training

Here is Part 2 of the article: How Do You Stack Up? Part 1 can be found here: Click here for Part 1

A Database

Each year I speak to thousands of loan officers. Would you like to take a wild guess as to how many have a true database? (Other than sticky notes) I would guesstimate that less than 10% have a database that is marketed to, and utilized. Scary isn’t it? A true database is one of the most profitable assets you could have in your career, and yet 80 – 90% of loan officers don’t take the time to create one!

This is yet another example of how the problem is often with the loan officer, and not “the down market” as so many seem to claim. (I reiterate that yes, things are more difficult in this market, but “difficult” does not equal “impossible.” Rather, it means that you must be meticulous in your execution of a sales and marketing strategy) It is estimated that between 10 – 15% of your database will use the services of a loan officer over the next 12 months. Why should those closings end up anywhere else but in your pipeline?

Over the course of a year, adding at least 1,000 new prospects to your database (Preferably more) should be fairly simple. But assuming worst case scenario here, that’s still 100 – 150 individuals who will need a loan within 12 months! If you haven’t taken the time to capture these names, collect contact info and drip market to them, then you’ve just forced yourself to work harder than necessary; and who wants that? Why not take the time to setup a database now? (It doesn’t have to be super fancy, just an effective means to compile, sort, and market to your prospects and past clients)

Most common reason this element is missing: Many are uncomfortable with setting up or using this technology, time management, many don’t place value on building a database due to the more long term payoff (Many prefer “now” business)

Differentiator

What sets you apart from your competition? Do you truly have a unique selling proposition that you have prepared to deliver to your niche market? I once had a business coach challenge me with this: I want you to write down just 5 things that make you different from your competition, and you cannot include “service” within that list. It must be specific, and I want to feel convinced to do business with you (Or at least to speak with you further) after reading your list… Oh yea, I want this done within the next 10 minutes!

Could you do this? Can you think of 5 convincing differentiators right off the top of your head? What are your skills? What do you do differently? If you run your business and conduct yourself exactly the same as the hundreds of loan officers within your immediate vicinity do, then how can you expect to be treated any differently than all the others?

Sales is no longer about what you say. Rather, effective sales hinges on how much of what you claim is believed by your prospects, and demonstrated. People are tired of empty claims… People want to see proof that you’re the obvious choice. What have you prepared to prove yourself?

Most common reason this element is missing: Most loan officers have not taken the time to learn proper skill sets that differentiate, Most have not taken the time to identify their strengths (You probably have more going for you than you think! Until you identify these reasons, then how can you tell the world about them?)

Call to Action

I used to avoid asking my prospects for referrals. I did this because I had convinced myself that most people would not be willing to give me the name and phone number of their friends and family members just because I asked… (And I was right too… “Most” is the key word here though…)

However, once I added this crucial element to my business plan, I found that 1 out of 10 - 12 closings actually gave me a solid referral worth pursuing. (Not just a random name) Now that may not seem like much. That’s less than 10% and many of you may be thinking that this is not impressive. However, I would like to point out that the time it took me to ask was less than 20 seconds, and this was the only change I had made to my closing schedule to get one of the hottest leads you can get: a personal referral.

The simple act of asking for something landed me with an extra closing each month. The point being made here is that your prospects are not mind readers. They need to be told what the next logical step is, and you need to make it easy for them to take that next step. No guess-work!

Your marketing will be far more effective when you provide credible reasons for taking action today. Use time limits, restrict numbers, make irresistible offers. There’s a lot of competition out there screaming for your prospects attention, so you need to make your message stand out.

Here’s a little technique I use often to help craft effective calls to action. Imagine that your prospect is standing right here in front of you. Write down what your top 2 competitors messages are likely to be. (Grab some of your junk mail, or listen to the radio to hear what the common advertisements are from your competition) Now your task is to assemble a message that beats out those other two.

Repeat the ads aloud and imagine how this sounds to your prospect. Is it compelling? Does it make you want to take action? It’s a simple exercise, but the act of viewing it from a new perspective can help you to improve your results exponentially.

Most common reasons this element is missing: Little time dedicated to crafting the message, Inexperience, Rush to get the message out

So how did you do? Do you have all of the proper elements included in your business? If not, why? What plans do you have in place to incorporate them? How soon? Success need not take long. Most likely, you already have a lot going for you. You will only strengthen your current situation by giving serious attention to the information provided above.

In fact, here’s a quick way to rate your current strategy. We’ve set up a self-test page at www.loanofficermarketinglab.com/selftest - Simply fill in the form with your best answers regarding why you’re different from your competition. It’s that simple! (You can also just do this yourself with a pen and paper, but if you want a 3rd party opinion, we’re happy to help) A response will be sent to you with recommendations in less than 24 hours.

Good luck! Make this your best week ever!

Chad Weber
Loan Officer Marketing Lab
www.loanofficermarketinglab.com

A Self Test for Loan Officers

NOTE: This article is very direct, and pulls no punches! If you are serious about making a change for the better, you should read the entire article now!

In today’s article we’re going to deal with cold hard facts and nothing else. No opinions, no fluff, and no candy coating the truth or pulling punches! This article is going to give you a close look at the reality of your current situation. In order to get the most out of this, you absolutely must complete each step, and you must be honest with yourself. Are you ready? Are you committed? Then let’s get started!

You’re in business to make money… That’s a simple truth that no one is denying. However, the first truth that we must accept today is that most of us in the mortgage industry have run headlong into some very difficult times. Originations and income are way down for a vast majority of loan officers.

With picky underwriters and lenders putting every loan underneath the microscope, it seems almost as if you’re rolling the dice as to whether a loan (Even those with 720+ scores and good appraisals) will be approved or not. When you face a situation such as this, there are 3 things you can do:

1 – Generate more prospects (Of a higher quality)

2 – Close higher dollar loans

3 – Complain about the market (And remain stressed, broke, and angry)

Which would you rather do? If you’re serious about remaining in this business, then you must choose now between closing a higher volume of loans, higher dollar loans, or do nothing? Do you have a preference?

The business of sales is not rocket science. While the process of sales and marketing may be difficult at times, there are only a certain number of challenges you will face, and a finite number of mistakes that can be made. (Often, it’s the same challenges over and over again right?) If you feel as if you’ve tried everything, and absolutely nothing seems to be working for you, then the problem is not with the market, and it’s not with the customers… The problem is most likely with your marketing/sales process. (This can be a bitter pill to swallow - But take heart in the fact that there is a solution!)

Remember, we’re dealing with facts here, so please don’t take offence to this statement. The only way to improve your business is to really dig deep and get to the root of the problem. After having trained thousands of loan officers across the U.S., I feel you should know that most originators have 90% of the formula correct.

It’s that small and elusive 10% that is missing and wreaking all sorts of havoc with your paycheck. Let’s see if we can help you to identify the culprit by reviewing a series of essential elements that absolutely MUST be present within your current marketing plan and sales process. (No exceptions or excuses allowed here. If even one of the following elements is missing, then you are slowing down your ability to close more loans)

Here’s what you need:

- Drip email

- Automated marketing elements (Auto-responder, web forms, etc.)

- Network of referral sources (Realtors for example)

- A minimum of 2 self-generated sources of leads (Not purchased leads, but self-generated)

- A database/lead management/CRM

- A way to establish credibility and differentiate

- A call to action you can add to your marketing

Now let’s see what you’re giving up if any of these elements are missing:

Drip Email

More leads are lost through lack of consistent follow-up than any other reason. If you do not have a drip email campaign in place for your database, past clients, current clients, realtors, FSBO, and any other niche you may be marketing to, then you’re leaving money on the table. It’s as simple as that. Email is quick and free.

Most common reason this element is missing: Procrastination, lack of confidence in writing an effective series of messages, lack of time management, lack of technology. (These should be automated, not delivered manually)

Automated marketing elements

You’re a busy person aren’t you? Chances are you don’t have a spare 10 – 15 hours available each week to complete the tasks necessary to create an effective prospecting, touch point, and follow-up campaigns needed to increase your closing ratio by 20 – 30%.

However, even with an average auto-responder or lead management system you can delegate those tasks to your PC so that a huge chunk of your day to day marketing activities get done even when you’re at your busiest. It’s like having a personal assistant that never takes a break!

Most common reason this element is missing: Procrastination (In picking out and setting up a system), not comfortable with technology, lack of confidence in ability to set up an effective work-flow, unwillingness to invest in the technology. (It’s very cost effective)

Network of referral sources

This element has become even more critical in today’s market. Whether you like realtors or not, you need to have a reliable group of professionals who are willing to send you pre-sold referrals ready to fill out an application. Last I checked, over 65% of all those who buy a home each year will do their loan with the loan officer that is recommended by their agent. If that number doesn’t get you fired up and ready to network then consider this: Every successful business in the United States is built on one major concept: leverage.

No matter who you are, or what you have accomplished, you are using leverage within your day to day life. If you have failed to embrace the concept, then you are making things more difficult than they need to be. Even 1 top producing realtor could be worth $60, $70, $80,000 or more per year income to you. That’s just one top producer! (One top producing agent was responsible for 31 closings with me in 11 months!)

If you think that marketing to realtors is too hard, (I have a plan that helps you get 6 – 8 appointments per month, but you must be willing to invest 30 days to land those) then consider this thought: What other activity do you

have up your sleeve can you spend 30 days on, that will generate $60 - $80,000 income or more?

Most common reason this element is missing: Information overload, negative stigma due to poor results on previous campaign, procrastination, fear of rejection, fear of hard work, “not enough time.”

NOTE: Article continued in Part 2

Chad Weber - www.loanofficermarketinglab.com

With the tightening of the mortgage markets, we see a lot of new ‘vendors,’ offering a seemingly needed product: paid credit repair.  We even have one here on Lenderama who seems like a good guy.   There is no worse idea for originators to pursue than relying Credit Repair customers to pay your personal mortgage.  Nothing will drive you out of the business faster than staking your income on people with crap credit.  Even if the credit improves, can you improve the homeowner credit faster than the guidelines change?

I’m not against credit repair services in theory.  In practice, they are far from ‘set it and forget it’.  If you could make one phone call, and be sure that the recipient honored them, then it would be fine.  But as it works now, the customer follows up with you instead of the service.   The membrane between the originator and the poor credit risk is too permeable to not have the originator get infected and dragged under.

First Reason Not To Use Credit Repair:  It Crushes Your Velocity

Speed is important in this business.  With more uncertainty entering the picture, we have a situation where we are in need of more certainty as to our own personal finances.   We need closings NOW, not later.  When a customer takes 30-60 days before they are even qualified to maybe apply for mortgage financing, try sending that lead to AMEX to get your bill paid.

Credit repair clients that do everything they are supposed to do don’t get funded for 90 days.  But, even with a good service, they will call you, say 1 time a week.  Let’s say that per that one time per week, 60% of the people get to the closing table (best case scenario).  For 12 weeks, you’ve gotta talk to them for 5 minutes a week.  That’s 1 hour.  If you have ten credit repair clients, you’re working with them for 10 hours in 12 weeks.  And in those ten hours, I could find two buyers that could close.  Bubba, today’s market doesn’t allow for charitable conversations.  Why would you subject yourself to this?

Probably to avoid rejection, but the tonic for avoiding rejection also avoids a paycheck, and gives you busy work that you sort of have to do.

Second Reason:  You Should Be Chasing the Creme De La Creme OF BORROWERS, The Ones that have the best per hour rate.

The other thing (that is being talked about over at BHB) is the fact that you should be chasing the best borrowers.  You should position yourself to earn their business.  The best borrowers will have the most easily packaged loan scenarios, and the fastest closings, and usually the most gratitude.  These are the folks you will be working with if you’re going to be sustainable.  Think: white shoe bank, not shyster in a zoot suit.  Being able to earn the best business that exists is the surest way to ameliorate the problems with this market.

Settling for credit repair borrowers lets you off the hook and confuses activity with productivity.   You’re insulated from feedback.  You don’t know how good you really are because you have people that ‘let you help them.’  Essentially every credit repair candidate will say yes.  Some qualified borrowers shop around.  Credit repair candidates don’t.   They are loyal and are able to ‘let you help’.’  But Tom Saywer ‘let people help’ too.

Help the folks that pay, not the folks that don’t reject you.

Third Reason To Avoid Credit Repair Business: You Are On The Hook For The Service Provided BY SOMEONE YOU DON’T KNOW.

Let’s think about this for a second.

Realtors commend commissions into our hands all the time.  And they are implicitly responsible for all that we do as lenders.  It takes a lifetime to build up our lists, and one missed phone call or bad deal to hurt both our selves and the real estate agent.  Will we be able to ‘vet’ the actions of a credit repair guy?  And do we want to invest the time and energy learning about a service that just gives us more unprocessed loops to weigh us down psychically?

I don’t want to learn the nuances of credit repair and the methodology.  I don’t want to ‘vouch,’ for the responsiveness and efficacy of a call center, and I can’t imagine a financial structure that puts highly competent people in charge of the minutiae of credit repair.  So, I’m not going to risk my reputation on any organization that relies on call center (i.e. uninvested) employees.

Forth Reason: Like Attracts Like

This is a corollary of #2.  You should chase the good and avoid the bad.  Studies have shown that looking at fat people makes you fat. Being around people that have gone through adult failure spiral changes you psychologically.  Makes it OK for you to do likewise, and makes shady and entitled behavior OK with you.  It’s the same moral hazard that was created by the meida,only it’s happening to you.  You see people, have empathy, and then realize the consequences aren’t that bad.

Then you don’t really care about slipping a little because you see that it’d be OK if you did, because you surrounded yourself with a group of tough people to work with.

I know Chris will likely have a lot to say about this.  And it’s not a malicious service, but no top flight originators should be using this type of thing.  My take: if they aren’t closin’ in 45 days, find someone that will.

Chris Johnson is a Vagabond new market survival enthusiast that is unable to catch up with the sheer number of blogs that Todd Carpenter runs.

“Hello Lenderama readers.” Thanks for the warm welcome, Todd!  My name is Matthew Bowe and most of you probably don’t have a clue as to who I am, so, let me give you a little background on who I am and what I’ve done, and then I’d like to start a conversation.  This conversation will start with THE QUESTION that nobody wants asked.

It was just a couple of years ago that I went from full time originating to full time product design and development at the Mortgage Coach.  For me it was an opportunity to blend my technology background of 13 years with my origination experience of almost 5 years.  It was a chance to work with a company that I felt was leading the industry’s newfound sense of values by establishing the notion of  Mortgage Planning (Mortgage Coach owns the domain MortgagePlanner.com).  It was a chance to work with someone with whom I had a great deal of respect and with whom I’d built a professional friendship; Dave Savage, co-founder and CEO.

My goal in going to Mortgage Coach was to help fill in what I felt were massive gaps in the industry.  In my mind then, and in most cases still today, I felt the Consumer was the one who was being forgotten by our industry.  Mortgages were and remain confusing and overly complicated.  My determination was to deliver value and simplicity to the consumer through the loan professional.  And, I felt that, as an originator, most of the information and services I was buying were too expensive and lacked tangible value.  I wanted to put real tools and results back in the hands of the originator.  Dave Savage shared this vision and believed in my capabilities and gave me quite a long leash to create some new products (Thanks Savage!).

While at Mortgage Coach I had primary responsibility for designing and bringing to market the Marketing Machine and the Equity Optimizer (renamed the Opportunity Optimizer), two products launched within 9 mos of my starting with Mortgage Coach (that’s why I call one of my blogs “Rapid Product Success”).  I can say proudly, both were successful launches and contributed greatly to the company’s financial success.  Additionally, in the newly released Analyze, I conceived and created the specifications for Visual Loan Presenter (VLP) which takes the proposal creation capabilities found in the Marketing Machine and integrates them into the desktop software.  John Schaaf, the CIO did most of the programming and implementation and deserves credit for a good chunk of the VLP implementation.

My last effort at Mortgage Coach, which I’m especially proud of was the Seller Buydown Flyer and Analysis.  It was a pleasure to work with Scott Nicholson from BofA who pioneered this as a solution in today’s market and adapt his process.  The final result is something that is incredibly easy for the Mortgage Coach member to create and the Consumer “gets” the meaning of the numbers right away. 

Mortgage Coach has let me know that there won’t be anything for me to do there for awhile.  So, while I’ve got some free time, I will be writing about technology and looking at the world through new eyes.  But, top of my mind is starting a conversation.  This will be a conversation about your business, and about the consumer.  I want to understand what is happening on the street and in the offices of your businesses.  I want to listen to you, and I want to take part in a discussion.

Let’s explore what is going well and what is falling apart.  What problems are solvable and which are just facts of life.  Let’s reveal who is serving you and who is hurting you.  Most importantly, we’ll discuss how can we win back the consumer’s confidence, and what it is going to take to get there. What questions do clients/consumers ask you that you find difficult to answer?  What is missing from our industry in serving the consumer?

We are going to explore these questions and issues together.  Some we’ll solve, some we won’t and some we shouldn’t even consider.  Some will simply be about awareness, while others will be about actionable change.  My intention is to build some free tools to help provide bailing wire and ducktape where appropriate.  But, most importantly, let’s start talking, because I’ve got some questions for you. 

Stay tuned for Question #1 as it is the question none of the industry’s big hitters wants asked in today’s market.