Recent economic data appear to indicate that the U.S. economy is recovering more slowly than initially believed. While this may be bad news for the stock market, it is good news for mortgage rates. Freddie Mac reported last week that the average 30-year fixed rate mortgage held steady at 6.71% — its lowest level since last November.Indeed, we may be on the cusp of another wave of refinancing.
A higher level of refinance activity will translate into more income during 2002 for most mortgage loan originators — if they prepare to seize the moment.
Remember all those previous customers you were planning to get in touch with? Now is the time. Do you have professionally prepared marketing materials and valuable articles to deliver? If you don’t deliver value to your sphere of influence, someone else will.
Additionally, it doesn’t matter how long the refinances last. It does matter what you are doing to prepare for the end. Each time a refinance craze starts we all say, “don’t forget your long-term referral sources.”
Each time refinance waves end, thousands of loan officers have nowhere to go. A National Lampoon article from decades ago seems to accurately portray the end of a refinance boom. The last man on earth is standing alone after a nuclear holocaust. All that is left is smoke and craters. The man is holding a TV in his hand and a plug looking for a socket. How lost each loan officer must feel when the refinances finally dry up.
What can be done to prevent the devastation of your refinance world?
The good news is that you do not have to forego the monetary reward of refinances to hold and even expand our base of long-term target support. You just need to start applying rules of synergy marketing to the world of refinances
Maximum Synergy Rules
Here are just a few ways to provide instant cash while maintaining long-term security.
These five ideas represent just the tip of the iceberg. The fact remains, if you do nothing you will be just like the National Lampoon cartoon a few weeks or a few months from now. Many of you might say, “I am in nonconforming. I don’t call upon Realtors.” So why are you ignoring your previous customers while you feast upon new refinances? Can’t you refinance someone who has made 12 good mortgage payments even if rates don’t go down? Aren’t CPA’s, financial planners and divorce attorneys great contacts for refinances that you can garner through your present base of refinances? Every loan is an opportunity.
You can gorge all you would like. If you don’t take care of your primary targets such as previous customers and Realtors, someone else will. That is the one thing sure about competition in a free market economy. There is always someone else waiting in the wings.
Dave Hershman is a mortgage industry author and speaker — with 8 books and hundreds of articles to his credit. He also heads OriginationPro.com Mortgage School.
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