Improvise, adapt and overcome. Those are the traits that comprise the unique skill set reverse mortgage originators must posses to succeed. Honestly speaking, no one likes adversity yet we find that innovation, creativity and the new ideas that bring a product to market are born from the fires of hardship. Case and point; the HECM Saver was created during the most challenging times and yet opens doors to increase market share.
No one can deny the hardships we face as an industry, for in the last several years we have not only seen housing values plummet, but also the compounded challenge of reduced lending ratios (principal limits). It’s in this very crucible that we have the opportunity to reinvent ourselves, our practices and market approach.
Working as a partner for Reverse Fortunes, I have the unique opportunity to speak with hundreds of reverse mortgage professionals across our great country. Yes, some have thrown in the towel and left the business, but others have actually stabilized and even grown their loan production. This piqued my interest. In speaking with these war-weary veterans of the industry I found some common traits, business practices and an overall mindset.
Improvise In a static or stable market there tends to be little innovation. What’s the motivation? Times are good, business is ticking along nicely and one tends to focus working “in” their business rather than “on” it. Presently, we find ourselves in a tumultuous market at best and pressed by weak home prices, which affords us the prime opportunity to improvise. By improvising, we are not advocating a haphazard approach but rather the adventurous mindset of testing, evaluating and executing new strategies.
For example, several years ago my good friend and myself hosted bi-monthly educational workshops. It was a low cost effort and the rewards in funded loans were tremendous. Then came 2008; attendance fell sharply along with conversion ratios of attendees to loan applications. Looking at our options, we stopped the workshops altogether for over a year and a half. Our emphasis began to shift to other lead sources and further development of referral partners. Over time I began to have this nagging thought, “is it time to try workshops again?” Looking to stick our toe in the proverbial water, we scheduled two classes and a modest direct mail campaign. The effort was rewarded with four funded loans from the first class and two from the second. The lesson learned was that one may put aside one approach for a season, but should be willing to test it again in the future.
Adapt I am blessed that while being a “teacher” of sorts, I find myself learning much from the professionals we serve. In speaking with one gentleman who has been steadily increasing his production, I asked “what are you doing differently today than you were last year?” He began to share with me his new practice. Each week, he consistently time-blocks (sets aside time in his schedule) for customer acquisition. This could be outbound phone calls to prospects, meeting professionals for referrals or touching base with his existing clientele. This accounts for eight to ten hours of his workweek. What did he have to give up to make room? Not much. In fact, he shared with me the fact that he’s gaining more traction every week and closing an additional 2-3 loans per month. He adapted to the changing market, stepped back from what was not producing results and found a simple solution. A recent study of mortgage professionals found that the top fifteen percent of originators account for seven times more production than the bottom eighty-five percent. What is their ‘magic formula’? They spend on average 1/3 of their time acquiring new customers and keeping in touch with their existing ones. He mentioned he is using a CRM (customer relationship manager) to make this task less daunting and with great success.
Overcome Our greatest challenge today reaches beyond market conditions, public perceptions, housing values or interest rates. It is our own mindset. Having spent over a decade in sales, I have both seen and experienced first hand the all too common self-fulfilling prophecy, both positively and negatively. To quote James Allen from his class As a Man Thinketh, “Act is the blossom of thought, and joy and suffering are its fruits...” We cannot change the outside forces that buffet our industry and economy. We can choose to improvise, and experiment with new approaches. We can choose to adapt new business practices and disciplines in place of the old ones. We can overcome the negative news and melancholy that challenges us. Our actions will determine our success and our mindset can give us the opportunity to learn and create in ways that only adversity could bestow upon us.