If you're like just about every other loan officer I've met, you believe you have unique qualities that would appeal to potential clients (or Realtors or other referral sources) – qualities these people could only discover by getting to know you. If that Realtor or that person shopping for a loan really got to know you, you're confident they would choose you to be their lender, right?

But if they haven't had the opportunity or taken the time to get to know you, there's no way they would know about these unique and attractive qualities of yours, and as a result, they are likely to see you as pretty much like any other loan officer. Which is why everybody is always asking you about your "rates".

This is a problem for you, because if you don't stand out in the crowd, you'll never get the chance to show them all the really important reasons why you would be the "right" loan officer for a potential client or Realtor partner.

Most loan originators try to solve this problem by using e-mail marketing, developing a website, and/or using social media or other types of marketing in order to build name recognition and a reputation in their local markets. The various technologies involved can seem somewhat daunting at first, but for most of us, the learning curve is not that difficult. So you can set up an e-mail marketing account, a website, Facebook and LinkedIn and Twitter accounts, and so forth, with a little bit of time and not too much trouble.

The hard part is coming up with things to say that people would actually want to read, or listen to, or watch.

Many loan officers would rather spend the afternoon in a dentist's chair than sitting in front of their computer writing something for other people to read. Once you get something down on paper (or pixels), your Inner Critic takes one look at it and tells you it's complete rubbish.

Other loan officers don't even get that far – writing anything, let alone something that would be informative, useful, and interesting, just seems like way too much trouble.

Whichever group you happen to belong to, you might end up buying canned content from one of the many providers out there -- people who know that there are a lot of you will pay good money to get something – anything – that you can use to feed your e-mail campaigns, website pages and blogs, and so forth.

The only problem with this approach is that it brings you right back to the problem you started with: you started with a desire to show potential clients and referral sources that you have unique qualities that would make you a better choice than any of your competitors. But now, because you're using the same content everyone else is using, you still sound just like everyone else.

And you have blown your chance to distinguish yourself in your market as someone unique and worth getting to know.


How to Solve This Problem

As you know, I coach mortgage professionals exclusively. I also limit the number of people I work with to no more than 20 full-time clients at a time. Among other services, I help my loan originator clients create their own unique content that they can use in their local markets to reach out to consumer (home buyer) leads, existing clients, Realtors, and other referral sources. We start with material I have written for this purpose, and then we work to personalize it for you and your market. And because I never work with more than 20 clients at a time, you can be confident that the content we create together will not only be interesting to your readers, it will be new to them.

If you'd like to find out more about how I can help you build your reputation in your local market, and if you've never had a free coaching session with me, please go here and request a free, personal, one-hour coaching session at no obligation.

In future posts, I will be sharing some of the things I've learned about creating content that is interesting, useful, and builds your reputation as a trusted expert in your field. Stay tuned.

It may seem like a flash of the blindingly obvious, but it's interesting and potentially useful information for loan originators who focus on building purchase business in their local markets: Inside Mortgage Finance recently commissioned a national survey of real estate agents, and found that Realtors express a clear preference for local lenders over call centers.

Why Do Realtors Prefer Local Lenders?

Delayed Closings. According to the survey, delayed closings are much more common when the buyer is not using a lender with a local office. You know from your own experience that Realtors get very nervous when it begins to look like the closing may be delayed because the lender has not obtained a final approval from underwriting. 

Lack of Accountability. A home sale with a $250,000 purchase price is worth $7500 commissions to each of the Realtors in the transaction. With that much money on the line, they don't like surprises, and they especially don't like having to deal with a contact person in a faraway city that doesn't rely on the Realtor for their business and is in no way beholden to the Realtor for the current transaction. It is almost impossible for a Realtor in this situation to get a straight answer from anyone in authority at the out-of-town mortgage center. And if there is a problem at the closing table after office hours, there is no one the Realtor can call to get the problem resolved.

Lack of Experience with Local Lending Laws. You know your state's laws as they apply to mortgage lending. According to the Realtors who were surveyed, Call Center companies that loan in all 50 states make more mistakes that can lead to delays or worse.

The Inside Mortgage Finance survey (conducted by Campbell Research) was apparently focused only on Call Center lenders, but many of the complaints voiced by Realtors about the call centers also apply to the nationwide megabanks. My coaching clients have frequently told me that Realtors are constantly complaining about the big banks, as well as the call centers, but they are often reluctant to say anything about it to their buyer clients. They don't want to appear to be trying to influence the client as to their choice of lender, and ultimately they're afraid of losing the client altogether. In many cases, the Buyer has already gotten "preapproved" online by the call center or the big bank before they even approach a Realtor. From the Realtor's point of view, it's hard to un-ring that bell.

Suggested Action Step: Every time a Realtor tells you about a negative experience with a Call Center or mega-bank, take down enough information from the Realtor so that you can construct a narrative of what happened. Collect as many of these as you can, and put them together into a report that you can circulate directly to your own clients and prospects. You can also make these reports available to your Realtor Partners for distribution to their clients and prospects. Remember: nothing beats evidence. (In assembling the stories for your report, be sure to quote the Realtor who is telling the story, and get permission to use their name. Avoid directly naming the call center lender or the mega-bank in question. Use as much detail as possible, including dates, numbers, specifics of the transaction – especially specifics on why the loan was held up or declined – but don't name the consumers involved unless they have given their permission.)

foreclose on the property – a process that both delays and raises the cost of obtaining a foreclosure). Because so much of this low-priced shadow inventory is now found in judicial states, fewer of these homes are coming to market.

Another constriction on inventory is being caused by what has been called the "interest rate lockout effect." Almost half of all homeowners with mortgages have loans with rates of 4.5% or lower. There is a well-founded and widespread belief that interest rates will be rising in the near future. As a result, these homeowners with low fixed rate mortgages have much less incentive to sell and buy another home if that would mean taking on a mortgage with a higher rate than the one they have now.

There is also a high percentage of mortgaged homes with an effective LTV of more than 80%. This doesn't prevent people from selling their home and buying another, but it would likely mean that they would be required to purchase mortgage insurance – thus making their payment higher and the mortgage more expensive.

These 3 factors have all contributed to the perceived lack of inventory.

There are also Constraints on the Demand Side
Historically, while first-time buyers represent a significant percentage of all buyers, the majority of homebuyers are also sellers of an existing home. But because of the supply-side constraints outlined above, we are not seeing as many "move-up buyers" in the mix. Many of the people who might otherwise be thinking of selling their home and buying another have decided to stay in their current homes and wait for conditions to get better. Until these people decide to sell, they won't be in the market to buy either, and that reduces demand.

Demand has also been reduced by the fact that institutional investors have lost much of their appetite for buying homes – largely because home prices have continued to rise (a 7.5% year over year increase in the Home Price Index just reported for June).

Furthermore, the significantly reduced number of loans being originated with credit scores below 640 today, compared to before the bubble burst, means that about 25% of the traditionally credit-eligible population is having a difficult time getting mortgage financing to purchase a home.

And finally, the decline in the national homeownership rate (currently at 64.8% -- its lowest point since 1995) shows a shift from owning to renting. This is particularly true of the Millennial generation. The home ownership rate for 25 to 34-year-old Baby Boomers was 51.6% in 1980. The homeownership rate for 25 to 34-year-old Millennials in 2012 was only 37.9%. (Millennials are also waiting longer to get married, which may be related, and many of them have much higher student loan debt than Baby Boomers did at the same age.)

How Loan Originators Can Proactively Respond to These Conditions 
On the supply (inventory) side of the equation, you can work with your Realtor partners to identify homeowners who might benefit from selling their current home.

Begin by identifying neighborhoods where prices are good (from a seller's perspective), and demand is good – as indicated by relatively short "days on market" before a sale, and by relatively high ratios (over 30%) of monthly sales numbers compared to the number of homes for sale.

We know that mortgage interest rates are still relatively low (about 4.25% as I write this for a 30 year fixed rate mortgage). If sellers can make a relatively quick sale of their current home, chances are good they will be able to purchase, and if necessary, finance their next home purchase fairly quickly, and before any significant increase in interest rates.

You also know that every situation is unique. The seller, for example, may have significant equity that can be applied toward the purchase of a next home. Even if the interest rate would be higher than their current rate, the larger down payment and the relatively small mortgage could make a higher interest rate a moot point for the client.

Your strategy would be to put together, with your Realtor Partner, a series of targeted, co-branded postcard mailings to the kinds of neighborhoods I have described. You and your Realtor Partner would be offering a free Market Analysis of the prospect's home (done by the Realtor), combined with a free Financial Analysis (conducted by you). The Realtor helps the potential Seller get a sense of what their house would sell for. Your job would be to interview the potential Sellers to understand what their goals would be, and what they would be looking to accomplish if they were to sell their home and buy another (or simply sell their home). With that information, you could put together a financial analysis that shows the prospective Sellers how likely it would be that they could accomplish their financial and personal objectives by putting your home on the market.

On the demand side, you would also want to work with your Realtor partners. They get leads every day from people who are basically dipping their toes in the water to see what's out there. These people are legitimate buyer prospects. They would not put themselves in the position of having to talk to a salesperson (the Realtor) unless they had a genuine desire to buy a home. But their skepticism and sales resistance is high – as evidenced by the typically very low rates of conversion that Realtors experience.

You (and not the Realtor) are in the best position to speak to these buyer prospects so that you can interview them and discover their reasons for wanting to buy a home – and just as importantly, their fears, obstacles, and concerns about whether this is the right time for them to do so. You can position yourself and act as a home buying coach. You place yourself on their side, and you help them understand and sort through all of the pros and cons of buying a home in today's market. Every situation is different. Whether you're talking to Baby Boomers, Generation Xers, or Millennials, you will find people who have been hesitant to move forward with the homebuying process because they have been misinformed or have been made fearful because of something they've heard from a friend or in the media that in their case, at least, does not apply.

In this way, you are able to help people who really would benefit from buying a home, and at the same time, you will be providing your Realtor partners with transactions they would never have gotten otherwise.

A New Seminar That Addresses This Solution
On Wednesday, August 13th, I will be presenting a new, free online seminar: The Home Buyer Strategy Session -- Your Key to More Originations. You may already be registered for this seminar. If you are, you received an e-mail yesterday with full instructions for joining the seminar. If you're not registered and would like to attend, go here.

You can also watch the latest seminar in the series, "How to Do an Effective Home Buyer Interview" by clicking here. You can access all of the previous seminars in this series by clicking here.

As you probably know, I've been presenting a series of free monthly online seminars on how to develop your purchase market business.

The latest of these seminars, How to Give Effective Presentations to Realtors, presented on Sept. 19th, is now available for you to view on the website here. You can also access previous seminar videos here

I will be traveling some in October, so the next online seminar -- How to Develop Solid Realtor Partnerships -- will be on Thursday, November 14th at 11:00 Eastern Time (12 Noon Pacific). If you were registered for the last seminar, you're automatically enrolled in all future seminars in this series. But if you haven't registered yet, you can do that here.

For a preview of what will be covered in the new seminar, please go to the Seminars page

In the movie "Jerry Maguire", there's a famous scene at the end, where Jerry expresses his love in a long-winded speech to the Renée Zellweger character.

At some point, she interrupts him and says, "You had me at hello."
Unfortunately, when it comes to "courting" Realtors, you hardly ever have them at "hello". And if you don't establish enough productive, mutually beneficial relationships with Realtors in your market area, you're entering the purchase market race with one leg and both arms tied behind your back.

Loan officers tell me that one or more of the following things prevent them from getting enough purchase leads and referrals from Realtors:

• "I don't know enough Realtors."
• "I can't get Realtors to talk to me."
• "Realtors tell me they will send me business, but they don't follow through."
• "Most of the Realtors I know are too high-maintenance."

In addition to these obstacles, here are some of the things you have probably heard Realtors say -- mostly as a way of getting rid of you:

• "I already have a lender (I'm happy with)."
• "My office has an in-house lender that we have to use."
• "Most of my buyers already have a lender."
• "I'm a listing agent; I don't really work with buyers."
• "Sure, I'd be glad to talk with you, but I'm busy right now; can you call me sometime next week?"

If you've heard these kinds of responses from Realtors (and let's face it, you almost certainly have), you know how discouraging it can be.

So we need to figure out why you keep running into these obstacles when you try to get leads and referrals from real estate agents.

If you want better results with your Realtor outreach, there are a few things you will want to understand about them. Read the full article here.

With interest rates up above 4% for the first time in a while (since August 2011, I think), a lot of mortgage loan officers are starting to think about rediscovering the existence of a purchase market.

Better late than never, as they say.

One of my clients (who has not been neglecting the purchase market) recently asked me for suggestions on topics and subject areas that would make good, relevant content to help him further build his visibility and credibility among the Realtors in his marketplace.

See my recommendations here.

If you were a fan of the 90's show The X-Files, you might remember that Agent Mulder kept a poster hanging in his work cubicle that said, "I want to believe".

And while we might not all want to believe in little green men, all of us in the real estate and mortgage industries want to believe that the housing market is on a strong path to recovery.

There are plenty of encouraging signs, too. But one claim that is being trumpeted is a bit premature: that we have entered a Seller's Market.

While home prices have been rising consistently lately, and inventory is declining, there is one necessary ingredient for a seller's market that we don't have yet: a strong and growing pool of buyers ready, willing, and eager to buy a home.

The fact is, we're running about 1.3 million units a year behind the average number of homes sold between 2001-2009 (which includes pre-boom, boom, and bust years).

And there are some fairly significant headwinds in our economy and real estate market that are pushing against the creation of enough buyers to raise those sales figures.

As just one loan officer, you may not be in a position to impact the national real estate market, but you can certainly have an impact on your local market, and in the process, you can build a reputation with both Realtors and Consumers as the go-to lender for the home purchase market -- which will put you in a very good position when we finally do fully recover from the disaster that struck in 2007-2008.

For a full analysis, and my recommendations for productive action, see my latest white paper, The Phantom Seller's Market -- which you can read on this site or download as a PDF.

People (including loan officers) have a tendency to expect things to remain more or less the same. It's understandable; you're busy going about your day-to-day business and you don't have a lot of time to be thinking about where the major trends may be leading us. Call it the Black Swan effect, or the triumph of hope over experience, but when seismic shifts happen, they tend to take most people by surprise.

In my Sept 13th webinar, I said the following about the future of the mortgage business as it affects originators:

The other day, I came across this website, created by a new division of Peoples Bank, out of Kansas City. Check it out:

http://www.closeyourownloan.com/

It's aimed at people looking for a mortgage loan, and the headline says, "Skip the salesman, Keep the Commission!"

I was talking to a client yesterday who works for a well-established lender in a major city. He told me that his company, in anticipation of the CFPB's proposed rule changes on compensation (all 369 pages of it), "is preparing for a radically different business model for the coming years. They are gearing up for a massive internet presence, with salaried type originators (The new compensation expectation). They don’t feel that they will be able to keep their current producers based on what they have heard will be the coming comp plans. Their plans call for lots of small offices that will feed a very cost advantaged internet processing and delivery system."

If you'd like to be out in front of the next big wave of change in your career, you might want to consider pre-registering for the next group of The League of Extraordinary Loan Officers.

In my last post, I used an analogy to demonstrate the idea that our national housing market is sick.

The question I would now like to explore is whether mortgage professionals can play a positive role in healing our ailing housing market.

When they consider the systemic problems of the current housing market, most loan officers would come to the understandable conclusion that these problems are well beyond their ability to fix:

• Depressed home values, keeping traditional Sellers and holders of distressed inventory from putting homes on the market.
• The difficulty of getting buyers approved for financing in today's regulatory and, some would say, paranoid underwriting environment.
• Concerns about the state of the economy, keeping prospective home buyers from committing to buying a home.

Fans of the Star Trek franchise will be forgiven for being reminded of Dr. Leonard McCoy's frequent rejoinder to Captain Kirk: "Dammit Jim, I'm a doctor, not a _________!!!"

The whole thing looks like a big, tangled ball of yarn. But sometimes if you pull on the right end from the right direction, you can create order out of chaos.

Let's start with the supposition that the current market represents a very good opportunity for people who would like to own their own homes. Let's further suppose that many of these people are currently inhibited from pursuing that opportunity because of their concerns about home values, their ability to be approved for financing, and their concerns about their own financial stability in the face of our troubled economy.

The case can be made that the currently depressed value of homes is, in fact, a feature – not a bug – if your goal is to buy a home that will increase in value over the years. When values are depressed, you can make a better deal. Add to that the fact that mortgage interest rates are currently at historic lows, and the opportunity becomes even more attractive.
Furthermore, mortgage loan underwriting, which most informed people would agree is more stringent today than it has been in many years, is itself a protection against taking unnecessary financial risk – for a prospective home buyer. We have a hard enough time qualifying people who can actually afford the home they want to buy; it is even less likely that we could gain underwriting approval for someone who is on thin ice financially, and would be taking an unreasonable risk if they were to try to buy a home.

So a case can be made that if you want to buy a home, you should at least look into it. You have very little to lose – other than a little of your time – and even if it turns out that now is not the time for you to buy a home, you will at least have learned something from the experience – including some kind of action plan that would put you where you want to be in the future.

Now, if we can accept this supposition, who would be in the best position to help prospective homebuyers overcome their fears and inhibitions – and take positive, productive steps forward?

Realtors? While Realtors are generally well informed about their local markets, are able to give good advice to homebuyers, and are capable of making the arguments in my supposition, the problem they would experience (and in fact are experiencing) is that their arguments tend to be seen as self-serving. In other words, while you and I would say that their advice that now is a very good time to buy a home is, in fact, good advice, consumers would tend to view it skeptically.

Politicians? OK, now you're just being silly.

Mortgage professionals are in a unique position to make a reasoned, balanced, objective case for the idea that, assuming you are financially ready to buy a home, now is as good a time as we have seen in many years for you to take steps in that direction.

Mortgage professionals are also in a unique position to be able to predict, with greater accuracy than just about anyone else, whether or not your efforts to obtain financing will be rewarded with success.

Mortgage professionals – particularly if they take the time and trouble to educate themselves about their local real estate markets – are in a unique position to credibly give potential home buyers and objective analysis of the likely effects that buying a home would have on a family's finances.

And finally, because mortgage professionals are seen as being more objective and neutral (perhaps because they do in fact sometimes say no to a prospective borrower). As long as loan officers do not present or position themselves as "salespeople", they are more likely than anyone else to be seen as credible, even authoritative, by people who are considering the purchase of the home.

We know that there is a significant amount of pent-up demand in our real estate market, composed of millions of people who want to own a home, but are afraid to take the plunge for a variety of reasons, most of which are based on unexamined fear and misinformation.

If every loan officer in the country were to help just one person/family each month to recognize that they can, in fact, afford to buy a home, and that it is in their best long-term financial interests to do so, it would immediately increase the number of home sales in the United States by a staggering 25%.

Home values today are stuck at levels roughly 30% below where they were at the peak of the housing boom – and they are stuck there for the very simple reason that there is way too much inventory (including shadow inventory that has not yet hit the market), and because not enough people are buying homes. Increase the number of homes being sold, and values will begin to recover. The overall economy will begin to improve. And while no one in their right minds wants to return to the Wild West days of Franklin Raines, Barney Frank, Chris Dodd, James Johnson, and Angelo Mozilo, one can even hope that an economic recovery would result in a return to prudent – but not paranoid – lending standards.

Thus, the ball of yarn becomes untangled.

Repeat after me: "Let there be an economic recovery, and let it begin with me."