Remember the mortgage industry back in the good old days?
Back before the great recession, before all these new rules, regulations, and all the bureaucratic red tape? Don’t get me wrong, my strength is that I wasn’t around to remember all of this, but studying history is important so let’s talk about it.
Sales Managers, especially the ones in the mortgage industry that haven’t produced since pre-recession days, typically don’t understand the challenges today’s LOs face because they never had to contend with all these obstacles, hurdles, and legal minefields themselves, back when they were LOs.
Most just preach hard nose prospecting, schmoozing, and a few are still just fine preaching the kickback pay-to-play game.
It’s not that simple anymore.
You can’t just go out there and network for business or just sell your products the way you could before because, frankly, everyone else is selling the same thing.
I mean, it’s not like there is any good reason a real estate agent who has ties with a lender, already has an established relationship with a loan officer…
What’s one good reason they should stop doing business with their current lender and start a new relationship with you?
They couldn’t care less about who their client gets a loan from because now the offers are all the same.
As a loan officer, what can you do?
How do you differentiate yourself?
How do you go out there, get those lucrative power partner relationships started if there is pretty much no differentiation in what you’re offering other than maybe yourself, your experience, and your team?
Back in the good ole’ days before they put Qualified Mortgage guidelines in place (QM’s) there were a ton of ways for you to set yourself apart and get agents to refer you business.
Before, you could offer to take the crappy deals that other lenders wouldn’t touch as a way to gain favor and, HOPEFULLY, some good deals with agents.
Before, you could set up professional business dates and use the old wine and dine courting techniques familiar to those in the dating game.
“Buy you a drink?” was code for “send me some deals.”
Or, if you saw the value, you could just give agents a little money kickback for sending you a deal.
(Yes, I know it was illegal but let’s be honest, who was enforcing RESPA before the CFPB came in?)
You can’t do that one, anymore.
At least, not if you’ve got ethics and you fear losing your job.
It’s illegal.
Before the great recession, the mortgage industry was like the wild west California gold rush.
That’s not the case, anymore.
Today, you’ve got to contend with Qualified Mortgage guidelines which were put in place after the recession to set lender standards.
The government wanted more accountability from lenders, and pretty much did away with all the fancy trick creative loans that used to be available in a variety of crazy flavors.
The QM guidelines aimed to regulate things like establishing the customer’s ability to repay, financing structure and other regulatory measures so now there are no more things like negative amortization loans and they no longer allow things like no stated asset loans.
Before QM the loans themselves were the unique value proposition. You could pretty much just walk in and if you could explain how your loan offer was more advantageous AND could increase the bottom line to the agent, boom, they gave you the referral business.
Back then it was significantly easier to get your foot in the door because asking for a minute of their time could translate to dollars in the RE’s pocket.
The products and programs could all stand apart and really could be unique.
That’s just not the case, anymore.
NOW with QM, TRID, and other regulatory rules – you have to be careful to be transparent, make sure all your i’s are dotted, your t’s crossed, and make sure you spell out and have in place all pertinent disclosures
These rules, regulations, timelines, disclosures…all of it a bunch of deal prolonging red tape.
Your pre-recession sales managers just don’t get it.
These are monkeys that were never on their backs.
Before, even the length of time it took for you to close a deal could be used as a strong enough selling point.
You could snag deals if you could promise they’d close within 5 or 6 days.
Not any more!
Today, you’re lucky if the deals close within 15, but more likely 25-30 days, and that’s because they have to by law.
Like I said, no more stated asset loans, no more creative ways to finance, no rate differentiation, and since rates are so low, and you have restrictions on markups, there’s no more meat on the bones, so there aren’t any lucrative profit margins to work with.
In essence, you have buyers all shopping from different vendors for, essentially, the exact same type of mortgages.
Differentiation is gone.
Since you can’t pay-to-play or risk the CFPB cracking down on you, you can’t grease the palms of those agents in exchange for referral business, the only differentiator you’ve got now is….you!
So, what do you do with that?
See, there are like 10% LO’s out there that think they’re slick, they’re creative loop-holers, and some of those folks don’t have ethics, so they don’t care. They’re down to pay-to-play because they just don’t care.
What about you and the other 90% good guys?
If you’re an ethical LO, you have integrity, you play by the post-recession rules, you’re willing to work through all the red tape, and you want to win fairly, how do you do it?
How can you coax real estate agents to decide to start referring more prospects to you?
Slip em money under the table?
Yeahhhh….no.
Actually, though, I think I’ve got something better.
While I’m sure there are a ton of real estate agents that’ll gladly accept kickbacks because the CFPB doesn’t crack down on them, from your vantage, I wouldn’t do it.
It’s not worth it, plus you don’t have to with what I’m about to share with you.
If you can draw the clearest line possible between your value proposition and add to the agent’s bottom line they’ll send you more referrals.
So, how do you do it?
You do it by generating and controlling your own leads and, instead, you become the lead supplier to agents!
What?!
I know that sounds oxymoronic, but stay with me.
If you generate pre-approved buyers and just deliver these folks to real estate agents, you’ve created 10x goodwill, and you ignite a reciprocity campaign that’s irresistible.
And, again, you can either get the leads and farm them out or just skip the real estate agents altogether if you like.
Just imagine generating pre-approved buyers, offering them up to whatever real estate agent you like, you think that might get you into the most inner inside of some of these coveted circles.
You’re giving these folks guaranteed commission checks.
That’s how we tie this all together.
The reason you’re not getting referrals is simple, you’re not adding to the real estate agent’s bottom line clearly enough.
The more convoluted, the more steps there are, the less likely you are to get referrals.
Help them.
Add value to them.
Generate your own leads, get them pre-approved, and the rest of the referral world is your oyster.
With that, thanks for reading and I’ll see you at the top.
Michael
P.S. Want me to help you set up your own simple predictable profitable lead generation system?
Just click this link, book your live demo, and let’s set one up for you, today.