One of the steps to take to become a megaproducing originator is to remember it's not about making money, it's about helping clients achieve their own goals. Do that and the money takes care of itself, according to a new book on how to be a mortgage broker.
Your Successful Career as a Mortgage Broker is a comprehensive look at how to become a mortgage originator, which route to take to success and what it takes to get there.
Author David Reed's resume said he started as a mortgage processor in 1989. He said he created one of the first Web sites to originate mortgage loans via the Internet in 1996.
Reed begins the 246-page paperback book with an introduction to the mortgage business and the main players involved in a real estate finance transaction. He explains the differences between brokers and bankers and having been both and said he liked the control of a mortgage banker.
"That control is invaluable when problems arise," he says. "But the independence and marketing possibilities of being a mortgage broker also carry huge advantages."
After walking readers through the steps of the loan application process, preapproving a loan and finding wholesale lenders, Reed explains credit reports, interest rates, rate sheets, what to charge and how to make money.
Reed's said his success in origination comes from a basic marketing formula he calls "5 X 2."
"Find five sources of business that will send you two loans per month," he writes. "Ten loans. That's about $2 million in monthly production and somewhere around $30,000 in gross monthly income. Can you live on that?"
Where can those five sources be found?
Realtors, tax accountants and a client database, he says.
"Tax accountants have always been one of my best sources of income, probably because they are rarely called on by mortgage-loan officers," Reed writes. "If you can make a presentation that emphasizes your expertise on the self-employed borrower, then that's your ticket to referrals."
Reed includes dozens of marketing tips from successful originators, including how to become a mortgage planner, develop a package of benefits with vendors and local retail companies and how to position oneself as an expert.
For example, an article written by Barry Habib is included in Reed's book that explains the importance of understanding the intricate details of mortgage pricing.
"The fact is, the 10-year U.S. Treasury note has nothing to do with daily mortgage pricing," Habib says. "In reality, mortgage interest rates and the intraday repricing that occur are determined by the performance of mortgage-backed securities or mortgage bonds, not 10-year U.S. Treasury notes."
In addition to educating oneself in the area of interest rates, Reed suggests that originators subscribe to trade publications, join local organizations and establish relationships with title agencies, appraisers and attorneys.
"You refer business to them, they'll refer business to you," he says.
Becoming an authority also increases business.
"Write a book, become a columnist, or speak in public about mortgage loans to establish your authority," Reed says. "Concentrate on a niche segment of the marketplace instead of trying to be all things to all consumers."
The main ingredient to success lies within the intent, Reed concludes.
"Don't forget that although a mortgage makes you money, what you're really doing is helping people buy their own home."