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's likely (and appropriate) that 90% of your professional attention is on originating loans. But federal regulatory oversight has already significantly altered the mortgage marketplace, and you would ignore its potential to threaten your  livelihood at your own peril.

In this new article, I attempt to provide some perspective on how much more complex mortgage lending has become since the enactment of Dodd-Frank, and why loan originators  need to stay informed about this particular elephant in the room.

I think you'll find that much of the information in this article can be shared with your colleagues, clients, and Realtor partners, and that doing so will help them all better understand why the job of helping people finance their home purchase has gotten so much more frustrating and difficult in recent years.
You can read the full article here.

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 a news conference last week, Fed Chairman Ben Bernanke explained his theory behind committing the Fed to expanding the money supply in order to purchase an additional $40 billion per month in mortgage-backed securities:

“If house prices are rising, people may be more willing to buy homes, because they think that they’ll, you know, make a better return on that purchase. One of the main concerns firms have is that there’s not enough demand.”

So, if I understand Mr. Bernanke correctly, he is saying that in an environment of rising home prices (which will be rising largely due to an inflationary Fed policy designed to lower mortgage interest rates even further than they already are) people will be more willing to buy homes because they think the value of those homes will continue to increase, so that when they sell that home, they will get a better return on their purchase. Sounds like deja vu all over again.

This is not much different from the thinking that gave us the Homebuyer Tax Credit – an earlier brainchild from the good folks at Central Planning, Inc. You'll remember that the tax credit gave buyers the equivalent of an extra $8000 with which to buy a home. But since sellers and other market movers were also aware of this $8000 boon(doggle), the artificially increased "demand" -- instead of resulting in people having more money to spend on a home -- instead resulted in homes costing more. Look at the data: during the height of the Homebuyer Tax Credit, home prices rose. As soon as the tax credit ended, home prices dropped like a rock.

We can expect this policy to help keep interest rates low. Will they go much lower than they already are? That depends on whether banks will pass those lower rates on to borrowers. Personally, I'm skeptical. Banks already have avoided fully passing on lower rates to borrowers because, from their perspective, they have more business than they can (or are willing to) handle. We may see rates go down a quarter to a half a point, but I doubt it will be much more than that.

Will there be a resurgence of refinance applications? There will certainly be a lot of inquiries from consumers, but it would take a fairly significant reduction in rates (below where they are today) in order for a refinance to make much sense to a borrower who already has a 3 1/2% loan.

Besides, mortgage rates aren't really the problem – for either purchase or refinance customers. To paraphrase James Carville, "it's the restrictive credit overlays, stupid." Banks and mortgage companies continue to be rather bearish on the idea of doing more mortgage loans.

And from their perspective, you can understand why. During the last decade, they responded to pressure to lower lending standards, which helped give us the housing boom and bust. Then, they got blamed for it – and the government, in an effort to offset the cost of taxpayer bailouts of Fannie and Freddie, pursued an aggressive policy of forcing lenders to buy back loans that had been made in good faith. Once burned, twice shy.

Moreover, as Jack Micenko, an analyst at Susquehanna Financial Group (quoted by the Wall Street Journal) said, "Will lower rates make banks less risk-averse? Unlikely, because it's even harder to get paid for that risk."

Action Plan for Originators.
We may or may not like or agree with government policy or the unwillingness of banks to take risks with their shareholders' money. But those decisions are beyond our ability to influence much anyway.

Here's what we can know with some certainty:

• Interest rates will continue below for the near future, probably for at least the next quarter or two.
• The release of shadow inventory by asset managers will probably continue to be disciplined, and designed to produce maximum return for the owners of distressed properties. That, and continued Fed policy of low mortgage interest rates, will put upward pressure on home prices.
• There are people who will benefit (or at least can benefit) from this set of conditions. Loan officers should focus their marketing efforts on these people/groups. (See the video of last week's seminar, New Opportunities for Mortgage Originators.)

The Fed on Thursday said it would spend $40 billion each month buying mortgage-backed securities  until it saw a sustained upturn in the weak jobs market.

Of course, the Fed will not be using taxpayer money to buy bonds. Instead, it will expand the U.S. money supply and electronically credit banks with more funds. To understand how this works, imagine that you wanted to buy shares in an investment, but you don't have the money to do it. Instead of borrowing money against your line of credit to buy into the investment (which would be risky enough on its own), you decide to hack into your bank and credit your account with the money to buy the shares. The only difference is that if you were to do this, you would be locked up as a thief. No one's going to be putting Mr. Bernanke behind bars for this.

Almost immediately after the announcement, ratings firm Egan-Jones cut its credit rating on the U.S. government to "AA-" from "AA," adding that quantitative easing from the Federal Reserve would hurt the U.S. economy and the country's credit quality, that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.'s real gross domestic product, but reduces the value of the dollar. This increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers -- thereby reducing consumer purchasing power.

I can't really disagree with that.

Why does the Fed need to buy mortgage-backed securities? Maybe it's because the yield on them is so low that investors don't consider the risk-reward ratio to be prudent. The Fed is betting that this will keep mortgage interest rates low (it probably will, for now), and that low interest rates will stimulate more homebuyer activity, which will stimulate the economy and create jobs.

But rates have been low for some time now, and demand has remained flat. See the video my latest online seminar, New Opportunities for Mortgage Originators.

Yesterday's jobs report, expected to show 150,000 new jobs created in August, came in at a disappointing 96,000 instead. The official unemployment rate actually dropped from 8.3% to 8.1% (because 119,000 people stopped looking for work in the same month) .

Fed Chairman Bernanke has already been hinting that the Federal Reserve is ready to begin a third round of Quantitative Easing, in an attempt to prevent the stagnant US economy from slipping into another recession. Quantitative Easing, in which the Fed buys US debt, is another way of saying that the Fed is planning to monetize the debt – which is a euphemism for printing a bunch of money and inflating our currency and making our money worth less.

There is some possibility that the Fed will wait to take action until after the election, in order to try to avoid making Fed policy a political issue during the campaign.

Chairman Bernanke's term ends in 2014, and Republican presidential candidate Mitt Romney has already indicated that he will not renominate Mr. Bernanke as chairman.

In the short term, a QE3 policy could temporarily help to keep interest rates low – a result which many in the mortgage and real estate industries would no doubt welcome.

At the same time, quantitative easing is, by definition, inflationary. QE2 seems to have had the effect of doubling the official inflation rate from 1.5% to 3%. Price inflation will affect virtually everything, including house prices. Again this is something that many people in our industry would welcome, but we should be careful what we wish for. When the cost of something goes up but its value does not, our money buys less of it.

What effect would a QE3 likely have on home sales? Average household income (in inflation-adjusted dollars) has fallen by $4000 in the last 4 years. An inflationary monetary policy would further exacerbate that problem. People are paying more, relative to their incomes, for basics like food and energy, reducing their ability to save to buy a home. Home price inflation would make it worse for buyers, and wouldn't even help sellers -- because the value of higher prices would be negated by inflation.

More importantly, the US debt now stands at $16 trillion – a number which exceeds the size of our entire economy – and it is growing every day. We are "fortunate" that, largely because of the problems of the European economy, U.S. Treasury debt is still considered a relatively safe haven, which means the Treasury Dept. is able to borrow at very low interest rates. Another round of quantitative easing may temporarily make us feel better (when the Fed buys Treasuries, the Treasury Department does not have to sell as much of its debt on the open market), but after the party ends, the inevitable hangover comes. A 10 year treasury currently pays 2.78%. But in 2000 -- just 12 years ago -- the rate was 6.03%. If the Treasury's cost of borrowing were to return to 2000 levels, it would raise our interest payments on the today's national debt by a breathtaking $520 billion annually.

As Friedrich Hayek (Nobel Prize winner in Economics and awarded the Presidential Medal of Freedom) warned, "I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments."

As I said, we in the mortgage industry should be careful what we wish for.

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."