Written By Beau Hodson – Founder of Transparent Mortgage
I am always interested in people’s response when I tell them I am a mortgage broker (or a loan officer, which was my job title in year’s past).
In 2006-2007, it was “you too huh” or a look that says, “good for you, you must be doing well.”
In 2007-2010, it was most commonly a look and response of empathy, as if to say, “ouch. I feel for ya.”
In 2011-2012, it shifted to “oh, wow, you survived the crash, well done.”
The fact is, the last 10 years in the mortgage industry have been unprecedented and extremely volatile. Things seem to be either very good, or very “not so good” and these shifts can take place quickly, swinging the pendulum back and forth in dramatic fashion.
Currently, the industry is going through another tough patch. By some estimates, total loan production is down by as much as 30-40% from this time last year. Reason being, rates have risen so quickly that the refinancing activity has dropped off a cliff, and the amount of home purchase loans has also cooled from this summer.
And with a ton of new federal regulation coming January 2014, the future direction of the mortgage industry is very uncertain.
Anyone who has been doing this for 10 years or more, such as myself, has plenty of stories, an iron stomach and probably a head full of gray hair, if they still have any hair left. I am fortunate in this regard, but the grays are certainly accumulating.
These dramatic fluctuations in business means dramatic fluctuations in income. Most sales professionals in this industry work on 100% commission. So when business gets slow, it can get frightening.
And sometimes it isn’t the amount of new business, it can be the myriad of factors that determine whether a loan will close, many of which are out of our control. An appraisal coming in low, obscure underwriting guidelines popping up, market rates shooting up day to day, a buyer cancelling escrow or simply pulling out of a transaction, a competitor undercutting you with a lower rate..…these are all things that happen and will stop the loan from funding.
With so many factors being uncontrollable, the term emotional roller-coaster comes to mind. Left unchecked, this job can lead to high stress and run your life.
To survive in this industry one must develop the ability to manage these drastic ups and downs.
Here are the tools I have found most helpful:
1. A balanced perspective. The ups are never as good as they seem and the downs are never as bad as they seem. Like the weather, they will pass and they will even out eventually. The one and only thing that you can count on is constant change.
2. Focus on the process and the practice, not the results. Detaching from a sense of success or failure depending on how many loans you funded last month is critical. Many times the little things done today is what creates success 6 months down the line. The best of the best will maintain a continued focus on the fundamentals, servicing clients and striving to become a better professional, regardless of how full their pipeline is.
3. Financial savings to weather the downturns. There have been years where I made almost of all my income in a 3 month span, and rest assured, the other 9 months were not easy. Having a certain level of savings allows you to continue to work and focus on doing the right things for long term success. Without this buffer, financial stress will impede work performance, but also force you to do things to get business right now, which often times can mean comprising principles or values.
4. Put principles and values first: When incoming business slows down it is natural to act out of desperation. However, any action or decision made from this place is surely not good for the long term or for the client. A perfect example is selling a loan or advising a client into a loan, because you are focused on the sale or commission check, rather than what is best for the client. Staying in this business over the long haul requires a strong commitment to always putting the client’s needs first.
5. Mental Crisis Management: Because the responsibility starts and stops with me, in terms of each loan I do, I have had plenty of days where I didn’t want to get out bed. Basically, something happened, usually a complication to a deal I thought was going to close, and I became afraid of failing or letting my clients down. I found that when this crippling fear comes up, the single best thing to do is simply to acknowledge the fear and let it pass through. Once it passes through, I was able to take pro-active action towards a positive result and nearly every time we are able to figure out a solution and get the loan closed.
The result of these practices is to take control back. Rather than letting the ups and downs control your emotional state and your life, they can put you back in the driver’s seat and in position to steer the ship onward and upward, building a quality business that not only survives, but thrives and can weather any storm.
About the Author ~ Since 2003, Beau has been a mortgage professional and has successfully closed over $100 Million in mortgages. He is the Founder and Senior Mortgage Advisor at Transparent Mortgage and has worked for Luxury Mortgage, Bank of America and Impac Funding. Beau is truly committed to serving the needs of his clients and raising the industry standards for integrity and transparency.
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Contact Beau today: 949.230.9358 or firstname.lastname@example.org