In my last post, I addressed where the borrowers had gone. In this one, I want to talk about how to get them back.
As I mentioned, borrowers are having trouble qualifying, much as they would have trouble running a 10k. Some can do it, but those people are almost all those that have been training, saving their money, hoarding their equity, shepherding their credit. Everyone else? Well, it’s time for those magical fitness tools, diet and exercise.
There are two difficulties with this. One, many people don’t know what they need to do, and two, almost everyone needs someone to help them, or they won’t do it correctly, no matter how badly they want to. This dramatically restricts the pool of borrowers and makes it hard for Realtors and loan originators to make a living. It sounds terrible. But it isn’t. Really, it isn’t. There’s a fabulous hidden opportunity here.
The good news here is that this means the market is as big as you want it to be. EVERYONE, or, okay, not absolutely everyone, but functionally everyone, will buy a home at some point. Right now, true, most of them cannot qualify for a loan to do so. The solution is simple. Stop being a track timer, and start being a fitness coach.
By this, I mean that it’s time to stop just taking an application and pulling a credit, and deciding that there’s no deal. Of COURSE there’s no deal. That shouldn’t be surprising. But if you want to make it in a market like this, you’re going to have to do more than issue a denial.
What we do is create a plan. We train our clients and show them how to get to the point where they do qualify. More than two-thirds of our clients are people we’ve been working with for more than 90 days. Almost half of them are people that we’ve been working with for six months and more. In May, one of our clients opened her file 228 days ago. But the week before her, we closed a loan for a fellow who opened his file 447 days before the close.
We discovered, looking at our closings, that we had done just as much business in 2009 as we did in 2006, despite the complete market meltdown we saw over that four-year period. But that happened because in a good market, like the one in 2006, we had no competitive advantage. Our specialty is rehab, doing the hard work to move a client from unable to qualify into position to get the loan they want. In a market where everyone can already qualify, in the hundred-yard-dash market, we have no advantages. But in the 10k market? We shine. Rehab and training in this market is not a frivolity. It’s a necessity.
Anyone can do this. We happen to be really good at it, and we like it (which is why we’re good at it), but anyone can do it. I spoke to a loan officer of my acquaintance a few days ago, and he was getting out of the business. I asked him why. Was his phone not ringing anymore? No, he said, it was still ringing, but none of the inquiries was turning into a loan. “Yet,” I said. “What?” he said. “Not a loan yet. As in, you work with them and eventually they’ll qualify.” At first he had no idea what I was talking about. Then he thought that was way too much work. So now he’s selling cars or something, instead of doing what he really likes and is good at, because he couldn’t change his thinking.
The borrowers are out there. There are just as many as there ever were. And we can have a greater impact on their lives than we could ever have had when all they had to do was roll out of bed and get a loan. All it takes is a little bit of hard work and some patience, and this market can have more opportunities in it than any other.
Tags: lehi lender, Lehi mortgage, training, utah mortgage, Work
Posted on Monday, 14th June 2010 by chrisjones
Posted in Blog & News | Comments (0)