Mortgage professionals must decide between two opposite paths in 2019: thrive or just survive. You need to ask yourself: Am I pushing myself and my team to place all the chips on the table and play, or am I going to be cautious and pass and see what shakes out in the industry?
Now is the time to throw all caution to the wind and get after it with a big push in the first quarter of this year. As 2019 evolves, you should evaluate your progress toward a strong year in bite-sized segments.
Take command in January with maximum effort by calling as many real estate agents as you can, along with reaching out to other contacts in your portfolio and pursuing leads from your consumer-direct team — focusing on debt restructuring and, where possible, pre-approvals for people who will be shopping for a home in the spring.
All mortgage originators need to solidify or secure a working base of 10 quality real estate partnerships heading into the second quarter of this year. Waiting for interest rates to drop or level off will not get you one Realtor relationship and, more importantly in 2019, there will be more originators competing for fewer loans, so the focus on real estate agents will be intense.
There are no shortcuts or magic formulas to success. It is disciplined strategy and maximum sales effort that will help you to stand above the pack during the challenging year ahead. The first quarter is your snapshot to see where the cards will land.
When we look at the reality of the recent 2018 interest rate increases, who truly feels they cannot sell a 30-year mortgage with a 5 to 6 percent interest rate to either a real estate agent or a borrower? The real estate agent needs you to exude confidence and, more importantly, walk the borrower through the true cost of a 0.5 to 1 percentage-point rate increase on their mortgage.
Depending on the loan amount, the difference may be minor compared to the opportunity to build equity and take full use of tax advantages. In general, the mortgage originator needs to paint a picture for the borrower of what it means to own a home versus renting and sitting on the sidelines.
There will be more bargain hunting because of rates rising. As a result, the originator and real estate agent need to work in tandem efficiently to encourage to borrowers at the beginning of the year.
Create a sense of urgency in the act of selling. That is more relevant in 2019 than it was just two or three years ago.
Set yourself apart
The No. 1 focus for your team has to be to put in the effort, make the extra calls and get in front of people early in the first quarter of 2019. Your team has to have the confidence in what they do as professionals.
Realtors will know who is in the game and who is choosing to be cautious. They want an originator who is aggressive and believes it is a good time to be in the business. There will be a separation in 2019 between the true professional and the originator who is only there when the rates are low.
In sales, what makes you different than the other originators? If there’s no difference, you will struggle this year. You have to change your game to have the success you desire.
The consumer-direct or digital-lending channels face other issues with borrowers. In 2019, it is essential that you gear your entire sales approach to being about payment and affordability.
Debt consolidation and purchase power should become the focus of the majority of your conversations. By reviewing all current payments going out for a borrower, you can pursue opportunities to capture cash-out refinance opportunities.
On the purchase side, it is all about affordability and creating that sense of urgency. Be cognizant of seller concerns that rising rates will scare off buyers. The time to buy is now for the person looking to get into a home or to lock in a rate, because sellers are more anxious than they have been in years.
Assess and support
The role that management plays is of paramount importance. Everybody knows that coach who shares too much, putting out every detail, even things they probably should keep to themselves. Originators need a leader, not the bearer of a daily dose of bad news.
The phrase, “lead by example,” will be valuable as managers need to get out in the field and do joint calls more than ever before — to assess the market and support their sales team. On the consumer-direct side, monitoring and coaching calls as part of a weekly-review process are key to improving capture rates. Be a mentor, not just a boss.
The role of any good manager is to make their people more productive and drive profitability through the people who report to you. Get out of your office and in the field or on the floor, and you will make a difference with your team this year.
The unknown is creating anxiety and the perception that it will be a tough year ahead for the mortgage industry. In reality, it is a great year of opportunity.
Mortgage rates are still affordable, with minor increases in payment amounts. Borrowers need to consolidate their credit card and auto debt. The industry can choose to view rising rates as, ‘We can’t compete.” A better view, however, is to see that now is the time to sell, when there is chaos and uncertainty. Be aggressive and grab market share.