Position Yourself for Success in a Down Market

March 12, 2007

Buckle-up, this wild ride has only just begun. With hysteria rearing its ugly head, the market jumping up and down, and “Boom” lenders going bust, it is time to evaluate where you are, what you are doing, and what you can do to ensure you’ll still be here in a year.

First, see the long view of the market and your customer base. When your customers are hearing and seeing panic, they want to know that you see the big picture. That big picture might mean telling them it is not the best time for them to refinance. It may also mean taking the time to help position your customers to improve their long term financial situation. The challenge, of course, is the impact on short term business. Are you willing to give up short term business now if it is in the best interest of your customer? If your answer to that question is, “No” - then you may not be here in a year. The market has been ruthlessly shaking out short term thinkers. Some of the largest players in the business have been forced to close their doors. The same fate will happen to a brokerage or originator not focusing on the best interests of their customer.

Second, educate yourself. In addition to consulting your customers on the long-view of the market, you need to continually educate yourself. Great sites like Originator Times provide free up-to-date articles from industry organizations and professionals who have valuable insight into what is happening and why. Take some time to review the articles and familiarize yourself with what is being said about the markets you have to survive in.

Third, reinvest what you don’t have to spend. Stop paying for things that are available for free. For instance, LoanAce (www.loanace.com) is loan origination software that can be downloaded for free. Why would you ever pay for software when there is software available that can do everything you need? LoanAce recently saved a company $17,000 it was about to spend on another loan origination product. The value of a free solution like this is not just the savings. The company now has $17,000 available to purchase leads, advertising, a mailing, or any number of things to generate leads and revenue. If you are not taking advantage of the many innovative and free products and services competing for your business, then you are spending money you do not have to spend. Not a smart move in a market shrinking by $1 trillion.

Fourth, ignore compliance at your peril. Originators and brokers must avoid the pitfalls that can come by calling someone on the do-no-call registry, doing broadcast faxing, or not following the Can-Spam Act. Don’t risk the thousands of dollars in fines by, “taking the risk” on getting leads the easy way. In the summer of 2006, one of the largest mortgage brokerages in the nation was threatened to be barred from calling Florida because of 8, yes, 8, phone calls. Could your business survive if you were barred from doing business in your home state?

Fifth, put your head down and get to work. Many originators forgot that hard work is what is needed to be successful in the mortgage business. No longer will stapling your card on a cork board at the local greasy spoon get you three calls a week. Those times are over. Pounding the phones, calling old prospects, trying to improve the credit scores of your borderline customers, understanding a longer sales cycle, and being an educated professional mortgage advisor with the best interests of your customers in mind, is what will make the difference for you in the tight market. You must work hard, and act with integrity, to be successful in this market.

Source: http://originatortimes.com/content/templates/contrib.aspx?articleid=2326

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