Thursday, September 28, 2006

Vuecentric: A package for brokers

Things are going to get tougher for mortgage loan brokers. Housing starts are down again, existing homes are selling more slowly and most of the folks that could refinance already have. But there will always be business out there for the best brokers. The real question is, will they be able to afford to do it?

During the refinance boom, there was a burst of activity on the part of mortgage technologists and Web commerce experts. Today, brokers have access to some really incredible software that allows them to conduct all of their business online, from anywhere. But without the high loan levels of the past, can brokers afford to pay all the players that have come together to create this Web-enabled work environment? Probably not.

So Austin, Texas-based Vuecentric has created a complete system that provides everything the broker needs in one package. The website, the SaaS loan origination system, the electronic partner network, and the tools to market it all. Until the end of the year, Vuecentric is offering the package to any broker for $499/year. Close one loan; pay for all the technology you need to run your business. It doesn't get any better than that.

For more information, surf to www.vuecentric.com. But do it soon. The offer ends Dec. 31, 2006.

Thursday, September 21, 2006

BusinessWeek: launches new podcast

BusinessWeek: Online has launched a new podcast. Hosted by Smart Answers colunmist Karen E. Klein, the first show is an interview with Mike Schultz, publisher of the Rainmaker Report from RainToday.com.

It's a pretty solid effort with some good information for marketing executives and salespeople provided in a straightforward interview style.

Despite the fact that at 22 minutes it was too long and that I expected the production to be a bit flashier, considering the visibility of the BusinessWeek brand, I listened to the entire podcast. But then, this new medium is part of my business. Would a typical businessperson have time for this show? I'm not sure.

I've subscribed to the podcast through my favorite aggregator, Bloglines, and expect to monitor it going forward. I'm hoping they'll do a show on new media soon. I'm interested to see if they can share some of the elements that give podcasts more potential for increasing sales than some traditional marketing methods.

Feds: Don’t sell, advise consumers

Predatory lending is wrong. Misleading a home loan borrower is illegal. Fraud has been called a cancer in our industry, and I agree. But how much handholding can a lender be expected to do and still have a reasonable chance of staying in business?

Earlier this week, Federal regulators criticized the residential finance industry for aggressively marketing "exotic" mortgages without making full disclosures on the payment shock associated with some of the loans, according to a story in National Mortgage News’ Daily Briefing.

There is some hand wringing going on in Washington because a recent report issued by the Government Accountability Office (that sounds pretty exotic to me, or do I mean Orwellian) on exotic loan products stated that some recent borrowers now lack sufficient equity in their homes to refinance out of the loans. I’m guessing that’s because these borrowers asked a lender how much equity they had in their homes and then borrowed that much, which is pretty much the point of a home equity loan.

According to NMN, the report notes that in their advertisements, "some lenders and brokers emphasize the benefits of AMPs (alternative mortgage products) without explaining the risks associated."

These loans are currently big business, as you would expect during this part of the cycle and SourceMedia’s Quarterly Data Report indicates they added up to more than $250 billion in the second quarter, almost a third of all mortgages funded. That makes it a serious issue, which makes lenders who sell them a target for federal regulators.

I see where this is going and it’s not good. Today, you won’t hear an ad for a new car dealer on the radio without listening to 15 seconds of mumbled fine print. Likewise, you won’t hear Mandy Patinkin talk about the new blood pressure medication without him spending a third of the commercial telling you about how you could die, or at least suffer a great deal, from taking the pill.

I guess if federal regulators have their way, everyone will spell out the downside before they make a sale. I guess it would be good to have drug dealers warn folks about possible jail time and the ordeals of withdrawal. The Olive Garden could describe the ruptured gut that could result from truly capitalizing on the “Never Ending Pasta Bowl.”

Had such rules been in place, I could have avoided that expensive HELOC I once bought. They offered me a very attractive rate but told me that it was tied to an index and could move. They assured me that it wouldn’t move beyond a certain cap, which made it seem fine to me. Gotcha!! The rate doubled before my first payment came due. Shame on me for not reading all the fine print. They knew that would happen and chose not to spell it out for me. I should have been smart enough to catch it. That’s life. They didn’t get any more of my business and never will.

But that’s how it works. We live in a capitalist society built around the concept of free enterprise (at least that’s what I was taught in school). We get to buy whatever we want, pretty much, and if we get burned we learn. Or not, as God intended.

As I see it, the government has two choices. One solution would be to tack on a lot more mandatory disclosures (what’s another inch of paper at this point?) and then further complicate the predatory lending laws by building in limits on all the terms of each of these new loans (which is a never-ending process, perfect for bureaucrats).

I think a better solution is to hunt down and punish lenders that cheat and defraud consumers by breaking the existing laws but to stop short of punishing them for bad decisions consumers might make (or risks consumers choose to take) when engaging in complicated financial transactions.

You’re free to disagree. Post below or e-mail me.

Tuesday, September 05, 2006

Idea: Talk to your prospects at conference

The Mortgage Bankers Association's annual conference is just a few weeks away. It's a great show that I look forward to every year. While this industry is responsible for moving massive amounts of capital around, it's really made up of a relatively small group of companies. As a journalist covering this business, I found the annual convention a great opportunity to reconnect with many of the friends and contacts I had made during the year.

But it wasn't a great opportunity to get an in-depth interview. People are moving way too fast. They have too many people to see and no one gets more than a sliver of their time. It makes for a fun conference, but not the best for getting business done. Does that suggest that you can't be successful if you're going to the show to get some new business? Of course not.

What it does mean is that the contacts you make here are not going to have time to hear your entire message while at this venue. You're going to have to get your ideas across in some other way. The vast majority of salespeople will take this opportunity to get a card, shake a hand and try to set up a later date for an appointment. Most busy executives will happily agree to put the meeting off until later, but follow-up will be required to make it happen and it is not likely the executive will remember the details of the meeting when it does finally happen.

There is a better way. I plan to record all of the key messages I want my prospects to hear in a short podcast (less than 5 minutes) and burn them to mini-CDs to carry with me at the show. I'll hand it over with my business card and send the busy executive on his or her way. When I reconnect after the show, a much higher percentage of my prospects will remember who I am.

If you're interested in a solution like this, check out our site. But if you want it by MBA, you need to get moving soon.

ABC: What bokers need to succeed

When the mortgage business slows down and volumes drop, which is happenning now, albeit slowly, the brokers are among the first to be affected. Many will leave the business to move back into other sales-related fields. Those that stay will need to get better at what they do in order to be successful.

A new white paper penned by Lisa Schreiber, Executive Vice President of American Brokers Conduit, talks about one way brokers can do that.

In this paper, Schreiber says that brokers need to increase their use of technology if they hope to be more effective in the future. The key, she says, is for brokers to ensure that the technology they use allows their wholesale lending partners to be embedded.

"When a mortgage broker opens their LOS each day they need to have a direct interface with their wholesale lending partner," she writes.

Two of the benefits she mentions are ease of marketing and consumer education, both critical success factors for loan originators.

To find out more about the white paper, check out ABC's website.

Secret! U: Walking the walk

As the mortgage cycle continues to slowly turn, it is likely that more professionals will be leaving the business from greener pastures. While the market today is still a much better place to make a living than it was 10 years ago, it can't compare to the glory days of the most recent refi-boom. I'm not sure this business is subject to the same market forces that once controlled it, but be that as it may, it is turning and fewer people will be employed here in the days ahead.

Those that remain will likely find it harder to make the kind of money they've made in the past. But, the best people are always in demand. The question is, how can you convince a potential partner (or employer) that you're among that number.

The best way to prove your valuable is always to be valuable. In the mortgage business, like any business, it comes down to ROI. For mortgage originators, that means closed loans. If you can draw in and close mortgage loans, you're going to do fine in the days ahead. Perhaps even better than before as there will be less competition and wholesale lenders will be doing more to support your efforts.

But what if you're just pretty good? Now would be the time to get some training. Coincidentally (actually, it's no coincidence as Peter Cugno, the man behind Secret! University has been around this business for some time), you can now become a certified mortgage professional (CMP) through training offered by Secret! University.

I'm always skeptical of programs that offer to give you a piece of paper to prove that you can do something (preferring to just prove that I can do something), but I am impressed with the depth of information the company promises to deliver. From the basics of industry terminology to ethics (something even some of the industry's largest companies haven't figured out yet), the curriculum is surprisingly complete. I can't vouch for the actual lesson plans as I haven't attended the courses, but I can say that the company's timing is right.

In the end, whether you sport a CMP designation or not is probably not going to be as persuasive as your actual on-the-job results, but the right training can improve your results. So, it might be worth checking out.