A Special Look at
2012
Growth Strategies for Keeping Your Edge in 2012
A View Into 2012: Looking Back By Erik Wiley
By Erik Wind
I
41
DECEMBER 2011
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business by efficiently uch like today’s targeting their existing other surviving customer base. Longindependent term relationships with mortgage origination Realtors yielded diminfirms, Pacific Residential ishing results, as Mortgage LLC (PRM) has Realtors themselves endured the business experienced a slowchanges, housing environdown or left the busiment correction and comness. Some experienced pliance overhaul that Realtors made the shift our entire industry has to real estate-owned experienced over the (REO) listings. Clients past five years. While “Face-to-face that haven’t shopped us this has not been withcommunication is in the past started out pain or sleepless the way to go if you nights, we did it without expect to earn referred d o i n g s o . A n d t h e n changing our overall business. This means t h e r e ’ s t h e m e d i a reporting that indebusiness philosophy and literally getting pendent mortgage only slightly altering our face-to-face with companies were unsafe general business plan. consumers so that Necessary course correc- they become clients.” and unscrupulous and that banks and credit tions are continually being made and should be. From unions are the secure lending Politicians vilified these changes, we have learned how resources. to adapt to current conditions and “mortgage brokers,” while at the turn a profit from less-funded vol- same time, demonstrated that they ume, all the while, staying focused didn’t understand the home loan on our loan originator/employee- process or consumer behavior in centric, relationship-driven referral the slightest. Rather than allow these issues to model. As a point of reference, our firm break us, our 2011 business plan operates in four states with a staff of focused on recruitment of quality approximately 130, half of which are originators and processing staff full-time loan originators (LOs). We with an eye to maintaining profare a purchase-oriented operation itable levels of production. We also and we earn almost all of our busi- focused on the sustained employness off of referrals from past clients ment of our sales support staff and real estate professionals. This which includes our corporate, mortbusiness strategy hasn’t changed gage banking, IT and marketing over the course of our seven years groups. I mention this because and will remain the basis of our medium- and large-sized companies business model going forward into need to have significant structure in place in order to successfully oper2012. ate as a mortgage banker while supporting LOs. Today’s higher costs of Bending, but originating a closed loan, plus the not breaking The purchase side of the referral- compliance and quality control (QC) based model of our business took a overhead that goes along with daily beating these past few years. As refi- operations, is much more expensive nances ebbed and flowed, we discov- than in the past. All of these ered that too many of our origination changes mandate that LOs receive staff had let their purchase business increased company support, none deteriorate. The causes for this vary. of which is available for free or easy Refinances were the low-hanging to come by. Our overall 2012 plan will focus fruit. Online lenders and big banks/servicers effectively competed for refinances and even purchase continued on page 42
NationalMortgageProfessional.com
gage professional who is ’ve written previously on staying on top of their how by the time the holpipeline. The borrowers will idays are here, the year appreciate your initiative. has already ended. It’s the time to spend time with Educating your family, friends and those referral network business relationships we In addition to your probreally appreciate. But, it lems, real estate agents in can also be a time for your referral network will reflection, goal-setting and have their own set of chalplanning for the new year. lenges to deal with, particuThe year 2012 is going to larly when it comes to short be a great challenge for “2012 will be a year many of us. Lending guide- where taking the ini- sales. If it’s their problem, lines are changing faster tiative to educate your then it’s your problem too. Stay one step ahead of than ever, while foreclo- referral network and the changing short sale and sures and short sales aren’t provide them with real estate landscape. Don’t going away any time soon. resources to make The following areas are two more money will pay expect real estate agents to of the biggest challenges dividends throughout know what they have to know to close a short sale originators can face next the year.” smoothly. If you can eduyear. By being prepared, you can turn these adversities into oppor- cate your agents on how to easily close a tunities while others continue to struggle. short sale, they can close more business; leading to more originations for you. Victor Pascale of Continental Home Dealing with Loans spends considerable time to educate changing guidelines There’s often a significant period of time his real estate agents on the short sale between when a borrower gets pre-quali- process. “I can only imagine how much comfied and when they actually apply. Since guidelines are changing frequently, origi- missioned real estate agents would have nators often find themselves getting con- lost if I wasn’t there to help them with their tacted by those who were pre-qualified short sales,” said Pascale. Victor gets his real estate agents the weeks or months ago, and being forced to tell their would-be borrowers that the pre- education and tools they need to make qualification is no longer valid. This can short sales just another transaction. While it’s never bad to be proactive, lead to mistrust between the borrower and originator and a setback to the borrower 2012 will be a year where taking the initiawho may have been ready to move on a tive to educate your referral network and provide them with resources to make real estate transaction. By diligently keeping in touch with bor- more money will pay dividends throughrowers whom you pre-qualified, you can out the year. inform them of these guideline changes on Wind is co-founder of your terms, rather than reacting to them Erik when the borrower comes back to you. ShortSaleSpeedway. He may be reached by With this strategy, the perception changes phone at (516) 882-6930 or e-mail at from mistrust and frustration, to a mort- erik@ewdc.net.