Residential Magazine

The Cavalry Isn’t Coming

Only you can create the conditions for your success in this economic environment

By Eric Simantel

At the beginning of 2023, the phrase, “Hang in there, it will get better,” was heard on webinar after webinar hosted by mortgage lenders. Guest speakers projected a rebound to the home purchase market would arrive by this summer. “The demand will keep the housing market stable,” they said. “Rates will come down,” they added.

Well, summer is just about here — and it’s only a few weeks away from the end of the school year, which officially launches the start of the summer homebuying season. Are you hanging in there? Or are you hanging on by a thread?

Whether the forecast of better days comes to fruition is almost beside the point. If things get better, great. Then you likely won’t have to worry. But what if they don’t get better? What can you do to help yourself — especially if you are one of those whose thread count might be on the lower side?

It’s time to act. It’s time to move forward. Undoubtedly, loan volume is down and there are some originators who don’t have any loans in their pipeline. Freddie Mac warned in October 2022 that total mortgage origination volume for residential housing would drop by more than $650 billion, going from $2.6 trillion in 2022 to $1.9 trillion this year.

United Wholesale Mortgage (UWM) estimates that roughly 22% of the mortgages completed in the U.S. are done by mortgage brokers. If the Freddie Mac estimate holds true and mortgage brokers retain their market share, this means the broker share of the pie will decline by about $143 billion. If the average broker receives 1.5% in commissions, it means all of the brokers in the country will see a decline of $2.15 billion in their net income this year.

Breaking it down even further, you can see what this means for individuals. There are 25,510 mortgage brokers in the U.S., according to Zippia, an online recruitment company. If these brokers were to lose a collective $2.15 billion in commissions this year, that would equate to an average loss of $84,280 in commissions per broker. That’s a sizable hole in their pockets.

Seize momentum

“Hang in there” simply seems like bad advice. The term implies that simply by not taking action, you’ll get through this. That’s not a strategy on which to gamble your business.

In sales, there are order takers and order makers. There are farmers and there are hunters. There are reactive salespeople and proactive salespeople. Business was so good for so long that it was comfortable and easy to be a reactive salesperson.

“The client returned for another loan because you offered good service — but they entered your funnel because of a different reason. Your challenge is to figure out that reason.”

In today’s market, an environment with fewer commissions on the table, it’s the proactive salespeople who are getting their unfair share of business. If they are getting their unfair share, are they taking it from you?

For the sake of the rest of the year, aim for the Scout motto: Be prepared. Bring positivity, but don’t expect economic conditions to change and help you finish this year strong. What is your business plan in this environment? What are you going to do differently to get loans in the funnel?

Maybe the thought of cold calling real estate agents makes you anxious or the idea of buying leads makes the hair on your forearms stand up. This isn’t to suggest that you try either of these tactics. But you’ve got to do something, don’t you?

Create a plan

Maybe you don’t have a plan or, if you do, you aren’t using it. A plan is something that you look at once a week and ask, “Did I do it?” It is a yes or no answer. There are no, “Yeah, buts.” A plan is also different than a goal.

A goal is an outcome. For example, a goal for the month of May can be to have 10 active loans in the pipeline. The plan is how you get there. It’s the road map.

And your pipeline isn’t going to fill with 10 loans by “hanging in there.” They will get there because you put them there through working your activity plan. Your activity plan should consist of actions that put you in front of a qualified prospect who can say yes or no to the question, “Do you want to do business with me?”

There are mortgage brokers who do things like reaching out to a specific number of people on LinkedIn each week. It can be about identifying homes in their communities that were sold in November 2022 (when interest rates were at their highest), then reaching out to borrowers to let them know that a refinance might soon be in order — which they probably are already thinking — and that you have a solution. It’s also doing things such as sending out a newsletter to past clients to ask for a referral.

For example, if you wrote down you were going to send 100 LinkedIn invites, tape 10 letters to front doors of folks who bought in November 2022, and send your newsletter out that week, you can answer the question with a simple yes or no. Did you do it?

Then each week, you can be your own sales manager and start looking at things like, “How many LinkedIn connections does it take to get a conversation started?” “How many letters do you have to tape up on different doors to get a response?” Then you can do cool stuff, such as setting expectations for how many loans your pipeline will get based on your specific number of projected activities.

Plant your flag

A unique selling proposition (USP) is what separates you from other originators in the marketplace. There is a reason that Whole Foods, Costco and Kroger all have full parking lots at their grocery stores on the same weekend — even if they are all within a few miles of each other. They each have a unique selling proposition. Some of this is cost related while some is selection related.

Develop your USP in one sentence. The wise know that it shouldn’t have the word “service” in it. You’ll agree that no loan ever entered your funnel because the prospect was sold on the fact that you provided good service. The client returned for another loan because you offered good service — but they entered your funnel because of a different reason. Your challenge is to figure out that reason, then make it a headline on your LinkedIn profile.

As an example, a fantastic unique selling proposition can be heard from a lender in Orange County, California. He said, “I don’t want your regular loans. I want your hairy loans. Give me the ones that your go-to nonqualified mortgage lenders won’t touch.” He simply planted his flag. He knows the space in which he wants to operate. That lender does really well.

Lastly, it might help for you to have an accountability buddy. This is another mortgage broker or colleague, someone who is in your shoes who can ask you, “Did you do it?” This isn’t a mentor or someone with whom to commiserate. This is someone who will help you stay proactive, not someone who will tell you to “hang in there.” Now go grow your business. ●


  • Eric Simantel

    Eric Simantel is a branch manager and mortgage originator for the Ryder Mortgage Group (dba C2 Financial) in Portland, Oregon. Simantel spent more than 17 years in the sponsorship and advertising world prior to getting his mortgage license in 2020. He received his MBA from the University of Oregon in 2002. He also earned a bachelor’s degree in marketing from San Diego State University in 2000.

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