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Latest Purchase Market Seminar is Up

10/8/2013

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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

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Why Loan Officers Never Hear a Realtor Say, "You Had Me at Hello!"

7/2/2013

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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.

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Don't Say I Didn't Warn You

9/27/2012

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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:

"I want you to think about something very seriously: how difficult, really, do you think it would be to design an online application that would allow a consumer to start a loan file and send it directly to processing and underwriting?

I can tell you that if that technology does not already exist, it certainly could exist within a year or so. Those of you who work for small banks and correspondent lenders probably don't have to worry too much in the short term. But if you work for one of the big banks, can you imagine how they would promote such a technological innovation to the general public? Why, they're cutting out the middleman and saving John Q Homebuyer money – lots of it!

I'm not saying this just to scare you, but rather to warn you that the world is changing faster than you may realize, and that the time when you could be satisfied to be just a good loan officer is coming to an end. There is one thing you can do that an automated system can’t do – you can create a relationship based on trust, you can become a trusted financial advisor, and you can become a Homebuyer Coach – which means that your clients who are buying homes can trust you to help them properly prepare themselves to find and buy the right home without overpaying for it. If you did these things, you would be adding value to what you do – value that would not be easy to replace.

If there were more ethical Homebuyer Coaches around in the first half of the last decade, we would've either avoided the housing bust, or we would've helped a heck of a lot of people avoid getting caught up in it."

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.
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"I'm a Loan Officer, Not a Doctor!"

8/21/2012

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"Dammit Jim, I'm a doctor, not a mortgage banker!!!"
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."

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    Bob Williamson

    Bob Williamson has been coaching mortgage professionals since 1988 -- and he looks it!

    His coaching philosophy is based on the principle that, as Zig Ziglar often said, "you can have anything you want in life if you just help enough other people get what they want."

    He believes that the most effective strategy for loan originators is to focus on being a coach to homebuyers and other loan clients, while being a full partner (and not simply a vendor) to Realtors.

    He lives in Albuquerque, New Mexico, near his daughter, son-in-law, and two grandchildren.

    Contact Coach Bob

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