Goodbye and good riddance to 2014—we’ve seen worse years but we have definitely seen better.
2014 started off dead slow with horrible weather locking much of the nation into their bedrooms under their blankets. The economy and therefore the real estate markets were frozen for all except those in the stock market. Inventory became the name of the game, and the lack of homes on the market and little new construction in the pipeline caused a panic among those who had been waiting to buy.
The press was agreeing with us for once that it was THE time to buy for values and affordability, but those few with good jobs and confidence panicked when they saw nothing in the town they wanted in their price range. Multiple bids began to pop off like firecrackers at Chinese New Year throughout the spring ending in crescendos of 20, 30, and 50 offers on not so great homes.
All logic was lost and emotional basket cases showed up on our doorsteps as the last step in the process, standing in the way of their dreams. We, of course, shook our heads like experienced parents warning them that banking is logical and mathematical, but we would do best we can; as we are supposed to be the voice of reason, especially now in the post- Dodd years.
We become the best damn M.A.S.H. units in the banking industry dealing with unappraisable sales prices, and no contingency offers pushed up against restrictive compliance dates that keep you from serving the customer the way they want (and sometimes from doing what’s right). It was certainly more stressful than high volume markets 4x the size because it was all purchase with insane expectations and intolerant governmental restrictions. Just getting refinance spikes like we had in October are a pleasurable event because you can mold and direct that pipeline with good customer relationships as opposed to the emotional irrationalities of last spring’s market.
I think we will have more rational behavior going forward as the market won’t chase these values to extremes. We also blew off a lot of the pent up demand and are closer to equilibrium of buyers and sellers out there; although the hottest markets in the sexy urban neighborhoods or best school districts in the burbs will still pop off, but those buyers have the cash to make it work.
The refinance will still be 20-35% of our market with 20% in the low balance and 35% in the high balance. It is amazing to me how many originators haven’t found a way to mine their database with out becoming addicted. I often come across brokers who made their income the last twenty years solely on their “book”. Sadly they did not take those deals with their eyes on creating relationships outside of getting one refi and maybe asked for their brother’s loan too. They didn’t hit the multiples in the form of Realtors (who sold you your house? Any friends who are Realtors you can introduce me to?), Financial Planners, (I see you have money with Ameriprise? Are you happy with their service if so can you email them and cc me that I’ll be asking them for updated documentation and put in a good word for me thx), Accountant/Preparer (you said you just sent your w2s to your accountant can you cc me in an email to him so I can get the documents I need from him directly and introduce us. BTW would you like to include him in the proposal I’ll be sending you in Mortgage Coach showing the tax benefits of the 30 vs. the 15 yr?)
I still see guys who say they are really in touch with their database think that sending out a generic card when rates drop think that covers it. If it isn’t personal it’s random. At Mortgage Network, Inc. we program in unique and personal automated touches throughout the year that are memorable but most important we tee up the Annual Review with a reminder note and then a prompting note to the originator to make the call with all the data fresh at hand to make the call productive. If you are not calling everyone you need to (which isn’t necessarily everyone in your database-you must categorize and not just by rate) then you have underserved them and lost the opportunity to cross sell like I mentioned above.
Data base segmentation done right is what separates those who can produce at high levels in a never ending bull chart vs. those who 2-4/mo forever. Data segmentation done wrong is the refi gold rush mentality that is crash and burn and wallow in denial praying for the “one-more-refi boom and promise to not spend it all” and I blame Dodd Frank for my lack of production.
You have one primary job in mortgage banking sales and it is to prospect to those who can refer business potentially every day; Realtor, Builder, CFP, CPA, Attorney, Affinity, etc. In the new world social media and web leads fill some of that void as well but only to bridge the gap to getting the holy grail of a truly referred lead by a trusted expert. Anything else is low, some very low, conversion percentage and robbers of your most precious commodity-your time.
Your database is the potentially rising tide that flows throw your business filling in the holes in your day, but always programmed to have its time because you can ignore the tide for only so long. When efficiently controlled and directed that tide of data can be very powerful in all markets, but especially of course, when rates drop. When you have set target actions with your customer and you keep a consistent line of communication open, you have a customer for life, if you just do what you said you would do.
For 2015 get your system right. Make sure your primary focus of quality referred business is a top priority. Have a solid system for database management of past customers and people of influence who are being groomed and managed in the way that they wish, so you can be their trusted resource to open up their relationships too and help you expand exponentially through them.
I have a good feeling that 2015 will be the foundation for healthy run for those who do it right.