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American Idol or Train Wreck; You Decide
By Joel S. Pate
Communication with current and potential referral sources has never been more critical than it is right now. For many of you, you have neglected networking with referral sources. Now, as the market has declined, your business is really suffering.
Always remember that weak referral sources only have deals every once in a while. On the other hand, real estate agents and builders that have a solid mechanism for generating business will always have some business. Their business will suffer during a down turn, but not as much.
With every originator in your market clamoring, clawing, and/or making promises that cannot be kept in order to generate business, what should you do to generate business from referral sources?
First, you must go back to basic training. Let's go over a couple of necessities when it comes to building a loan origination business:
- Know your products
- Become an expert at a particular niche (and I don't recommend it to be subprime at this point)
- Begin to hold yourself out as a professional in a particular niche, area of town, with builders, with agents, CPA's, etc.
- Schedule your day to get work done
- Schedule your day to meet with potential referral sources
- Make sure you and your processor are on the same page
- If you don't have a processor, join a company that will provide support
- Establish a method for communicating with your referral sources
- Do what the hell you tell someone you will do, and do it on time.
- STOP TAKING BREAKS WITH THE LOSERS IN YOUR OFFICE
No. 9 is absolutely, categorically, without a doubt, one of the most critical statements that you should make your own.
I once owned six mortgage companies. While at one of the offices one day, the manager was perplexed over the fact that a loan had not come out of underwriting. The closing was scheduled to take place in two hours. Instead of telling the manager what to do, I wanted to see him in action. He waited and waited and waited. He called and called and called. He waited and waited and waited some more. Finally, when the agent called from the title company, he decided not to take the call. Instead, he called the originator on that file and left him a voice mail. I overheard him say, "Tell them we will be held up a little."
Well, I know that you are ahead of me already. Soon, the agent called the originator. Then, the originator called the office. The manager said, "Didn't you get my voice mail?" What a loser.
You know, I should have fired the manager that day, and closed the office. Over time, that office ended up costing me over $250,000. Oh, the power of hindsight.
If you don't know by now, this procrastination, non-professional business practice will not produce results. First, of course you already know this, but the originator took a terrible 1003. Then, he let it sit on his desk a couple of days. Then, he gave the half-baked app to his processor. Now Julia was a good processor, but who can process crap?
Then, with the closing approaching at the speed of a decline, the loan was submitted without notifying the real estate agent that the closing might (who am I kidding--WOULD) be delayed.
Instead of first doing your job by taking a great 1003, and then moving the file through the system responsibly, and then properly setting reasonable expectations for the agent, the borrower and the seller, and don't forget the listing agent, you allow, no, you are the architect and builder of what becomes a train wreck. Sound familiar? I know it does.
If you have allowed files to move across your desk in a manner described in this true story, and then you had the audacity to make one to two points, and you didn't apologize to the real estate agents involved in your orchestrated fiasco, I suggest you make a list, buy some doughnuts, get in your car, without rate sheets, and go and apologize to everyone that you can for taking their hard earned business for granted.
They may never do another deal with you, but, the very fact that you had the guts to do what is right, will at least get you mentioned at the water cooler as an originator with guts that perhaps, just might, deserve one more chance.
My wife tells me sometimes that I am not positive enough. She tells me that I should be more like Randy Jackson and Paula Abdul. But, I am really more like Simon Cowell. Sometimes folks just have to be told that what they are doing is abominable. They have to be told that they can do better and that if they want to stay in this business, they must make a plan, decide they will act on the plan everyday, and that then, if they are lucky, they will become this year's American Idol in their market.
So, it's time to schedule hours and hours per week in the street talking to potential referral sources. I have heard Todd Duncan make this statement many times over the past few years: "To be successful in the mortgage business, you must spend your time taking applications, communicating files to your processor, going to closings, and meeting with current and potential referral sources." As my dad would say, "If you are not doing these things, you are unemployed as an originator."
Remember, you are earning exactly what the results of the efforts you have placed forward are worth. Ouch!
Well, it may hurt, but if you will always take that level of responsibility for what you earn, you will never have to worry about blaming anyone else for the results you are achieving.
Whether you fit the description of the train wreck I describe in this week's article and you need to apologize to someone or you are new to the business, if you are not taking an application, or communicating the file to the processor, or going to a closing, you should either be meeting with current or potential referral sources or at home with your family.
That's it. That's the secret. Do a good job, do what you tell people you will do, know your business, ask for forgiveness when you need to, and meet more referral sources.
Remember what Tim Braheem says: "He who dies with the most friends, wins."
Remember what Greg Frost says: "I do business with my friends and I make friends of those that I do business with."
These key statements work in every market, in every part of the country. They will work today. If you do not have a loan, follow this advice now:
Call your husband or wife. Tell them you will be out of the office for a while. Try to get someone to pick up the kids. Tell them that you will be home, tonight sometime, when you have taken a 1003.
While in your car, call every real estate agent involved in any loan you have. Update them on the file. Tell them that you appreciate their business. Ask them if you can drop by to talk about a new marketing plan you are working on that will generate more business for them. Tell them you'll come by next week.
So what is this marketing plan? I'll tell you next Monday. Now, get out of the office and shake some hands.
If you are interested in seeing more strategies like this, www.vadiumgroup.com/cpexpert.php.
Dedicated to coaching YOU to CP Loan Success!
Joel S. Pate
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 $1.3 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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