Slower production calls for expansion of your skills and further creativity to keep production up. It may also mean more flexibility in your risk tolerance due to ATR/rebuttable presumption risk. If you’ve been reading the headlines there is a massive untapped market that floats just outside of the QM rules. It appears that day by day, more and more lenders are seeing this market as having great potential.
Think about it this way. Our industry started blowing up in the beginning of 2007. It’s now 2014 and during those 7 years a lot of products have come and gone. Additionally, many homeowners were caught in a “Catch 22”. Last week I read in Michael McAuley’s newsletter that over 10 Million people fell into the foreclosure hole.
Now before you get all worked up, I’m not implying that unqualified clients should obtain financing. I’m talking about the old school way of looking at the credit of these clients and the common sense of the situation.
Some Thoughts to Pump Up the Volume:
•Many people were left with a home they could not sell so they ended it with a Short Sale. In many states these Short Sales ended in Foreclosure because of the delays with the lenders. Either way, credit was severely damaged for general government financing and conventional financing.
It seems like the banks are picking up on this trend and aggressively attacking this market to weed out the good credit risk from the bad credit risk. After all, if a client had perfect credit before and perfect credit afterwards, then the likelihood is this was a temporary glitch in their credit history.
•How about Self-Employed borrowers? There were reasons why the lending industry created programs for that market segment and those loans performed well when done logically.
• Grant Program Participants are a huge source of business in most states. Cozy up with the counselors who educate the consumer, and those who make the grants like state agencies. A little education goes a long way in increasing your pipeline. The added benefit is that you will be serving the under-served markets and can demonstrate this to a Fair Lending examiner.
• USDA is still out there. It just takes a little education to find out what the rules are, and where you can use this program to finance property.
• Bank referrals are another large source of business. Many, including credit unions are fairly narrow in what they can and can’t do. Educating them about what you can do, gives them a reliable outlet for those loans they will not do.
• VA Loans are Abundant! There are many young soldiers coming back from war and settling back into a normal life. Educate them on their options and help them understand how their VA benefits can get them into their own home.
• Even FHA is becoming more flexible with second chances. So if you don’t know about that new program, check it out.
• Become the GenY, Millennial’s and GenX mortgage guru. Approach them through social media as an education mentor on finances and mortgage. Answer their questions; give them ideas, share success stories, examples, etc. This is a hugely untapped market that is eagerly seeking information. The key is to give before you get, so this is a long-term marketing strategy.
I certainly hope you are finding these ideas helpful, but most importantly that you build strategies around making them happen!