year. Please remember, if you work for a company that can still accept applications that will close before New Year’s, you have a distinct advantage over your competition and one that grows in importance, every day further into December you can go!

Pushing hard the last two weeks of November and the first two of December generates important distinctions between you and your competition. Understanding that there are people out in the market who still need to buy or sell a house, as well as your Realtor® referral partners that are just one or two transactions short of moving to that next tier on their commission schedule. You also have a unique opportunity to be in front of a select group of people who value the time left in the year and understand that it’s pretty tough to have a bad year if you ROCK the first quarter! That’s what pushing now does; it sets up your first quarter of next year!

Take the time and explore your schedule for December! How far can you go and still close loans this year? Have you shared this information with your pre-approvals and your referral partners? Not just your Realtor® referral partners either, your accountants and financial planners also have clients that would benefit from closing a deal this year!

A special shout out to my client Richard Veldman of Benchmark Mortgage in Michigan. Richard was weary of the Black Friday Sale Strategy at first and thought it might be a complete waste of time. However, since he has made a commitment to coaching and at least trying to incorporate a few selected strategies into his life, He made his video and shared it with his clients and referral partners. The response was swift and positive. He had Realtors® asking him if they could share his message on social media, and he received 3 new transactions in the first two and a half days! I love it when people just TRY!

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

Ready to skyrocket your results?  Visit http://www.imtcoaching.com/fast-start-180.html


Benefits & Consequences

I had a great vacation to Hawaii; I think all of you should plan a trip there and see the pure beauty of the islands. Being part of the Memorial Day celebration at Pearl Harbor was especially moving. This trip really brought to the forefront of my mind something I have stressed with my clients for a long time, and that is understanding that every process requires the distinction of the benefits and/or consequences of the action or inaction.

Just like Hawaii rising out of the ocean and growing from volcanic activities, there are benefits and consequences from the event. Every time the lava flows, there is both destruction and growth as a result. Just seeing lava flow is amazing, looking back and seeing trees and bushes growing out from the cracks in the once molten lava are the reality that what once was is now something different. The evolution is the only constant. As part of one island grows each day from the flow, other islands shrink from erosion! It’s incredible to see up close a process that has been taking place for millions of years in action.

Just like the Hawaiian Islands growing out of the ocean, your business is the same. It starts from literally nothing, then the first contact, the first referral, that first application, and that first closing. All part of the loan cycle. Each part of that cycle has benefits and consequences. Your job as a professional is to convey and understand the benefits of your system, and the consequences of not having your system evolve. If your system doesn’t evolve, it won’t survive!

We have to understand how our system benefits the client, the referral partner, and our future business. If you don’t fully understand how all three of these things are being dealt with, you will suffer the consequences of lost referrals, referral partners, and your very business future. So take the time and look at your business. Be sure you are clear as to what you are doing and how what you do benefits the three areas you need to provide for:

  • How does my system and process provide a great experience for my customer?
  • How do I make certain that it works as well for my referral partners?
  • At the end of the transaction, do I have a value based follow-up system that keeps my clients connected and nurtured so that I gather their repeat business and their referrals?

If you fail to cover all three points, your business will not evolve as it should, and you will be open to losing opportunities, referral partners, and future business! So be sure you get crystal clear! Are we communicating effectively to the client and the referral partners about the benefits of working within your system as well as the potential consequences if they don’t?

Nature has a plan and a structure to grow incredible beauty from molten lava right out of the ocean. While this plan had taken millions of years to evolve, the steps and the timeline are quite clear and the results are exceptional. You don’t have the luxury of millions of years to evolve your process. You just have weeks, months, and a few years to get these things done. The good news is you aren’t creating life from the ocean; you are just meeting people and helping them close on a mortgage loan in 30 days or less!

There is a real beauty when you already know all the elements needed for a perfect process. You already know the timeline of events needed to be sure you meet that 30 day or less closing. You already know what the client and referral partner want and how to deliver it. You already know how to nurture all of your past relationships with value. You already know what you need to do to create an exceptional experience. Your job now is to schedule the work, share the process, execute the plan, and make the adjustments needed for you to evolve into that mortgage professional you know you can be!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com

“Sharing Best Practices”

As a coach, you do what you can to share the best practices with your clients. Most of the time, you can convey the concepts pretty clearly, sometimes it’s best to just share that concept in motion. Well, that was exactly the case this past week when I brought two clients together so they could each see how the other was doing a specific part of their business, and both benefit from the time together.

My client Joe has more than twenty years in the mortgage business and is a master of communication and follow-up. My client Christy is beginning her fifth year in the business and has mastered the art of the initial filtering process and setting expectations for the clients and referral partners. Each of them could benefit from the other’s strengths, as well as the visualization of actually seeing the work in motion. So last week, Joe and I left Florida and went to Louisiana to visit with Christy and her team.

In just one business day, both Joe and Christy got to see and share information that will forever change how they do business. Both people got to see how exactly what they were trying to accomplish, executed by someone that has mastered the very part of the business they want to improve upon. I will tell you, as a coach, watching the student become the teacher was a priceless experience. To have your clients learning from each other, to see how the message and the mechanics were transferred so simply was about as good as it gets. Just one day that will change the way two teams of people provide an exceptional experience for their clients and their referral partners forever!

We are all busy. We all have a great number of things going on in our lives both personal and professional that it can make it hard to stop and either ask for help, or be the one that helps another. In this case, the timing wasn’t ideal for either one of my two clients, and certainly didn’t fit well into my schedule, but it was important enough to make it happen, and everyone involved learned something valuable and benefitted from the time together.

So think about what you do and how well you do it. There are some things I am sure you would like to make better, and some things you do as well or better than most. When you struggle to find a solution on your own, ask for some help! Ask your coach or mentor to connect you with someone that has mastered the things you struggle with. Also be open to help someone who struggles and has asked you for some help. I promise you, it’s worth it!

Our business suffers from the lack of mentorship. As the profession ages, we do a very poor job in our industry hiring, mentoring, and building that next generation of mortgage professionals to be better and more consumer centric than we were! The fact is we really need to elevate our profession as a whole. We can do this by building better systems to support a better client experience, and share that knowledge with the next generation of professionals that will follow us forward.

So with a great deal of pride in my two clients for making this past week happen, the two teams of people who will now change a few things in their lives to make the experience better and more productive, I challenge all who read this to make a commitment to learn one better way this year to serve your clients and referral partners; then share one way with someone that could use your help. I guarantee it’s worth the time and energy to do!

Thanks Joe & Christy! Thanks Team Solar and Team Farro! Thanks for caring enough to share this experience with each other and allowing me to be a part of it.

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com

“The Best Succeed”

The best succeed when times are challenging because they engage the situation and work toward a solution. OOPS! I used that four-letter word again, “WORK!” It’s true; the best succeed because they are willing to do the very things those that don’t succeed are not willing to do. Plain and simple, if you want a result, you have to do the work!

We are looking around the country and hearing from most markets that there is a challenge with inventory. One client of mine just told me that their borrower was told by their agent, that it might take a year or longer to find them a home! Can you imagine? What a great way to present the case for home ownership than to tell someone that it may take a year for them to find a home?

Let’s be clear, in some markets, there is certainly a lack of listed inventory. That said there is no shortage of homes, just a shortage of homeowners who don’t know that it’s time for them to sell and move on! Nobody has made the case and given them their “WHY”! Nobody has shared with them the value on moving to their next home. Yes, not everyone is currently living in the home they say is the home they plan on staying forever! So why not help them get there?

We all know home prices aren’t going down. Neither are interest rates. It makes perfect sense to make the move now! Not only because it saves money, but what do you think the market is going to look like at the height of the spring and summer markets?

It is time for lenders and their Realtor® referral partners to sit down and run the numbers. Look at the demand, the neighborhoods, current and past prices, and make the case for action! Remember, the best succeed because leaders lead! Take out your copy of the “Forever Home Strategy®” and review it carefully. Be sure you are clear to all the moving pieces and the timing of these actions and activities. Make use of your social media platform by using video to share your actions in specific neighborhoods! Create involvement and value by being consistent with the information and your actions!

Two hours once a week working directly in the field talking with the people who would benefit from making a change! Forty or fifty contacts a week for four to six weeks could very well make the difference between complaining about tight inventory, and closing a few transactions! After all, would you rather be sitting down complaining about the market, or would you like to be doing some work and closing some deals?

Questions or comments: Mike@IMTcoaching.com

The “Forever Home Strategy®” is part of the IMT Coaching Program and Power Partnerships® at www.rlppnow.com  $59 a month can change your business for the better!

Introducing Power Partnerships®!

The CFPB has made it very clear that it will be taking action against Realtors® and lenders that violate RESPA. While many on the lending side of the issue have been aware of the CFPB focus, the real estate market has been shaken by the fact that companies and individuals who violate the law are likely targets of interest by the CFPB.

The Realtor®/Lender relationship is one of the most fundamental pieces of purchase transactions. Many lenders have worked almost exclusively with Realtors® to generate their mortgage opportunities. Given how powerful and productive those relationships can be, some have gone beyond the rules governing those relationships, and those people are now coming into sharp focus of the CFPB. The CFPB has shown that it isn’t just worried about those who are giving the money against the rules, but those accepting the money are also open to investigation and penalties! Clearly those people involved really need to look at their business and be sure they are compliant!

There is so much that can be done within the scope of the rules that can generate opportunities and create value, that it is hard for me to see why anyone would risk their livelihood by not engaging in the strategies that are compliant? You can’t just buy your way into a relationship any longer! You have to establish and maintain relationships based on mutual benefit, mutual action and activities, and the willingness to work with those who see the value to the consumer by providing an exceptional experience! Besides, why does everyone need to be in everyone else’s pockets; why not just make and keep your own money?

Terri Murphy and I have created Power Partnerships® based on our years of experience working with the best Realtors® and loan originators in the country. We have spent a great deal of time refining the tools and the strategies that help provide significant listing and buyer interest. After all, purchase business requires someone to sell, and another willing to buy. Putting them together and providing a hassle free transaction is what the consumer wants, and what we should demand of ourselves.

Power Partnerships® is the only online training academy available produced by coaches, each with over 30 years of experience, who work in the arena every day. More importantly, the systems and strategies we bring to you are the very systems and strategies our own clients use on a daily basis! This system also provides the user with access to either coach by email if they have a specific challenge or question.

If you want more from your current relationships, if you are looking to identify and attract the best people in your market; if you want a compliant system that shares the actual step by step actions, activities, and schedules you will need to succeed, you need to take a look at Power Partnerships® and see if $59 a month can change your life? Realtors® and lenders are a natural combination. Here is the platform where both can come together and work toward finding new opportunities and converting those opportunities into closings!

So go to www.RLPPNOW.com and take a look around. See if what we are doing here is of interest to you and your team. We can offer discounts for multiple subscribers, and you may qualify to have Terri and I come to your town and present the program to your team and your referral partners!

The time has come to take the Realtor®/Lender relationship to the next level. See how we can help you make that move!

Questions or comments: Mike@IMTcoaching.com or visit us online at http://imtcoaching.com