A lot has been made of how to get referrals, the best sources to hit up asking for business, and the general keys to generating such a seemingly passive approach to garnering business. Besides 'the usual suspects', the realtors, financial advisors, bankruptcy attorneys, bank loan officers, etc of the world....I would like to focus on another potential troop of referral foot soldiers, conforming business. You know, impecable credit, good asset, stability of residence, occupation, lower LTV's, the ideal borrower. The very business that you won't make a mint on an individual deal, yet it's easy to do and volume driven. These are the hidden gems of referral business. Let me give an example or two.
Scenario 1 - Late in 2005, the air is crisp, holidays just around the corner and I have a nightmare on my hands. The dreaded Foreclosure Buyout. We've worked on this deal for over 2 months now, the customer is in a financial and psychological frenzy and time is running out. About ready to visit my family in Raleigh N.C., I too had my lending panties in a bunch hoping to pull off a small mortgage miracle. Do you believe in miracles? So do I. On Dec 23rd, 2 days before the Christmas hour, his loan closed and the young chap was off to a fresh start. Merry Christmas! And while the guy thought I was the best thing since a mail order Russian Bride in Stilletto Heals, the nature of the transaction leads to a slight problem. How many people do you think he was bragging to me about? The fact of the matter is while I helped him out in the most thankful of ways, the client wasn't going to work & social functions talking about this great mortgage guy who bailed him out of a foreclosure. Indeed, he sent me an email afterwards saying, "While I don't make a habit of discussing my financial situation with others, if I hear of anyone whom needs your services, you are the man." Hmmmmmm.....don't blame him I guess. Number of Referrals = 0
Scenario 2 - March of 2006, on a late night making phone calls to former clients of former employees who worked here (Orphaning Files)....I caught a gentlemen at 8:30 and ended up revamping his application, establishing a great rapport, and didn't leave the office until 9:30. Ended up registering his loan and closing his cash out refinance. Unlike scenario number 1, this guy got a great rate and couldn't help himself but to brag me up to everyone he could (without me even asking...which ongoing I always do now). In fact, before I even closed his loan, he referred me to his boss and 70 year old mother. I should make mention that his 70 year old mother was going to go with an offer from another "Very Visible Company" which was an adjustable rate. Not only did I close his loan in March, but I closed his boss's and his mother's in the same month! I closed two other self sourced conforming loans that same month and each referred me a person whom I also closed a month later.
My point is it makes sense to go after conforming business like your hair is on fire. Sure, you probably won't get a big hitter in regards to fee income like on the subprime end, but it is all about volume. Looking back on 2006, the majority of conforming loans I closed referred at least one person to me. And the conforming customer getting those great rates are more likely to brag about their situation and who made that possible. It's the old sales stragedy of appealing to their ego. Giving conforming customers conforming rates and pricing appeals to their ego and they are surely to brag. Which does wonders to your ego in the eyes of those they refer to you.
If I could make a feature post nominaion this would be it. Confoming clients are in fact reproducing clients if handled properly. With your results this year, its a leason you learned quite well. Way to Blog!
Why limit yourself to one type of loan. The reasons we are brokers is to have an array of options. Conforming, Alt A, sub-prime....I take it all!