Why You Should Say No To Some Loans with Geoff Zimpfer

In today's highly competitive mortgage industry, building profitable relationships with the real estate agents is essential for success. However, finding effective ways to secure agent relationships can be a challenge. With so many mortgage loan originators vying for the attention of real estate agents, it can be difficult to stand out and establish meaningful connections. Our new case study featuring loan officer Chris Cogill is a must-read. Chris has closed a remarkable 36 million in funded loans from agent referrals. And in this case study, he shares his proven strategies for building strong relationships with real estate agents and leveraging those relationships to drive more business. To get your hands on this resource, head over to LOKestudy.com and download your free copy of the case study today. You'll find actionable insights and practical tips that Chris used to close 36 million in funded loans from agent referrals and how you can, too. Don't miss out. Go check it out right now, visit LOKestudy.com and download your free copy today. Hey, hey, what's up listeners? Howdy, howdy, howdy. Do you have some for coming at you, mortgage marketing, radio, podcast, episode? Thanks for tuning in. Hey, guess what? It's just you and me again. That's right. This is a special coming at you a fast and furious with a concept and idea. Wanted to get some content out to you before we get into the Christmas holiday, which is coming up next week. So, hey, listen, Merry Christmas, happy holidays. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. Happy New Year. We're tired. Happy New Year. Thi- there. So make sure you join in there and then you'll get notified of going live. If you're a YouTube person, you can go over check out the channel at Mortgage Marketing Radio on YouTube as well. So back to this idea. So our friendly folks over at Housing Wire. If you, by the way, if you're not a subscriber to Housing Wire, definitely should be get access to their premium content because that's where the best stuff is. I believe they call that housing wire plus, definitely well worth it. So here's the thing, right? Why do 28% of mortgage applicants never close the loan? And also, I want to share this with you in the context of the crazy market we've been in, the REFI surge, you know, the purchase surge that's going to be here in 2021. We know everybody's been stretched to capacity limits, right? The housing ecosystem. I think part of the way that you get some scale in your business is by being okay saying no. So in the article here from the Housing Wire, which is titled why 28% of mortgage applicants never close the loan, there's some comments from a loan officer's that they interviewed around the country. Give you an example of this. This is from a loan officer, Draper and Creamer Mortgage in Englewood, Colorado. It's talking about, so how many deals do you take that are hairy, that are a lot of extra work that are credit challenged, that are, you know, have with it additional issues that make it more challenging and time consuming too close. And what is the impact of taking those deals on? Both to you, to your referral partners who you might be sacrificing availability for, to your team who might be burdened with additional work required on a loan that might not have a high probability of closing or might be less profitable, especially considering the amount of time it would take to do that. So my question is this, right? Is the, you know, you think about that grizzly bear who's standing in front of the stream of, of salmon, right? And we have been and are going to continue to be in a market that's kind of like that grizzly bear standing at that stream where he's just sticking his mouth out and catching salmon as they fly by, right? And it's very similar for us in the mortgage business with the refides and of course with the increase in purchase, right? The demand is huge. Capacity is overwhelming. And I know some of you are overwhelmed and burnt out, want to take a break? I get that totally understand. But sometimes if, you know, it makes sense to say no. So there's an interview of just a brief, you know, um, sound bite from one of the loan officers at Draper and Kramer Mortgage in Engelwood, Colorado, talking about how he had a refinance, refinance client that had a geodesic dome home. You guys, you know what those are? It looks like the golf ball home, right? Those are nearly impossible to finance. So this loan officer was commenting that it's not worth his team's time currently. To further quote his response, we can't be chasing rabbits all over the park right now. My team of L.O.A.'s processors, assistant processors, underwriters and closers are still overwhelmed for business. I need to keep it easier for them. Are you trying to get blood from a stone? Are you trying to play Jesus and raise Lazarus from the dead? Amen. Can I get a witness? Right? Sometimes you got to say no. Make sense? Guys with me? Housing wire reached out to the loan officers and mortgage executives across America to drill down on specifics of which perspective borrowers weren't making it to the finish line, thus weren't closing. And interestingly enough, the average borrowers FICO score today is at the highest level in recent history at over 750. The average borrowers FICO score today. I don't know what you're seeing. I don't know who you're dealing with, right? A lot of first time home buyers might not fall into that category. You do an FHA deal, as I get it, right? And of course mortgage rates are super low for people with strong fundamentals and people look at them and it's high, right? They want to buy a home or save money through a refi. If we take a look at the average pull-through rates, let's see here. According to the most recent MBA report on profits, 72% of mortgage applications in the third quarter were funded by independent mortgage banks. So that's basically the pull-through rate, right? Historical data from the MBA shows a huge variance in pull-through rates. In the fourth quarter of 2019, it checked in at 78% pull-through rates, right? It's low point over the last five years with 67% in the first quarter of 2020. However, the pull-through rate has hovered in the low 70s over the last five years. So what's changing this? What impacts the pull-through rate, right? Well, first of all, multiple sources have said that pull-through rates on refi are much lower than purchase. Now, here's a key point. Why is this? Well, the article at HousingWire made a point of saying that borrowers typically stick with the real estate agent's LO recommendation. I'm going to pause there for dramatic pause because you guys have been listening to me long enough, you know I'm an advocate of partnering with real estate agents. I'm not going to give them down the rabbit hole and talk about all that and good agents, bad agents and all that kind of stuff. I've talked about it enough before that the right agents with the right alignment and relationship and partnership can be an oil well for you that produces consistently with the least amount of effort and cost and highest ROI on purchase loans. Maybe we'll do a deeper dive and deeper comparison. By the way, if you want a deeper comparison on that, hey, my book is out. Disrupt your die. How to survive and thrive the digital real estate shift. You can find the book. You can get the book at this website. I'll make sure to put a link to it in the show notes, but the book URL is getdisruptordie.com. If you haven't yet got my book, it makes a wonderful gift for real estate agents as well. So I digress back to the subject in hand. Barrow words typically stick with the real estate agents LL recommendation. All the arguments and gripes about agents and the three card deal and all that aside, when the partnership is properly set up and aligned correctly, that is usually the case. Case in point why I'm an advocate of what I am now going to be calling a hybrid loan officer. That is the new term for the new year hybrid loan officer. What is a hybrid loan officer? A hybrid loan officer is one who operates and receives business from both the more traditional sources, such as referral partners, past client database, sphere of influence, but also the more if you will modern marketing, which is content online, social media, personal branding, things like that. And the way I see it is the future is really about the hybrid loan officer and how effectively can you ride on both fences because you don't want to be what's called a fading winner. A fading winner is somebody who's been in the business a long time, who's really good with clients and does well knows their stuff, but hasn't pivoted to be present and available on right where the modern consumer is on today's platforms digitally and be in front of them. So they are fading away from consumer attention. Still winning but fading away makes sense. So I just wanted to hang out there for a moment because as you're evaluating your business and your sources of business for the new year and you want purchase business, you want to grow purchase business, clearly real estate agents should be one of the pillars. And for those of you who challenge that or whatever or just I hear people talk about just you need to be consumer direct, I get it, you need to be consumer direct, but the hybrid loan officer is me personally where it's at. And if you want to have a further conversation about that, jump into our Facebook group, mortgage marketing radio, let's continue the conversation. So anyways, picking up where we left the left stuff left off. So look, there's several factors that come into play on the pull through rate, right? For instance, L.O.'s not wanting to waste time with Ray choppers. Okay? How about with weak credit and limited cash reserves? How about tricky loans? See, it's like one loan officer said is if I'm stepping over dollars to pick up pennies, if I'm taking on these challenging loans. Right now, our job or has been our job this past years to reach our hands in and scoop as much out of this bucket that we can. Right? Without neglecting our key relationships, without getting overly heavy on refive versus purchase business, right? Having that long-term play. But at the same time, I guess the point I'm trying to make is, are you saying no where you should be? Or are you trying to please everybody and say yes, and then you're spending multiple cycles of time and energy of your your own and your teams on trying to raise the debt? On trying to close a loan that maybe it'll close, but is it worth the time and energy suck that it's going to take to get that to close? How about smaller loans, right? Do you have a minimum loan size that you're willing to do? And then how much time do you screen up front? Let me ask you this way. How surprised are you by underrated decisions when it's no or not ready? What percentage of the loans that you submit do you know up front will will fly versus won't? See, I had a call earlier today. We were looking at the this loan officer's metrics and numbers on the percentage of not ready files. The percentage of rush to close, right? And this loan officer, although he's been around a long time, approaches submitting loans, much like throwing dice here in Vegas. Let's see where it ends up. Seven sevens that I get snake eyes, right? Do yourself, do your favor, do your clients of, you know, a favor and know your guidelines. Know that before you submit a loan, you should be confident enough in that loan that it will close. Otherwise, why bother submitting it? Look, there's always going to be the opportunity for challenging loans. The loans with extra hair around them, right? The loans with the complex income calculations and so forth. Unless you're a whiz bang at income calcs or you got somebody to help you with that, that's cool. Fine, go for it. If you're a self-employed specialist, awesome. You got a cool program for that. But my point is this is, right? I'm hesitant to use the word, I was thinking the word easy money, right? Total transparency with you guys. I'm not trying to convey that it's easy. What I'm trying to say is, right, let's win as much as we can and let's not bog down our system or our process to the detriment of the bigger picture, if that makes sense, okay? Okay, so let's take a look at some more data here. According to recent analysis from LBA, where commissions earned by LOs in Q3 2020 increased 50% from Q3 2019, principally because the average LO funded 51% more volume in Q3 2020. According to this, 2.6 million a month, average LO fundings versus Q3 2019, 1.7 million per month. So if you're above that, you're doing well. How much of that, of course, is because of the market. Refi transactions accounted for 46% of total volume in the quarter, according to LBA, where? W-A-R-E, that is. I think the name of the game here that I just want to bring to your attention as you evaluating your business plan for 2021 is efficiency and prioritization. Whenever you're dealing with capacity and growth, right, that's one of the things you've always got to deal with is efficiency. How efficient is your system? I'll bring it up again, my free three-favorite things. Take a look at your business as you're planning out 2021 and take a look at these three areas. People, process, technology. Those are essentially the big three areas of your business that will determine the quality, the profitability, and the efficiency of your business, and how referable of an experience you create for your referral partners, for your clients, what people think about you when you're out of the room, kind of your personal brand. Do you have a personal brand right now? Is it a personal burn? What I'm coaching people on right now is to look at those three areas. Do you have the right people on your team? Are they in the right roles? In previous podcast episode, you heard me interview Michelle Odo talking about how to build a $100 million dollar team. She commented on loan officers making this mistake of hiring juniors to be a pseudo-LOA or to help me deal with front-end loan issues and stuff, wrong person for the role. You want to hire a junior, make sure you're hiring a junior, and you know what the role is for, and you know that they're going to originate, and they're not going to be your front-end loan person. You want a front-end loan person, hire somebody ideally suited for that. People also take a look at your referral partners, time to reevaluate your relationships, pull reports on total production, how much of the business are you getting? Do a post-close interview with your referral partners, a year end interview. Would you describe our process for it? What have you heard from our referrals that we've jointly worked together, our mutual clients? What do you hear? Squarmy, ABC, right? Where can we improve? People process technology. Where do you need to be more efficient? Where do you need to place more prioritization? And maybe it makes sense to have a conversation with your team about turning away difficult borrowers, being willing to say no to rate shoppers, for example. So back to the article here, the loan officer interviewed John Yusner, production manager at Mason McDeffey Mortgage, shout out to you, John, if you're listening. He told Haasengwire that a mortgage applicant last week seeking a small loan amount on a condo, his team spent a half hour after the application going over fees and the finer points of the loan. The borrower continued to shop, continued to ask for more disclosures with number so he could shop. And John simply asked him to go to another lender, explaining that my team doesn't have time to work on loans that aren't committed to closing with us. Ladies and gentlemen, do you have the courage to say that to people? Are you committed or interested? Is there anything that will prevent you from moving forward with us today, Mr. Mrs. Client? Have we answered all the questions to the best of our ability? You feel 100% confident about getting active in the market to make an offer on purchasing a home? Before we move from here, Mr. Mrs. Client, submit your loan for processing and underwriting, we just wanted to double check that, first of all, we're 100% committed to you to meeting our terms of this agreement, to giving your world-class service, to saving you X amount of per money or getting you in the dream home that you want. We just wanted to ask, are you equally committed back to us? The reason why we ask Mr. Mrs. Client is because in today's market, where resources are scarce, time is scarce, demand is high, we just want to make sure that before we ask our team to go to work for you, that you're 100% on board with us. So those types of questions, right, to make sure you're qualifying and that you've got the commitment from them. So the point being, back to this loan office of story, is that even in this case of the condo, the guy shopping, they had a lower-rate and fees, this lender, John did, they had a lower-rate and fees than the other offers he had, yet he didn't trust us. We don't have time for flaky shoppers that have zero commitment. There are too many good customers out there that want a good deal and will let us do our jobs without taking up hours of additional time. That's where our focus is. Where's your focus? I mean, what kind of referrals are you getting from realtors? Do you need to have a little conversation? Are you getting like borrowers with no socials, right? Down payment assistant for nationals? And again, I'm not saying down payment assistant is bad and in of itself, I'm just asking you to evaluate, right? What are your most profitable sources of business and what is impacting your team from a efficiency and prioritization process? And oftentimes, what I'm coaching a loan officer, John, is that if they are getting bad, quote, air quotes bad referrals from real estate agents, like low quality, you know what I mean? Low income, no income, that kind of stuff. Yes, there's programs out there, but I mean, if these are really ugly hairy type loans or borrowers and they're just thrown crap over the fence at you, well, that's the time to have a conversation, right? That's the time to say, hey, Mr. Mrs. Realtor, I'd like to talk a little bit further about our partnership and the direction moving forward. So I noticed of the last three loans you gave me, right? That these are the challenges with the borrowers, right? They've got no social security number. These are individual taxpayer identification numbers only. We've got this, this, this, this, and this. And I'm just curious, like, what's the source of these leads? See, my approach to this is if I'm getting crappy leads from a Realtor, here's what some allows do. They get angry and pissed off. I get curious. I get curious. Why? Because I truly and generally want to help, right? If I've chosen to invest some time with this real estate agent for a potential partnership, I've chosen them for a good reason. Hopefully I've done my homework and I understand, right, that they've got some potential as a referral partner. Maybe I just like them. Maybe we have a good rapport. Depends on your business model and if you're going super deep with agents versus going wide, right? I don't know where you're at in terms of your maturity and your business and your referrals. But the bigger point is this is I know every one of you listening right now has had that situation happen. You get the lousy referrals. Once I get it, right? Two, three times it becomes a pattern. Now we got to have a talk. So I'm curious. Hey, Susie Q over at Remax. I noticed the last three loans you sent me, right? This is what I found commonalities. We got this. This is this. So listen, I wanted to ask you a couple of questions. Like what's this force of these leads? Where are they coming from? What's your process? How are they coming to you? Is there any information you're collecting up front? Is this a Facebook ad? Is there a form filled out? Is this a phone call? You know what I mean? I want to dig deep and find out what the source of these leads are. Why? Well, because maybe I can help. Maybe I can help change a few things. I can look at a landing page. I can look, you know, look at a process and recommend some additional steps in qualifying and vetting out and saving time for both of us. Because let me ask you something, Susie Q at Remax. Do you want to spend time chasing bad deals? No. Great. Would you be open to me helping you, right? Find better qualities, et cetera, et cetera. And, you know, okay, great. How do you do that, Jeff? Well, look, there's 57 ways to do that, okay? By the way, back to the book. Yes, another book plug. Get DisruptorDie.com. There's like a whole chapter in there. Six ways to generate leads, right? And that's not what this podcast is about. So my point is just have a conversation with the realtors about it. Look for those. And if look, if it's a realtor who just doesn't get it, wants to continue throwing you crap, all right? Well, then that's a time to either, you know, slowly fade away or just have an upfront conversation and say, look, I'm not sure that I'm the right partner for you. Because, you know, my team's time is too precious and too valuable to be, you know, throwing stuff in the hopper that really has got too much hair on it. And it's very unlikely that it's going to close. And I'm not a credit repair specialist. I can refer you out to one. But anyway, that's where I'd like to go with this relationship. Does this make sense, guys? Okay, with me tracking. Hey, and by the way, if your business model is working, those tricky deals, those hairy deals, those credit challenge deals, and that's your model and, you know, because you're maxing out comp on that or whatever, hey, that's cool too, right? That's not necessarily the majority of people that I think tune into this show or that I work with, but I understand that's a business model as well. For instance, you know, helping people that are fresh out of bankruptcy, for example, credit challenge people may be related to divorce or medical issues or something. I don't know. There's multiple niches in this business. So I'm not trying to, you know, look down on people that specialize in difficult to do loans. I'm just saying it's hard to scale those, unless you've got, you know, incredible process efficiencies technologies and a robust team. Does that make sense? By the way, if you're really great on closing times, sounds funny when I say that because like, oh my god, who's really great on closing times? Look, there's lots of lenders who are still great on closing times. Make sure you advertise those. Make sure you bring those up front. You know, it's one of the things that differentiates you as a lender, okay? It's an advantage in today's market if you happen to have the operations efficiencies for that to happen. So look, closing out, I just wanted to bring this to your attention. What are you saying no to or what should you be saying no to, right? That would give you additional scale bandwidth efficiencies and actually make you more money if you said no to some of these crazy deals, all right? So that's the lesson for this week. Hey, a friendly reminder, by the way, if you're looking to scale and grow your business preparing for 2021, we know it's going to be a strong purchase year. Some of you may have led neglected your realtor referral relationships. I get it, but if you want to get in front of this wave of purchases that are coming, I said it earlier here on today's podcast, remember I said that borrowers typically stick with stick with the real estate agents, L.O. recommendation. Look, real estate agents done well can be an oil well. The challenge I find for most L.O.s, what they tell me is like, how do I get in front of them? How do I reach out to them? How do I contact them without co-calling? Well, for 10 years now, I've been doing it myself and helping L.O.s reach agents at scale so they can find the right agents for them without chasing, without co-calling, without begging, without pay to play, right? And it's done via an educational platform of teaching agent classes in a modern way that's Zoom ready to go, turn key and friendly so you can get in front of maximum agents in minimum time. You can find out more about that at the mortgagemarketing.pro website. Just go to mortgagemarketing.pro and there's a brief video that we put up there. And as I said, everything's turn key, template, PowerPoints, check notes, check notes, checklist, speaker notes, handouts, zoom friendly, ready, how to use Zoom, how to get promote events on Facebook, et cetera, how to get butts in the seats. So this is, you know, on the short list of the top three things I see top producers do to effectively get in front of agents. As a matter of fact, the last podcast we had, Michelle Odo, she's a $150 million producer for 2020. She's been a client of mine for, I don't know, two years now and I've got a quote from her saying she's having great success attracting quality agents. She's booked 10 meetings with agents and received six referrals. How about Liz Reese mortgage broker out of Northern California? Every time I teach a class, I get referrals. The system makes it easy to attract agents and differentiate myself. You want to do that? You go to mortgagemarketing.pro. We do weekly calls, group coaching calls, open office hours. And it's not just about agent classes. We get a dive deep on social media and YouTube. I bring in twice a month. I bring in a special VIP guest just for our private pro members to be part of that call. We do a deep dive on stuff. We just had a call on Homebot, did a deep dive with my bro Ricardo Bueno, which blew everybody's socks off on how to actually grow your own business and database by teaming up with agents on Homebot. So mortgage marketing.pro is we can learn more about that. So that's it. Once again, I wish you all a Merry Christmas, a happy New Year, a happy, happy holiday, whatever it is that you celebrate and embrace. And I want to just say thank you so much. It's, I'm grateful for you that you've even tuned in. Join the Facebook group. Go check us out, mortgage marketing radio in the Facebook group. And I will see you in the New Year. If not before then have a great one. Bye for now. Hey guys, what's up real quick? You've heard about the mortgage marketing pro membership before. And I just want to quickly remind you if that you're in a place in your business where you simply need more purchase loans. You need to fill your pipeline with purchase business. Let's just face it, agents are still a solid pillar of business and sources of purchase business for you. Well, good news. Our mortgage marketing pro membership helps loan officers like you close more loans without the hassle of chasing agents or cold calling done for you agent classes, expert training videos, a marketing automation platform that automates the entire process for you, everything you need to build your personal brand in your local market, attract and convert agents into referral partners. Plus done for you proven marketing materials and plug-and-play content to make promoting your class, getting agents, butts and seeds, partnering with affiliates, real easy. But that's not all. You'll also get access to our weekly mastermind calls with top L.O.'s authors, speakers and coaches to learn the best strategies to grow your business right now in today's market. And as an extra bonus for limited time, for all new members, you'll get access to a database of 200 agents in your local market that have closed anywhere to from 8 to 50 transactions in the last 12 months. And we'll provide that list uploaded into our platform for you so you can get off to a fast start in reaching actually productive agents. So what are you waiting for? You can check out more at mortgagemarketing.pro, see more of the success stories there. And if you feel compelled to do so, book a call, we'll have a chat. We'll see if it's a fit. Don't miss out on this opportunity to take your mortgage business to the next level right now. Head over to mortgagemarketing.pro.