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A mortgage broker should study the local market and see what class of people will continue to need mortgages in these times. Here are some suggested niches to consider: O Home purchases: Many people will still buy new homes even in this market. A broker may want to develop a strong purchase business by cultivating relationships with realtors. O Senior citizens: Senior citizens will continue to need reverse mortgages. The demand for them will increase as they become more known. Baby Boomers will soon be senior citizens, which could create a large market for reverse mortgages. By the year 2030, there will be more than 72 million people, like me, over the age of 65 with grandchildren on my knee, Vera, Chuck and Dave. O First time homebuyers: Newlyweds and other first-time homebuyers need a place to live. Many will buy homes, regardless of the economy. Many new college graduates will buy homes. A tax credit of up to $8,000 is available for qualified first-time homebuyers that purchase a principal residence on or after Jan. 1, 2009 and before Dec. 1, 2009. O Relocations: Executives relocate from city to city usually without regard to housing market conditions. Ingratiate yourself with realtors who handle this market. O Foreign nationals: Guten Morgen mein Liebhaber, buenas tarde mi amiga, bonsoir madam. Foreign nations, especially Europeans, are interested in U.S. housing. Develop relationships with your European friends. O Investors: As prices decline, more investors will speculate on property purchases. Prices have declined to

Loan products The loan products that may make you flourish in this environment include: O O O O O O O O

Commercial; Mortgage purchase plans; Cash flow purchases; Reverse mortgages; FHA programs; USDA programs Downpayment assistance; and Short sales.

The commercial market Commercial real estate values remain relatively stable. There are many areas of commercial mortgages that mortgage brokers could learn and specialize. Some of these areas include: O O O O O O O O O O

Large commercial loans; Small commercial loans; Church loans; Office buildings; Apartment buildings; Condominium association; Hotel (chains and non-chains); Gas stations; Funeral homes; and Convenience stores.

Mortgage purchase plans In a tight mortgage market, less home purchases qualify for mortgages. Therefore, there is more owner or seller financing. Owner financing is when the seller sells real property and takes back a mortgage deed and note from the buyer. The seller has stepped into the shoes of the bank. Some sellers do this willingly; however, most sellers would rather receive all cash from the sale of real estate and not be involved with the borrower. How can a mortgage broker earn income and help a client when a home

seller provides “owner financing?” Creative mortgage brokers can suggest to the owners of the mortgage (the mortgagee) many ways that they can sell all or part of their purchase money mortgage for immediate cash. A purchase money mortgage is a mortgage created with the purchase of the real property. Fees for this valuable service can be very lucrative and processing is limited to gathering a few documents and submitting them to a mortgage note purchaser. The selling of a mortgage is a Mortgage Purchase Plan (MPP). An MPP is also known as a cash flow purchase, an existing mortgage purchase plan, an owner-held mortgage purchase plan, an owner-financed mortgage purchase plan or discounting a mortgage. An example of this is based on the owner taking back a first mortgage; however, the principles are the same whether the purchase money mortgage is a first or second mortgage. The names have been changed to add some humor. Sally Seller sells her home for the following: Downpayment: ..........................$20,000 Purchase Money First Mortgage: ..80,000 Sales Price:................................$100,000 To sell the home, Sally takes back a mortgage she does not want. The buyers have only $20,000 in cash. The terms Sally and the homebuyer negotiate for the $80,000 first mortgage are seven percent interest for a 30-year amortization period with a balloon of approximately $75,305.27 due in five years. The monthly payments are $532.24. continued on page 36



Become famous in your community as a mortgage expert. You can increase your exposure by writing articles for the local newspapers and by presenting seminars. You can get to know the newspaper and magazine business writers and offer to provide quotes on the mortgage market. You can regularly send press releases to the newspapers, TV stations and radio stations. After time, they will accept you as the real estate expert. You can arrange seminars at condominiums, office complexes for the


levels that allow the rent to cover the costs to maintain rental property.


Become famous

building employees, schools for the teachers and other employees, libraries for the community, fire stations and police stations. At Jackson Memorial Hospital, in Miami, an insurance agent provides a monthly seminar with refreshments and music for the doctors. How many hospitals could you arrange a monthly seminar? The doctors and interns who will buy homes in the future love the food and music. An Alabama mortgage broker has an exclusive contract with a union to present programs to the union’s members. The union pays him $35 per attendee. He has more than 100 attendees at each seminar. How many loans could you close from each seminar? O

You should understand the details of the loan products you currently offer. Understand the nuances. Become a total expert in your products. Don’t fight about the constant changes in the rules. Learn new products that accomplish your new prospects’ wants, needs and desires. The products that may make you flourish in this environment are discussed below. In selling and negotiating, you should concentrate on learning to sell yourself and your product’s benefit. Someone will always have or say they have a “better” product than you. Learning management skills makes you more valuable to an employer and in your business. Marketing will help develop your image. Marketing items include flyers, brochures and other advertising pieces. Management skills will make you more valuable to your employer. Management will give you a better understanding of business. It will create a more efficient and effective organization. You can acquire these new skills through course offerings from associations such as the National Association of Mortgage Brokers (NAMB), NAMB’s state affiliates or the Mortgage Bankers Association (MBA). These organizations provide conferences, seminars, books, online programs and trade shows. Visit their Web sites to find out how you can increase your industry knowledge. When you attend a trade show, review the vendors and exhibitors. Plan to visit the vendors that will help your business grow. Make your time at the trade show productive. Also, you can acquire new skills through books, classes and the Internet. Realtors, developers and investors are real estate experts. You are the financing expert. If you can add value to their product and get them a fistful of money, they will keep you around. If you can help structure transactions for the real estate experts, you will become the financial expert.