The Mortgage Cicerone - The Loan Attraction Coach - Con

If You Chase Two Rabbits, Both Will Escape

A New Post By The Mortgage Cicerone
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Every originator I know wants to be valued and appreciated by their clients and referral partners. We all know the answer lies in increasing your value with your clients and referral partners above and beyond that of your competitors...right!

We all want to increase our value, yet how does one do it?

I believe two of the key elements is tied to FOCUS and putting the needs of others before yours.

By focusing on the business you want, the people you want to connect with and the behaviors/actions needed to succeed, you are drastically increasing your value and loyalty.

There is a saying:

"If you chase two rabbits, both will escape."

What this means is, you have limited time and resources and by trying to be everything to everyone and not focusing your activities, you become like a rudderless ship in the ocean.

The problem with most loan originators is the marketplace does not see them as special, rather most are viewed as commodities. Actually the real problem is, deep down most originators put their needs first (before their clients) while also viewing themselves as commodities to both their clients and referral partners.

Todd Duncan teaches the need to focus on three things:

1. The right priorities
2. The right relationships
3. Both should be supported by the right purpose

He also teaches the purpose that carries the highest level of influence is:

"Be a giver and not a taker"

One of the greatest ways to change you personal influence is to change your thought process from TAKING to GIVING!

When you know:

• What your doing and the purpose behind what your doing is because you want to make a difference (and)
• You want to give something to a client or referral partner they are not getting from any of your competitors

You are increasing your loyalty by increasing your value.

Ten Key Strategies Every Originator Must Master

There are three tenets to successful business development:

1. The purpose of marketing is to differentiate yourself from the competition in a positive way so that your prospects are strong.
2. The purpose of sales is the conversion of these strong prospects who are motivated to act because they like and trust you.
3. The purpose of customer service is to exceed these customers' expectations and thus place you in position to build your business through referrals.

Is there an alternative?  The alternative business model is more likely to resemble a treadmill as you start over again and again.   Those who are the top producers and long-term players in our industry have a foundation model of success rather than a treadmill.  Every step they take in the industry is built upon the previous step. 

Sales and marketing training is truly worthless if you are not able to implement the entire model into a comprehensive fashion. Ninety percent of your training should be part of a comprehensive curriculum designed to help YOU understand what it takes to become an expert within the mortgage industry.  You should not be merely interested in helping yourself become competent, rather an expert. Only an expert can implement the concepts outlined above.

We must start with differentiation.  Those who succeed in the long run are those who elevate themselves above and beyond their competition.  Because the mortgage industry has few barriers to entry and no significant training after you arrive, the mortgage industry is one of the few industries in America in which you can achieve differentiation by becoming an expert in your field.  If you are an expert and a CPA, you are one of many thousands. This is not so in our industry.

Wouldn't you rather lead rather than follow with the masses?  Wouldn't you rather advise customers instead of competing on price or other promises?  Only experts can advise.  We must remember that we are helping people make the most important financial decision they will ever make.  Our industry must start treating this decision with the importance it deserves.

It is said if you don't know what you don't know, you won't improve.  Too many of us enter the industry and we have no idea where the road leads, let alone if we are moving in the right direction.  A loan officer can have two weeks experience in the industry or twenty-five years.  It does not matter. If you have not been shown the right road, you are not likely to have found the way.  Ask yourself, how many hours and dollars have you cost yourself heading in the wrong direction?  Isn't about time the real road was laid out for you?  Unfortunately, even when you have mentorship in this industry, some of it leads us the wrong way.  When we travel too far in the wrong direction, it is sometimes a long way back.  A perfect example would be a loan officer forgoing their long-term market to feast on refinances.  While making a few extra dollars, that loan officer is now hurting their long-term changes of success.

The purpose of this post is to give a delineation of what it will take for a loan officer to become an expert and thus differentiate themselves from the competition. If you are interested in just getting by, I would suggest you stop reading at this juncture.  If you are truly interested in learning what it will take to succeed, this will at least give you an outline for the road.  It certainly does not include every facet or course I would recommend, but it gives you the idea of how varied and comprehensive we must be.  Our industry touches upon many facets of people's lives and we can't help people without taking into account all aspects of the real estate finance transaction.

1.       Learn the real estate process. I know of loan officers who say they don't like working with real estate agents and still others who have never bought a home.  With regard to the first situation, I say simply-get over it.  You cannot afford to ignore what can be anywhere from twenty-five to seventy-five percent of the market in a given year.  You are in the real estate industry and agents are a major player.  Your refinance clients will purchase a home sometime in the future and an agent will be involved.  You need to learn how to deal with the right agents and how to control the sales situation.  Not only should you play in this market, you should take a real estate licensing class.  Not to sell real estate but to understand what agents do.  In other words, you must become an expert in not only your field, but in your targets' field as well.

Regarding the absurd situation of someone selling mortgages and never owning a home, I listen with amusement when someone tells me that they can be effective without being a homeowner.  If I were a real estate agent trying to convince someone to purchase a home, why would I send this person to someone who can't convince themselves to purchase?  A vital aspect of sales is empathy, and you can't empathize with prospects that have experienced something you never have experienced.  Perhaps you can sell real estate as a commodity, vying for the lowest bid, but you are never getting off the treadmill in this way.

2.       Learn the three economic reasons to own a home.  It is truly amazing both loan officers and real estate agents are not experts calculating and explaining the economic benefits of homeownership; leverage, rental equivalency and inflation protection, because these concepts because are the basis of our whole industry.  It is why the industry is called the American dream.  Not mastering this is akin to selling with your hands tied behind your back. Imagine teaching Realtors these concepts, instead of pushing products.  Believe it or not, real estate agents are not taught these concepts in real estate school.  What a way to differentiate yourself by teaching them the most important concepts they will ever learn.

3.       Learn the economics of your rate sheet.  This is another way you can distinguish a bit player from an expert. We try to make loan officers competent by teaching them how to read rate sheets.  But do they know why one program costs more than another?  Do they understand spreads?  Most loan officers are reduced to general statements such as "it costs more because of risk."  It is not always because of risk.  And sometimes this statement sounds and is ridiculous.  I always have a great time giving examples of this in class while I get loan officers to understand the relationships of pricing.  One of my first seminars to real estate agents was titled "Everything a Realtor Should Know about the Secondary Market."  Do you think I had a hard time convincing them I was an expert when everyone else was delivering rate sheets and doughnuts?

4.       Learn important economic concepts of real estate finance.  We are not selling a bunch of loan programs.  We are selling financial instruments.  We need to understand how these instruments can be used to achieve financial goals.  Concepts as the efficacy of different levels of prepayment and debt consolidation come to mind at this juncture. How can you call yourself a trusted advisor without mastering these?  Our goal is not merely to give people what they want, but to help fill their short-term and long-term needs.  Note this requires more than knowledge of loan programs. A loan officer learns programs.  An expert learns how to utilize these programs to help their clients achieve their short and long term economic goals.

5.       Learn how to compare loan programs based upon future scenarios - including ARMs vs. fixed, points vs. no points, one loan vs. two loans, negative amortization and more.  For example, do you know the three major scenarios to describe the possible future patterns of interest rates and what they mean?  You need to understand the historical case, the worst case and FIAR case scenarios and how to work them into comparisons for your clients.

6.       Learn how to underwrite as well as process a loan - including the intricacies of taxes and self-employment.  I laugh at trainers advising loan officers to call upon CPAs, knowing full well that when the CPA starts talking about intricate tax returns the loan officer is completely lost. You don't have a right to call on CPAs unless you are an expert in tax return analysis. To this end, I don't think you should just learn how to read a tax return, I think you should take a tax preparation course.

A loan officer should not just learn how to process, they need to learn how to underwrite.  How can you take control of service levels if every time you send a loan to an underwriter it is as if you have sent it into a black hole?  You should know more than the underwriter knows with the goal of underwriting each file BEFORE it goes to the underwriter.  That includes reviewing the appraisal.

7.       Learn how to control your customers and the process.  If you want to deliver great service with less stress in your life, you must take control of the process.  If you don't you will start with an imperfect product and an imperfect product will result in an imperfect process.  How can you exceed your customer's expectations if you can't even deliver adequate service? Experts are well beyond this juncture. 

I once closed closed over sixty loans in one month. Do you think I could have done this without taking control?  If you are meeting with clients two and three times during the process and real estate agents are running after you to get status, you are reacting and are certainly not in control.  Not taking control causes the treadmill or "roller coaster" model of production and subjects you to countless hours of stress every month. The long-term result?  Lower production levels or complete burnout.

8.       Learn how to market from within the loan process.  Taking control of the process puts you in a position to avoid costly and inefficient marketing methods such as cold calling or purchasing leads.  Do not expect a referral base to start appearing after a few years of going in the wrong direction.  Every time you leave the process to market, you take yourself further away from a successful business model.  Experts learn where the opportunities are.  What the foundation model does is help open your eyes so you don't miss these opportunities. When you are running around out of control and then marketing all over the place you will miss so many of these opportunities that are right under your nose.

9.       Learn what is right and what is not.  If you want to lead, you can't do so moving in the wrong direction or coming from the wrong side of the line.  You may close a loan and make more money tomorrow or next week, but you will never leave the treadmill because you will not qualify to work with leaders.  Leaders understand the importance of relationships.  Rate shoppers do not.  I firmly believe that much of the fraud that occurs in this industry, including predatory lending, occurs because we have not clearly drawn the line for loan officers. Experts are not wondering where the line lies.

10.   Become an expert in sales and marketing.  Over the years I have spent an inordinate amount of time correcting much of the training most loan officers and Realtors receive.  What sounds like good advice such as "you have to ask for the business" and "you must overcome objections" actually can be counter-productive.  For example, the secret to getting referrals is not asking, it is positioning yourself to ask.  This is why so many of us find asking so uncomfortable.  If asking were the secret, I believe many more loan officers would be out there asking instead of saying, "oh, I know I should be..."

Even traveling one step beyond being an expert in sales and marketing within your industry, you must become an expert in sales and marketing within the industry of your target.  Loan officers should not actually be attending "loan officer" marketing seminars. They should be attending "real estate agent" marketing seminars. My first rule of synergy says that everything you do must achieve a second objective, even your educational plan.  Why not surround yourself with your targets while you learn how to help them? 

Yes, it will be a lot of work.  But if you try positioning yourself as an expert you will achieve what many keep searching for.  Finally your efforts will help you get closer to your long-term goals of a satisfaction within your career.  Those who know that they can deliver more value not only are in a great position to ask for the business, those seeking counsel approach them every day.

Loan officers hear questions every day such as "what is your rate?"  Experts hear questions such as "what do you recommend I do?"  How would you like to spend the rest of your career, answering the first question every day or the second question?  This is the choice you have. Unfortunately we are so busy trying to chase down the next deal and becoming competent, most of us never reach that position.  I am here to tell you that not only is reaching this goal possible, it can be achieved with the right road map.

There are three tenets to successful business development:

1. The purpose of marketing is to differentiate yourself from the competition in a positive way so that your prospects are strong.
2. The purpose of sales is the conversion of these strong prospects who are motivated to act because they like and trust you.
3. The purpose of customer service is to exceed these customers' expectations and thus place you in position to build your business through referrals.

Is there an alternative?  The alternative business model is more likely to resemble a treadmill as you start over again and again.   Those who are the top producers and long-term players in our industry have a foundation model of success rather than a treadmill.  Every step they take in the industry is built upon the previous step. 

Sales and marketing training is truly worthless if you are not able to implement the entire model into a comprehensive fashion. Ninety percent of your training should be part of a comprehensive curriculum designed to help YOU understand what it takes to become an expert within the mortgage industry.  You should not be merely interested in helping yourself become competent, rather an expert. Only an expert can implement the concepts outlined above.

We must start with differentiation.  Those who succeed in the long run are those who elevate themselves above and beyond their competition.  Because the mortgage industry has few barriers to entry and no significant training after you arrive, the mortgage industry is one of the few industries in America in which you can achieve differentiation by becoming an expert in your field.  If you are an expert and a CPA, you are one of many thousands. This is not so in our industry.

Wouldn't you rather lead rather than follow with the masses?  Wouldn't you rather advise customers instead of competing on price or other promises?  Only experts can advise.  We must remember that we are helping people make the most important financial decision they will ever make.  Our industry must start treating this decision with the importance it deserves.

It is said if you don't know what you don't know, you won't improve.  Too many of us enter the industry and we have no idea where the road leads, let alone if we are moving in the right direction.  A loan officer can have two weeks experience in the industry or twenty-five years.  It does not matter. If you have not been shown the right road, you are not likely to have found the way.  Ask yourself, how many hours and dollars have you cost yourself heading in the wrong direction?  Isn't about time the real road was laid out for you?  Unfortunately, even when you have mentorship in this industry, some of it leads us the wrong way.  When we travel too far in the wrong direction, it is sometimes a long way back.  A perfect example would be a loan officer forgoing their long-term market to feast on refinances.  While making a few extra dollars, that loan officer is now hurting their long-term changes of success.

The purpose of this post is to give a delineation of what it will take for a loan officer to become an expert and thus differentiate themselves from the competition. If you are interested in just getting by, I would suggest you stop reading at this juncture.  If you are truly interested in learning what it will take to succeed, this will at least give you an outline for the road.  It certainly does not include every facet or course I would recommend, but it gives you the idea of how varied and comprehensive we must be.  Our industry touches upon many facets of people's lives and we can't help people without taking into account all aspects of the real estate finance transaction.

1.       Learn the real estate process. I know of loan officers who say they don't like working with real estate agents and still others who have never bought a home.  With regard to the first situation, I say simply-get over it.  You cannot afford to ignore what can be anywhere from twenty-five to seventy-five percent of the market in a given year.  You are in the real estate industry and agents are a major player.  Your refinance clients will purchase a home sometime in the future and an agent will be involved.  You need to learn how to deal with the right agents and how to control the sales situation.  Not only should you play in this market, you should take a real estate licensing class.  Not to sell real estate but to understand what agents do.  In other words, you must become an expert in not only your field, but in your targets' field as well.

Regarding the absurd situation of someone selling mortgages and never owning a home, I listen with amusement when someone tells me that they can be effective without being a homeowner.  If I were a real estate agent trying to convince someone to purchase a home, why would I send this person to someone who can't convince themselves to purchase?  A vital aspect of sales is empathy, and you can't empathize with prospects that have experienced something you never have experienced.  Perhaps you can sell real estate as a commodity, vying for the lowest bid, but you are never getting off the treadmill in this way.

2.       Learn the three economic reasons to own a home.  It is truly amazing both loan officers and real estate agents are not experts calculating and explaining the economic benefits of homeownership; leverage, rental equivalency and inflation protection, because these concepts because are the basis of our whole industry.  It is why the industry is called the American dream.  Not mastering this is akin to selling with your hands tied behind your back. Imagine teaching Realtors these concepts, instead of pushing products.  Believe it or not, real estate agents are not taught these concepts in real estate school.  What a way to differentiate yourself by teaching them the most important concepts they will ever learn.

3.       Learn the economics of your rate sheet.  This is another way you can distinguish a bit player from an expert. We try to make loan officers competent by teaching them how to read rate sheets.  But do they know why one program costs more than another?  Do they understand spreads?  Most loan officers are reduced to general statements such as "it costs more because of risk."  It is not always because of risk.  And sometimes this statement sounds and is ridiculous.  I always have a great time giving examples of this in class while I get loan officers to understand the relationships of pricing.  One of my first seminars to real estate agents was titled "Everything a Realtor Should Know about the Secondary Market."  Do you think I had a hard time convincing them I was an expert when everyone else was delivering rate sheets and doughnuts?

4.       Learn important economic concepts of real estate finance.  We are not selling a bunch of loan programs.  We are selling financial instruments.  We need to understand how these instruments can be used to achieve financial goals.  Concepts as the efficacy of different levels of prepayment and debt consolidation come to mind at this juncture. How can you call yourself a trusted advisor without mastering these?  Our goal is not merely to give people what they want, but to help fill their short-term and long-term needs.  Note this requires more than knowledge of loan programs. A loan officer learns programs.  An expert learns how to utilize these programs to help their clients achieve their short and long term economic goals.

5.       Learn how to compare loan programs based upon future scenarios - including ARMs vs. fixed, points vs. no points, one loan vs. two loans, negative amortization and more.  For example, do you know the three major scenarios to describe the possible future patterns of interest rates and what they mean?  You need to understand the historical case, the worst case and FIAR case scenarios and how to work them into comparisons for your clients.

6.       Learn how to underwrite as well as process a loan - including the intricacies of taxes and self-employment.  I laugh at trainers advising loan officers to call upon CPAs, knowing full well that when the CPA starts talking about intricate tax returns the loan officer is completely lost. You don't have a right to call on CPAs unless you are an expert in tax return analysis. To this end, I don't think you should just learn how to read a tax return, I think you should take a tax preparation course.

A loan officer should not just learn how to process, they need to learn how to underwrite.  How can you take control of service levels if every time you send a loan to an underwriter it is as if you have sent it into a black hole?  You should know more than the underwriter knows with the goal of underwriting each file BEFORE it goes to the underwriter.  That includes reviewing the appraisal.

7.       Learn how to control your customers and the process.  If you want to deliver great service with less stress in your life, you must take control of the process.  If you don't you will start with an imperfect product and an imperfect product will result in an imperfect process.  How can you exceed your customer's expectations if you can't even deliver adequate service? Experts are well beyond this juncture. 

I once closed closed over sixty loans in one month. Do you think I could have done this without taking control?  If you are meeting with clients two and three times during the process and real estate agents are running after you to get status, you are reacting and are certainly not in control.  Not taking control causes the treadmill or "roller coaster" model of production and subjects you to countless hours of stress every month. The long-term result?  Lower production levels or complete burnout.

8.       Learn how to market from within the loan process.  Taking control of the process puts you in a position to avoid costly and inefficient marketing methods such as cold calling or purchasing leads.  Do not expect a referral base to start appearing after a few years of going in the wrong direction.  Every time you leave the process to market, you take yourself further away from a successful business model.  Experts learn where the opportunities are.  What the foundation model does is help open your eyes so you don't miss these opportunities. When you are running around out of control and then marketing all over the place you will miss so many of these opportunities that are right under your nose.

9.       Learn what is right and what is not.  If you want to lead, you can't do so moving in the wrong direction or coming from the wrong side of the line.  You may close a loan and make more money tomorrow or next week, but you will never leave the treadmill because you will not qualify to work with leaders.  Leaders understand the importance of relationships.  Rate shoppers do not.  I firmly believe that much of the fraud that occurs in this industry, including predatory lending, occurs because we have not clearly drawn the line for loan officers. Experts are not wondering where the line lies.

10.   Become an expert in sales and marketing.  Over the years I have spent an inordinate amount of time correcting much of the training most loan officers and Realtors receive.  What sounds like good advice such as "you have to ask for the business" and "you must overcome objections" actually can be counter-productive.  For example, the secret to getting referrals is not asking, it is positioning yourself to ask.  This is why so many of us find asking so uncomfortable.  If asking were the secret, I believe many more loan officers would be out there asking instead of saying, "oh, I know I should be..."

Even traveling one step beyond being an expert in sales and marketing within your industry, you must become an expert in sales and marketing within the industry of your target.  Loan officers should not actually be attending "loan officer" marketing seminars. They should be attending "real estate agent" marketing seminars. My first rule of synergy says that everything you do must achieve a second objective, even your educational plan.  Why not surround yourself with your targets while you learn how to help them? 

Yes, it will be a lot of work.  But if you try positioning yourself as an expert you will achieve what many keep searching for.  Finally your efforts will help you get closer to your long-term goals of a satisfaction within your career.  Those who know that they can deliver more value not only are in a great position to ask for the business, those seeking counsel approach them every day.

Loan officers hear questions every day such as "what is your rate?"  Experts hear questions such as "what do you recommend I do?"  How would you like to spend the rest of your career, answering the first question every day or the second question?  This is the choice you have. Unfortunately we are so busy trying to chase down the next deal and becoming competent, most of us never reach that position.  I am here to tell you that not only is reaching this goal possible, it can be achieved with the right road map.

The "Acres of Diamonds" in Your Own Backyard

Yes, you have heard me say it before and you will most likely hear me again numerous times in the future. Today while speaking to Mark Green at Top of Mind, he inspired me to get back on my soapbox again. Why? Because Mark is the top CRM guy I know around and he just plain gets why originators need to keep in front of their database.

So, I have a few questions!

Loan Originators, do you have an automated system that consistently keeps your name and services in front of your clients and motivates them to:

• Come back to YOU for their refinance or purchase needs?
• Refer their friends and family to YOU for their refinance or purchase needs

No Loan Originator has a more valuable asset than their customer base 

Customers who have done business with you or your company represent potential gold mines. Unfortunately, most mortgage companies and originators focus their marketing activities on winning new customers. Instead, they should focus on client retention and not leave their treasured past customers unloved and available for the competition to come in and snatch them away.

Acres of Diamonds- Your customer list

Many originators have recognized the need to have a customer or client list. However, very few know how to truly cultivate their customer list into a constant source of new business. Think about the fact that every customer you have has friends and family that can use your service, either now or sometime in the future. On top of that, many of your customers will come back into the mortgage market for a new real estate purchase, to refinance their present mortgage or for a home equity loan. Plus, banks and credit unions have another huge advantage in that they have additional services that they can cross sell.

The National Association of Realtors stated that 27 percent to 32 percent of homeowners will purchase another property within first two to three years after their initial purchase. Additionally, the Mortgage Bankers Association found a homebuyer will average 8.3 first mortgages (purchase & refinance) over the next twenty years.

That is a huge percentage of your customers coming back into the market in a relatively short period of time.

You Have Control of Your Leads

Another obvious advantage to the "customer for life" concept is the control it gives you. Rather than having to rely on the real estate agent base, the mortgage originator is now the front-runner. Most every loan officer would love the opportunity to be able to call his or her real estate agents and tell them that they have a past customer who is back in the real estate market, and ask if the agent would like to work on that customer's next real estate transaction.

Turn satisfied customers into loyal customers and don't let them get away

Continue reading "Are You Mining the “Acres of Diamonds” in Your Database? " »

Yes, you have heard me say it before and you will most likely hear me again numerous times in the future. Today while speaking to Mark Green at Top of Mind, he inspired me to get back on my soapbox again. Why? Because Mark is the top CRM guy I know around and he just plain gets why originators need to keep in front of their database.

So, I have a few questions!

Loan Originators, do you have an automated system that consistently keeps your name and services in front of your clients and motivates them to:

• Come back to YOU for their refinance or purchase needs?
• Refer their friends and family to YOU for their refinance or purchase needs

No Loan Originator has a more valuable asset than their customer base 

Customers who have done business with you or your company represent potential gold mines. Unfortunately, most mortgage companies and originators focus their marketing activities on winning new customers. Instead, they should focus on client retention and not leave their treasured past customers unloved and available for the competition to come in and snatch them away.

Acres of Diamonds- Your customer list

Many originators have recognized the need to have a customer or client list. However, very few know how to truly cultivate their customer list into a constant source of new business. Think about the fact that every customer you have has friends and family that can use your service, either now or sometime in the future. On top of that, many of your customers will come back into the mortgage market for a new real estate purchase, to refinance their present mortgage or for a home equity loan. Plus, banks and credit unions have another huge advantage in that they have additional services that they can cross sell.

The National Association of Realtors stated that 27 percent to 32 percent of homeowners will purchase another property within first two to three years after their initial purchase. Additionally, the Mortgage Bankers Association found a homebuyer will average 8.3 first mortgages (purchase & refinance) over the next twenty years.

That is a huge percentage of your customers coming back into the market in a relatively short period of time.

You Have Control of Your Leads

Another obvious advantage to the "customer for life" concept is the control it gives you. Rather than having to rely on the real estate agent base, the mortgage originator is now the front-runner. Most every loan officer would love the opportunity to be able to call his or her real estate agents and tell them that they have a past customer who is back in the real estate market, and ask if the agent would like to work on that customer's next real estate transaction.

Turn satisfied customers into loyal customers and don't let them get away

How to Get Off the Boom-Bust Roller Coaster of Mortgage Origination

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

One of the most common complaints I hear from mortgage originators is the boom-bust roller coaster component to the business. While it is real and happens to a large contingent of originators, there are mortgage professionals that seem to be immune from the fluctuation their peers experience.

Why?

Bottom line is there are a few key critical elements or fundamentals these mega-producers practice that make their business and income more predictable. One of them is they treat and practice the art of building a consistent annuity of referrals and make it part of their everyday processes and practice. In fact, I have found they get down-right obsessive about building and service their annuity client base when times are good, because they know and expect the market to turn. So while most of their peers are focused on funding the loans in their pipeline (and subsequently not marketing their database of clients), these top producers are a bit contrarian in they are like squirrels and are building up a storehouse of food for the winter months.

It's about referrals from both clients and referral partners.

We always hear about building a 100% referral based business. While I don't think very many can claim 100% of their business is referral based, I know numerous superstar mortgage and real estate professionals who's business is in fact at least 90 to 95% referral.

The Best Time To Get A Referral

What do people talk about with their friends when they're buying a new car? About new cars! Better yet, what do people talk about when they are buying a new house or refinancing a mortgage? That's right...houses and mortgages.

More importantly, when they talk about mortgages, are your customers talking about YOU?

Your goal as a salesperson is to maximize your referral business. To do that, you MUST make the process systematic and so easy that every client working with you will recommend their both family and friends exclusively TO YOU.

Yet, most mortgage and real estate professionals don't live on referrals - WHY NOT?

I've found they are either embarrassed or they get so busy with the transaction details during the mortgage process they never get around to asking!

How I Turned One Transaction Into 72 Closed Loans

Yes, you read that correctly...72 closed loans.

It all started with taking the application and consistently asking for referrals throughout the loan process and loan management period after the loan closed. In fact, from the time I took the loan application and the loan closed, my client referred six other family, friends and neighbors (they all closed). Long story short, within the next four years I closed 72 loans that stemmed from the original six referrals provided me by my client....talking about a referral tree with a lot of branches!

Are You Self-Reliant or Reliant...A Case Against the Latter

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Note: Nighttime satellite photo of Korean Peninsula and the contrasting illumination between North and South Korea.

I'm guessing Milton Friedman would have loved this picture.

In fact, this satellite picture provides a powerful metaphor highlighting the difference between two deeply contrasting political. social and economic systems. Subsequently, it also represents the difference between individuals who are self-reliant/industrious and those who promote entitlement policies that eventually subordinate personal freedoms and produce a citizenry dependent upon the state.

Back to Korea.

While North Korea is ethnically homogeneous with their brethren in the South, there are stark gaps between the two countries separated since the Korean War (1950 - 1952). For example, North Korea developed into a communist dictatorship with a strong centrally planned economy while South Korea became a democracy with a thriving free-market based economy has thrived domestically and globally. 

In addition, isn't it amazing even the fishing fleets in the waters surrounding Korea throw off more light than all of North Korea.

It is my sincere belief we as individuals, an industry and nation can learn from the example of these two countries. It is up to us as citizens and mortgage professionals to take responsibility for both our actions and that of the industry we operate.

The Blues Are Bad For Your Business and Life: Sorry B.B. King

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Are you having one of “those” days when things aren’t working out and you can’t figure out why you are feeling down, blue, and hopeless. It may just be a one day thing, but a gloomy encounter with your boss, team, referral partner, vendor or customer can cost you a substantial loss of business and your pessimistic outlook may try even your most treasured relationships.

For some of us, a mild case of the blues will come and go, but for others, this state of mind not only negatively impacts our personal lives, but influences our professional relationships and ultimately our profits.

According to therapist Lexie Pftezing, author of 60 Second Blues Busters:

"most people spend three out of every 10 days battling the blues. We may say we’re having a bad hair day, got up on the wrong side of the bed, we’re bummed...regardless of what we call them, the blues affect us in many ways."

These negative feelings permeate our attitude making us feel more sensitive and defensive. Our productivity goes down, and absenteeism inevitably goes up. When you add up all the factors, one bad mood can waste hundreds or thousands of dollars spent on a marketing campaign when you exhibit a sullen or a less than confident attitude when interacting with clients or referral partners.

Pfetzing and her co-author Joyce Quick offer remedies to stifle the short term blues and to circumvent a more serious downward spiral of depression. The book essentially says “you don’t have to suffer and you can feel better fast.”

Pfetzing also says “All of our suggestions involve some sort of action and positive activity” to revive the spirit and soothe the soul, but recognizes the fact that when you are down it may be difficult to think of anything to do to transform from blah to better.

We may encounter intermittent interactions with family, friends and colleagues that leave an impression that may last for the duration of the relationship. One less than enthusiastic response to a prospective client or customer may lose a lucrative account and sever a long time relationship. One morose team member can bring down an entire team.

So how exactly can we avoid a down day that adversely affects our work place, health and relationships both personal and professional?:

Here are a few tips to consider:

1. Just take a break. Take a short walk requires a change in your breathing and a definite change of scenery. Start looking at the world in gratitude for what you do have which requires studying what you do have and not directing energy to what you don’t have. Depression demands a thought process that doesn’t serve an attitude of gratitude.
2. Rest a little. Most of us can’t curl up in our offices for a short nap, but stress rises when we are overworked, and constantly giving to others leaves nothing for ourselves. Really take a “coffee break” and celebrate a little time alone. It may require leaving the office or eating lunch in the park, but a little alone time will allow you to re-center and revitalize your thinking. Make it a little ceremony just for you. The world won’t crash if you “disappear” for 15 or 20 minutes. It may make a gigantic difference in your productivity and your “attract-ability” factor.
3. Make a list of the things you need to do, prioritize the “gotta’s” and tackle the top three with high energy for completion. This will impart a sense of accomplishment that you need to relieve feeling overwhelmed.
4. Make a list of what is working. Even though things may seem hectic, loans are getting funded and things are getting done. Note those things going well in your office and ask yourself why. You’ll likely discover it is because you have built good systems or processes for these things and you are staying on top of them.
5. Be honest and ethical. It's important one conducts themselves ethically. I have seen countless people overcome with the blues or downright depression when their actions were incongruent with both their personal and established ethical practices.
6. Avoid Debbie Downers. When you are feeling down, the worst thing you can do is to surround yourself with other individuals with less than positive attitudes.

While the the blues can be quite different from true clinical depression which requires specific treatments, but for most of us, these simple steps can help us “snap out of it” and get on with the adventure of life.

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Are you having one of “those” days when things aren’t working out and you can’t figure out why you are feeling down, blue, and hopeless. It may just be a one day thing, but a gloomy encounter with your boss, team, referral partner, vendor or customer can cost you a substantial loss of business and your pessimistic outlook may try even your most treasured relationships.

For some of us, a mild case of the blues will come and go, but for others, this state of mind not only negatively impacts our personal lives, but influences our professional relationships and ultimately our profits.

According to therapist Lexie Pftezing, author of 60 Second Blues Busters:

"most people spend three out of every 10 days battling the blues. We may say we’re having a bad hair day, got up on the wrong side of the bed, we’re bummed...regardless of what we call them, the blues affect us in many ways."

These negative feelings permeate our attitude making us feel more sensitive and defensive. Our productivity goes down, and absenteeism inevitably goes up. When you add up all the factors, one bad mood can waste hundreds or thousands of dollars spent on a marketing campaign when you exhibit a sullen or a less than confident attitude when interacting with clients or referral partners.

Pfetzing and her co-author Joyce Quick offer remedies to stifle the short term blues and to circumvent a more serious downward spiral of depression. The book essentially says “you don’t have to suffer and you can feel better fast.”

Pfetzing also says “All of our suggestions involve some sort of action and positive activity” to revive the spirit and soothe the soul, but recognizes the fact that when you are down it may be difficult to think of anything to do to transform from blah to better.

We may encounter intermittent interactions with family, friends and colleagues that leave an impression that may last for the duration of the relationship. One less than enthusiastic response to a prospective client or customer may lose a lucrative account and sever a long time relationship. One morose team member can bring down an entire team.

So how exactly can we avoid a down day that adversely affects our work place, health and relationships both personal and professional?:

Here are a few tips to consider:

1. Just take a break. Take a short walk requires a change in your breathing and a definite change of scenery. Start looking at the world in gratitude for what you do have which requires studying what you do have and not directing energy to what you don’t have. Depression demands a thought process that doesn’t serve an attitude of gratitude.
2. Rest a little. Most of us can’t curl up in our offices for a short nap, but stress rises when we are overworked, and constantly giving to others leaves nothing for ourselves. Really take a “coffee break” and celebrate a little time alone. It may require leaving the office or eating lunch in the park, but a little alone time will allow you to re-center and revitalize your thinking. Make it a little ceremony just for you. The world won’t crash if you “disappear” for 15 or 20 minutes. It may make a gigantic difference in your productivity and your “attract-ability” factor.
3. Make a list of the things you need to do, prioritize the “gotta’s” and tackle the top three with high energy for completion. This will impart a sense of accomplishment that you need to relieve feeling overwhelmed.
4. Make a list of what is working. Even though things may seem hectic, loans are getting funded and things are getting done. Note those things going well in your office and ask yourself why. You’ll likely discover it is because you have built good systems or processes for these things and you are staying on top of them.
5. Be honest and ethical. It's important one conducts themselves ethically. I have seen countless people overcome with the blues or downright depression when their actions were incongruent with both their personal and established ethical practices.
6. Avoid Debbie Downers. When you are feeling down, the worst thing you can do is to surround yourself with other individuals with less than positive attitudes.

While the the blues can be quite different from true clinical depression which requires specific treatments, but for most of us, these simple steps can help us “snap out of it” and get on with the adventure of life.

Who Can You Call At 2:00 a.m.? - Part Two

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

In Harvey Mackay's book titled "Dig Your Well Before You Are Thirsty," he asks his readers:

"Who Can You Call At 2:00 a.m.?"

This question is one of the most critical and revealing questions one can ask themselves about their network of friends and business/personal acquaintances.

To help understand what I'm getting at, answer these three questions:

1. Make a list of ten powerful people you know that can make things happen if you called them.
2. What have you done for any of these people lately?
3. Do you only call them when you need something?

Whenever I'm speaking and ask these questions, I often see the audience squirming when they understand the point being made.

Getting back to the question, who can you call at 2:00 a.m. in the morning?

According to Harvey Mackay, that question is without a doubt one of the most important questions one can ask themselves as an individual or business person. When answering this question, you are really asking yourself:

1. Who can I count on?
2. Who's counting on me?
3. Would anyone answer my call if I called them?

Bottom line, networking is more than keeping a contact database or putting every person you meet in your PDA. It's about CONNECTING with the people in your Blackberry. The art and science of connecting is so much more than phone numbers or names in your database...it's about connecting with people who can make things happen.

Now the next question...are you connecting with people who can make things happen?

Because...You are the sum total of the five people you spend the most time with!

The People You Know?

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Have you every taken the time to think of or write down the names of all the people you have known? When you you complete this exercise, the web of connections throughout your lifetime is wide.

Yet, HOW MANY ARE STILL INVOLVED IN YOUR LIFE TODAY?

Now ask yourself, HOW MANY HAVE FADED AWAY FOR ONE REASON OR ANOTHER?

Whether they are distant family members, old neighbors, friends from school, ex-coworkers and other casual acquaintances you have met along the way, they have all in some shape, way or form influenced or impacted your life positively or negatively.

It is important to know who you know now and have known in the past...it encompasses who you are today.

Now an even more important question is; WHO WOULD YOU LIKE TO KNOW THAT YOU PRESENTLY DON"T KNOW NOW?

When you ask yourself who you know now or who you would like to know, think about your current state of business and what you would like it to be in the future.

According to Jeffrey Gitomer:

"Who you know encompasses who you can presently connect with easily and obviously. The better you know them, the easier it is to make a connection. How well you know them determines how early or how late you can call them on the phone.

There is power in who you know. Not just the connection power. Growth power. Success Power. Even fulfillment power."

That's why it's critical to your career to know:

1. Who do you know?
2. How well are you connected?
3. Do you know how to make a connection?
4. Who knows you?

Who knows you and did you make a connection?

It's more than just knowing someone, it's making a critical connection with the people you want to know and need to know.

It's the connectors that succeed long term in the mortgage and real estates business. Yet connecting is more about giving than receiving and that's where so many people striving to be a connector fail.

TO BE CONTINUED

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Have you every taken the time to think of or write down the names of all the people you have known? When you you complete this exercise, the web of connections throughout your lifetime is wide.

Yet, HOW MANY ARE STILL INVOLVED IN YOUR LIFE TODAY?

Now ask yourself, HOW MANY HAVE FADED AWAY FOR ONE REASON OR ANOTHER?

Whether they are distant family members, old neighbors, friends from school, ex-coworkers and other casual acquaintances you have met along the way, they have all in some shape, way or form influenced or impacted your life positively or negatively.

It is important to know who you know now and have known in the past...it encompasses who you are today.

Now an even more important question is; WHO WOULD YOU LIKE TO KNOW THAT YOU PRESENTLY DON"T KNOW NOW?

When you ask yourself who you know now or who you would like to know, think about your current state of business and what you would like it to be in the future.

According to Jeffrey Gitomer:

"Who you know encompasses who you can presently connect with easily and obviously. The better you know them, the easier it is to make a connection. How well you know them determines how early or how late you can call them on the phone.

There is power in who you know. Not just the connection power. Growth power. Success Power. Even fulfillment power."

That's why it's critical to your career to know:

1. Who do you know?
2. How well are you connected?
3. Do you know how to make a connection?
4. Who knows you?

Who knows you and did you make a connection?

It's more than just knowing someone, it's making a critical connection with the people you want to know and need to know.

It's the connectors that succeed long term in the mortgage and real estates business. Yet connecting is more about giving than receiving and that's where so many people striving to be a connector fail.

TO BE CONTINUED

Do Absolutes Exist For Mortgage Originators?

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Over the years, several people have approached me to consider writing a book focused on originating mortgage loans ethically.  The more I pondered their request, the more I found it to be a challenge. Bottom line, every skilled mortgage originator has their own ideas about what it takes to be a successful originator and I am no exception. After twenty plus years in the business, I have observed, read and developed my own style and way of conducting business successfully.

While my unique mortgage experience (good and bad) is very helpful, the more I thought about authoring such a book, the more it caused me to question and investigate what I really know about originating mortgage loans. This led me to examine my foundational opinions and methods; which in turn led to further research areas I felt were important and to assimilate and garner perspective.

Are There Any Absolutes To Successful Mortgage Origination?

Many years while in college, a professor boldly declared to my class with supreme confidence:

"There are no absolutes."

I immediately asked him:

"So what you are telling me is that there are ABSOLUTELY no ABSOLUTES?"

And his response was:

"Absolutely!"

I then responded:

"Then the only absolute is there are no absolutes? Which makes your statement an absolute which in turn contradicts what you stated and makes your absolute statement false?"

Needless to say, the learned professor was not happy when my fellow students suddenly laughed and the good professor could not defend his statement.

What  does this have to do with mortgage origination?

Bottom line...I believe there are a few absolutes to being a successful mortgage originator over the long haul. While I agree there is substantial gray in our business, at the bottom of my heart, I believe the number one absolute to long-term success and self-fulfillment as an originator:

"You must always conduct your business honestly and in the best interest of your clients even if it means losing a client, commission or referral partner."

In my humble opinion, this is the number one rule (absolute) every long-term originator must follow. There are numerous examples of individuals that did not follow this rule and in turn made BUNDLES of money. However, the key operative term is LONG-TERM success and wealth sustainability. While it is very likely an individual or company can make a small fortune during certain markets (e.g. 2002-2006) ignoring this precept, their long-term sustainability is questionable. The marketplace is currently full of such examples. 

Will I get to writing that book in the near future...not sure. However, I will continue to share my thoughts/suggestions and plan on further developing this concept at The Mortgage Revolution this November 9th through 11th. 

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

Over the years, several people have approached me to consider writing a book focused on originating mortgage loans ethically.  The more I pondered their request, the more I found it to be a challenge. Bottom line, every skilled mortgage originator has their own ideas about what it takes to be a successful originator and I am no exception. After twenty plus years in the business, I have observed, read and developed my own style and way of conducting business successfully.

While my unique mortgage experience (good and bad) is very helpful, the more I thought about authoring such a book, the more it caused me to question and investigate what I really know about originating mortgage loans. This led me to examine my foundational opinions and methods; which in turn led to further research areas I felt were important and to assimilate and garner perspective.

Are There Any Absolutes To Successful Mortgage Origination?

Many years while in college, a professor boldly declared to my class with supreme confidence:

"There are no absolutes."

I immediately asked him:

"So what you are telling me is that there are ABSOLUTELY no ABSOLUTES?"

And his response was:

"Absolutely!"

I then responded:

"Then the only absolute is there are no absolutes? Which makes your statement an absolute which in turn contradicts what you stated and makes your absolute statement false?"

Needless to say, the learned professor was not happy when my fellow students suddenly laughed and the good professor could not defend his statement.

What  does this have to do with mortgage origination?

Bottom line...I believe there are a few absolutes to being a successful mortgage originator over the long haul. While I agree there is substantial gray in our business, at the bottom of my heart, I believe the number one absolute to long-term success and self-fulfillment as an originator:

"You must always conduct your business honestly and in the best interest of your clients even if it means losing a client, commission or referral partner."

In my humble opinion, this is the number one rule (absolute) every long-term originator must follow. There are numerous examples of individuals that did not follow this rule and in turn made BUNDLES of money. However, the key operative term is LONG-TERM success and wealth sustainability. While it is very likely an individual or company can make a small fortune during certain markets (e.g. 2002-2006) ignoring this precept, their long-term sustainability is questionable. The marketplace is currently full of such examples. 

Will I get to writing that book in the near future...not sure. However, I will continue to share my thoughts/suggestions and plan on further developing this concept at The Mortgage Revolution this November 9th through 11th. 

Have You Ever Had a Client Impossible To Please? - Fire Them!

A New Post By The Mortgage Cicerone.
A Guide for Mortgage Professionals.
Read other posts by The Mortgage Cicerone.

We have all heard the old adage...the customer is always right.

However, after years of working with customers and referral partners, I seriously began questioning:

Is the customer always right...no matter what?

My first years in the mortgage business, I believed the answer was emphatically yes. After all, that's what my business professors taught me in college. However, after a few years of dealing with more than a few difficult customers, I seriously began re-thinking the customer service mantra "the customer is always right."

Have you ever had a customer who was impossible to please? No matter what you did, nothing made them happy? I have and below are a few other facts I realized:

• They were typically my lowest profit loans (if they closed at all)
• Allocated three to five times more time/effort/stress on them (at the detriment of my loyal clients)
• Never referred me future business
• I didn't like them
• Shopped you to the very end
• No customer loyalty

No matter how you sliced it, those customers DID NOT excite me. Nor, could I see the likelyhood of building a strong business model by allocating my limited resources towards them.

We are fortunate the mortgage business is an industry that helps people. One of my greatest satisfactions is knowing I make a difference in my clients lives. However, I also believe our business transactions should be a win-win-win situation. It should be a win for our client(s), a win for the company we work for and a win for the loan originator.

It boils down to one simple question: As a loan originator, would you rather work with people you like, who are loyal, profitable and refer you future business or with those that are not and make your life difficult?

Duh, that's even easy for me to figure out!

Does this mean we ignore the customer and treat them badly? NO WAY...they are after all, the reason we are in business. However, it does mean we place limits on what we will tolerate and whom we work with.

When I fully understood and embraced this concept, my career took off and so did my earnings. I remember the first time I released an extremely difficult client. I simply stood up, stuck out my hand for a handshake and graciously explained; "When we first met, I promised I would be honest with you. It's very evident you are not happy with the services and rates I can provide. Based upon that, I believe it would be in your best interest if you worked with another mortgage professional that can better meet your needs."

What is nice is many people will actually apologize after you tell them this and others will leave, both which are fine.

Remember, you do not have to work with everyone, nor should you. Create a target customer profile. Then target those customers that fit your profile. You don't have to please everyone. If you do, no one is happy and and both parties will lose out in the end...it should be a win-win-win transaction. This goes for customers, Realtors, title reps, lenders, and every other vendor in your life. If the relationship is not pleasant, find a way to fix it quick or end it. Life is too short and blood pressure rises too easily to deal with unpleasant people.

As an exercise, start going through your past loan files and identify the individuals whom were the most difficult to work with. I bet you will find you:

• Earned the lowest amount per hour.
• Spent more time on their files, on average, for less money.

Note: The time spent with difficult clients, is time you could have been better serving your good clients (turning them into loyal clients), marketing, networking, being with your family or doing something you enjoy.