Category: Lending (page 56 of 56)

by Morgan Brown

Mortgage Banker

Author website

In one of my last posts I wrote about converting internet leads or as I called it, successfully navigating “Distrust Mountain“. I received a ton of response to that post via email and the number one question was “What is the answer, what are the tactics?” to this statement in my original post:

The ability to climb that first, nearly insurmountable, face of defense on Distrust Mountain is what separates the good loan officer from the average one who is struggling to earn a paycheck. I call it scaling the face. Scaling the face requires all sorts of special talents including building rapport, telling a compelling story, having a unique selling proposition, displaying excellence and professionalism, building on small commitments, and numerous others. The tactics for doing so is a topic for another post, but needless to say, that wall is there and needs to be scaled.

I’m sorry to disappoint, but I have no magic bullet. I am sure that you all suspected that to be the case; for there truly is no such thing – if there was we would have all seen the infomercial. There are no gimmies in the sales world (thank you for listening, choir). With that disclaimer out of the way I’ll do my best to outline the best practices THAT I HAVE FOUND help successfully close internet leads. Unfortunately it’s a long process and I’ll need to break it in to a handful of posts over the next week to keep your eyes from falling out of your head; but I will get through it — bear with me.

I think our approach works pretty well; I also know that there is room for continual improvement. I don’t purport this to be the best or only way to convert internet leads; but it is our way. Our un-audited results indicate that we receive a return of about 5 to 1 on our investment in internet leads; and we’re pretty happy with that. If you want greater ROI, you’ll need to do a better job than Read more

by Morgan Brown

Mortgage Banker

Author website

Heard this one before? I tell you what, if I had a nickel… skip it, you know what I’m saying. During the last few years home owners, especially in areas with exceptionally low levels of housing affordability, have flocked in droves to the “dreaded” pay option mortgage. Now with recasts looming, interest rates rising, and equity dripping away, more and more home owners are calling me asking how they can still afford their home AND stop losing equity.

A quick thought on the “dreaded” pay-option mortgage. Negative amortization gets a bad rap these days. The mainstream media loves these loans because they are the ideal poster-child of a mortgage market debacle. Think about these loans for a minute: they eat home equity, have high interest rates (usually), are confusing, and make the people who sell them A BOAT LOAD of money. That sounds like music to a reporter’s ears. And so they get a bad rap.

While I generally dislike pay option loans, it’s not the loans themselves; it’s how they are (mis)used. To be sure, neg-am pay-option loans have a place in the lending spectrum; but I believe that place to be with the short-term, savvy investor, playing the flipping game in a rising market, not with the family of four trying to buy a bigger house in San Francisco while working with restrictive cash flows. The problem is that the people calling me are not the savvy investors; it’s the family of four that took a neg-am loan, got addicted to the minimum payment option, and now is in a world of hurt.

These people chose the pay option for either the low payments, the low fees (with a commission north of 3 points on the back of these loans, anyone charging front points with a full margin is sadistic), or they liked the idea of choosing their payment option each month. Most people in the payment-option loans made two critical mistakes: 1. they took the loan for a property they planned on staying in for a long time and 2. they lacked the will power to make anything more Read more