The Originator's  Network News

Inside This Issue *Short-sale Guidelines,              by Linda Davidson *Building Your Referral Business, by Kerry Johnson, Ph.D. *Marketing Successes *Bridal Marketing, by Larry Montani  *The Economic Crystal Ball  *More

 

 

 

 

 

 

 

 

 

The Monthly List:  

 

  10 “Different” Places   

        to Advertise

1.       Church bulletin

2.       Restaurant menu

3.       High school athletic program

4.       Stadium scoreboard

5.       Attorney association newsletter

6.       Grocery cart

7.       Movie (screen) theater

8.       Bus bench

9.       Pizza box coupon

10.  Bus/trolley car

  

 

 

 

 

 

 

 

 

 

 

    

 

Another Fine Tip

   A veteran originator added to her already distinctive image by offering to assist customers with their special home-related needs. For example, she encourages them to call her should they need suggestions for local businesses for remodeling, flowers, catering, housekeeping or other services. She maintains a “best of the best” list so she can quickly make references. She noted that this is another way to be a presence in customers’ lives, beyond her mortgage services.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Care:

Special Mailers &Events

 

    Looking for special snail/e-mail ideas or occasions to promote in June? Of course, Flag Day (6/14) and Father's Day (6/20) are obvious choices, but if you are searching for a few options to send greetings or otherwise recognize customers or prospects, consider these dates:

 *6/8-Best Friends Day

 *6/18-Go Fishing Day 

 *6/21-Finally Summer Day   

 *6/26-Forgiveness Day 

 Send a card or e-mail to past customers, Realtors, builders and others.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

 

News…Briefly

   Top Ranked Metro Areas—Kansas City, Mo. and Houston are the two best places for borrowers, according to a recent Forbes.com survey. The survey rated areas based on their interest rates and the percentage of people with delinquent loans or foreclosed homes. Other Top 10 metro areas for homebuyers were Dallas; Virginia Beach, Va.; San Antonio, Texas; Boston; Pittsburgh, Pa.; Denver; Seattle; and Portland, Ore.

   Home Prices Stabilizing—Stabilizing home prices are encouraging, according to Lawrence Yun, chief economist with the National Association of Realtors. “This flattening in home prices is something we’ve been seeing in all of the home price measures lately and quite clearly in this metro area price report,” he said. “The tax credit has been very effective in drawing down excess inventory, with about one million additional sales resulting directly from the stimulus.”

   Total state existing-home sales, including single-family and condo, were at a seasonally adjusted annual rate of 5.14 million in the first quarter, down 14.0 percent from a surge of 5.97 million in the fourth quarter, which was driven by the initial tax credit. However, first quarter sales remain 11.4 percent above the 4.61 million-unit level in the first quarter of 2009. “Year-ago comparisons are more meaningful in this report due to sales swings from the tax credit,” Yun said.

   Sales increased from a year ago in 44 states and the District of Columbia; 31 states and D.C. saw double-digit gains while two were unchanged and four were down.

 

   Builders Are Confident—Builder confidence in the market for newly built, single-family homes increased for a second consecutive month in May, to its highest level in more than two years, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI gained three points to 22 in May, its highest point since August of 2007. “Builders surveyed for the HMI at the beginning of May were undoubtedly reacting to the heightened consumer interest they had just witnessed as the deadline for home buyer tax credits arrived at the end of April,” said Bob Jones, chairman of the National Association of Home Builders (NAHB). “Builders are also hopeful that the solid momentum that the tax credits initiated will continue even now that those incentives are gone.”

 

Trends Watch

   Reverse Mortgage Warning—If  you include reverse mortgages in your service menu, be sure to pay attention to a warning from the Financial Crimes Enforcement Network (FinCEN). According to a recent report, there has been an increase in fraudulent activity with the FHA’s Home Equity Conversion Mortgage (HECM). The FinCEN advisory stated that reports of financial crimes against seniors involving the FHA reverse program have become more prevalent. The schemes include: cross selling, the theft of a senior’s HECM loan proceeds through cross selling of financial products in violation of HUD rules; property flipping, a straw buyer transferring ownership of a low-value or problem property to an unsuspecting senior without going through a mortgage sale; and  power of attorney, involving a perpetrator who may use a power of attorney for the senior to apply for and close HECM loans without the complete knowledge or participation of the victim.    

 

Becoming a Short-Sales Expert

  The short-sale market continues to expand and it’s essential that originators and their teams are up to speed.  Linda Davidson, senior loan officer with The Davidson Group at Service First Mortgage, Garland, Texas, is well versed in short-sale transactions and emphasizes the importance of educating borrowers and others on the key factors involved. They have created a “Top 10 Points to Know When Purchasing a Short-Sale” list that is helpful for LOs, borrowers, Realtors and others. Following are a few critical areas:

  Be Realistic About Timing—Discuss the time frames with your buyers and Realtors so that they know when the lender is going to order the appraisal, survey and other documentation. “The lender doesn’t want to order these items (and start spending the buyer’s money) until the short sale is approved,” Davidson noted.

  Have Realistic Expectations Regarding Cost Negotiations—“Loan officers need to understand what the short sales lender will and won’t allow the seller to pay,” she stressed. “A buyer with limited cash doesn’t want to put a contract on a property that is a short sale unless they know up front what the short sale lender will allow to pay in closing costs/prepaids.” 

  Know Repair Rules—“Originators need to discuss the property condition with Realtor up front,” Davidson explained.  (In most cases, banks holding foreclosed properties won’t do any repairs, regardless of what is requested. The buyer will be asked to purchase the property “as is.”)

   Understand Lender Appraisal/Inspection Requirements— “You need to discuss this with the buyer and Realtor up front. For example, it’s important to be certain utilities are on for the appraiser when he goes to the property (otherwise additional costs could be incurred).”

  Clarify Closing/Funding Time Frames--In most cases, it takes a minimum of three-four weeks to close on a short sale once a contract has been accepted. Closing papers typically must be sent by the lender to the title company a minimum of 72 hours in advance. In addition, there are 10+ companies/positions that are involved in the transaction. It is important to understand that it takes time to purchase a short sale property and it is a team effort to make certain that a smooth and easy closing happens. “It’s critical that originators don’t over-commit in suggesting time frames,” added Davidson. “Early on, you need to be very clear what your customer should expect.” 

 

 

              

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Building Your Business with Referrals
By Kerry L. Johnson, Ph.D.
If you're still making cold calls to get business, you undoubtedly don't enjoy it. There is a better way. Learn how to use referrals. You've probably heard these often-used excuses for not getting referrals: "If my client really wanted to give me a referral, he would have offered it," or "If my work was really outstanding, I would be inundated with referrals."  The truth is that your clients think you are already extremely successful. You project this image as you sell yourself. As a client once said, "I was shocked when my mortgage broker asked me for a referral. I never before realized he wanted or needed them." Many salespeople use effective referral-generating techniques. Referral Tips    One successful originator’s technique focuses on asking for referrals during the closing process. At the point Ron closes the prospect, he takes an application from his briefcase and explains that he needs some information. He admitted to me that he usually has enough details already to fill out the app, but the request sets the stage for gaining referrals. When he's working with a married couple, he usually asks the husband to answer selective details, and then gives the wife a piece of paper and a pen. He asks, "Would you please fill this out listing four or five people you know who might be thinking about moving in the near future, would like to save some money on their next mortgage, and might benefit from my help." Ron then turns back to the husband and completes the details.    Ron has often been interrupted by the spouse asking, "Exactly who do I put down?" He replies, "Just four or five people you know socially or professionally with good common sense, are thinking about moving in the near future, would like to save some money on their next mortgage, and might benefit from my help." Ron usually receives three or four names. His closing average of 85 percent on referrals is probably due to prompting even the most reluctant clients for referrals. He softens his close by explaining how he will deal with the names. For instance, Ron may state, "I want to meet with people like yourselves so that I can share some ideas on how to save money on their next mortgage. I will respect the fact that you are friends and there won't be any high pressure. I will strive to help them in much the same way as I have helped you." Some general rules in asking for referrals are: 1) Tell your clients why you want them. 2) Mention that you will respect their relationship with the referral, as well as the referring client's financial privacy. 3) Be specific. Instead of requesting "a few names," ask for five referrals. You are much more likely to get what you ask for when you give an exact number. 4) Learn something about each referral's personal life. Does she play tennis? Is his hobby interior design? You will be able to develop a high level of trust and rapport by initially saying, "Jan tells me you're quite a tennis player." Using personal knowledge like this will also position you as a friend of a friend. It will make it very difficult for a prospect to say no to an appointment request. 5) Ask for the referral before the closing paperwork is done. Have you noticed how quickly busy customers want to get back to their office or home after business has been completed? If they sense that giving you referrals is part of the sales process, they'll give you more qualified names. High Visibility    Ron uses another effective device for gathering referrals. He asks his clients to hand him their personal telephone book. Ron then turns the book to "H" and writes in "Ron Howard" and his telephone number. He also turns to "F" for Financial services and writes in the name of his company, Investors Financial services, with his name and phone number. Ron reports the average client will refer another 20 to 30 of his friends and acquaintances using this method. He has even been called from cocktail parties by clients who want him to schedule an appointment with their "good buddy" (they just met).   Call Quickly    Referrals are not like old wine and aged cheese. They do not improve with time. Call referrals within 48 hours. The first person to ask about your referral progress will be your referring client. If he knows you pursued his lead, you are likely to get other names. If he thinks otherwise, gaining more referrals from him will be tougher than arm-wrestling a grizzly. Also, remember to copy your first letter of correspondence to the client who gave you the referral. He might help sell you with a telephone call. It is very important to get your client involved in prospecting. You might, in fact, gain five percent more business just by virtue of letting your client know that you've actually contacted the leads he gave you.      Your clients will be your best source of business. All you need to do is ask them to refer you. But more importantly, let them know that you didn't just take the leads and throw them in your briefcase. Your clients want to see you become successful. They want to see you become wealthy. Let them know that you are appreciative and that you have followed up on the leads they gave you. They will give you many more in the months and years to come.   (Kerry Johnson, MBA, Ph.D. is a best selling author and frequent speaker at mortgage conferences around the world. Peak Performance Coaching (his one-on-one coaching program) promises to increase your business by 80% in 8 weeks. To see if you are a candidate for this fast track system, click on www.KerryJohnson.com/coaching and take a free evaluation test. Or call 800-883-8787 for more information.)       Marketing Successes   Family Photo Day—Jeff Lake wanted to do something special for his past customers and felt they couldn’t resist a family photo day. He was right. Lake and team (Guaranteed Rate) sent regular/e-mail invites to his database, asking them to join him at a scenic Chicago botanical garden on a Saturday afternoon. Forty families came to have their portraits taken and later received a free 5 x 7 print. They could also purchase a photo package after the event. The kids received balloons and the parents got discount coupons for $300 off their closing costs.  Lake noted that everyone enjoyed the day and his total investment of $750 (photographer and photos, park rent) was definitely worthwhile. “It was a soft sell,” he said. “However, we got four loans immediately from those attending—netting our team $6,000—and a lot of leads for future loans.” Lake added that they’re already planning a similar photo day in October at a pumpkin farm.    Advanced Basics—Many originators emphasize marketing to customers, Realtors, builders and a few other key groups. Jack Lieberman, USA Mortgage, Austin, Texas, has  developed a simple, effective approach involving a select network that includes five Realtors, two moving companies , two insurance agents, three CPAs, five attorneys, three financial planners and two tax preparers. “We’ll call these ‘partners’ and offer to contact their clients to provide a review of their mortgage and when we do so, remind these customers that they’re working with a highly professional advisor (CPA, attorney, etc.),” noted Lieberman. “The insurance agent, CPA and others understand the power of leverage. The benefit to the advisors is the increased business they receive because of our interaction with their clients.  Not only do we ‘rave” about the advisor, we plant seeds of further services or products that they might need.  Such as, if they have homeowners insurance with the agent, we find that they may be missing Umbrella, Life and Jewelry riders; then we refer back to the agent for additional sales.  Our main objective is to provide greater value to the clients besides what the advisor sells.  This has been very successful.  Remember, referrals received from key advisors are golden.  It’s always easier for someone else to promote our expertise then bragging about ourselves.”   Lieberman stressed the value of this ongoing contact campaign. “Statistics have never changed,” he said. “Eleven percent of the people you call need to do some business in the next 90 days, 14 percent of the people know someone who needs to do business in the next 90 days and so on. Every four people you talk to turns into a deal.”

A Few More Top Producer Strategies

   Superstar originators (who close major volume) aren’t necessarily any smarter than the rest of us, but they frequently develop some distinctive marketing approaches.  Here are a few of their proven strategies (more next month):

  *When he does a loan that involves a CPA, divorce attorney, home improvement contractor, or Realtor, this LO sends them a brief thank-you letter and a box of chocolates. He also asks that they send information about themselves. This encourages both parties to share referrals.

  *Places banner ads on Realtor Websites.

 *Sends customers an annual "life letter" that focuses on personal development, such as having a positive focus.

 *E-mails Realtors bi-weekly loan question/scenario and solution. The notices help establish a stronger brand image.

  *Sends information form to past clients (requesting updated contact details) and asks for their preferred form of communication (letter, e-mail, call etc.).

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   Give Your Team The Skills They Need

                          to Survive....and Succeed!

                         Douglas Smith & Associates     

   Nationally acclaimed mortgage industry speaker, author and sales trainer Doug Smith is helping companies find customers and make money in these challenging times. Invite Doug into your organization to build the skills, talents and confidence of your loan originators.

   Visit www.DougSmithOnline.com or call Douglas Smith & Associates at 877/430-2329 to find how he can help you.

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Bridal Marketing Creates Awareness, Leads

By Larry Montani

 

   Next month begins the bridal season, and originators looking for another effective niche should consider reaching out to brides, grooms and their parents. Every year, I participate in approximately 15 bridal shows. I distribute fliers, hand out cards and discuss financing options, all with the same goal of developing a new group of enthusiastic first-time buyers. It gives me an opportunity to meet with some prospects who are interested in buying a condo or first-time property now and others who will be ready to purchase in another year or two.  Here are a few tips:

 

  *Talk to Chamber of Commerce, other organizations to learn of upcoming bridal shows in your area.

   *Prepare a special flier that emphasizes the benefits of homeownership.

   *During the show, discuss first-time buyer options with the future bride and groom and their parents. 

  *Have everyone who stops by your booth sign a registration list so you can follow up.

  *Immediately after the show, send a letter or card and continue sending updates for the next year.

  This can be a very profitable niche. I average three “hot” leads per show and close a reasonable number of refis (couple already own their home) and purchase transactions each year. I also use the prospect list in another way—inviting them to our regular homebuyer seminars.

 You can’t expect instant results from this marketing; you’ve got to be willing to maintain contact for at least a year. However, during and after the shows, you’re also building brand awareness—a new group of prospects will get to know you.

(Larry Montani is a mortgage consultant with GMH Mortgage Services, Shrewsbury, N.J.)

 

The E-mail Marketing Advantage

By Mike Baker

   We must find a way to get in front of (and educate) our clients and referral sources. The goal is to have them see us as an expert and “go to” professional. As such, e-mail marketing is one of best the ways to expand our online business network. It is one of the fastest and most personal ways to leverage client connections. Customize it with their name, first, last, or both, and you have a captive audience.

   There are three reasons to market this way. First, personal e-mails work well as pre-sellers. Auto-responders are wonderful in that you can load up your messages and set them to go out at certain intervals. You do this once, and they continue to go out for each new potential customer that signs up, without you lifting another finger. Basically, it will be warming up your potential clients while you are free to do other tasks. Second, done correctly, e-mail marketing can have a much higher close rate than other marketing. Your potential client is hit with a sort of “in your face” strategy, whereby you are talking directly to them. Unlike an ad in the paper or a commercial on TV that is generic, e-mail is personal. Get their attention by including their name. Write as though you are addressing their particular problem, and you have the battle half won. Finally, you can reach ten or 10,000 people at the touch of a button, and will have no more time invested to reach them all, no matter how big your list grows. Simply type your message, load it into your formatter or broadcast service, hit send, and every one of your clients or potential clients are notified of your message. And the best part is it costs nothing more than your subscription.

   You’re probably already using e-mails to update and educate your customers/Realtors with follow-ups and related notices. Here are a few other options:

   *E-newsletter--with either a single or multiple page format.

   *Product of the month bulletin--showing the popular loan programs or services that you provide.

   *Greeting cards--Rather than send via snail mail, you can use www.AmericanGreetingCards.com  to send regular birthday and holiday cards.

   *E-invites--Encouraging Realtors/others to attend monthly luncheons, seminars, other events.

   There are many available services. VerticleResponse and Constant Contact are two that I have used with great success. They are marketing companies providing self-service e-mail marketing, online surveys and direct mail for small businesses to create, manage and analyze their own direct marketing campaigns. These services enable you to get your business e-mail marketing campaigns up and running within minutes, regardless of technical expertise. It’s best to make a list of the features you want and see which providers offer them in your price range. They start at $19 a month, so this should be affordable (even in this market).

 

(Mike Baker is sales manager at Resource Lenders, Fresno, Calif.) 

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