But instead, the purpose of this post is to just share this story and let you think.  Think about the direction that society is going in.  Think about how decisions like these affect your business and your relationships.  Formulate your own opinions on who is right, who is wrong, and what is it going to take to get our society out of the messes that we are currently in.

Take some time, sit back, read the story, think, and have a great week!

http://www.legalnewsline.com/news/224281-new-york-judge-nullifies-mortgage

We had the NAMB Emergency State of the Union call the other day – thanks Mark for all of your help in organizing and hosting it!

While listening to the call, there was a main overriding theme that I kept hearing:  What is NAMB doing for us?

More importantly, the question should be, what are YOU doing for NAMB?  What are YOU doing to further your own industry?

Are you listening to conference calls?  Are you reading and staying current on changes in the industry?  Are you thinking through the ramifications of the changes?  Are you discussing the changes with co-workers and associates?  Are you expressing your concerns to NAMB?  Are you following NAMB’s recommendations and pleas when they give you the talking points and ask for you to help by contacting your legislative representatives?  Have you joined NAMB?……..Whoa!….Hold on…..we need to stop right here!!!!!

You are not a member of NAMB?  First, you MUST join NAMB.  It is appalling that loan officers in one breath ask what NAMB is doing for them, but in the next breath, they will admit that they are not members!

NAMB is an association to serve the mortgage industry.  And most of the NAMB “employees” are volunteers!  They do not manufacture products.  They do not sell goods.  They rely on our dues in order to have the capital to operate!  Your annual membership dues — as small as they are – are needed!  Have you even looked into a membership?  Have you seen how surprisingly cheap it is?  Your monthly coffee budget is probably higher than the annual NAMB membership!  It is unfortunate that loan officers do not feel the concern to support their own organization - an organization built solely to work for and represent them!  NAMB is not a bloated fat cat with tons of money in the coffers.  In fact, currently NAMB does not bring in enough funds to properly operate.  They need to carefully pick and choose which battles to fight.  And when they do fight, it is with one hand tied behind their back because they do not have enough membership dues to wage the proper battle.

Without you, NAMB cannot do anything for you!  So instead of what is NAMB doing for us?  What are YOU doing for NAMB?

CLICK HERE TO JOIN NAMB NOW!

Definition: Persisting in or remaining constant to a purpose, idea, or task IN SPITE of difficulties or obstacles.

Do you have what it takes to succeed? Are you going to thrive and survive or just get by in 2010? Or would you rather wait until 2010 to figure it out? There are only three months remaining before 2010 arrives - you need to prepare for it now!

In order to persevere, you are going to have to work at it. It does not come by happenstance.  You will need to be disciplined and remain focused on what you are doing as well as what is happening around you. 

There are many changes taking place in the mortgage industry and many people crying the end of the business!  You can easily put your head in the sand and hope for the best, or you can work ON your business.  Here are some simple things to do today to guarantee a successful start to 2010:

DAILY – Make one hour of prospecting calls.

WEEKLY – Visit Realtors offices and other referral partners.  You may be surprised to hear this, but very few loan officers are doing this right now.  Real Estate offices have become Loan Officer ghost towns.

WEEKLY – Participate in Networking events.  The key word here is ‘participate’ – that requires a little more effort than just showing up!

WEEKLY – Follow up with the contacts from your networking events.

MONTHLY – Hold seminars – this may include first time homebuyer seminar or lunch-and-learn at Real Estate offices.

None of these activities requires a lot of time.  It simply requires some discipline to get out of your chair and work ON your business.  By having a plan now, and implementing it, you can ensure your success going into 2010.  A little perseverance will overcome many of your perceived difficulties that you are seeing today.

Finally, stay connected to your industry!  Are you a NAMB member?  Are you participating in the various petitions going around?  Are you reaching out to your elected officials?  There is a State of the Union call on Thursday.  Be a part of it.

If you stay the same and do what you are doing today, then 2010 will be no different than 2009.

Commit to change yourself and you will see changes!

Commit to persevere and you will succeed! If you commit to a plan, your success is guaranteed!  It is as simple as that.

My son Jake is 8 years old. He loves his little cars and trucks – 252 loves at last count!

Every time that he receives birthday or holiday money, it immediately burns a hole in his pocket and he wants to go to the local big box toy store to buy some more.

On a recent trip to the store, he splurged and bought a $15 truck, trailer, and race car combo that he just “had to have”. When we got home, we discovered that the packaging was more than just fancy packaging. This “toy” was really meant to sit on a shelf and be displayed just like a trophy.

Well, for an 8 year old, this toy would not do.  It had to go back. There was no way that he could have something just sitting on a shelf and not be able to play with it. So we taped the receipt to the packaging and set it aside for our next trip to the store.

Ninety-two days later, I found the toy sitting on the top shelf of a closet. Somehow, we had forgotten to return the toy. That same day we went to the local big box toy store with unopened box and receipt in hand. When we arrived, we were immediately told, “sorry, we do not accept returns after 90 days”. I tried to talk my way through it. I asked for store credit instead of cash. I even made sure to have the poor innocent face of an 8-yr old beside me. No such luck. The rule is the rule and we are two days late! (So much for turning the frown upside down!)

Two days! What difference does two days make? I understand policy. I even read the fine print on the receipt and it said the same thing. I get it. But if you are still stocking and selling the same item, and it is the same price (yes, I checked), then what difference does two days really make? Especially if we are willing to accept a store credit?

On our way home I started to think about this experience.  How is YOUR customer service? Do you bend your policies? Or are you stiff and rigid too? In the mortgage industry, we may not have products that our customers can return, but we do have to deal with customers. What is your rule for returning phone calls or emails? Do you keep your professional partners updated on loan status? Do you attend your closings? Do you thank your customers after the transaction? Have you implemented a customer retention program?

The good thing that has come out of this lesson: After wasting $15 on a useless toy, Jake is now understanding that Amazon.com is fun to shop at too and you do not have to leave the house!

Sorry big-box…..I understand that the rules are the rules.  But it was only 2 days and a $15 toy!

Now that you have completed your goal and the metric, it is time to look at the strategies and actions to achieve your goal. The strategies are the focal points or pillars that are needed in order to accomplish the goal. The actions are the tactical steps needed in order to make the strategies successful.

Let’s look at how we would put this together into a cohesive plan:

 If your goal was to generate $30,000 of monthly fee income in order to meet your financial obligations as well as give back, then the goal and metric may look like this:

Goal: To generate $30,000 of fee income each month in order to live debt free and reinvest 20% back into the community.

    Metric: Gross revenues of $30,000 per month; generate 10 closed loans per month, with average gross revenue of $3,000 per loan.

By having this metric, it is very easy to determine when you have reached your goal. By making it monthly, we have the metric to continuously assess the goal in order to determine if you are on target or falling short.

(Note: A lot of people like to express their goals on an annualized basis. I prefer to show it as a monthly goal. By doing it this way, I find that it will keep you better focused and does not allow the distractions or procrastination when you miss the target by saying, “oh well, I will have to work harder next month to meet the annual goal” or “that is ok, I still have 6 more months before the year is over”.

Now that we have our goal and metric, we need to focus on the strategies that will allow us to get there. For this plan, I have created three strategies complete with metrics in order to keep us on target:

Strategy #1: Increase Repeat and Referral Business

    Metric: 3-4 loans per month

Strategy #2: Increase Networking

    Metric: 4-6 loans per month

Strategy #3: Create First Time HomeBuyer Business

    Metric: 3-5 loans per month

After you have the strategies in place, you will need to focus on each one and look at the steps or actions required in order to make the strategies successful. These are the action steps. I will expand a couple of the strategies in order to show you how to build out the plan. The purpose of this writing is not to discuss what philosophies or actions work best, but instead to show you how simple it is to create a business plan.

Strategy #1: Increase Repeat and Referral Business

    Metric: 4-6 loans per month

Action 1: Develop post closing marketing system to touch past cutomers and referral partners every other month. (By using a system as powerful as Top of Mind Networks, you can automate this task for postal mail and email marketing.)

Action 2: On the off months of Action 1, call each customer and referral partner. (If you have 200 customers, that is only 10 calls per business day. 100 customers = 5 calls. If you feel that you have too many calls to make, then split up your list so that each month you are doing one half of Action 1 and one half of Action 2. The important part is that you are taking consistent action!)

Strategy #2: Increase Networking

    Metric 4-6 loans per month

 Action 1: Participate in the Chamber of Commerce

  Task 1: Join the Chamber of Commerce

  Task 2: Attend first mixer and hand out and receive 10 business cards

  Task 3: Add names to database and add names to your every-other month mailing campaign

  Task 4: Follow up with phone call within one week of meeting

  Task 5: Repeat each month

Action 2: Participate in a different networking group

  Task 1: Find a networking group

  Task 2: Join the networking group

  Task 3: Attend first mixer and hand out and receive 10 business cards

  Task 4: Add names to database and add names to your every-other month mailing campaign

  Task 5: Follow up with phone call within one week of meeting

  Task 6: Repeat tasks 3-5 each month

Action 3: Dinner Party

  Task 1: Read the book, Never Eat Alone

  Task 2: Plan monthly dinner party at home

  Task 3: Invite three past customers and three people from Action 1.

  Task 4: Follow up with phone call to each participant within one week of dinner party.

  Task 5: Repeat tasks 2-4 each month by mixing up the party with new invitees and past invitees.

There is no right or wrong answer and no right or wrong methodology when it comes to writing a business plan. The important part is being able to set targets and know when you are meeting them, exceeding them, or falling short. A business plan should give you the steps or actions that are needed in order achieve your goals. By setting goals, you are able to keep pushing yourself to excel and not sit back and relax because you made one sale or closed one loan. By actively and consistently working your business plan, you should be able to reduce the ups and downs from the sales flow and start to see consistent success.  Then, just like the pilot, you know exactly where you are headed and how you are getting there!

Please comment below and lets share ideas and strategies that each of us finds useful.

My family and I spent this past weekend participating in a sport that we really enjoy and are very fortunate that we can participate often – hot air balloon flying!  We were at the Pro-Football Hall of Fame Enshrinement Festival flying with over 70 additional hot air balloons.  The balloon flights were for competition as well as flying for fun.

Since the balloon flights were only held in the early morning and late afternoon, I was able to enjoy some down time during the day relaxing by the pool of the hotel. During this time, I was reflecting on how similar ballooning is to the mortgage business – or more specifically, how similar it is to a loan officer’s business.  Wishes and dreams are nice and can make great pictures.  But without the proper planning, preparation, and ACTION, you will never get off of the ground or be able to hit the pre-determined target.

A hot air balloon flies with the wind.  When in flight, a balloon can only go in one direction – the direction of the wind.  There is no steering wheel.  There is no turning around, no backing up, and no second chances.  Therefore, each flight requires proper planning in order to achieve the goals and meet the planned destination.  And especially during competitions, paying attention to the direction of the wind at the different altitudes becomes vital.  Otherwise you would never get the balloon to the target.

Many loan officer’s operate their business just like a balloon – they fly in the wind! 

In order to have a successful flight, a pilot needs a game plan.  Your business is the same.  Do you have a game plan?

Do you control your business or does your business control you?  There are many different areas of control in your business that we could focus on.  But for this writing, I am specifically talking about business plans. 

How many of you actually use a business plan?  How many of you spend the time to write them, modify them and routinely update them?

Have you ever collected your thoughts to prepare one?  Most sales people do not write business plans.  When people hear the words Business Plan, they feel that it is something only a newly formed company needs to create in order to get funding.  In reality, a business plan is simple.  It is being able to plot out the direction that you want to “fly”. 

Business plans can be created at any time of the year.  You do not need to wait until the beginning of the year.  In fact, right now is the best time to write your plan.  It ensures that you continue to fly on your path and finish the year strong.  Since sales start over each and every day, right now is the perfect time to get started.

Over the next two days we will focus on creating a simple yet effective business plan.  But first, in order to have a plan, you need to know your goal.  What is your goal?  What are you wanting to achieve?  And how will you know when you get there?

Write down your goal.  Make sure that your goal is specific and definable.  For example, you do not want to boil the ocean.  Therefore, your goal is not to be rich!  That is too broad.  Instead, you want to boil a pot of water.  Maybe your goal is $100,000 income or 50 closed loans.  Those are more specific and definable.  Your goal does not need to be stated as income.  For example, your goal may be to establish 20 new referral partners where each partner sends you one deal per quarter.

Once you have your goal written down, the next thing that you need to do is write a metric for measuring that goal.  In other words, how will you know when you are there?

Focus on those two items and be sure to write down your answers:

1. What is your goal?
2. What is the metric to know when you have achieved your goal?

Tomorrow we will look at the next step and show you a sample business plan; simple and realistic.  Remember, the actions of today will significantly affect the results of tomorrow.

Are you in ______ for the long term?

Often people will get laser focused on their immediate needs and then neglect or ignore their long term needs.  Yet, the long term is what defines you and gives you the freedom to enjoy the immediate!  Is this you?  What is your _____?  Family, Work, Friends, Marriage?

When you are working on a project, do you find it easier to quickly dart over to your fast food joint for your quick gut-fill of grease?  Or do you walk the 5 blocks to the sit down restaurant that offers fresh healthy food?  The fast food satisfies your hunger (immediate); the walking and healthy restaurant satisfy your hunger, health, and waist line (long term).

When you are headed to an appointment, do you wait until the last minute to leave so that you can squeeze out one more email/read one more blog and pray that traffic is on your side, only to arrive and apologize for being late? Or worse, your family and friends start telling you that the meeting time is 30 minutes earlier in order to accommodate your continuous tardiness?  Oh sure, you finished your task (immediate); but not keeping your word affects your long term accountability and reputation.

Did you have a good year and convince yourself that you need to be rewarded with the new house/car/boat instead of properly building your reserve account?

Do you have trouble planning for the future and seeing the value that your immediate decisions and actions will have on your long term needs?  Most salespeople that I talk to and work with are no different.  In fact, salespeople are arugably the worst planners for the long term.  They focus on the immediate and their “today”!  They do not realize that the actions of today will significantly affect the results of tomorrow.

It does not matter where you work or who you work for.  It does not matter if we are talking about family, work, friends, marriage, or personal satisfaction.  You are in business for yourself – even when you work for someone else.  You need to take responsibility for yourself.  You are the CEO of your You, Inc., and you need to work on and plan your business!

The year is half over.  Are you meeting your goals?  Did your new-year-resolutions evaporate by January 10?  It is time to blow the dust off of your business plan and see if you are still on target?  Or did you forget to put together a plan?

Many people do not have a business plan, and worse, most do not even know how to prepare one!  You do not have to wait until the beginning of the year to put together a plan.  And your “business” can be your family life, your relationships, or your life goals.  Next week, we will review how simple it is to put together a plan….even if you have never had one, and even if it is the middle of the year!  After all, in life, just like in sales, the year does not start over on Jan 1.  The year starts over EVERY day.  And, for salespeople, the year starts over after every sale!  So, even though we are in July, now is the beginning of your year and time to get started!

Are you in ______ for the long term?

The HVCC dictates a hands-off policy for lenders and brokers. Thus, we can no longer choose the best appraiser for the neighborhood, talk to the appraiser, or even discuss comps with the appraiser. Because of this ridiculous HVCC rule, we are seeing a lot of bad appraisals. And one of the worst results can be a lower value when the market actually still supports the higher value.

Just this week, I have seen the following deals blow up and need to be re-worked:

1. Refinance – original appraisal was $560,000. We had to order new appraisal under HVCC rules. New appraisal value, $450,000!

2. Purchase – Purchase price: $440,000. Appraisal value: $410,000 – after waiting 12 days, the appraisal finally came in one day before the proposed settlement date!

3. Purchase – Purchase Price: $280,000. Appraised value: $265,000.

Agents, please do not exclude financing contingencies. It does not matter what any lender tells you – we all have to work under the same rules for conventional loans (and some lenders are starting to require HVCC for FHA now too!). This is a reality that is affecting all of us everyday. This is a reality that will affect you too!

Under the new rules, it is imperative that you put the financing contingencies back into contracts. To not have a financing contingency is gross negligence in your implied duties of care  with your written agency contracts. Please remember to protect your client!

And while we are talking about this subject, please go here, and let your voice be heard!  http://www.hvccpetition.com/

The Home Valuation Code of Conduct (HVCC) is now one month old and already wreaking havoc on the industry!  The HVCC was a knee-jerk reaction to curb abuses in the mortgage industry.  In typical political fashion, the focus was placed on the wrong area within the industry.  The falling home prices that almost everyone has been experiencing were not caused by fraudulent appraisals, coerced values, or appraisers chosen by mortgage companies!

The ease of obtaining money, lack of credit standards, and expectation of double digit rates of return are the reasons for the economy being where it is today!  Not the appraisals.  Greed has put us where we are.

We need YOUR help!  This is not just a call to action for the industry, this is also a call to action for anyone that wants, needs, or has a mortgage!  The HVCC is bad for the economy and will further erode the values of properties if it is left in place.

http://www.hvccpetition.com/

Why is the HVCC bad?

1. In a lot of areas in the country, appraisals are now costing the consumer more money!  Under the HVCC, specific rules have been created in order to ensure that appraisals will be randomly or independently assigned.  This has created a need for Appraisal Management Companies (AMC).  The AMC’s are charging a higher fee and paying appraisers less money in order to retain a portion of the fee for their “management” role.

2. Did your loan get denied? Now you have to pay for another appraisal for the new lender!  Sure, the HVCC allows for portability of appraisals.  But the lenders are not accepting them for fear of violating the rules of HVCC!

3. Qualified and experienced appraisers have been refusing to sign up with the AMCs and work for less money!  Often times, the fee that the AMC will pay an appraiser is up to half of their typical and customary fee.  Therefore, a lot of good, qualified, and experienced appraisers are not willing to sign up and work for less money.  (No, this is not a case of the appraisers being greedy. Appraisal fees have remained stagnant for close to 10 years.)

4. The appraisers that are willing to conduct appraisals for a smaller fee will either have less experience or have less desire and motivation to properly research the property!  This is not a slam on appraisers.  But, unless you live in a cookie-cutter suburban neighborhood where values are stable, the proper research and care in determining a value on your property may be compromised.  Inexperience and less pay can create inferior quality of work.  And this is even more important if you have a unique home or property that requires proper research.

5. When using AMC’s, the management company may not be choosing an appraiser that is familiar with the local neighborhood!  AMC’s are supposed to alternate the selection and assignment of appraisers.  Therefore, we may not be able to use the appraiser that is intimately familiar with your neighborhood because he is not “next on the list”.

6. There will be fewer appraisers entering the industry; and the ones that do enter, may have lower quality training as we can no longer count on them being trained by the high quality, experienced appraisers!  The appraisal industry is one of the few industries that still exists with an apprenticeship training program.  Under the old rules, an appraiser did not mind giving up 30-60% of their fee in order to teach the trade to an apprentice.  Under the HVCC, their pay has already been cut.  Therefore, appraisers are not willing to further cut their pay in order to teach the trade to someone new.

We need your help! We need to stop the HVCC!

http://www.hvccpetition.com/

Please go to this link and sign the petition.  Our voices must be heard before the economy suffers further erosion.