2007 November | The XBroker Mortgage Real Estate Marketing Technology

Archive for November, 2007

More Steps to Running and Surviving in the Mortgage Business in 2008

November 30th, 2007 Categories: Mortgage News

People seem to take my thoughts or suggestions as if they could exist in a vacuum, which they most certainly cannot. As you read on it should become more apparent that these ‘Twitter-esque’ suggestions are about general philosophies and solid business practices, not an end all be all ‘if you don’t implement everything I write about you’re DOOMED’, as some people seem to try and digest and regurgitate it as. Very few things in life are all or nothing, so stop being so rigid and allow your personal context to open a bit. I do know one thing for sure though: Any and all of these steps work, because at one time or another I’ve exercised every one, practiced what I’m preaching…However I choose to spin these steps, they work in theory and practice.

You’re not a Twinke. It warrants stating the obvious, that the wide scope of these posts about ‘running a mortgage business’ in todays and tomorrows markets are about the Art of Reinvention. The shelf life of a business is about 2-3 years, then it starts dying…today a business must consistently reinvent itself or it will die. This is the Information Age where ‘Life Comes at you Fast’, you gotta be quick, nimble, and otherwise ready to change at a moments notice..case in point, the mortgage (and real estate) industry has changed more over the past 5 years than the previous 30+. I personally owned an operated a mortgage (as well as a real estate) brokerage for 8 years, and no less the 4 times it was ‘reinvented’… marketing, business structure, process flows, financial strategy all rehauled to change with the times.
Step Seven. Don’t ever say or advertise that a mortgage is ‘no cost’ or anything to this effect. Doing so should get one fired (and shot) on the spot.

If you’re a consumer and are thinking ‘I think I’m going to go with that mortgage company that’s offering a no closing costs loan’, that mortgage company is getting ready to bilk you for enough money to cause you buyers remorse on a clinical level. With all the (sensational) news that has permeated the universe over the past year about the racketeering-like mortgage industry, if you still think that a mortgage is in any way ‘cheap’ or ‘free’, you need to assign a durable power of attorney to someone with more sense than you.

Step Eight. Stop explaining the fee to do business with you in terms of a %. WTF does a % of a homes value have to do with how much you make? While it may make great sense to you, it’s really the most illogical way to ’sell’ yourself and services. Consumers are getting brighter, people like me are telling them to avoid mortgage pros who try and justify that ‘a point (or whatever) is very fair in todays market’. Valuing mortgage services in terms of a percentage will be portrayed as assuming a consumer dumb and docile, for which they will not do business with you…so stop insulting them and talk in dollar$.

Step Nine. Right up front, tell every potential client that you’re not going to be the cheapest mortgage pro they’ve dealt with, nor will you be the most expensive. By telling the consumer your fee and justifying it with tangible service and knowledge parameters, you set the playing field to make any other mortgage monkey they talk to compete on this turf, and most can’t.

Step Ten. Learn how to and/or implement a digital database management/marketing strategy. No, your Loan Origination Software is typically not good enough.

Step Eleven. Repeat after me…”I cannot make $10,000(+) on a single loan anymore”…

Step Twelve. Start a blog. Abandon your current dinosaur of a website from Myers, Lion, etc etc and move your web presence to a blogging platform, preferably one that isn’t proprietary since the ‘open source’ options available out there are stable and fantastic, not to mention that proper support is deep and easy to find. A blog is no longer just a tool to write journalistic online articles for all to revel in your omniscient brain (in case you’ve been under a rock or high on some). Blogging platforms are evolved web-sites that allow you to create, even better: Recreate you and your business on the fly. Changing a traditional website platforms look/feel/functionality is either expensive or just short of an act of God to pull off. For these same reasons avoid said proprietary platforms that can only be configured by a select few individuals.

Mortgage blogs pale in comparison to their real estate cousins in number and quality, which is a great reason to start now. At Inman Connect NYC 2007, I dropped in on one mortgage panel that had the founder of LowerMyBills.com as a panelist. When the panel was asked by the moderator about blogings potential effect on the mortgage world, everyone pretty much shrugged with a ‘Duuuhr’ look on their face until LowerMyBills spoke up and stated he thought (im paraphrasing) ‘that consumers wouldn’t identify with a mortgage blog nor was their much value in them’.

Step Thirteen. Move, act, and market yourself in direct contrast to yesterdays ‘industry leaders’, not doing so will continue to lower your business.

Sphere: Related Content

Authored by Jeff Corbett | 5 Comments

A Step by Step Plan on How to Run a Mortgage Business in 2008

November 29th, 2007 Categories: Mortgage News

At least 5 times per week I get asked how I would run a mortgage business in todays market, or something to that effect…there’s a million ways to ask the same question. So, in the spirit of why I started blogging (because I really do not like repeating myself) and in Twitter like fashion, Ill start running my fingers against the keyboard and impress my thoughts accordingly…

This will be a few part series on how I think a mortgage business (brokerage et. al) should be (re) run in todays market, going forward. I’m shooting from the hip here, in rapid type mode, so excuse the lack of linkage.

Step One. Fire everyone, reduce the size of your current office space, and buy new computers if they are 3+ years old.

Step Two. Toss your antiquated compensation plan. Antiquated means:

A) Any model that pays some ’split’ of gross commissions between the originator and the business.

B) Pays employee’s for loans the closed within the past 30 days, since doing so is a terrible way of managing cash-flow.

Step Three. Figure out a new compensation plan for your two ‘new’ originators (see below)…preferably one that pays them a fixed $ amount per loan closed, regardless of loan amount. This gets them focused on volume and away from the biggest, closest donut on the plate, as well as better aligns the interests of all parties involved: originator, wholesaler, and consumer. Adjust your compensation payment schedules (payroll) to remit the average of the three previous months gross commission total. For example:

Joe closed 4 loans at $400/per in month one ($1600 Gross), 12 loans in month two ($4800), and 8 in month three ($3200). Add the 3 months gross commissions and divide by 3. $1600+$4800+$3200 = $9600/3 = $3200 gross to Joe at the end of month three.

Next month if Joe closes 15 loans, the oldest month’s commission figure falls off ($1600), the next two back up and the newest months gross commission amount of $6000 is figured in…and Joe takes home a check for $4666.66.

This strategy, called a 3 month moving average (or 3 MMA), allows the business to manage cash flow better, avoiding the feast or famine dynamic that exists in too many mortgage offices.

Step Four. Rehire your two most seasoned mortgage originators. Benchmark test for a seasoned originator: They must be able to look at a 1003/1008, a Tri-Merge credit bureau and within 60 seconds know where the holes are (if any) and identify which 3 wholesale lenders are most likely to buy the deal.

Step Five. Rehire (and/or acquire) and overpay for at least 2 good processors. Good processors, the uber-organized people who actually turn mortgage files into loans are worth far more than a sales monkey, especially in 2008.

Step Six. Trash the ridiculous used car salesman marketing pitches. Open your Kimono and be honest with potential clients. Tell them how this business works, how you make money, how much you make…keep your pitch that simple. Then tell the potential client you won’t do business with them until they shop you against 3 other mortgage outfits, with one disclaimer…they can’t tell the next three mortgage pimps what you just disclosed to them, and then let them decide who they want to do business with. If they call back, they’re yours for life, if they don’t, you didn’t want them in the first place…

Sphere: Related Content

Authored by Jeff Corbett | 5 Comments

Groove Your Way to Productivity and Javascript on Juice

November 29th, 2007 Categories: Real Estate Technology

While I may not be a programmer, I am a tech geek at heart. Technology has always been a gateway for me to reduce laborious tasks and increase communication efficiencies…in other words it helps alleviate my procrastination habits and other nefarious personal productivity holes.

Although Groove.net and Extjs.com are two vastly different applications, they both represent progressive advances in communication abilities and end-user experiences, using the web as a vehicle.

‘Work together and share information with team members — anywhere, anytime, with anyone.’ Groove.net is a Peer-to-Peer (P2P) collaboration software application that evolved out of Lotus Notes. I started using Groove about three years ago, before Microsoft bought it and Ray Ozzie up into the belly of the beast, and I must say it is the most seamless collaborative software program I’ve ever come across.

Instead of spending gobs of cash on hard and software as well as hiring a systems administrator to manage a server based local area network, Groove is an inexpensive, secure, and most importantly an EASY solution for disparately located groups to implement and use to collaborate on projects with.

Anyone can demo Groove free for 30 days…try it out with a colleague, if you are part of a real estate or mortgage ‘Team’ have everyone try it together, you’ll wonder how you got along without it.

On a higher tech acumen level, extjs.com is what I call Javascript on Juice. This open source resource provides beautifully clean code that can be implemented into almost any web-based application you can think of.

One of their most ambitious and friggin awsome looking applications is the extjs Desktop, you almost forget that this is inside a web-browser. While some people may try to pass this gorgeous looking code off as their own, extjs openly touts some big dogs who are using their wares: Dow Jones, IndyCar and IBM.

What you are seeing here is a shift in how websites will look, feel and function…wicked cool.

Sphere: Related Content

Authored by Jeff Corbett |

A Good Mortgage Article About a Novel Topic

November 26th, 2007 Categories: Mortgage News

Most of the ‘news’ about mortgages centers around the ‘credit crunch’, mortgage company obituaries, more foreclosures, more defaults, more misery…

Every now and then I read a post (about the mortgage industry) that contains content which is progressively valuable. Granted, unless you work in the industry, general mortgage news isn’t the most compelling shizzle to read.

So today I read one that made me say…wow, that’s some good sh*t!
I appreciated Dan’s post about mortgage rates because it offered up a seldom discussed, difficult, yet important topic in clear language…and he did it in less than 10 pages. With all the ‘Carnival’s’ and ‘Best of’ lists that I always forget about, every now and then I’ll post a ‘Thats My Dogg!’ type of post. When one gets the nod, they may then boast their very own Pimp Cup. No rhyme or reason to all of this, just gonna column as I see em…