As published in Scotsman Guide's Residential Edition, December 2005.
For a mortgage company to thrive, it must close enough loans to generate net income. But the difficulty arises in identifying how a company can close more loans and reach its profitability goals.
There are building blocks within a company that allow one area of the business to build on the success of other areas. An experienced management team can supply a company the required respect from its prospective relationships. A strong balance sheet (i.e., sufficient capital) gives the prospective relationships a feeling of commitment on the ownership group behind the mortgage company.
Solid management and capital are a significant step to establish the much-needed relationships with investors and creditors. In my experience, no factor provides recognition or credibility quicker than a strong equity base.
The critical ingredients for success include hiring the right personnel; offering the right product lines; processing and closing loans quickly; paying commissions at the market rate; living up to your word; creating an outstanding relationship with investors and creditors; and establishing name recognition.
Hire the right personnel: If a job applicant does not appear fully committed or is presenting problems, move on. Avoid wasting any more time or effort on this person, and start pursuing the next best candidate. Further, a good wholesale representative can add immediate value to a company. The question is, at what cost? An often-overlooked part of the equation is the reps' actual costs versus their net contributions to the company.
Offer multiple product lines: The ability to obtain many products is critical. These are the main tools with which your account executives and loan officers will face the world. Your organization should be able to create a client relationship, no matter what the loan or terms. It must have a strong application package that will make investors want to deal with you. Only by establishing these relationships can a company provide the required products to support its marketing staff.
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