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   ARTICLE   |   From Scotsman Guide Residential Edition   |   March 2013

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Niche products can be a vital part of your portfolio

In the past few years, the mortgage industry has seen a resurgence of products from the past. Whether it’s downpayment-assistance programs or asset-depletion programs, the lending arena is opening back up to certain underrepresented products again.

These products — among many others — are what the industry considers niches. Regardless of the specific type, niches are important. For instance, they’re excellent recruiting and retention tools. As loan officers speak to clients, peers and referral partners, it’s inevitable that they’ll hear about a product that one of your competitors is offering. If your organization doesn’t offer this same product, your company has two basic choices: You can embrace the idea that mortgage professionals should sell the products they already have, or you can attempt to be a catch-all company and offer a slew of products.

Looking back to 2008 and 2009, many mortgage banks and lenders were trying to keep their hands clean by offering only conventional and safe products. After the mortgage meltdown, few lenders wanted to fund risky products, and the 30-year fixed-rate fully amortized loan became king once again.

Slowly, however, we’ve seen this begin to turn around. So, with that in mind, ask yourself what your niche is. Does your company offer niche products in which you can specialize? It doesn’t take much to start marketing Federal Housing Administration 203(k) loans, for instance, and then to become known in your area as an expert in rehab loans.

The same can go for any niche. Escrow holdbacks, for example, can be a great niche in which to specialize. To be able to tell your Realtor partners that those pesky repairs can be patched up after closing — rather than before — can be rewarding. Often the easier you make your Realtors’ lives, the better off you are.

Downpayment-assistance programs were a huge niche a few years ago, and for those who marked their place in this niche, these programs still can be a breadwinner. Although many lenders offer a form of downpayment assistance, an expert is harder to come by today.

Try to find something you can offer clients that few others can and then market that product relentlessly. You may find yourself surprised by who contacts you after a little marketing. For instance, if you specialize in loans for foreign nationals and post a blog about this niche, buyers from all over the world may contact you and increase your business. 

If your company isn’t offering any niche products, it’s likely because of your investors. After all, even if your company is retaining its servicing rights, your loans must be salable. Find out who your investors are, and when you come across a niche product from a competitor, inquire about who is purchasing their loans. If the answer involves an organization that isn’t one of your own investors, you can ask your secondary department to research that organization.

Today’s banks and brokerages are investing big dollars into creating marketing platforms for their loan officers. From co-branded flyers to automatic customer-retention mailings, today’s marketing can be robust and exciting. Even if your organization doesn’t invest much in marketing, there are other ways to spread the word about your niche. Create a blog, for instance, or post to Twitter, Facebook, YouTube, etc. Those searching for your niche online will call you. If you cannot close loans out of your state, find a referral source to send leads that you can’t service. This in itself may be a great way to increase future opportunities. 


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