|
IN THIS ISSUE:
- A Message From Jason Kane
- Direct Mail Marketing
- Reverse Mortgage Market
- Will Subprime Have Affect on Home Sales?
Dear Friends,
Is your
mortgage company looking to break into the New England market, or
expand its originations to additional states?
Due to the recent changes in the subprime market, many
mortgage companies
are expanding their reach by tapping into new markets.
Having worked with numerous national and regional mortgage
companies, we have the ability to ease the transition that many
companies face when originating in new states.
I would welcome the opportunity to learn more about your business,
and discuss how Kane Title Services can help you navigate new
markets. Please feel
free to call me at (508) 809-6580.
Sincerely,
Jason Kane
Back to top
Direct
mail marketing should play an important role in your current
marketing plan. Here are some basic rules that you should always
keep in mind when marketing to your current clients, prospects and
professional referral sources.
-
Be
Consistent. Studies show that on average it takes six
to seven times for your message to make an impact on a client.
Regular monthly or quarterly mailings to clients and prospects
can increase repeat or referral business . You never know when
someone is ready for your services, so keeping your contact
information consistently visible is key.
-
Send
Useful Information. Send postcards, brochures or
magnets that provide practical and valuable information. For
example, send Home Tips magnets about baking substitutions or
helpful ways to remove stains, or Landscape Tip Postcards for
each respective season. Sending valuable information increases
the likelihood that they will keep it around, in turn keeping
your contact information around as well.
-
Offer
An Incentive. Most people love discounts or free
offers. Extend a free consultation or financial evaluation at
no obligation. Offer a free Educational Brochure about a
popular topic relating to your client. Offering a simple
incentive will often increase your response rate.
-
Make
It Memorable. Stand out from the crowd with what you
choose to mail. Send a colorful eye-catching postcard that
will grab their attention and make them want to read it. You
can send an Inspirational Postcard with an uplifting quote, or
a Humorous Postcard with a silly image and funny catch phrase.
Getting them to read it is half the battle.
-
Don’t
Forget To Prospect. While it is important to retain
your current clients, it is also vital to prospect new clients
and potential professional partners. Start prospecting niche
markets for new clients. For example; first time homebuyers
such as newlyweds or renters, the reverse mortgage community
or credit challenged audience.
Keep in
mind that professional partnerships have the potential to increase
business for both sides. Don’t forget to prospect financial
planners, CPA’s and insurance agents.
While
the above tips may seem very basic, it is often important to get back
to the basics. There are many advertising choices out there but no
matter what avenue you choose, direct mail still has an impact in
this day and age… tap into your market and watch your business
grow!
Source:
G.Buehler, In Touch Today
Back to top
If
your career as a mortgage loan officer has focused primarily on
originating conventional or "sub prime" mortgages, and
you are now transitioning to reverse mortgages, there are several
things to consider as you meet with prospective clients.
Your
marketing and social skills need to reflect the critical
differences that exist between the users of reverse mortgages and
conventional mortgages. NRMLA hosted a special Learn While-U-Lunch
program to provide information to members. Speakers included Mary
Ressetar, Wells Fargo Home Mortgage, Chicago; Bill Agner, The
Mortgage Network, Indianapolis, Ind.; and John Lucas, GMAC
Mortgage, Encino, Cal.
Here
are some important issues discussed:
Take "Selling" Out of Your Vocabulary. Do not
aggressively sell the reverse mortgage as you would a refinance or
home equity loan. Listen to the client. Explain how the reverse
mortgage can help them with whatever needs they may have, whether
it is paying off an existing mortgage, or paying for in-home care
so your client can stay in the home longer. By doing that, you are
providing a solution to specific issues facing the client.
Create Sense of Stability. Seniors can be very reticent,
cautious, and sometimes frightened by what they do not understand.
To help a client feel more at ease, Lucas explains how the reverse
mortgage is a government-insured program, tightly controlled by
FHA and HUD. This creates a sense of stability and security.
Be Patient. If you are entering the reverse mortgage
business and looking for a quick sell, this is NOT the market for
you. You may be educating a clients today about a product that
they may not take advantage of for six months or a year, said
Agner. In some cases, seniors may call or schedule an appointment
but their attitude is "I'm not ready for it yet, I don't need
it, I may want it in the future, and don't pressure me to sign on
the dotted line today." If you pressure clients, you'll lose
them forever. That particular scenario may frustrate a loan
officer accustomed to earning a weekly commission check, but
pressuring a client is not tolerated.
Find Out How Much Client Already Knows. Thanks to NRMLA,
Fannie Mae and AARP, a lot more information is available on
reverse mortgages. As a result, more seniors are conducting
research prior to counseling or contacting a lender. A client may
be coming to you because they have additional questions that need
to be explained in plain English. "If you can help them
understand how the program works, and what the benefits can be,
that's what makes the world go around for us," Ressetar said.
Send Follow-up Package. After the initial
consultation, it is important to send a follow-up package of
materials outlining the items discussed on the phone. "I
always reassure the client that I'm going to send them information
on everything we've discussed," said Ressetar. “That way,
they don't have to feverishly take notes and worry about getting
everything down on paper.”
Debunking Misconceptions. There are still a lot of seniors
who think the reverse mortgage is a loan where "the bank
takes your house and you get a little bit of money." It's a
good idea to say to them that some of the things they may have
heard which are negative and bad about reverse mortgages are not
true. "Reassure them that this is a program that's carefully
controlled by FHA and HUD and lenders aren't allowed to
willy-nilly do whatever they want," commented Lucas. You have
to keep repeating that, and you have to do it patiently and
slowly.
Lack of Understanding About Finance. You will encounter
seniors who never wrote a check or paid a bill in their life
because the spouse handled those transactions. Suddenly they are
thrust into the world of finance. Try to gauge how much your
client already knows and be patient with them as you explain how
the reverse mortgage works. Treat your client as you would a
parent or grandparent.
Making House Calls. You may already be accustomed to
working on the weekends and evenings. The same is true for the
reverse mortgage business. You will encounter clients who are
homebound. You'll need to drive to their home upon request,
especially on the weekends or evenings, because they often want
their children or a financial advisor present.
Don't Be Afraid of Adult Children. "Adult children can
be your greatest ally," said Lucas, especially when senior
clients are still not comfortable putting a mortgage on their
home. If there is an objection it is usually because children do
not understand the program, or they think it is a scam. "Once
they know how it works, they normally tell the parent this is
something you should do," noted Lucas.
Cultivating Lead Generation Sources. Any person who touches
a senior is a potential lead generation source, including
elder-law attorneys, estate planners, home-care providers,
long-term care insurance specialists, CPAs, senior centers, church
groups, and other non-profit community-based organizations.
"Every person you talk to, whether it's a group of Realtors,
CPAs or financial planners, yes, they all have clients, but they
also have parents, grandparents, aunts and uncles, people they
know who may have a financial problem," said Lucas. You may
want to distribute an announcement to your existing network of
contacts from the mortgage business, letting them know, "this
is what I'm doing now," added Ressetar. "Reverse
mortgages aren't quite the buzz word yet, but they have received a
lot of attention. Somebody may respond saying I've heard of these,
tell me more."
Explaining the Costs. The costs to obtain a reverse
mortgage may alarm some of your clients, which is why you need to
discuss the issue up front. "I tell them this is an expensive
program and one of the reasons why it's expensive is because
there's an upfront mortgage insurance premium remitted to the
government," said Lucas. "I tell them that the insurance
is very important to you…this is the security and stability of
the program. If the provider of the money ever fails to provide,
FHA and HUD will step in and provide whatever the contract calls
for.” That means you don't have to worry if you are signing up
with XYZ Mortgage Company, which may not be around five to 10
years from now. The FHA insurance guarantees borrowers that they
will never owe more than the value of their home. Ressetar said
the FHA mortgage insurance "guarantees your client will not
be leaving a debt for their heirs to contend with." Agner
stressed that reverse mortgages are long-term financial vehicles.
"If borrowers only need money for six months or a year, then
you may want to advise them to get a home equity line of
credit," he said. "You want to show them early on how
the cost as a percentage of the loan does go down over time, which
is why I say it's a long-term loan."
Here's
a link to the National Reverse Mortgage Lenders Association, the
website is a great source of information: http://www.nrmlaonline.org/default.aspx
Source: National Reverse Mortgage
Lenders Association
Back to top
The
sub-prime crisis has turned into quite a nightmare for some
homeowners and the lenders who originated those loans. Now, the
$64 million question is: if and how will it affect the housing
market.
"Delinquencies
and foreclosures are going up because rate re-sets are kicking in
on exotic arm loans -- the interest-only and negative amortization
arms -- the very aggressive type of mortgages," says
economist Zoltan Pozsar, of Moody's Economy.com
The
problem, Pozsar says is that borrowers were not properly qualified
for these mortgages. "The
way lenders have qualified these borrowers is by saying,
"let's look at the teaser rates—it's two percent for the
first two-years of the loan'—and sure [borrowers] could qualify
on that. Lenders were basically not looking at whether the same
borrowers could qualify when the rates re-adjust to six or seven
percent," says Pozsar.
Pozsar
says that even a two to five percent rate increase can translate
into a few hundred dollars increase in a monthly mortgage
payment—something he says many of these borrowers did not
completely understand nor are they prepared for.
"Especially
for these low-income households, who were mainly targeted for
these loans, a few hundred bucks is a lot," says Pozsar.
As
homes are foreclosed on, the original mortgage loans on those
homes are not being paid to the investors who bought them as
investments. So the investors are looking for the money from the
original lender.
"The
reason these lenders are going bankrupt is that investors [to
whom] they have sold these mortgages are now forcing them to buy
these "junk" loans back, so to speak, and [the lenders]
don't have the cash to do so," explains Pozsar.
As this
happens, a domino effect is set in motion.
"The
issue here is that lending standards are tighter, the funds that
flow to lending institutions to make mortgage loans are drying up,
there's less [money] going into that part of the financial system,
there is a mini-credit crunch developing especially in the
sub-prime market," says Pozsar.
The
scenario creates a very volatile situation for not only potential
borrowers, homeowners, lenders, and investors but also the entire
housing market.
"One
predication I would make is, once all these mortgage lenders go
out of business because they are choking on these losses, this
firewall that exists between investors and originators is going to
go away," says Pozsar.
He
says, that leaves investors in a far more vulnerable position.
"The
next act of the sub-prime mess is going to be investors and hedge
funds getting [financially] hurt, especially the ones that hold
the riskiest of these sub-prime-mortgage bank securities.
But
Pozsar says the real threat may still lie in the future.
"Now,
if that happens, through contagion, the fear could easily spread
from the sub-prime market to the prime MBS (mortgage-backed
securities) market and that would further reduce the funds that
are available for mortgage lending out there and that could
translate back into the real economy by even the good borrowers
not being able to find the money and get a mortgage. So that could
force an extra round of decline in home sales and home
construction," cautions Pozsar.
Before
you think it is all doom and gloom, Pozsar says about this
hypothesis, "This is a risk that we are very carefully
monitoring; it's not happening yet but it could."
However,
some mortgage and real estate organizations don't believe the
situation is quite that ominous. Credit tightening rather than
defaults may have a more substantial effect. But these
associations still point out that we have a strong, solid economy
in which people are being employed, not laid off. It's this sound
financial environment that some experts say makes today's housing
market different from the last housing crisis in the 1990s -- and
gives them reason to expect a brighter picture on the housing
front.
Source: Realty Times
Back to top
|
