Plan For Success
I have been associated with the mortgage banking industry for over 38 years. I retired in 2010 but still have periphery associations with the business through homes.com, a national real estate web portal for whom I work. Mortgage banking is phenomenal business even fraught with the problems that have been thrust upon it.
I have always been “old school” with regards to the production. You know the drill, call on realtors, builders, title companies, attorneys, insurance agents, and garner referrals from friends, family and the usual gamut of potential partners to build your business. I have NEVER been a big believer in getting leads to build a mortgage banking business. However, let’s think about this and examine the proposition.
Referral partners as mentioned above are lead source.. pure and simple. The difference is they expect in return.and rightly so. That’s why we call them referral partners. This process works. It has for years and will continue but there are other methods of supplementing or building your origination function. That brings me to mortgage leads.
Mortgage leads come in all shapes and sizes. There are aged leads. There are highly used leads, filtered leads, highly filtered leads, organic leads, real time leads, purchase money leads, refinance leads and the list goes on and on. Each has a different cost associated with it. Generally speaking the more highly filtered the lead the more it will cost and the higher potential for closing that can occur. The opposite is also true. The more organic or used the lead, the less cost associated with it and the lower possibility of closing. However, a lead correctly marketed to has a great chance of turning into a closed loan. Often it is a function of persistent and consistent high content marketing over a long period. The great thing about building mortgage origination function using lead sources is you can control those costs with the caliber of leads being bought. To get your organization off the ground quicker might require highly filtered leads with a combination of organic leads added to smooth out the production cycle and lower cost over the long haul.
Refinance leads will close quicker and at a higher rate than will purchase money leads. Some of both should be a part of the business plan but the greater emphasis should be on purchase money leads with the focus of the correct loan for the client, great customer service, and follow up and relationship building as the primary focus over the long term. These transaction characteristics will result in referrals and repeat business for which we all strive. It doesn’t make any difference whether that purchase money lead comes from a referral partner or a lead generated off the internet from a real estate web portal. Purchase money leads have always been the framework for a long lasting and profitable origination function and will remain so.
Customer Relationship Manager
Mortgage leads are only the first step in the building process. The title of the article indicates the building process requires a comprehensive plan and step two utilizes a quality customer relationship manager. (CRM) This enables the sales force to contact the lead quickly and continuously nurturing them to a final decision and possible closed loan. Most originators give up after a couple of customer contact efforts. Statistics have shown that in many cases the potential customer should be contacted at least 6 or 7 times in order to consummate potential loan transaction. There are many CRM’s on the market. They all do the approximately the same thing. As in all things shop wisely and compare features and capabilities with prices. Stay within your overall feature needs and budget. Better yet ask your lead provider is they will provide a CRM system with the leads purchased as homes.com provides. Make sure that your sales force is trained in the CRM use and uses it consistently. Often they don’t! Consistent customer contact coupled with customer follow up and quality information from the salesmen is the absolute key to the building process.
Brand Your Organization
Then last item in the comprehensive plan is branding your organization. Name recognition is not only important, it is imperative. Staying in front of the buying public should be a high priority. Ask Cocoa Cola or Apple or Verizon or any other well know brand why they spend millions of dollars on advertising. Coke is one of the best known brands in the world but they stay in front of the buying public because eventually name recognition is directly tied to sales.
In a mortgage operation third party affirmation of the company is also critical. Radio, TV, signage, or internet appearance contributes to continuous third party affirmation of the organization that will handle the largest financial transaction in most individual’s life. Make your company a household name. Be extremely familiar to your customer. Make your company a verb like Google. Your client should know who you are and that you have the capability to deliver on your promise implied or direct to help them finance their ” American Dream.” This doesn’t happen by hiding under a bushel. You have to be known. Without the consistent name recognition you become “Mortgages by Joe”. In the highly competitive marketplace it is not always the organization with the best rate, price or overall deal, it is the organization with the best name recognition. A recognizable name generates a comfort level within the borrower that his loan will be handled properly.
I guess you could tell by the tenor of the article that I might have changed my mind with regard to production. Lead generation does work in building a mortgage banking business but the process must be planned carefully and worked consistently to yield the high volume results that most companies desire.
John D. Laudenslager
Regional Account Manager