The economic data of the past few months has confirmed an economic recovery. This is good news for the stock market, but bad news for interest rates. Indeed, unless rates make a significant recovery in 2004, the refinance boom of the past few years will be history.

The higher level of refinance activity absolutely translated into more income for most mortgage brokers in the past few years. If you seized the moment. Remember all those previous customers with whom you were planning to get in touch? If you didn’t deliver value to your sphere of influence, someone else did.

In the long run, it doesn’t matter how long the refinances last. It does matter that you are continually preparing for the end. Each time a refinance craze starts we all say—don’t forget your long-term referral sources.

Each time the end comes with thousands of loan officers who have nowhere to go. It always reminds me of a cartoon which appeared in The National Lampoon decades ago. The last man on earth standing alone after a nuclear holocaust. All that is left is smoke and craters. The man is holding a TV in his hand and a plug looking for a socket. How lost each loan officer must feel when the refinances finally dry up.

What can we do to prevent the devastation of our business world? The good news is that we do not have to forgo the monetary reward of refinances to hold and even expand our base of long-term target support. We just need to start applying rules of synergy marketing to the world of refinances.

Here are just a few ways to provide instant cash and long-term security

1. When using direct mail, target refinances and purchases. Does it cost any more to target refinances (If your present loan is an adjustable…) and purchases (… you should consider refinancing or purchasing a new home) at the same time? Your most precious resources are time and money. Adding this focus costs more of neither. Maximum synergy rule number one: every action must achieve a second objective. Picking up purchase leads, especially before the Realtor does, gives you maximum leverage.

2. When taking a refinance application, find out who sold them the house. Yes, every refinance client has a Realtor attached. Promptly call the Realtor and let them know what is happening with their client. Most Realtors are not getting status on the loans That THEY referred to loan officers. Getting status on a loan they did not refer would be just too much! Want to impress someone? Be unique--maximum synergy rule number seven.

3. When taking a refinance application, establish contact with their financial planner, CPA or insurance agent. Yes, you should ask for referrals from the client. But who can refer more business, your applicant or a CPA? Offer to do something of value for the CPA, such as sending them a copy of the HUD-1 so they are prepared to use the information at tax time. Maximum synergy rule number three—some targets are more effective than others.

4. Source refinance customers together with your targets. A CPA or a Realtor is providing a service to their clients by letting them know about the lowest rates in years. They need to provide value on a regular basis so that they can receive future referrals and repeat business. Provide professional pieces for your targets to mail to their clients. Maximum synergy rule number four: every action can be made more effective with additional doses of synergy.

5. Keep in touch with your sphere now. There is no way that you will keep in touch with your previous customers, their Realtors, their CPAs and more without a data base. Not when you are so busy. You can’t keep in touch with sticky notes. You must have a database, contact management software, a contact management system AND value to deliver. Service providers such as my company can provide newsletters and articles that you can provide to your customers on a regular basis. But we can’t develop the your sphere of influence for you. Average data entry costs are twenty-five cents per record. A database of one thousand would cost only $250 to set up. Not much of a cost considering the long-term value of your most important target—previous customers. Our three-day school culminates with a sphere of influence exercise that I consider the most important marketing exercise you will ever accomplish.

These five ideas represent just a tip of the iceberg. The fact remains, if you do nothing you will be just like the cartoon a few weeks or a few months from now. Many of you might say—I am in non-conforming. I don’t call upon Realtors. So why are you ignoring your previous customers while you feast upon new refinances? Can’t you refinance someone who has made 12 good mortgage payments even if rates don’t go down? Aren’t CPAs, financial planners, divorce attorneys and more great contacts for refinances as well as purchases? You harvest both types of transactions through your present base of refinances. Every loan is an opportunity.

You can gorge all you would like. If you don’t take care of your primary targets such as previous customers and Realtors, someone else will. That is the one thing sure about competition in a free market economy. There is always someone else waiting in the wings


Article submitted by Dave Hershman. Dave also heads OriginationPro Mortgage School. For more articles by Dave and free marketing materials, visit www.originationpro.com

Article © Anywhere Communications All Rights Reserved