Perfect Storm - Have you ever experienced a perfect storm?
The mortgage industry is in the middle of a perfect storm right now.  If you can’t or won’t navigate your way through it, you will drown.

The past few years, the number being up for discussion and debate, have been a wonderful time, a rewarding series of profitable events; closings by the score, and we have all benefited from the needs of the customers that we have helped. Not to be minimized is the fantastic benefits that the American public has received in terms that far outstrip any previous housing/monetary marketplace.  Lower rates have lead to increases in homeownership. Consumers have had the ability to spend freely and then experience consolidation of debt, seemingly with no loss in buying power. Better and more liberal underwriting that has allowed a public who would never have imagined being ensconced in their own “home” and not be relegated to the whims of some landlord.

Wall street has been more than co-operative by allowing us to create then market the many variations of financing that have powered the increase in price/value/equity all across this great nation. The Option-arm, just to mention one type of product has seen an unprecedented number of takers as homebuyers who could not and would not previously buy real estate. Home sellers have asked for, and been rewarded with increased prices, in most cases far beyond belief.

The economy has chugged along at a pace allowing rates to lower then level off and become fairly stable.  This has permitted a change in rates that was slow and even a bit predictable, which as experienced prognosticators know is almost impossible.

I have researched real estate values in many markets and it seems foolish to be quoting any here, just so that someone else could play the game of “I can do better than that”.  But it is a fact that we have seen these unprecedented increases, unrealistic expectations being fulfilled. It has been just FANTASTIC!

And now, here we are, in the middle of the storm, the one that has us being closed in from all sides as the tsunami of increased rates, lower values, inexperience and  the Marketplace of Wall street being less inclined to be as free with their money as they were before. A PERFECT STORM.

Is there a way out of it? Are there any boats that can survive the onslaught? Are we all going to perish? Drown in our own successes?

Navigation is not just a matter of understanding what to do; it is using every tool at your disposal and using them to their fullest extent, and then using them again. Be creative, be resourceful, be imaginative, be useful.

What most of my clients over the past year have been hearing from me more than anything else, is that they need to make their life’s work the focus of their everyday existence, to give other w2hat they need to make them happy, more successful more rewarded, better understood, more secure financially.

It was never as clear to me until the past few years that we have as n obligation to ourselves that “if we give to people what they want, we will always get what we want”. The rub here is that most people cannot figure out and really don’t try to give to others what they want. They first think of themselves and if perchance the others are able to benefit from their actions then good for them.

Case in point- a navigating tool:

Realtors are desirable people to do business with. You can argue with me all you want. Yu can tell me all you want that they are selfish, have their hands in your packet and onl care about themselves, but I posit to you that you need them, just as you need attorneys accountants, financial advisors, accountants, insurance brokers, title companies, builders.

What you want however is for them to give you business.

My nephew recently went to real estate school; to secure his real estate license. After he gratefully passed the test ion his first try, a real accomplishment here in New Jersey, he was given a desk at a local real estate office that has offices in many states. During his first week at his desk, still trying to find the bathroom, he was accosted, yes accosted, by no less than seven representatives of seven different mortgage companies. Here was their pitch. If you have any buyer that you need to pre-qualify be sure to call me. If you have any deals, be sure to call me. If you have anyone that you think that might be looking for a mortgage, be sure to call me. I said to my nephew, please, please, call them back. Call them all back. Ask every one of them if they have any ideas to help you develop your business, if they can help you develop your business then you’ll do business with them. Not one, not one, was able to come up with even one small idea to help my nephew through his first month. NOT One!

Now this is some way to navigate out of the storm it sure is1

So, here is a way to not ask for business, but to actually help someone else do business, and if perchance they do more business, then they will do business with you.

To wit: realtors want to sell houses. You want to have relationships with realtors who sell houses.

Find an apartment complex that has between 150 and 200 units. Be sure that the rent rolls are in line with the real estate market that you like to service. (Don’t find a complex that has higher rents if you like to do FHA type loans.) Research the complex, how many one bedroom, two bedrooms, etc. and what are the rent rolls. Then find out the addresses. Buy a list from a broker; it’s cheaper than any other way.

Now I ask you, if you were to never mail a piece of mail to that apartment complex for the rest of your life, what are your chances that you will do any business with the people in that complex? Nil? NADA? Very little? Ok, now what if on the other hand you send every one of the people in that complex some thing, every month for the rest of your life, that helps them live better, like reminding them that owning a home is better than renting and why, like tax benefits, security, independence. Now go and find a realtor who wants to grow their business. This of course will be hard to do. Ask the realtor that if you send a mailer out to all the people every month and include them as a person to contact when they are thinking of taking the benefit of tax reduction, will they give you the lead of any leads that are generated from that complex. Now, how do you think that realtor is going to react? Here’s an additional idea along these same lines. Find ten apartment complexes, ten different realtors, ten accountants, attorneys, title companies, insurance brokers, and financial advisors. Put it all together and you have a long-range plan to navigate through the storm. Not quick enough? Not enough navigational expertise to get you out of the storm today. Ok, here’s another one.

Watch out now, you’ll need some extra time to absorb this one. Find a local savings and loan, credit union or small bank that does mortgages. This I know is going to be one of the more difficult tasks of your day. On a percentage basis, especially with the recent changes in the secondary market in the sub-prime arena, they do not want to do those loans. They are not profitable. So ask for rejects. Make a friend. Stop in to see that person every week. Don’t miss a stop. You drive by it anyway on your way to and from where ever you go, don’t you? Well stop there and ask if you can help them look good to their boss. Remember find out what they want and give it to them.

Want another one: ok here goes

Companies want to look good to their employees. You want to do business with companies, plus attorney’s accountants, financial advisors etc. Companies would find it difficult to find people who could offer their employees discounts for doing business with them. You want to develop relationships with attorneys, accountants, financial advisors, builders, insurance brokers, realtors, and title companies. All of these people working together could be mutually beneficial to each other. HOW you ask?

Find five companies with about 100 employees. Stop in to see the president or HR Administrator of the company to see if they would be interested in doing some benefit for their employees at no cost to them. (Give them what they want!) see if they would like to see their employees get a discount for just learning about the benefits of homeownership, debt consolidation, insurance benefits, social security issues. Offer to put on a quarterly seminar, include whatever type of speaker they would find beneficial, and be sure there is a discount available.

This is a rough sea. One that many will drown in. It takes skill to be able to navigate today. Not skill in how to rebuild a car, diagnose a medical condition, but skill in marketing.

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