Wake Up Mortgage Wholesalers— Revisited By Dave Hershman Well, we are in the middle of another refinance boom—unless rates went up before this article is published. That means many loan officers are feasting and it also means most wholesale companies are deluged with business. The focus is accommodating the business and not the future. They are adding reps and operations staff as fast as they can, and many are inexperienced or were not working for a company for a reason. However, this article is not about the quality of the staff … it’s about what happens when this particular boom is over.
So, what happens when the refinance boom ends?
What represents added value? For one, wholesalers should be trying to improve the careers of their targets. If they provide training, it is typically on their products and procedures. This is akin to a loan officer speaking at the office of a real estate agent and talking about their great rates, programs and doughnuts.
Wake up wholesalers.
Expert knowledge and expert marketing.
Is your company helping you with One without the other is worthless. this worthy goal? Experts who cannot market like experts will not position themselves the right way. Those who market well but are not experts will similarly fail. Those who can show loan officers how to provide value to the real estate community as well as alternative referral sources will position themselves differently within this industry. If this is not part of your business model, then you will be missing the boat when it sails without refis.
Wholesalers around the country complain that a typical broker does not know how to put together a decent
Dave Hershman is a top author in the mortgage industry with seven books published, as well as hundreds of articles. Dave has delivered hundreds of keynote speeches, seminars and schools for the industry as well. He may be reached by e-mail at Dave@HershmanGroup.com or visit OriginationPro.com.
AUGUST 2012
The benefits being an expert and furthering expertise goes beyond marketing success.
Without this important component you will unfortunately be in the position of the blind leading the blind. If it leads your clients down the wrong path, the end of the refinance boom is going to be very painful. Granted it will be painful for all—but especially for those who are not in the best position to deliver value. Wake up and think about it because the clock is again ticking …
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OREGON MORTGAGE PROFESSIONAL MAGAZINE
Support efforts to improve the careers of your targets. Not just to become better salespeople, but to become experts within the industry. It is the experts who will survive. It is the experts who will thrive after the boom. Loan officers cannot service real estate agents by solely promising the best rates, as opposed to having extra value to help enhance agent So what are the business through synergistic relationships. How are you helping the loan wholesalers doing officer, your clients, deliver this about it? It appears to the neutral observer value? Certainly not by buying them that next to nothing is being done to golf or drinks. I cannot imagine how position the typical wholesaler to these things will help your clients succeed after the boom times. If a become higher quality customers. lender is focusing upon rates, they Training is one way to deliver value are likely to be attracting brokers to your customers—either by deliverwho are selling based upon rates ing this training through your compainstead of relationships. These bro- ny or supporting industry-wide kers are also more likely to be those efforts. Unfortunately, there are not who are less experienced. enough alternatives within this indusIn reality, those brokers who are exe- try for broad-based financial training cuting broad-based relationship busi- that resides well above the basic level. ness models are the ones upon which Personally, I really thought training every wholesaler should focus their would become more important in this attention. However, that strategy industry when licensing became a requires a long-range business model requirement. However, licensing just and I don’t quite see that happening covers basics and compliance. It does today. That requires the delivery of not help a loan officer succeed. More what we call “added value” instead of than 50 percent of the loan officers hawking rates, programs and service. aren’t even required to get that Not that rates, programs and service because they work for banks. Banks
package and they are reprocessing loans for them. How expensive is it to reprocess loans for brokers who are supThere are other posed to be processing loans before they are ways to provide submitted? Will you be such value, able to afford to lend including this help when the busimarketing ness is not so profitable? support. How many wholesalers Where will this leave are helping brokers focus your clients when you “In reality, those upon increasing their have to withdraw this brokers who are ability to provide purlevel of support? And executing broad-based badgering them to do a chase leads to their real estate agents or helping relationship business better job is not enough. models are the ones their business-to-busiExperts understand that upon which every ness clients such as real the job they do in appliestate agents, financial cation not only makes wholesaler should planners, CPAs, etc. focus their attention.” the process smoother expand their own sphere for all concerned and of influence? saves time, but also leads to true I have focused upon two things in opportunities for more referrals. It is my career: Helping loan officers not just about asking for referrals. It become experts in the industry so that is about putting yourself in position the can be expert mortgage advisors, to ask. and showing loan officers how to marLack of quality training is quite ket like an expert. If you think I am expensive for all the players focused upon the word “expert,” you involved—from the homeowners we are right. Experts earn more. Experts are serving to the brokers’ employers don’t sell—people come to them for and the wholesalers who service the advice. Experts become leaders and brokers. In the long run, not deliverwill survive the end of the refinance ing this training will be deadly. I boom. Wholesalers, are you experts? If should point out that it is not only the you are not, how can you teach your loan officer who needs to become an most important clients to become expert—so must the wholesaler who experts? is serving this loan officer.
NationalMortgageProfessional.com
No one knows when it will end—but it will end. Refinance booms always end at some point. If a particular mortgage wholesaler is focusing on delivering rates and thus serving the lower end of the broker spectrum in terms of experience and/or quality—the end of boom times is likely to hurt that much more for those companies.
are not important, but to be a great wholesale company and a leader— these factors must be a given instead of the entire focus. In other words, if you don’t have the “basic three” down pat— don’t even bother trying to become a leader.
are uneven in what they deliver and you can be sure compliance is part of the package.