BY GIBRAN NICHOLAS
MAY 2009 O
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
O www.NationalMortgageProfessional.com
The other 50 percent
6
It is estimated that more than 50 percent of American homeowners are either in or near a negative equity situation. My question is: “What systems do you have in place to consistently find and motivate the other 50 percent of homeowners and home buyers that actually qualify for financing?” According to the latest statistics by the Federal Reserve, American homeowners still have more than $8 trillion of home equity remaining—even after the record plunge in home sale prices. Furthermore, American households still have an aggregate net worth (assets minus liabilities) of $56 trillion. In other words, there are still a large number of Americans who can qualify for financing right now. Among this group of individuals who need you and can qualify for your services, you will find business owners, executives, real estate investors, retirees, senior citizens, first-time home buyers and others. Believe me, these people do exist! The only question is where are they? How can you find them and what value do you deliver that attracts them to do business with you?
Where do you find these people? I was recently giving a speech to about 50 CPAs at an event hosted by the CPA association in my state. At least a halfa-dozen people in the audience came up to me afterwards and wanted to refer me business. You see, more than 50 percent of all mortgage originators have completely left the industry. All of these CPAs and financial advisors have been abandoned by our industry and they don’t know whom to work with and where to send their clients. In fact, 61 percent of all financial planners surveyed by the Financial Planning Association indicated that they want to meet and work with qualified mortgage professionals. Not only that, but 81 percent of investors surveyed said that they want their financial advisors to provide them with advice on more than just investments. I’ve got to tell you, if you want to meet the other 50 percent of homeowners who are not underwater, you really need to start networking with CPAs and financial advisors.
In fact, I recently spoke to a group gory was, “Who is the current U.S. of 75 mortgage originators in southern Treasury Secretary.” I was taken by California at an event hosted by the surprise when not a single contestant California Association of Mortgage even attempted to answer this quesBrokers. As I was interacting with the tion. I thought to myself, how could audience, one of the things I asked these people not know Hank Paulson them was whether anyone in the audi- when his name and picture have been ence was involved with their local CPA appearing on almost every channel, association. Not a single person raised newspaper and Web site every day their hand. I then asked if anyone was and night for the past several weeks? The next several questions came involved with their local Financial Planning Association. Again, not a sin- from the “Shakespeare” category. gle person raised their hand. What Ironically enough, all of the contestants were clamoring over exactly is the problem each other to answer here? Why are so many every one of these quespeople in our industry tions. These smart people complaining about lack seemed to have memoof qualified borrowers rized all the works of a when they are all fishing dead poet who lived hunin the wrong ponds? dreds of years ago, and Now, let me ask you. yet not a single person Are you involved with your could name the man who local CPA or financial planwas responsible for the ning associations? Why largest government internot? Yes, I know funding vention in our markets’ sources are pulling their “Are you involved in recent memory. Right funding, Fannie, Freddie with your local CPA then and there, someand the Federal Housing or financial planning thing dawned on me: Administration (FHA) are associations? having an identity crisis, These people are living in lenders keep changing Why not?” a different world than my their guidelines, the unemworld. The things that ployment rate is double what is was two years ago, and everybody seem to be important in my world are thinks that mortgage brokers should just not even on their radar. Not only that, but life goes on and these people are all go out and shoot themselves. But in the meantime, these CPAs living their lives, enjoying Shakespeare and financial planners are just waiting and all the other things that life has to for someone like you to stand up and offer, even in the middle of a financial be a hero for their clients who can crisis and deep recession. qualify for financing. Where are you The moral of the story here is that in and why are you hiding? This is your time and place. You have been chosen order to attract people to do business with us, we need to live in their world by your destiny for this very moment. and speak their language. There are What do you say and how more than 300 million Americans who are continuing to live their lives even in can you attract these clients and their financial light of the current downturn. People will always need a place to live. People advisors? I was flipping channels on my televi- will always get married, have children, sion one evening in late 2008 and care for elderly parents, deal with health came across that classic show, issues, get divorced (unfortunately), etc. Jeopardy! Two of the categories in this In order to do business with these peoparticular show caught my attention. ple, we need to first understand our role The first was “The Financial Crisis,” in their life story, and then communiand the other was “Shakespeare.” One cate our value to them and their finanquestion being posed to the contest- cial advisors. It’s really a two-step ants from “The Financial Crisis” cate- process:
Step #1: Acquire unique knowledge and skills that are valuable to this target audience. You need rock solid answers to questions like these: I What mortgage strategies will best empower me to fund my child’s college education now that student loans are so hard to come by? I What should I do if I own my home free and clear, don’t want to sell it right now in a down market, but still want to move into a new home with little or no mortgage payment? I Is this a good time to buy a home or should I wait for four percent interest rates? I What strategies can I implement immediately to profitably invest in the turbulent real estate markets? I And the list goes on … Step #2: Communicate your unique value in a way that differentiates you and your communications from all the noise bombarding these people. Only by implementing this simple two-step process can you transcend the unfortunate circumstances of today’s market realities, and find and do business with the other 50 percent of homeowners and buyers that need you and can qualify for your services. Gibran Nicholas is the founder and chairman of the CMPS Institute, which administers the Certified Mortgage Planning Specialist (CMPS) designation. The CMPS Institute has enrolled more than 5,500 members since its founding in 2005. Gibran is also the chairman of Published Daily, a customizable online magazine, newsletter and marketing service that helps professionals transform their clients and prospects into a referral-generating sales force. He may be reached at (888) 608-9800, ext. 101 or e-mail gibran@cmpsinstitute.org. Visit author Gibran Nicholas’s blog at http://gibrannicholas.com where he shares his insights on economics, real estate and financial issues, including the current mortgage and credit crises.