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Merry-Go-Round
By Joel S. Pate
Well, it's the end of the year. How'd you do?
Many of you are very concerned as you go into the holidays. And you should be. The market has changed, it is going to get slower before it improves, and it will be a long time before it is as good as it has been over the past three years. As a matter of fact, it may never be that good again. Or, it could be better.
Just the sound of the above paragraph will make many of you disillusioned. But, it shouldn't. What I have described is the reality of the past and the future of this great business.
And it is a great business. I hope that you do what it takes to survive in this market until it finds its new footing. A friend once gave me this sage advice, "Keep your head down until the death angel passes over. And remember, he always passes over."
Last week, I witnessed one of the most amazing speeches I have ever heard while attending the Loan Toolbox Business Plan 2007 event in Las Vegas. Bill Dallas, long-standing industry pioneer, gave a tremendous 90-minute talk on the current and future status of the mortgage industry. For those of you that do not know Bill, he is one of the pioneers of the subprime and alt-A lending business. Over the past decade or more, Bill has built and sold several industry leading mortgage lenders. He is one of the most well respected individuals in this industry.
What no one knew at the time of Bill's speech is that his newest company, OwnIt Mortgage, was shutting down. Bill, as the consummate professional that he is, he made the presentation, shook hands with many in the crowd, and handled himself with utmost dignity.
All the while, his newest company was boarding up the doors. I am sure that Bill did everything he could possibly do to keep that from happening. But, sometimes, events are simply beyond your control, and you must face the fact that it is time to stop.
I wanted to tell this story for a couple of reasons. First, I wanted to honor Bill Dallas. And second, I wanted to remind you that everyone faces rough patches, and that at the end of the day, you must protect yourself and your honor, by doing the right thing. Don't let the day in and day out activities of this industry blind you to the reality that you are just a man or a woman, perhaps a father or a mother, definitely a son or a daughter, and you have a greater responsibility to yourself and your family than to anyone else. Sometimes, you have to get off the merry-go-round in order to ride another day.
Many of you are faced with a severe downturn in business. As underwriting guidelines tighten, many of your customers that would have qualified two months ago are being turned down. You are faced with the fact that you will not make your numbers, and may, in fact, go in the hole for the month, the quarter, or maybe even the year.
I want to encourage you that the answer to this real problem is not to commit fraud by juicing documents. Don't do it! You need to understand that while you must keep production going, to keep the merry go round happy, you need to understand that long-term success will only result from good honest business, and that you must just bite the bullet if you have to, and admit to yourself that you will have lower results.
Long-term success in this business can only be obtained by developing good referral sources that send you business and consumer direct marketing plans that generate leads to send to your referral sources. If you have not concentrated sufficiently on this part of the business, I suggest that during the slow days of the holidays, you develop a plan that will get you up and running in January as fast as possible.
As you know, I concentrate on small to medium size builders. Year after year, in good markets and in the bad ones, these builders have survived. Becoming their preferred lender is not easy, but it can be done. I know many loan originators that are doing it now, and if you are determine to learn how to communicate with builders, particularly utilizing our off-balance sheet financing methodology, you will stand head and shoulders above the other originators in your market.
The bottom line for builders that take advantage of the off-balance sheet financing is summed up in these words: The builder causes his customer to obtain the financing needed to fund his business. This frees up his balance sheet and allows him to make more money with less capital. It's that simple. If you learn to communicate this effective message to the right builders, and perform correctly on a day in a day basis as you assist the builder's customer in obtaining the end financing, you will find that you will increase your business and hopefully thrive during this downturn.
I hope that you take the time over the holidays to review the many articles that I have written on this subject throughout the year. You can find the articles on the archive page by following the link below.
Until then, I want you to strongly consider the example that Bill Dallas gave our entire industry last week. Sometimes, you just can't go forward. But at the end of the day, the industry, your peers, your friends, your relatives, your customers, and much more importantly, the person that lives on the inside of you, will understand, and all will appreciate you holding your head up high, being honest, forthright, and responsible.
Remember, sometimes, you just have to stop spinning the merry-go-round. Sometimes, you have to step back and take another look at the business. Sometimes, you have to quit in order to survive.
Remember, every time you are honest with yourself, every time you are honest with everyone around you, every time you are faithful to uphold what is right, and you do the right thing, you are a winner, you are a true professional, and there is a place in this industry for you.
Dedicated to coaching YOU to CP Loan Success!
Joel S. Pate
To review this year's articles or find out more about the exciting niche market of off balance sheet financing to small to medium size builders, contact me via my website at www.vadiumgroup.com/cpexpert.php. I wish you and your family the best over the holidays.
Joel S. Pate, a dedicated entrepreneur, has spent more than two decades in the building, mortgage, and real estate industries and has been involved in over $100 million in construction loans and over $4.5 billion of residential lending. As the CP LOAN EXPERT columnist, Mr. Pate provides straightforward, unbiased advice about every aspect of construction permanent lending. If you ever wanted to unravel the mystery surrounding new construction lending, then you should tune in.
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