Monday, March 1st, 2010 at
3:06 pm
The mortgage business is an ever changing and it is an industry that has its own complexities. It is very much important that you understand how the mortgage industry works and how is the profit generated by the lenders. An analysis of this information will help you to have an insight knowledge about the techniques with which the loans can be appreciated and what is the reason behind the question as to why some lender offer certain loans and not the other. This article will help you to have insight knowledge about the different lending institutions that operate in the mortgage market.
Private lenders Vs institutional lenders: The foremost broad distinction arises between the private lenders and the institutional lenders. The lenders in the institutional lender category include commercial banks, savings and loans, credit unions, mortgage banking companies, pension funds, and insurance companies. These lenders generally determine the loan giving capacity of a person based on the income and credit of the borrower; these institutions have to adhere to the standard lending norms. On the other hand the private lenders do not have the guaranteed depositors and they are not regulated by the norms of the federal government.
Primary Vs the secondary market: First of all these markets should not be confused with the first and second mortgages. The primary mortgage lenders deal directly with the general public and they themselves originate the loans from their resources and then lend the money to the borrower directly. The primary market is often referred as the retail side of the business. The profit is generated by the lenders from the loan processing fee and not with the interest amount of the loan. The primary mortgage market generally lends the money to the consumers and then they sell the mortgage notes to the investors in the secondary market so as to replenish their cash reserves.
Some of the largest buyers in the secondary market are the Federal National Mortgage Association or FNMA or Fannie Mae, the Government National Mortgage Association or GNMA or Ginnie Mae and the Federal Home Loan Mortgage Corporation or FHLMC or Freddie Mac. Private financial institutions such as banks, life insurance companies, private investors, and the other thrift associations also buy notes.
Mortgage brokers Vs Mortgage bankers: It is a common assumption that the mortgage companies are the banks that lend their own money, it is important to note the fact that any company that you deal is either a mortgage banker or a mortgage broker. The mortgage banker is the direct lender who owns money and he often sells it to the secondary market. They are referred as direct lenders and they are the ones who sometimes even retain the servicing rights. On the other hand a mortgage broker is an intermediary who is responsible for loan shopping, he is the one who is responsible for the loan analysis, and he acts as a connecting link for the lender and the borrower. Mortgage brokers do not deal directly with the public and they are also referred as the wholesale lenders.
By: shijina
Related Posts:
Wednesday, February 10th, 2010 at
8:37 am
So you’re are looking to recruit for new mortgage brokers. When you think about doing that you probably hope that you can create enough interest in your company that you have enough hiring prospects to choose from and still be able to get the cream of the crop. There are many options out there for recruiting. But when looking for good mortgage brokers, it is best to look at what will get you the best Return On Investment. Just like in attracting clients to your business and calculating the ROI by tracking what each of those leads spent, take a look through the same window in applying Direct Mail to recruiting brokers.
Direct Mail is one of the best ways to recruit. Why?
1. You can get a targeted list. Because when using direct mail you can easily acquire a very targeted list of mortgage brokers. You can get a list of mortgage brokers with home addresses. You can get a list of brokers with a certain income. You can get a list of brokers in a certain area, a certain age range. This makes it easy to only attract the brokers who will fit into your business model.
Pay your list close attention. It could take you from the “pedestrian” approach and shoot you over into the fast lane. Targeted lists are not the only benefit is using Direct Mail to target new recruits. Now let’s look at the other two points and see how they all tie together.
2. You can make the main “button” your headline. A “button” is word, phrase, picture, etc. that elicits an emotional response. Your direct mail piece should show that the opportunities they will have at your company are better than the opportunities they will have at their present company – right off the bat. You want an emotional response because you want them calling you.
In designing many direct mail postcards for the mortgage business, I have found that there are three key buttons that brokers respond to when being recruited. You can use any of these when you are using direct mail for recruiting. Using them in the headline will evoke the best response.
The three main points that are going to get a broker’s attention are:
a) Earn larger commissions,
b) A better selection of products to offer,
c) “Brand Recognition” – you have a great company identity to back them up.
Making the headline tie in with your list is key. Maybe you pick a list with their annual income a little low so that you can target this demographic by saying something like “Not Taking Enough Home? We can give you higher commissions”.
If your business model is having more products to sell and consequently a higher closing percentage for that mortgage broker, then get that message across in your headline. Remember, you only have a few seconds to communicate your message in a direct mail piece, so push your particular button in the headline.
Let’s say that your business model is such that you only offer a small portfolio of products because that is your niche and you don’t plan to expand your product line. You may want to push higher commission structure. In essence, pick which one of the big 3 fit your company best and run with it.
As a mortgage company, you give your brokers opportunities and pay them – in its simplistic form. Direct Mail is one of the best forms of advertisement when recruiting because you push whichever opportunity button that directly communicates your business. Make that “button” your headline. Elicit that emotion, get the call. The other opportunities or benefits you can put as secondary communication – for example in a bulleted form on the back of the postcard. But your headline needs to pop and pull with the main button that you want to get across.
3. Use a postcard. The difference in sending a nice professional letter rather than a postcard is this one thing: Are they going to open it? How many “junk mail” pieces do you get in the mail and don’t even open? Plenty. Get their attention in the few seconds that you have and get your point across. Postcards are short, sweet and to-the-point. You may never have that opportunity with a letter. Then when they respond, follow up with a letter telling more about your company. But make sure that the letter has your same colors and/or logo on it so they recognize it as the same company who sent them the postcard.
If you have a full color dynamic postcard that says “Wish you were reaching your full potential as a mortgage broker?” Or “Are you’re commissions not what they were cracked up to be?” That is going to jump out at them. That’s exactly what you want. Now you’ve got their attention and they will be more likely to call and see what you have to tell them.
Also, you want to get your message across with two or three postcards – each slightly different than the first, but with the same look, feel and colors. All you want to say is what opportunity you are offering – don’t put all the details on the card, just make them want it and make them call. A letter or package sent out afterwards that explains your whole business, what you can offer them, what products you offer, what your commission scale is (a lot of times your commission scale is too much to put in the postcard) is a great follow up. In the postcard, just tell them that more than likely what you’re offering is better than what they are getting now.
4. Finally, tell them to give you a call. Your headline and graphic are the most important parts. Get their attention first as the main focus – then they will turn the postcard over to read what else you want to tell them. But don’t forget to command them to call you.
You can be extremely effective in recruiting with direct mail postcards because with direct mail you are directing your message to a well-defined target that is more likely to respond than if you just shot off an arrow with your eyes closed. Good luck and happy hunting!
By: Joe Niewierski
Related Posts:
Tuesday, February 2nd, 2010 at
7:06 pm
How To Set Up A Totally Free Direct Mail Program For Your Mortgage Business
Glad to see that this article caught your attention. You’re going to love this amazing little direct mail mortgage marketing strategy.
This super simple idea will actually allow you to mail 500 or 1,000 or 10,000 or even more…postcards and/or fliers each week for free…all of this without you having to pay one single cent for postage. In fact, this idea is so profitable, that a number of mortgage professionals notified me that they replicated the idea multiple times and created their own lucrative direct mail companies outside of their mortgage businesses. Now that’s powerful!
Forgive me for jumping ahead here. Let’s start back at the very beginning and explore the details of this idea.
The most expensive part of a direct mail campaign is your postage. For that reason alone, you may not currently be using direct mail in your mortgage business. Your next most expensive item will be your list. The postcard might cost you a few cents apiece to print depending on your quantity. So that’s almost nothing.
What all of this boils down to is that it’s pretty tough to get a mailing out these days for less than 55 cents each or maybe 65 cents apiece. So that makes direct mail pretty darn pricey. So here’s what you do to avoid paying postage, list rental, printing, and even make a profit using this idea.
First, you find out how many people live in your marketing area. What you want is the number of residences in your area. The post office will show you how to do a “Dear Resident” mailing. The post office will deliver your “Dear Resident” postcard very cheap if you are trying to hit every household in a certain zip code or set of zip codes.
If you’d like to personalize the carrier envelope, just look under the Yellow Pages under the category labeled “Mailing Lists,” and you’ll find a list of local companies that can help you. However, personalization is not a requirement. In fact, most loan officers that use direct mail address their offers to “Dear Resident.” You’ll also find this reduces costs substantially.
Second, let’s say you find out that there are some 12,275 residences in the targeted area you want to reach. What you now do is approach other businesses that would also be interested in reaching these same people with a postcard advertisement. Ask these businesses if they would like to spend, say, 20 or 25 cents instead of 55 or 65 cents to reach a potential customer in their target market.
As a reminder, only approach businesses with this idea that are not competing with you and your mortgage business. There are tons of businesses willing to participate and a good letter promoting the concept will keep your waiting list constantly filled.
All of this sounds pretty simple, doesn’t it?
Well, it is. In fact, the odds are good you already receive a mailing like this. There are a number of companies out there that will provide this service for you at a cost. They are called “card deck mailings.” Just type “card deck mailing” into Google, and you’ll see all kinds of companies come up in the listing that will do your card deck mailing for you. Better yet, when you receive your next mailing…call and check out their pricing. Your card will be ganged in with all the other merchants.
But here’s the simple truth. You can save a lot of money my doing these mailings yourself. They are really very easy to do. There is something to be said for that old adage “If you want it done right, do you it yourself.” You’ll have total control of the process. And especially total control of who is getting your mailing. Very often, the “card deck” mailing companies hit to big a geographical area and include too many folks outside your marketing area. So, do it yourself so you can be certain you’re only paying to reach those people you want to reach.
Also, you can gang together more than just postcards in an envelope. You can also gang fliers, letters and other advertising materials. Although I have seen some “card deck” mailings arrive in clear shrink wrap, plain old envelopes work just great.
But whether you do it yourself, or use a company that specializes in card deck mailings, this is a very cost effective way to advertise your business in your local marketing area.
But there is one key you need to be mindful of to make this kind of a mailing work for you. You need to make sure your mortgage message stands out from the other messages in your mailing package. Again, don’t offer this opportunity to your competitors…only to those businesses that want to reach the same people in your marketing area.
Here’s a great opportunity to actually make money in two businesses.
You’ll make money in your mortgage business by promoting your company via your mailing…that is, with your own postcard or flier. And, you can make lots of money selling your direct mail program to your co-op mailing partners. Just mark-up the cost. A 15% mark-up or so to compensate you for your work and initiative is certainly reasonable, and you’ll still be under pricing the big national “card deck” mailing services. When you get all your prices together, you may find that you can demand an even larger mark-up.
Start mailing your co-op mailings once a month, and then increase the frequency as you get your systems and procedures in place. I’m sure you can see that there is some great money to be made doing this. If you’ve got some guts and ambition, you can work this system to a point where you are mailing countless card decks and other co-op mailings per week with very little if any cash outlay. Your co-op mailing partners are funding the entire process and even paying in advance for the privilege of working with you.
I’ll let you do the math here on what you could make with this idea if you just mark-up the cost a minimum of 15% to your co-op mailing partners. You may need to consider a part-time assistant early on to make this work for you. Of course, nothing will work if you don’t work the plan. To get this system up and running will take a little initiative and some oomph on your part.
At the very least, use this little trick to conduct direct mail marketing campaigns for your mortgage business at no cost to you. It’s not at all hard to find six or eight or ten or more businesses that will be more than happy to sign-up for the program and participate with you.
This is a great idea…drop me an email or give me a call…I would love to hear of your success with this program.
By: Tom Domin
Related Posts:
