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Originators can’t afford to ignore the niche

This year, some originators have to make big decisions about how they’re targeting new business, and how they’re marketing themselves to new clients and partners.

Once those clients are engaged, however, are they able to get everything they need? What if they’re not a borrower who can qualify for a conventional loan, or need another kind of program? What then?

At the Power Originator Summit, industry professionals will delve into the ins and outs of niche products, such as fix and flips, investor, build-to-rent, and other options.

“I honestly think there is no section of our country, there is no originator that should not be able to offer all different niche products, regardless if it’s this or non-QM, or reverse, whatever the case may be, whatever kind of different loans out there,” said Laura Brandao, president of American Financial Resources. “Originators have to be that trusted advisor to be able to inform their client for the best situation because they are that trusted advisor, and if you are someone that says ‘no, I’m only going to sell 30-year fixed loans to my borrowers from Fannie Mae or Freddie Mac or whatever,’ you’re not helping and being that trusted advisor for those families.”

Brandao said that now is the perfect time to make the game plan when it comes to builders, both those operating in the site-built space as well as builders of modular and manufactured homes. Although winter is perceived as a tough time in the building industry, she said that’s the wrong way to look at it.

“Winter is the best time for people to make those relationships with the builders and the contractors because this is when they have time to listen. If you miss them right now, you’re done. Because by the time the springtime comes, and they get busy, they’re not going to have the opportunity to make those new connections and be able to listen about programs, so now is the time to that. It’s not the time to sit back and wait and sit back and see what others are doing. Now is the time to form those strong relationships and educate the marketplace and go out and make that networking, because if you don’t, it’s too late.”

AFR has recognized that some originators get stuck when speaking to builders about specific programs, especially if they haven’t done worked with many of them before. As a result, on their new no-draw construction product, they have started doing calls directly to the builders with the originators on the line as well.

“How can I possibly expect someone to go out to the marketplace and be able to answer questions that they have never been faced with unless I’m there to support them and provide them with what to anticipate?” Brandao said. “It’s [a] completely new concept, so it will definitely take education.”

In order to help builders and contractors keep projects moving, AFR has created a program where builders get the initial disbursement, and don’t get the rest of the money until completion. Builders like it because they’re not waiting on disbursements to complete projects, are able to work faster and complete more projects, and it’s a much cheaper option for borrowers because the administration costs are much less than with a more common type of construction product with multiple draws.

Originators may not always understand a builder perspective, but Brandao said that she plans to make short videos and training guides to help originators in the marketplace understand how to educate their builders and retailers.

If originators can learn how to leverage these and other products in the marketplace to secure more builders as partners, they can unlock great potential of builders who will provide a constant stream of borrowers to those originators.

The niche market has really turned around. When AFR launched its newly-simplified government one-time close construction program, no one had any interest. At the time, the market was extremely busy with refinances, and other types of loan programs, and originators didn’t need to look beyond their “regular” business. Not only have buyer pools changed, however, but there are a wide array of creative products in the marketplace to suit a variety of consumer needs. And for originators, that’s

“Because there has been a decrease in the regular business, people are trying to look for new ways to create opportunities,” Brandao said. “I have a feeling those opportunities were always there, I don’t necessarily think that the opportunities are new opportunities, I think now people are more open to learn them and be aware of them and be able to take the time to expand their horizons.”

Characteristics of great loan originators

There are a lot of things about origination that can be taught: product guidelines, how to structure a loan, and effective database management, to name a few.

Other things, however, are much less tangible. There are some traits that almost all of the top originators share, and it’s not necessarily the ones you might expect. Not all originators, for example, are outgoing and outspoken extroverts, who thrive on shaking hands with everyone in a room. Not all originators are even good salespeople. Most, however, possess a number of traits on the list below.

1. Personable Any top producer will tell you that origination is just as much a relationships business at it is a mortgage business. People want to work with people that they like, and partners want to partner with people that they like. Originators have to enjoy connecting with people and fostering relationships that can then turn into business. Genuinely being interested in people and their lives makes it easier to stay connected over the years, and—contrary to popular belief—doesn’t necessarily require an outgoing, bubble personality.

2. Strong work ethic Origination isn’t a clock-in, clock-out job, and so originators have to be willing to do whatever it takes to get the deal done. That doesn’t necessarily mean working more hours; it means being diligent, seeing everything through to completion and constantly working to improve the experience for the client and the process of their business. Part of having a strong work ethic means being consistent and committed to getting results.

3. Resilience Origination is not for the faint of heart. Sometimes deals fall apart at the last minute and the originator needs to swoop in to save the day. Markets are cyclical, and the most successful year can be followed by the least successful. Regardless of anything that goes wrong, originators have to be able to adjust, adapt, and move on.

4. Leadership Whether they be a branch manager with a team of originators, or the head of a small production team, leadership is an important quality for an originator. The best leaders are able to manage people and personalities, and have the ability to take a big-picture view of the business, identifying problem areas. The best leaders also serve as an example to peers in the business of how to operate. They recognize that not every originator working in the space is a competitor. They’re not afraid of collaboration and exchanging ideas with others.

5. Forward-thinker No one can predict the future, but the best originators make plans for where they want their business to be, not where their business is today. That might mean overstaffing in anticipation of increased production volume, or it might mean studying the market to understand where the economy is going. Some of this comes with industry experience, and being able to recognize patterns over time. Even inexperienced originators, however, can be interested in innovation and investing in ways to boost future business.

6. Patience Mortgage origination isn’t about staying in the game for a few years and getting out. Cultivating partnerships and trust takes time, and people who are interested in a quick fix or immediate results need not apply. Strategies to improve business rarely make a difference overnight; even when there’s a flurry of activity or a new campaign brings in leads, it still takes time for originators to get to the closing table, and that process involves a lot of factors that are outside of the originator’s control. Top originators know that doing the work of tilling the soil today will bear the harvest for tomorrow, and nothing happens overnight.

Integrating new niche products into a company culture

Niche loans may be intriguing for some originators, but it’s not always easy to integrate them into their current strategy. It’s not hard, however, to see why the need for niche products exists, and why they have risen in popularity.

At the Power Originator Summit, the niche loan session will not only introduce and explain various niche loan products, but also provide originators with ways to blend them into their existing offerings.

Chad Jampedro, president of GSF Mortgage, called 2018 a “defining year” for niche products, including non-QM, renovation products, home equity products, and construction lending products. It was borne out of necessity.

“Prior to 2018, there was enough of [core traditional products] going around, where originators really didn’t have to lift their head and focus on digesting and implementing new strategies and new products, but in 2018, that quickly changed,” he said. “It almost changed with the stroke of midnight going from 2017 into 2018, and with those rate increase, you’ve got an entire sales industry looking for new and better ways to increase production.”

GSF saw it happen with their single close construction product, which Jampedro said “exploded” in 2018 because they were able to grab the attention of originators in a relevant way.

“In sales, the best strategy is to solve the problem. The problem was, we don’t have a lot of inventory in many markets, so the only solution is to build it, and then we offered a solution to make the financing relatively easy, and getting the attention of the originator coupled with market conditions really allowed for niche products to explode.”

Because adoption and integration really come down to training and, yes, some initial hand-holding, it’s important to work with lenders who put a lot of resources into product training. Product training goes beyond teaching originators the guidelines and requirements of specific products, although that’s an important part of it. There’s also the practical aspect; how to pitch it to a new audience.

Jampedro said that it’s a sort of self-serve atmosphere, where originators can pressure lenders to provide as many resources as possible, and if they’re smart, lenders will acquiesce.

“We spend a lot of time on training; not just training on the technical but training on the tactical. And there’s a difference. The technicals are: here’s your LTV, this is what you can and can’t do, here’s the documentation that we need; but also the tactical: how to explain it? How to explain it to a builder?”

Beyond that, lenders who have been in the niche space for a long time are well-equipped to help originators fit it into their culture and routine. Understanding culture is important, Jampedro said, because there’s the overall sales culture of the office, and there’s the culture that exists within each individual branch and with each originator, and that plays a big part in how they offer new products as an option.

Rather than using a sales script, for example, a much more effective strategy is for lenders to offer a blueprint for originators to add their own words and explanations, based not only on the understanding of the product, but on the needs of the client and the existing rapport with them, if one already exists. If one doesn’t already exist, then having a genuine conversation goes a lot further toward building rapport than a fact sheet would.

“If you’re reiterating a bullet point list, I’m not really sure that gets the message across,” Jampedro said.

And, he adds, look for additional support from the lender beyond that initial training.

“It’s really high touch service on the niche side, and it needs to be, because when you’re selling something that maybe you’re not as familiar with, there are little nuances that come up and you have to be able to tap into a resources quickly, and the niche folks that we’re working with seem to be doing a very good job of that. They understand that,” he said.

In addition to encouraging originators to explore niche products, GSF launched the Direct Originator Partnership a year ago. Originators who participate in this partnership aren’t tied to a larger branch setup, skipping over branch overlays and fees and allowing them to take advantage of scaled services internally, including corporate processing, marketing and technology resources and support—not to mention more attractive pricing.

For people who don’t want to have a role as a branch manager, the Direct Partnership could be a way to simplify their work and just focus on origination. Jampedro sees people moving back to brokering and although GSF is a retail shop, he said that while there’s value in that in the marketplace, not everyone can set up their own broker shop. There’s value in the in-between space.

“We look at all originators as brothers and sisters in the business, especially if they’ve been in it more than 10 years. However they can get a loan done, as long as it’s compliant and safe, and it does right by the customer, we’re in.”

Is mobile missing from your process?

“Mawwage is what bwings us togeva today.”

The thing that brings originators closer with their partners and with their borrowers today isn’t marriage (or its Princess Bride equivalent); it’s mobile.

For an originator trying to compete in today’s increasingly digital mortgage space, it can seem nearly impossible to provide consumers with all of the technology that they want. But Ryan Leopold, co-founder of CardTapp, said that it’s easier than originators think to harness the power of mobile marketing in a recent webcast hosted by Originator Connect.

The messaging behind Rocket Mortgage is that applying for a mortgage should be simple. There shouldn’t need to be a long, involved process. Click once on the app, and it’s easy for people to get a mortgage the same way they do everything else in this online, on-demand world. But according to an Ellie Mae Borrower Insight Survey, 37% of millennials actually wanted more face-to-face interaction or more communication with the lender. They want flexibility to control the process.

“It’s not really about replacing the originator. There’s going to be a segment of the market that goes in that direction, but what they’re saying is that they want high-tech, high-touch,” Leopold said.

High touch means giving them access to all of the information that they need to learn about products, programs, loan requirements, and being available and easily accessible to them during the process.

“They still want to work with you . . . they just have to be able to find you. They have to cut through the clutter and all the noise that’s out there and find you. That’s your job to [be] findable and easily accessible.”

Leopold says that although a lot of companies have already embraced the digital leap to some degree, not enough originators are adopting best practices in the space, and they’re not conveying it well enough to either borrowers or referral partners. Mobile, he said, can really deliver great tools in a digestible way. He co-founded CardTapp in order to deliver that highly-personalized, “always on” customer experience, while providing better engagement with clients and optimizing conversion.

Originators often come in contact with people who want to buy a home in the future, but isn’t quite ready to take that next step. Does the originator hand the borrower a business card (which is likely to be lost or discarded) at the end of the conversation? What’s the alternative?

Sharing an app, of course. By bringing together all of an originator’s content—from Facebook posts to reviews to a 1003 to videos to a mortgage calculator—CardTapp promises an easy way to bring value to people, all under an originator’s brand. This not only keeps borrower attention localized, but keeps the originator top of mind and accessible, only a click away when the borrower is ready to proceed.

The app also has a tracking mechanism, so originators can control the follow up. They can see who is referring them, how many referrals have come through the app, and get real time alerts as to when people are using the app and what they’re viewing within it.

“If you know people are thinking of you at an exact moment and you’re able to connect at that exact moment, that’s when you have the highest probability of a connection occurring,” Leopold said.

Plenty of lenders have apps, and plenty of people have too many apps to begin with. Leopold avoided that trap by taking a different approach.

“Getting people to download mobile apps from the app store is very, very unrealistic in today’s world. You have to go to the app store, you’ve got to find it, you’ve got to put in a password, if there are any updates or changes to the app that are going to occur, they have to do an update. It’s just unrealistic,” he explains. “Ours is more web-based . . . [it’s] really just shared through texting.”

Another benefit to going mobile is to streamline the referral process. When partners or past clients pass an originator’s contact info to someone, there’s no easy way to follow up and get them into the ecosystem unless the prospect makes contact. Making the referral process faster and more efficient is a benefit for everybody, Leopold said. Originators can keep track of the referral, the consumer can get to know a trusted local lender through a convenient platform, and it speeds up the connection process for the agent.

“What agents really, really want is for you to connect with their buyer right away, as soon as you can, get them qualified, if they are qualified, get them preapproved, so that agent can get them in a car and help them buy a house.”

Embracing a digital mindset doesn’t have to be as difficult as onboarding complex and expensive systems. It can be as simple as acknowledging that consumer expectations have changed and for originators to reevaluating their process through the lens of those expectations.

If the process hasn’t kept up with the changes, then determine which mobile solutions can change that dynamic.

The ARIVE experience is here

ARIVE is live, and over the next few weeks, thousands upon thousands of mortgage brokers will be able to start using the platform.

Although registrants may be aware of ARIVE’s features and have seen the demos, there are still going to be some brokers who are hesitant to go all in.

Anthony Casa, chairman of AIME, said that there’s no need for hesitation: that brokers should expect to reduce system-to-system data transmission by almost 90%; that the length of time taken from loan submission to being clear to close is going to decrease by at least 20%; and that in general, it will be a massive driver of efficiency.

“It’s going to streamline the entire user experience, and for me, I think that when it comes to this industry as far as mortgage brokers go, it’s very hard to grow your business because you have to do so many things, you have to be so involved in certain different things, and it’s not very scalable,” Casa said. “I think this is going to create a platform where you can be a one man shop that can triple your business in one year, simply because now you can focus on the relationship development.”

Relationships will also develop between mortgage brokers across the country through ARIVE’s global community, a social feed-like area of the platform where users can ask questions, post polls, share lender insights, and have other interactions. The more engaged a user is, the more points they will earn. The ARIVE team has a supreme vision for this engagement that they’ve integrated in the platform: lead sharing.

One of the problems that the broker channel faces is that sometimes a referral will contact someone who can’t help them. A person living in Maryland, for example, is referred to a mortgage broker by their colleague who works in Texas. The broker isn’t licensed to do business in Maryland, and that’s where the conversation ends—leaving the borrower free to consult the internet and leave the broker channel entirely. ARIVE has created a lead share mechanism, where brokers can look to put those consumers in touch with another broker in their local community. The “gamification” will dictate which brokers get the appropriate leads, based on customer reviews, average length of time from origination to closing, and proximity to the borrower. Casa said that this lead sharing in itself could double the entire channel.

“We believe that’ll create this competition-like mechanism where everybody’s going to be focused on having the best customer service reviews, close loans the quickest, and to really, really engage in this program so that if they do, and they do have the highest rating, that when a lead or consumer comes into their community that needs a mortgage, they’ll get assigned that lead, and they won’t have to pay for it, it’ll all be aggregated based upon their performance.”

Casa said another point is making sure that underserved consumers are able to get in touch with originators who can help them. If a borrower’s first language isn’t English for example, then they need to find an originator who speaks their mother tongue. ARIVE makes all of that resource-sharing possible.

ARIVE has already begun welcome brokerages with varying business models to the platform, followed by pre-registered FUSE attendees, and then independent brokers. They’ve been onboarding lenders as well, but after announcing ARIVE last fall, it was clear that they had to make adjustments in that area.

The initial plan was to get every single wholesale lender integrated to the platform. When looking at the more than 100 lenders on the waiting list to board the platform, however, the team realized that not all lenders were going to make it through the current lending environment.

“We saw that there was a great deal of concern over their financial stability. So if we’re sitting there and spending all the time integrating with the lender, it’s very high touch, and it takes a lot of time and it takes a lot of money, to be honest with you, and they go out of business or they sell because they can’t afford to make it in this environment, then that’s a loss for us,” Casa said. Instead, they decided to take a more strategic approach, focusing on the players who have the financial capital and the resources to weather a down market, and then work their way down to the smaller players.

For originators waiting to get their login credentials, Casa said it will have been well worth the wait—and the hype.

“They should basically expect something they never, ever thought would be possible.”

Education takes center stage at Power Originator Summit

Tired of being sold products, services, and memberships? Looking for an event that can actually provide tangible tools for business building this year?

The inaugural Power Originator Summit is that event.

Organized by Mortgage Professional America, the Power Originator Summit has a unique combination of conference, awards, panels, and expo that also gives attendees a chance to hear firsthand from the industry’s top originators, all with the goal of getting originators more business in 2019 and beyond.

A highlight of the summit will be the Power Originator Awards for the titles of Woman of the Year, Best New Technology, Young Gun of the Year, and Originator of the Year. Nominations are currently open, and the winners will be announced throughout the event.

Apart from the awards, the Summit will include: a keynote address by Shawn Moon, co-author of Fierce Loyalty: Cracking the Code to Customer Devotion, and senior consultant at FranklinCovey; a conversation with some of the top originators in the country, including Shant Banosian and Ben Anderson; and sessions on the growth of independent brokers in 2019, fix and flip and investor loans, ways to fill the pipeline with ready-to-act leads, unique programs, and non-prime loans.

Whether it’s learning how to get in front of potential borrowers, ways to build client loyalty, methods that edge out the competition, or new marketing strategies to fill the pipeline, the Power Originator Summit is the ultimate event for inspiring and equipping mortgage originators to fine-tune their business techniques and up their origination game up a notch while everyone else is struggling to hold on to market share.

Top Originator: Ben Anderson leads a revolution

Entrepreneurs are a special breed of businesspeople. While they’re not necessarily more driven to succeed than those who work for other people, entrepreneurs have to be behind the wheel, completely responsible for their own success.

No one knows this more than Ben Anderson, a branch manager at RPM Mortgage, a division of LendUS. He’s funded more than $1.4 billion in mortgages, and has made it onto Scotsman’s Top Originators list for seven years in a row, six of those years being the top producing loan advisor in Orange County.

For Anderson, being an originator isn’t just about getting loans; it’s about truly understanding your business and how you can best succeed. The market is constantly changing and without that education, at best, you’re never going to become a top producer; at worst, your business will fail.

“To me, the business is radically changing. I call this market 3.0. Market 1.0 was pre-recession, when it was easy; market 2.0 was post-recession, low rates, where it was almost even easier; and now we’re at market 3.0, where you have to be truly independent to make leads work,” Anderson said. “So to truly be successful in the next market’s rally or market five, seven, 10 years later, you need to really understand how to run a business. And if you’re just plugging into that FDIC bank, then you’re not getting that hands-on education, you’re still relying on somebody else to generate your business for you. That type of business has a shelf life and it’s only so long before that type of business is extinct.”

In Anderson’s experience, the way to truly get the education that you need and the ability to take charge of your own success doesn’t come from a bank.

“It’s really simple: there are no banks that I’ve heard of or been a part of that have rolled out a system for how to be successful,” Anderson said. “Nowadays, you need to have a blueprint on how to get your business going, and there isn’t one. I’m very process- and systems-driven, so at the end of the day, it’s about me creating a system for loan originators to be successful.”

That system is The Mortgage Revolution, a program that Anderson has created for originators. The program teaches originators to regain their independence and how to become true entrepreneurs, withstand the markets, use media and branding to their advantage, and work with agents and give them the most possible value. He shares tried and true tips to his own success so that other loan officers out there can follow it point by point and in turn, give the entire industry a lift.

Anderson was a collegiate athlete, and you can see that same disciplined approach in the outline of his Mortgage Revolution plan. The program is 13 separate steps, the first of which is a 30-day bootcamp (“21 days makes a habit, 30 days will change your life”).

Of the hundreds of thousands of loan officers in the U.S., Anderson is one loan advisor who has been around since before the Great Recession, muddling through and figuring out ways to produce when other originators got out of the business. Anderson encourages other advisors not just to anticipate the needs of your business, but to really understand how you can apply specific techniques to your model and put yourself in control of your own success.

“With technology taking over, you have to understand how that can help your business. And unfortunately, if you’re looking at FDIC banks, larger institutional lenders, they don’t allow you to use that kind of marketing to run your business because they’re more concerned with the brand being the engine that drives the business, than the originator being their own brand. So if you’re an originator and you want to be successful, you’ve got to find a way to make your brand the engine that runs the business, not the business the engine that runs you. You’re going to lose out on the customer’s experience directly.”

Anderson’s motto is ‘Do more, make more, close more, and give more.’ Intense, sure. But so is he.

Top Originator: Shant Banosian

If you follow mortgage news, then you’ll recognize his name: Shant Banosian is Guaranteed Rate’s top loan officer nationwide for the past three years, with 1126 closed units and $457.9 million in funded loans in 2017. He has a career volume of over $1.5 billion in funded loans and was ranked as the #3 loan originator in the country by top dollar volume.

The key isn’t in low rates, or all of the other things that everybody else talks about —Banosian said it’s all about execution and differentiation.

One of the ways that he differentiates himself can be seen in his housing market, where deals are closing increasingly faster, and they’re competing with cash offers and offers with waived contingencies. Banosian’s key is to make sure that your realtor partner needs to know that you’re going to deliver on that mortgage, so that they’re not stuck with a client who is at risk of losing their deposit, getting caught up in litigation, and/or losing the home altogether.

“You’ve got to be able to deliver on the promises you’re making in terms of closing quickly and the quality of work and understanding your guidelines, and I think that’s really, really important right now because it is hard to get an offer accepted. If you can be a person that is going to be the difference between their offer getting accepted and not accepted, because of your skills, your reputation, your quality, that’s the type of people that realtors want to work with.”

While some originators are figuring out how to survive in the current environment, Banosian doesn’t think that everyone will.

“I do think that your loan officers across the country who are doing 1-3 loans likely are going to disappear or go out of business,” he said. “For the people that are doing business or growing their business, or even able to stay, they should be able to go and grab market share.”

And if you’re going to stay and capture market share, one thing is for sure – you have to implement the right technologies that will enable you to stay competitive. The 30-day closing isn’t really a big deal anymore, and it’s increasingly important to be able to move faster and close loans in as few as 15 days.

“You’ve got to use this as an opportunity to really integrate technology, because a lot of really, really great technology is coming out across the entire industry, and I think it’s really important to understand those things, master them and implement them, just make your process more efficient, make your time more efficient,” Banosian said.

In general, Banosian has transformed his team to run it much more like a complete business, and that includes having separate functions amongst sales, business development, marketing, operations, customer service, and client retention. Most loan originators are really focused on driving in new business, he said, whereas his team is treating has started functioning as an entire company within a company. “We’re much more businesslike in our approach and much more strategic thinking and forward thinking,” he said.

When it comes to hiring, Banosian said, people need to be brought on board the minute you feel like your service level is dropping and you’re no longer able to do the proper follow ups. He hires people to adopts the most time-consuming (and least enjoyable) so that he can focus all of his activity on sales, business development, and business building. As the head of a team, there’s a learning curve when it comes to grooming a new hire, as well fostering your own role.

“Leveraging really talented people is important. There’s only so much one person can do,” Banosian said. “I think the biggest mistake that loan originators make is when they hire people, they just assume that that person they hired is going to figure that out and that’s impossible. You’ve got to train them, coach them, give them processes, give them documentation, really set them up in a position to not fail, and also become better at that task than you ever were, so that you never have to go back to it. And then also, they develop confidence, in executing those tasks and you develop confidence in letting those things go.”

One of the reasons why he’s a leader at Guaranteed Rate is because the way he does business fits into their business model, which involves being aggressive in their approach and adaptation of technology. Between these “massive” investments as well as a growing loan officer base, Banosian said that in spite of the current market, which is a little more challenging than it has been in years past, he has a platform that will enable him to grow through any market shifts.

“It’s a really, really exciting time. I can’t remember a point where we’ve had such focus in terms of growth and had such focus in terms of being a disruptor in terms of really differentiating ourselves amongst all the companies out there,” he said.

Insellerate platform stays in the middle to be ‘true’ CRM

Insellerate describes itself as a specialized CRM system focused on the mortgage industry as it combines features from CRM and LMS. CEO Josh Friend sat down with MPA to discuss recent developments at the company and how they are helping improve the loan officer-borrower relationship.

MPA: What are the new developments at Insellerate?
Josh Friend: (A) couple of things. One is we really expanded our APIs and our platform so as to make it easier to integrate with. So as lending continues to use more and more technology, our platform has now been built really to be a central hub for a lot of lenders’ technology. So something we’ve seen from our clients, and they’ve asked us, is they have six or seven bits of technology, or some have as many as 15 things, technology used for mortgage lending, be it pricing engine, LOS, some type of content marketing system, a phone system, a servicing platform, you name it – it’s all these different systems they are using. But they haven’t been able to integrate them together very well.

So we’ve really added some API integration so that lenders can now bring all their technology solutions and be able to use it through one user interface and have one system. So it’s been a big part of what we’ve done. And then we just released our fourth version of our infrastructure and we moved to Microsoft Azure Platform as a service.

So something that we didn’t pay attention to a long time, coming from the data industry myself, was compliance and data security. Our platform now is using the latest technology in the cloud for security, scalability, redundancy. So as lenders are continuing to have a need for better security, we are now able to provide that. We are the only CRM in our space that … has the necessary type 16, type 1, and type 2 audits.

MPA: How is Insellerate improving the LO-borrower relationship?
JF: Lenders have had to take a better application, and so do LOs. It’s clunky and it’s outdated, so that’s where we come into play. … Take a look at consumer studies. What rates them as having a good experience was (that) they were communicated with in a timely manner. They got called back. They were able to reach a loan officer. They had questions. They got responses at the right critical times. They could reach out and make phone calls to them. They contacted them.

So we enable the loan officer to have a clear view of the process, and we automate communication and empower lenders to make sure that whatever communication strategy they set. … (W)e want to make sure that your loan officer calls a borrower once a week or twice a week, or the processor calls once a week or twice a week. And you want to increase that collaboration between loan officer, processor, borrower. That’s where our platform sits in the middle. It’s a true CRM.

MPA: What is a future role for LOs as the mortgage process becomes more automated?
JF: We really see the loan officer is still going to be critical. They’ll still be the expert. Again, consumers – they want to talk to someone, right? If I’m getting a car insurance, I’m being informed in a video. I still typically want to talk to someone. I have a question at least about some type of car insurance. I have an 18-year-old son and I want to double check: If he drives my car, what does that mean? … So I think where all this technology is going, it’s going to make our LOs way more efficient. So LOs productivity is going to go up drastically, but more importantly, it’s going to give LOs much better tools to help the customer make better decisions.

How to help investors

Originators across the country are looking for more places to get business.

One of these places is from investors. This isn’t sub-prime lending for owner-occupied properties as it existed in the old days; it’s for investors who are either looking to fix and flip properties, or to invest in a long-term rental property. Mark Burch from Temple Rock will sit on a panel at the Power Originator Summit in April, and he’ll explain why and how the private lending segment of the market is experiencing a boom.

“We are seeing extraordinary growth. Our first year, October, I think it was $5 million and then this year, October, I think it was five-fold, almost $30 million in originations. And it’s just getting bigger and bigger,” Burch said.

Believe it or not, the interest in renovating and selling a home—the fix and flip—isn’t over yet. Although the DIY shows and websites don’t show the truth of fix and flips, they’re still stoking the flames for what can be an lucrative endeavor for those investors who have a proper plan.

The market is in an interesting place at the moment, though, where inventory is increasing and homes are sitting for longer in many areas across the country.

What does that mean for investors, and how can originators help steer them in the right direction?

Burch, who’s an investor himself, said that the best way to help investors get started is to put them in touch with other investors. There are real estate investment groups that meet on a regular basis, where investors, would be investors, and people who have money to invest in deals behind the scenes can meet to discuss tips, tricks, strategies, and difficulties. Get educated before jumping in, Burch said, but cautious of those espousing advice.

“I understand that [experts] have a lot of information and a proven system, but I don’t feel like it’s necessary to be successful,” he said. “I had a guy at a meet up tell me he spent $30,000 . . . to be a certified flipper, and he hasn’t even flipped one house! It’s much better to take $30,000 and use that money to get yourself involved in the deal. And that’s where I think the learning process, like anything else, if you treat it like a business, you do your research, you go to meetups, you talk to people, you read books, there’s so many great books out there that help these investors start.”

Investor loans are an example of why working with a financial advisor partner is a great idea. They’re obviously much more equipped to help would-be investors decide where to get the money for their investment, whether it be from savings, whether they pool their money with someone else, whether they get into a self-directed IRA.

Even though Burch thinks that the market is a couple of years overdue for a correction, he also thinks there’s still life in the fix and flip market.

“You see Wall Street dumping a lot of money in there, and they’re going to fuel this for a couple more years. Everyone’s seeing a squeeze in real estate for sure. Houses are sitting longer and we’re on the downward curve,” he said. “We’re two years overdue for a correction already, but I think a lot of the reason why that is is because of these loans. Because giving people access to money and to purchase and to speculate is allowing more and more houses to be renovated and flipped.”

Burch said that most of the properties are being eaten up by companies who don’t want to get involved in the fix and flip business whatsoever, they just want to have inventory and property because there’s so many investors out there looking to buy a house. This cuts into the profits of the true fix-and-flipper, so investors have to be savvier when it comes to choosing property. And once the property is obtained for a short-term purpose, he said, it’s imperative to have an exit strategy.

“You cannot originate it without saying, ‘okay, my exit strategy is to fix the house up and then flip the house and sell it on the MLS.’ ‘My exit strategy is to fix this up and then get another loan because I’m going to go rent it.’ ‘My exit strategy is, I’m not going to do any work to it, I’m just going to buy it with a debt service credit loan and keep it cash flowing.’ So that’s what all of these loans are doing now, is allowing people to flourish in the space, to be able to get financing, which, three, four years ago, really wasn’t available to the real estate investor.”

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