This piece originally appeared in the January 2023 edition of MReport magazine, online now [1].
I remember 2007 to 2008 very well. The entire mortgage industry was hanging on by a thread. Layoffs and financial institutions were closing left and right. The news would have you believe that the housing bubble was going to crush us all. Many mortgage professionals had to make a tough decision.
Staying in the mortgage industry meant being patient, trying new strategies, and building new relationships. Some left the mortgage space but others joined.
Mortgage companies closed and others launched. With every bit of turmoil came a new opportunity.
Today, we find ourselves in a similar position. For me, the news stories spelling doom even spurred a bit of nostalgia. I’m reminded of a song I used to listen to on the radio in high school, “Better Days” by Citizen King:
‘cause I’ve seen better days
Been the star of many plays
I’ve seen better days
And the bottom drops out
In many respects, we are much better off today than we were in 2007. The housing market is much stronger than it was before the Great Recession. Certainly, the unprecedented events of COVID-19 have taken us on a roller coaster ride. However, some of the pain we’re experiencing is self-inflicted and can be corrected.
There is still time to pivot, salvage what’s left, and develop a path forward to experience success.
Another difference is that we now have the assistance of new technology to help us navigate these challenges in ways that would feel impossible 15 years ago. In fact, technology is often the pivot that separates successful originators from the rest of the pack.
The bottom line is that it will take time to overcome the challenges of this new mortgage market. Loan officers must create new disciplines, but they will surely get through this. Here are three things they can do to get started:
Remember: Demand Still Exists
While applications and volume are down overall, it is essential to keep in mind that demand for mortgages and housing is still relatively strong. Home prices in some markets are even falling, which is creating more inventory and opening up opportunities for certain buyers to find the home they truly want.
In addition, every time interest rates drop by 1/8th of a percent, applications still rise, even in today’s market. This tells us that the American Dream of homeownership is alive and well.
As long as people are still buying homes, mortgage loan officers must be equipped to find the opportunities when they arise and positioned to capture them. If one mortgage loan officer fails to do so, another will most definitely capitalize on their mistake.
Leverage Your Past Clients and Contacts
Loan officers typically use their LOS, CRM, or contact list to track their prospects and past borrowers. At some point, each of these folks has indicated they are interested in a mortgage, which is why an MLO has them as a contact. Yet all too often, they are completely ignored. In fact, according to a recent survey, 53% of mortgage loan officers do not use technology to manage their contacts or databases to optimize sales opportunities.
Utilizing technology to identify when someone in your database has improved their credit and may be interested in debt consolidation, reducing their loan term, or other products will instantly improve your pipeline. Not only that, but it will provide higher converting opportunities without increasing network marketing as well.
Solidify Your Referral Network
Once you embrace the fact there is still demand for financing and have identified opportunities within your database, the last step is to strengthen your referral partner relationships.
Many of your contacts likely came through a referral from a real estate agent. The ability to reconnect borrowers who have been reactivated back to your referral partners will solidify these referral relationships, which can lead to additional referrals. In addition, your contacts who did not come as a referral from an agent may not even have a real estate agent. This may be the opportunity to connect them with one of your referral partners, which can also benefit you in the long run.
Remember, current market conditions are hurting agents just as much as loan officers, if not more so. They may not have access to the type of technology that allows loan officers to monitor their contacts for new business opportunities. That means loan officers can be the resource or starting point for a home transaction if they take the right actions.
Just like the Citizen King song, there are always better days. Personally, I think our industry’s better days are right around the corner. However, mortgage loan officers cannot sit idly and simply hope their phone starts ringing.
Every loan officer has loans buried in their contacts and databases. All they must do is embrace the nostalgia and leverage the technology that allows them to identify the demand, and better days will be back before they know it.