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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2008

Planning Your Attack: 5 Steps

Being prepared is often easier than preparing a good excuse in today’s market

The pace of change in our industry is unprecedented. With daily price freezes, product eliminations, Federal Housing Administration (FHA) modernization, Fannie Mae and Freddie Mac pricing grids and tightening guidelines, many mortgage brokers are completely out of focus. Clients are frustrated, agents don’t want excuses for every deal, and underwriters are pulling out their fine-toothed combs.

This presents the largest unspoken problem for our profession: Mortgage originators risk becoming reactionary. None of us has witnessed a market this volatile and a future this uncertain. It’s difficult to set the tempo when you’re hearing an unfamiliar tune.

More than ever, now is the time for situational awareness. This means you must be aware of all elements around you, understand what they mean and anticipate what will happen. Absorbing data becomes a method of defining context and cultivating strategy.

Situational awareness is especially important in work domains where the information flow can be quite high and where poor decisions may lead to serious consequences. This type of awareness promotes initiative, and you cannot be proactive effectively without it.

Our industry is quite unforgiving of carelessness, incapacity or neglect. So during a crisis, keep first things first: Remain focused and retrieve your business plan. Sudden shifts or impulsive reactions will only distract you and delay your progress.

Don’t have a business plan? Make one. It helps to have a tangible plan of action in lieu of vague ideas or inconsistent practices. Here are some steps you can follow as you construct your own.

Step No. 1: Guard the castle

You simply must execute your current pipeline. Do you run every preapproved client through your automated underwriting system? Do you give agents and customers unsolicited weekly updates of loans in progress?

Develop a meeting schedule with your processor or underwriter. Ensure that settlement statements arrive at least 24 hours before closing and review them with your clients. Secure all parties to a customer-retention program.

Many of these functions can be automated to allow for more effective use of time.

Remember to thank your referral sources properly, as well.

Step No. 2: Distinguish yourself

Your business plan should include a stable marketing strategy and a method for tracking which avenues bear fruit.

Combine traditional print or electronic communications with personal follow-ups. Approach former clients and referral sources with something to offer versus something to ask. Does your marketing contain valuable information versus just a slogan and phone number?

Become indispensable. If nothing else, remember this: Ultimately, people do not want mortgages. They want solutions. Show them that you can provide solutions.

Step No. 3: Better yourself

Learn something new. Be adept at explaining the highlights of the Housing and Economic Recovery Act of 2008 to your real estate agent partners and clients.

Also, familiarize yourself with presentation software so you can stage seminars like a professional. It’s easier than you think.

Branch out with the product types you offer. Become an FHA expert -- FHA originations are up significantly since last year.

Also, consider learning about and offering reverse mortgages, which allow homeowners ages 62 and older the opportunity to use the equity in their homes. Baby boomers started turning 62 this year, and reverse mortgages often are considered the fastest-growing segment of the industry.

You must position your basket under the tree that is dropping apples. This is the essence of situational awareness.

Step No. 4: Seize opportunity

Any seasoned investor knows that a weak market creates an opportunity to buy at a discount. Is now the time to upgrade your loan-origination software or database-management platform?

Take a good look at your technology infrastructure and solicit feedback from employees on the front line. They’ll feel valued, and you’ll receive quality information to improve your processes.

Step No. 5: Communicate

Each week brings a dizzying array of product revisions, declining market information and underwriting changes. In addition to offering updates via your company’s intranet, e-mail and fax systems, plan a weekly conference call to address items of emphasis and recurring trouble spots. Consider it a tuneup.

Bring laser focus to your goals, and use the call to involve your team. Be proactive and encourage others to do the same. Provide a company status report and recognize top employees.

The Wall Street Journal reports that the most-desired item employees want from their employer is appreciation. I say it’s the most-desired and the most-forgotten.

The best method for dealing with today’s mortgage crisis is to manage your business actively. The way to survive is through situational awareness. And don’t forget, we don’t see things as they are -- we see them as we are. 


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