Savage Insights

SALES TEAM BEST PRACTICE: Use This BusinessWeek.com Article as a Customer Value-Add or Door Opener

A recent study by professors of Columbia and New York Universities shows that, used properly, Option ARMs actually are the best mortgage options in the marketplace today. Their exact words in the study are, “Our analysis is based on the assumption of full rationality of borrowers.” The only challenge with the study is that not all borrowers are “fully rational”. However, the study is a groundbreaking report that will be talked about for years to come. 

The results of the study were announced in an article on BusinessWeek.com, and the article provides a great opportunity for you to contact your customer base right now.

Regardless of whether you like or dislike Option ARMs or whether you agree with this article totally, it is a valuable source of knowledge that should be used to position you as an expert to your clients and referral partners. It can also open doors.

You can simply say you thought they might be interested in reading it, then segue into, “Do you have any clients or friends in Option ARMs? I offer an ARM Review that will help them understand if they have the best ARM given today’s marketplace.”

You can even say “I took the liberty of including a Total Cost Analysis with a sample Option ARM so you can see how what they’re saying in the article applies to your individual situation…”

It would also be beneficial to clearly explain how they can succeed at reaching their Freedom Point faster using an Option ARM.

Remember that when mortgage industry news like this is brought to the public, it creates questions in your clients’ mind. You are the one they will want to turn to get their questions answered, but most of them won’t ask; they’ll either try to decipher the information themselves or they’ll go and ask the wrong person.

You need to be out in front of them and take advantage of opportunities that present themselves in order to generate new business.

I recommend you read this article ASAP and share it immediately with your entire sales team. Then, encourage your team to call their best referral partners and forward the article and report. 

Don’t wait. This opportunity is hot, but it won’t last. Within weeks most will already know about this article and you will have lost the opportunity to be a leader and innovator.

To read the BusinessWeek.com article:
http://www.businessweek.com/bwdaily/dnflash/content/sep2007/db20070921_855992.htm?chan=search

To download the study:
http://www1.gsb.columbia.edu/mygsb/faculty/research/pubfiles/2686/optimal%20mortgage%20design.pdf

The Day the Market Shifted From Price to Trust (and how you can take advantage of it)

I’m proud to introduce our first guest “blogumnist” — Bill Hart. A motivational coach for building champions and the host of FrontRunner Resource’s “Real Estate Performance System” (REPS) audio series, Bill conducts seminars internationally for both mortgage and real estate audiences. He’s got a great message for any loan officer who’s not sure where they stand in today’s marketplace.

Here’s Bill.

We all know what this past summer’s mortgage meltdown was like, so I won’t revisit it. However, what is worth noting is what has transpired as a result.  Recently, a number of my coaching clients have started experiencing something new — top Realtors have started calling them! The best agents are now looking to mortgage professionals who engender trust and confidence for answers and reassurance. The best part is, these are the same real estate agents whom my clients have been targeting (some for a very long time).

Why is this happening?
Because they have concerns and are approaching a mortgage professional that they trust. How sweet it is! After coaching mortgage professionals for years on how to effectively approach real estate agents (and preparing them for the predictable rejection), all of sudden the tables are turned; suddenly the agents are doing the approaching. Agents are not approaching all loan originators…just the ones they are confident will give honest, accurate information — for they are looking for trustworthy loan originators to refer clients to.

What’s happening in the mortgage industry is very similar to forest fires. What people usually see with a forest fire is amazing devastation. But what they don’t realize is that forest fires are a necessary component for cleansing the forest. They create a mosaic of burned and unburned areas, resulting in natural breaks and diversity in the landscape. They also return valuable nutrients into the soil for new growth to flourish.

Now let’s compare it to the mortgage industry. As horrible as the impact of the sweeping subprime meltdown has been for many families, there is another way to look at it. Like a forest fire, much of the dead wood is being cleared, and the loan originators who will not get burned are the ones who learn to become trusted advisors to their referral partners and their clients.

Now let’s switch metaphors

I conduct a seminar called “Fixing the Leaky Bucket”, and in it I teach that, since less business is coming into your bucket, you must fine tune your skills to increase the number of leads you receive, while at the same time fix your bucket so the leads don’t leak out. The first step in becoming a trusted advisor is fixing the leaks in your bucket. I recommend patching those leaks by implementing the following:

1) Lean into Learning. Look into industry designations and advanced training. Go after articles and podcasts (such as Dave’s Strategy Alerts) that will keep you up to speed on the latest issues affecting our industry. It’s time to truly become the expert. Automated Underwriting has been great, but it’s also time to get back to basics; qualifying based on facts and reading tax returns are good places to begin.

2) Master your Database. Those with current email addresses for the majority of their customers have a real advantage. They are able to immediately reach out to past borrowers, spheres of influence and referral partners. Make this an action plan to resolve now. Every time someone comes into your office or calls on the phone as the result of a RateWatch report you sent, ask them for their email address.

3) Reach Your People. Whether it’s a full-blown event at a hotel or a simple presentation at your local title company, it’s time to take advantage of the public’s interest in the mortgage industry. Dispel myths, acknowledge truths and position yourself as the expert. (If this idea scares you to death, pick up a copy of “Working the Room” by Nick Morgan. This is the best book on public speaking I have ever read). Put together a plan to start calling your database, today. Commit to no fewer than 10 calls per day. Just do it.

Remember, even though the pie may be shrinking, there are fewer forks in it. Get educated on what’s going on so you can discuss the situation with your clients and prospects. Get on the phone and talk to people proactively and confidently. Don’t freeze, be active — be a relationally driven trusted advisor. Right now is the season for new growth and increased market share. It’s yours for the taking.

Our thanks go to Bill for his outstanding insight.

Bill Hart can be reached at Bill@BuildingChampions.com.

If you are interested in being a guest blogger of Savage Insights, email me your idea at dsavage@mortgagecoach.com.

Rising Rates Should Not Affect Your RateWatch Strategy

Tim Smith writes, ”In a market where rates are going up and probably higher than my typical client’s existing rate, how can sending out RateWatch be used to get business?”

That’s a great question. Actually, today’s volatile market is the best time to send out RateWatch.

Now more than ever, at a time when mortgages are on the front cover of every magazine and on the nightly news in every market, every homeowner with a mortgage in America either has questions about their mortgage, or is concerned about their mortgage or has a close friend or family member who is concerned.

Sending out something that is personal and relevant, like RateWatch, has more value than ever — it may provide some insight that has impact to a family member or friend.

For every homeowner in an adjustable rate mortgage or concerned about cash flow, you should be including an option ARM, an interest only and a 30- or 15-year fixed. There’s always going to be some contrast between what’s available in the market and the mortgage that a homeowner has. Providing homeowners with clarity on their mortgage as it compares to the market has value.

In fact, your headline could be about clarity — “Now, in a time that’s confusing, here’s some clarity for you.”

Also, always include a cover letter such as:

Dear John,

In this marketplace where mortgages are in the headlines every day and loan officers are continually going out of business, I’m getting more and more questions from homeowners about what they should be doing.

If you have questions, don’t worry. I can answer them. I offer a variety of complimentary services to help you understand your current situation:

- A Recast Review to determine how your loan is changing and how you are
  impacted by market conditions

- An Equity Review to help you understand if now is the time for you
  to be consolidating your debt

- A complimentary Credit Review to determine how much you would qualify
for if you wanted to purchase another or a new property

If you have questions, please don’t hesitate to call me. And if you know people who have questions, please pass my letter on to them and encourage them to call me.

RateWatch is your biggest asset in this market. Don’t wait. Start sending it out today.

Also, this is a great strategy to share at your next sales meeting. Use this as a training tool and share with with your entire sales team.

Do you have a great strategy to share? Email me at dsavage@mortgagecoach.com.

Tom Bass Generates New Loans by Helping Realtors Sell More Houses in a Down Market

Realtors and homeowners are struggling everywhere to sell homes today. The market has flattened out, and in southern California in particular, homes are staying on the market for as much as 9 months. Owners are having to institute price reductions of $15,000 to $20,000 to facilitate a sale.

But not those who work with Tom Bass. Bass is an 18-year veteran of the mortgage industry. In his best year, he did $165 million, and even in today’s market, he’s producing over $70 million. He’s been a Mortgage Coach user for six years and is a leader in the industry that everyone can learn from.

In this Strategy Alert, Bass details a very unique strategy that is generating great success for him. He uses a Total Cost Analysis report to develop a seller buydown strategy that saves both the buyer and seller money, and moves the house to closing, creating business for both himself and the Realtor.

“Instead of the Realtor going to the seller and recommending a $20,000 price reduction, I suggest a seller funded buydown” he says. “For instance, if a seller dropped the price on a $440,000 house by $20,000, it would reduce the buyer’s payment by $99. But if I applied that $20,000 toward a buydown, that would represent a $347 difference. So I started meeting with all my Realtors and offering these buydown strategies.”

To capture Realtors’ and homebuyers’ attention, he creates a sample mortgage plan in the Marketing Machine, relabeling it “Seller Buydown Analysis”, that shows a step-by-step example of a TCA. He then saves it in PDF format, giving it to his Realtor partners to take to their sellers as a visual tool.

After just one week, he says, two Realtors were able to close sales on houses that had been on the market 6 to 7 months. “The sale was a direct result of showing them how they could lower their monthly payment using the Total Cost Analysis report.”

Listen to the 10 minute interview with Tom about his killer mortgage planning strategy here:

or you can grab the 10Mb file here

To view a sample of Tom’s Seller Buydown Analysis report: Click here

To contact Tom Bass:
tom@tombass.com

Scott Cummings Saves Customers $114,000

If you want proof that loans are closing in this marketplace, look no further than this latest audio call I recorded with Scott Cummings of Albuquerque, New Mexico.

Recently, Scott decided to start measuring not just how many loans he’s closed or how much money he’s made, but how he’s been able to impact his customers’ lives.

After doing the math, he discovered that he and his team have saved customers $114,000 over the past year. And these are customers who had no idea they were stuck in a bad situation or could improve their financial situation.

You could be achieving the same success. Check out this five minute audio call now and learn Scott’s winning secrets.

You can listen to our conversation here,

or you can grab the 8Mb file here