Trade Ups to the Rescue?
Listen to the VA!!

Resolution #1: Don’t be a boiled frog!

 It’s okay to admit you haven’t done it. Your goals act like New Years resolutions. The world is pretty divided into those that take them seriously, set goals after introspection, and then try and design a plan to implement them, which is the minority. The rest of us either don’t do them at all or try to fool ourselves and the world by making up generic goals with no introspection and no plan to implement. This group does not change. Their business erodes slowly over time but it is insidiously hidden by incoming refi tides that prop it up to make the business look healthier than it is and support the fraudulent process of years of disingenuous goal setting.

Now that DoddFrank has eliminated the other route of evolving your business into making more on less eternally (as if THAT model could have gone forever!), the shrinking pool of potential refis and the bottoming rate curve continue to toll the church bells in warning and mourning. Like frogs in boiling water, too many of us are setting ourselves up for at best minimum wage but most likely dramatic personal change.

If you have analyzed your books of business over the past years you can find lots of excuses about products that don’t exist or tightened guidelines, that once they return everything will be better.  Reality: they won’t anytime soon so move on and adapt. You will also see in your past book of business referral sources that haven’t given you a loan in years. Just because they are on your AVCO label list doesn’t mean they are still your client. Reality: They have left the business or left you for some one more professional who actually sees them often and adds value. Lastly just because your database is over 500 names doesn’t mean it will produce 50 loans when you send out your “rates have fallen’ postcard. It has been strip-mined by you single-mindedly looking for refis by just mailing after you’ve panicked when apps stop. Reality: Your customers will know you just care about the transaction, you will never tap into their real value of referrals or add value to them other than saving the .25% for a No/No.

These businesses are declining year after year and they can’t truly see it. Companies are as guilty as their employees of not facing the reality and eroding overtime. 2008 was a shock for many due to external influences but that water had been boiling for a quite awhile and many charged right off the cliff. The answer too many companies, like their employees, state is that volume will cure all ills with out looking at their true heart of how things truly operate in their company. You need to make tough decisions with reinvestment in technology, accounting, delivery, etc as well as tough decisions on your employees.


Like an aged athlete living on past glories, our industry is littered with individuals living off their past glories. We still think of them as the $100M guy or the Queen of Underwriting who knows all, but they are different people today. It is not fair to them or the company to continue to live the lie. They have to be placed in the right position for where they are and where they are headed; the dilemma is whether they can actually see that truth in the mirror; Most cannot and it can get sad and ugly.

The big lie today is that part time or very low producing sales people are ok and actually make money for the company. Now I don’t want to take the large company top down view that paints all with the same brush but the numbers don’t lie as a general rule and therefore we should not assume innocence and make excuses. ALL loan officers have a base cost of $3k/mo; if they are not covering it they are losing money for the company. But maybe they are doing all the right things and they are going to pay off in the future? Absolutely then that’s an investment in the future. But if they have been in this business for a long time, they will struggle to stay above the Mendoza line, especially in non-refi times. All it takes is one less loan or sudden compressed margins or change in product mix, and that business really hemorrhages.

So the fact that you personally, or as a business, have been getting by without really committing to introspective, self-analysis with resulting SMART goal setting, means nothing for the future that lies ahead. We are staring once again into the unpredictable abyss where nothing should surprise you. How can you not be ready for ALL possibilities? Times a wasting! Just look at your Mayan calendar! We have less than a year left to do something meaningful!! Let’s get to it!!


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Hi Brian,

Happy New Year. Really well put. I have always love the "boiling from" analogy. I'm almost done with my business plans for the year which include diversity in income sources because there are a lot of things we cannot control. Just think what a 1% increase in rates will do to this industry? Especially those in the refi-trap.

As always a great post. Wish you the best in 2012!

Warm Regards,


HARP Mortgage Loan

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