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   ARTICLE   |   From Scotsman Guide Residential Edition   |   February 2012

Adding Borrower Value Through Social Media

Learn how and why to connect with your clients

According to the Mortgage Bankers Association, there will be less than $1 trillion in loan originations in 2012. Considering that originations were approximately $3 trillion only a few years ago, the industry has had its volume cut by two-thirds. That means mortgage professionals are faced with two choices: They can be in the top one-third of their industry, or they can find a job elsewhere.

There’s no shame in moving on. A good salesperson is welcome in any industry, and there are plenty of businesses where closing the sale doesn’t involve a fraction of the red tape that mortgage professionals have to deal with in this industry. With loan-officer compensation being a serious issue for many companies, it would not be surprising to see even more professionals leaving the mortgage industry for greener pastures.

Those who stay will be the best of the best. That said, there will still be both winners and losers this year, as it seems doubtful that two-thirds of mortgage professionals will abandon the industry altogether. The losers will be just a shade slower at identifying good prospects, just a bit later with a phone call or an e-mail or too busy to make it to a given networking event. The losers in 2012 will be better salespeople than most of the winners during the refinance boom, but they’ll still lose out if the volumes fall as far as the MBA is projecting.

"Social media is about two-way conversations, though some of them are very short. The old game of sending out information and then not hanging around for the conversation will not be effective anymore."

The winners will know exactly where to go to find prospects, exactly how to pre-qualify the good ones quickly and get their applications into the loan-origination system (LOS), and how to nurture those who don’t qualify yet so that they’re first in line when they do qualify for a loan. How will they know these things? This information is the fruit of existing relationships.

Social media and marketing

The most successful players in the U.S. financial services industry have always been masters of the marketing game. They know the kinds of information American borrowers are looking for, and they know where these prospects will look for it. They’ve been successful for years, advertising in newspapers and using spokespeople on television. Now, they think they’ll continue to lead the field by doing the same things with social media. That won’t work.

Social media is a different game than traditional marketing. In the past, marketing was a one-way conversation — information moved from the company to the prospective borrower. Social media is about two-way conversations, though some of them are very short. The old game of sending out information and then not hanging around for the conversation will not be effective anymore.

In fact, treating social media like traditional advertising could do more harm than good to the companies that engage in it. This makes perfect sense if you think of social media websites as venues for social gatherings. With few exceptions, the social rules that work for real-life gatherings are followed by participants in these online venues.

For instance, if you enter a room where a party is taking place, witness a number of people greet you warmly but then turn your back on them, you will be perceived as rude. And yet, this is what many companies do in the social media realm. They enter a conversation by sending out information and then fail to respond when someone in that venue attempts to start up a conversation.

This may be due to the fact that many companies testing social media are not getting many responses. Perhaps they don’t expect to get any and therefore aren’t monitoring these sites effectively. With the right content and careful monitoring, however, companies can turn these social media conversations into relationships that will lead to sales.

Conversing and convincing

In the past, it seemed as though prospective homebuyers only needed to know a given interest rate and an estimate of the closing costs before they made a decision about a new mortgage loan. These days, things are a bit more complicated.

For one thing, it seems that fewer and fewer people trust the mortgage industry. Borrowers expect to be lied to, if not by the loan officer that takes their application, then by the fine print buried in the loan file itself. American homeowners are having a difficult time telling the big banks from the federal government and figure that if their bank gets into trouble, then the government will bail it out. At the same time, however, homeowners seem to think that if they get into trouble, then their lender will turn them out and cause them to lose their homes. Most people in the market today doubt that they’ll qualify for a mortgage loan even if they can find a bank that’s still making them.

Of course, most of these perceptions are wrong, but unless borrowers know this, they may as well be reality. The most successful originators will change these borrowers’ perceptions, but only through a number of heart-to-heart conversations. This makes social media a vitally important tool for mortgage professionals, yet how they use it will make all the difference.

When it comes to content, borrowers need to hear the truth from someone they feel they can trust. Since it’s unlikely that loan officers will be able to get people who don’t know them to trust them easily, these professionals will fall back on old techniques that worked in the world of direct sales for generations. They’ll solicit referrals and testimonials from borrowers they have served and other professionals with whom they have partnered. They will share what they know about the process freely in as many social media settings as they can. They will offer what borrowers feel is valuable, and in this way they will build reputations that will support their businesses in their local markets.

So what kind of information do borrowers find valuable? It’s simple: information that will get them a loan when they need one, that will save them money when they can save it, that will keep them out of trouble if they’re in risk of getting into it and that will give them back some of the flexibility they once had in their financial lives. Mortgage professionals should remember that their industry taught American homeowners how to access their equity almost effortlessly. Mortgage professionals showed consumers how wonderful it could be to have the money they needed whenever they needed it. Now, mortgage professionals have to show them how to get more of what they want with what they have.

• • • 

It may be years before the market returns to some form of normalcy. When it happens, it’s much more likely to be the norm of the mid-90s than that of the first few years of this century. In the meantime, engaging borrowers in helpful conversations about their needs and the offerings that might meet them will allow the industry’s best originators to do very well in the years ahead.

Increasingly, these conversations will happen online in social media settings that require mortgage professionals to share what they know intelligently, keep an eye out for responses that can be the beginnings of conversations and then keep those conversations going until they can build the relationships that will result in more business.


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