Industry Trailblazing


Success is no stranger to Daniel Jacobs. He is known most for growing and selling 1st Metropolitan, but his resume goes far beyond just that one company. He has always had a passion for improving the business of mortgage lending. So, it should come as no surprise that he is involved with a new company and continues to push the envelope. What will the mortgage banker of tomorrow look like? How will mortgage lending change over the next five years? Daniel Jacobs sat down with our editors to answer these and other pressing industry questions. Here’s what he said:

Q: How did you start out in mortgage?

DANIEL JACOBS: When I bought my first home I worked with an inept originator who seemed to have all the trappings of success, except for knowledge of her job. She was unable to answer basic questions about the process and documents I was being asked to sign. When I asked why the APR on the Truth in Lending disclosure I was signing was different that the disclosed interest rate she spoke very slowly and loudly and said, “that means the AANNUAL PERCENTAGE RAAATE….” I knew I was neither hard of hearing nor particularly slow in my listening skills. When I heard her mention her newly purchased boat I immediately decided if she could do this job I could do it better. So, immediately upon closing on my home purchase I set out to get into the mortgage industry with the goal of being better than the originator I worked with and to create a better experience of other home buyers in need of home financing.

I started out as an originator and moved into various management roles as I uncovered painfully inefficient processes that I felt I could improve. Most of my positions in the mortgage industry were ones created by my own proposal after identifying organizational problems and proposing to solve them.

Q: How has the mortgage industry changed since you first got involved in the space?

DANIEL JACOBS: The industry has, for too many, morphed from a cohesive profession to a disjointed series of sales and clerical jobs. Mortgage professionals used to be expected to understand the lifecycle of a loan, underwriting guidelines and respect and understand risk. We were a live band with each instrument playing their part in one hall, together, to create cohesive albums. Each band member had to know the other’s parts so they could create songs together at once. Now we are an industry of studio musicians who play our respective part alone in a studio with faceless digital producers who splice and manipulate all the parts together to make singles. Do we still create songs? Yes. But we used to create music. There is a difference.

Originators have allowed themselves to shift from knowledgeable advisors in business development to mere sales people. Processors have allowed themselves to shift from inside knowledge banks and sales and process facilitators to clerks who blindly satisfy a series of checklists in indecipherable processes dictated by automated systems spitting out unpredictable requirements and checklists.

When I started in this business it was incumbent upon all originators and processors to gain a deep understanding of underwriting guidelines and underwriters were gatekeepers of risk, using judgment and common sense. Over the years originators, as a whole, have commanded a greater and greater share of the revenue while becoming less and less invested in the business. Processors have become more and more clerical with checklist satisfaction responsibility. And underwriters have become what processors used to be. The AUS black boxes have become what underwriters used to be. And no one really understands why we do anything anymore. We just do it because the checklists tell us to.

Q: You successfully grew and sold 1st Metropolitan Mortgage. How did you do it?

DANIEL JACOBS: I worked for a very entrepreneurial owner who wanted to grow from a small local broker to a significant national mortgage company. He was willing to invest in acquisitions as well as organic growth. In September 2002 we bought the assets of 1st Metropolitan Mortgage and quickly learned that it was a great sales organization but it was about to implode, as the company had little corporate infrastructure, controls, and systems in place to operate effectively. The company required a complete restructuring.

Step one of this restructuring was to set and establish our professional values and ensure that, even in the absence of sophisticated operational systems, everyone in the company operated with the same fundamental set of governing values. In the first year after the acquisition we had to part ways with well over half the sales staff whose values were not aligned with ours. We parted ways with our largest branches at times when they had differing governing values than the company. And that really helped set the tone for who we were and how we would operate.

We then scrapped everything we did procedurally as a company, unless we could clearly justify it as necessary and relevant at that moment. Doing stuff just because that’s the way we have always done it was not the answer. We had the flow chart hallway where once a week we’d print out poster size flow charts for every department and posted them on the walls. We had sharpie pens hanging on ropes along the wall and every week we’d cross out and change processes for each department and the next week we’d start the new process and we kept doing this until everything really started to work and synchronize into a cohesive system company wide.

Next, we automated everything we did. EDAC (Electronic Data Access Center), our Web-based integrated management system, was born. We established the manual procedures with the reports/output we needed for everything and then we started creating custom technology to support everything we did. We required one control repository for every data point to ensure we never had disparate systems with conflicting data. And every solution had to be able to scale. Nothing could be implemented as a solution unless we could do it 2,000 times per month for the same cost as doing it 50 times per month. We always started with the output we desired and that revealed the input we required. We ended up with a proprietary HRIS, licensing system, internal customer ticketing system, legal tracking system, vendor management, marketing automation system with management dashboard and reporting, all in one. It connected seamlessly into our GL system and LOS for one comprehensive management system that every person in the company used on a daily basis.

This system allowed us to grow our branch, loan unit and employee head count, across the nation with tight controls, scalability, and extraordinary efficiency. With more than $4 billion in volume, 1500+ loans funded per month, 150+ branches at any given time, we had five full-time accounting staff members and four full-time HR staff members. Our systems and automation were extraordinary and helped us get through those tough years when the downturn ravaged the industry.

Of course, the world’s best technology and systems are completely ineffective without dedicated, highly talented staff and management. By establishing an environment where everyone knew what we stood for, where we built technology to help people be effective, where having a lot of fun at work while working crazy hard and being extremely productive was the standard, we had an extraordinary employee retention rate. Companies often tout their culture to others. We found others touting our culture to us. It was really a special group of people with extraordinary dedication who made 1st Metropolitan a great place.

Q: You’ve also become involved with Pro Mortgage Branching Solution. How would you describe their value proposition?

DANIEL JACOBS: PMBS is a small boutique branch recruiting firm I founded with my business partner, Adam Sidle, in late 2010. Adam was a top branch manager and then recruiter at 1st Metropolitan Mortgage. At 1st Metropolitan we used to spend a lot of money producing new branch manager and LO leads to grow the company. Most of those leads did not qualify to become a MetroBranch, but we tracked many of them and found they landed at another company where they were a better fit. So, Adam and I founded PMBS, where Adam is the operating partner, to help retail branch managers and branches with the right lender for their needs. It is a very rewarding business, as the PMBS BranchMatch process is like a great personal matchmaker, trying to find just the right fit for long-term relationships. But at PMBS we are matching branches and companies for long-term business relationship vs. creating personal connections for marriages. Mortgage lenders and branches both love the value proposition because it is a lower cost sourcing model for companies and free to branch managers.

Q: What does it take to be a successful mortgage banker these days?

DANIEL JACOBS: Focus. Intense and multi-faceted focus. Mortgage bankers must be very good at business development, legal and regulatory compliance, secondary execution, efficient process management, and people management.

Ten years ago a mortgage banker could be good in one of these areas and mediocre in others and still remain viable. Today’s environment is so unforgiving in all areas, that mortgage bankers must employ the very best talent, and be committed to an intense focus on being excellent in every area of their business to remain viable.

The gap between viable and highly successful used to be wide. It’s razor thin in 2014, leaving little room for mediocrity or error as a mortgage banker.

Q: How do lenders manage the compliance burden and still remain profitable?

DANIEL JACOBS: The only way to effectively manage the compliance burden and remain both profitable and competitive is through constant process refinement. With costs rising and margins shrinking, lenders must constantly find more effective and efficient ways to operate to remain profitable. With every new compliance burden the entire loan manufacturing process must be considered in context to avoid undue layering of procedures and expenses to address them. Mortgage lenders must reinvent their way of doing business annually to remain competitive in today’s market.

Q: Where do you see the state of innovation in mortgage banking today?

DANIEL JACOBS: Innovation is largely on hiatus in mortgage banking. Non-QM is what is all the buzz, but let’s face it, product development is hardly innovation. Historically, it has been the standard. Perhaps once the industry knows where the secondary market stands, what the fate of the GSEs will be, and we believe we are beyond the danger of an imminent rising rate environment, and the CFPB is a more predictable regulatory body who has established largely known and quantifiable boundaries and risks, the industry will begin truly innovating again.

Q: Lastly, what will mortgage lending look like five years from now?

DANIEL JACOBS: Five years from now there will be fewer mortgage bankers. The barrier to entry to start a new mortgage banking firm will continue to rise with growing capital needs, rising compliance burdens, and greater experience and capital thresholds to gain direct access to the secondary market.

Additionally, we will see more diversified mortgage banking firms with multiple retail production channels ranging from consumer-direct online models to traditional branch models and some hybrid models. Consumers have become more comfortable than ever transacting refinance loans over the phone and Internet. Over the next five years we will see far more move-up home buyers willing to do business virtually, while first time home buyers and buyers with complex financial situations will continue to demand a local, face-to-face transaction.

In five years we will also find lenders offering more commonly offering service level guarantees, as the regulatory climate will have plateaued, the market will have cycled from refinance to purchase to a healthy blend of both again, and lenders will have time in the interim to better focus on perfecting their processes, technology and service value-proposition.

Industry Predictions

Daniel Jacobs thinks:

  1. The CFPB will make a splash with multiple “example fines” of name brand mortgage lenders. The industry will gain valuable insight as to where the new business risk lies.
  2. By spring 2015 non-QM lending will gain significant traction, approaching a double-digit percentage of overall loan volume. We’ll “party like its 1999” – when subprime lending was on the upswing but still made sense. That’s what Prince was referring to, right?
  3. At least two top 20 lenders will exit the industry or consolidate with other lenders.

Insider Profile

In addition to being a partner in Pro Mortgage Branching Solutions, Daniel Jacobs is the division president of American Financial Network. ( AFN is a national mortgage banker, in business since 2001 and has operated mainly in California until recently. Some key members of Jacobs’ management team have joined him to expand AFN’s presence on the east coast, and in 2014 the company has opened six branches. AFN funded $1.6 billion in 2013 and predicts year over year growth in 2014. The company received its Fannie Mae seller/servicer designation as well as its Ginnie Mae Issuer status earlier this year. AFN operates an east coast corporate office and operations center in Charlotte, NC.

What Influences You?

You Can Download This Full Article As A PDF HERE

Trevor-GauthierIn the space of ten days this past summer, I saw Lady Gaga, Slash and Aerosmith in concert. At first blush, it would appear they have little in common. Aerosmith has its roots in the 60s and 70s. Slash played with Guns N’ Roses in the 1980s and Gaga didn’t begin producing chart-topping hits until the early 2000s. It would seem, apart from their shared success and enormous talent, that there really isn’t much tying them together.

Yet they do have much in common. The careers of these three artists span more than 50 years. None of them are done yet, though I was reminded Aerosmith first took the stage some years before I was born. The span of their careers is an important point. Each was influenced by performers who came before them. They, in turn, are influencing those that come after. Each adds to their individual styles by drawing from other artists. Aerosmith drew from Led Zeppelin, Alice Cooper and the Beatles. Slash and Guns N’ Roses were influenced by Aerosmith and Led Zeppelin, among others. Lady Gaga shares the Beatles and Led Zeppelin with the other two. Not so dissimilar, after all.

Influences play a powerful role on mortgage teams, as well. Every lender I know has other mortgage organizations they look to for the best-in-class approach to every aspect of the origination cycle. Lady Gaga was not the first to costume-up. Nor was she the originator of her piano-themed stage show. Elton John wasn’t the first either, though she cites him as a major influence. I may not have been around for Aerosmith’s start, but I was there for Elton John, however, and the similarities are evident. Most important of all, however, the acts still work.

My team has a broad-ranging list of influencers, only a few of which are directly mortgage-related. Take the impetus for Accenture Mortgage Cadence. We were born from the manufacturing industry, believing the making of a loan is not that dissimilar from the making of an automobile. When you break it down into components, you see that creating a loan is no different than manufacturing anything else. It can be standardized, objectivized and, using technology, mechanized. That influence, at our core when we started in 1999, remains central today.

Our team was also highly influenced by organizations that deliver outstanding customer experiences. Many of us got our start in mortgage lending. All disciplines, from origination through closing — even servicing — are represented in our organization. Those of us with an industry pedigree noticed early on that customers were not having any fun financing their homes. We, as borrowers, had the same sorry experience. We looked at companies that excelled in creating customer experiences and worked on building those into our technologies. Today, we are influencing others in the business.

Mortgage lending is a tradition-bound business more known for following rather than setting trends. Yet our industry is being studied by what we would consider non-traditional mortgage lenders. Who is watching us? As early as the 1990s, Microsoft made a foray into online real estate finance, even before our industry went the Internet point-of-sale route. Their entry may have been premature; Microsoft abandoned the business in the late 1990s before borrower self-service gained even a toe-hold.

Who is the next non-traditional entrant? It could be any one of a number of companies that have deepening customer relationships. You know these organizations well. You and I transact with them regularly and effortlessly. They are very good at delivering on their promises of service and quality. They have also been exceptional at business model extension. Start with one idea, perfect it, add another, and another, and another. Why not mortgage lending? Why not indeed. Just as the Beatles influenced both Aerosmith and Lady Gaga, we are influencing these emerging non-traditionalists.

My point is this: the mortgage industry has reached a point at which we have to examine our past influencers while at the same time looking for new ones, rapidly and liberally adapting best practices from anywhere and everywhere. Of course the market is much different today; the business climate has changed, borrowers have evolved, and available technology and its capabilities are downright confounding. In light of these factors, we need to look for new influencers to help guide our future strategies.

It may be easier than we think to identify these influencers. If new organizations enter the mortgage lending business, they won’t do things the way we do them. We know more about the business than they do, but that may be a weakness. We can look at the business the way they do, as if we had no mortgage operations whatsoever. It’s difficult to do, but if we start with a clean slate and act accordingly, we are likely to out-compete those we have influenced.

Watching the shows in the last weeks of summer brought me to another important realization. There is no way that Gaga, Slash or Aerosmith believes that all the music that could be created has been created. If they did, they would have stopped trying years ago. Instead of stopping, they have all been prolific. Aerosmith released five hit albums in five years during the 70s, continuing the trend through the 1980s with new music. Lady Gaga put out five albums in six years, impressive for not only the number of releases but for the evolution of style with each new release. The sheer volume and variety of their output is astounding, proving not only that success fosters more success, but that creativity spawns even greater creativity.

We know for certain that millions of individuals will become homeowners in the next 10 or so years. Millions of existing homeowners will trade up or down as well. How will we reach them? How will we make sure they get their loans from us? We can take another page out of the blues, rock, and pop songbook. First, like Gaga, we have to creatively evolve our styles for the simple reason that borrowers have evolved. Seasoned borrowers lived through the housing crisis. They are consequently savvier.

First-time buyers, the burgeoning market waiting to blossom, come to the idea of homeownership with vastly different expectations about financing than did their parents. They think they can have anything and everything they want in about 24 hours. Why not a mortgage? It’s just a loan. The first lender to reach that level of service gets Lady Gaga-like style points.

That lender will also make a lot of loans. Success breeds success, and, as a result, they will make even more loans. Adapting styles that speak to borrowers will be one of the key strategies of tomorrow’s successful lenders. While a 24-hour mortgage may be a few years off, the mortgage lender that is transparently available when and where the borrower is using the technology of their choice will win and will get the standing ovation. Rapidly enabling borrower self-service is one big first step toward a style of lending that will be the new industry standard in just a few years.

I admit to having eclectic tastes in music. Walk into my office on any given day, and you are as likely to hear one of these three artists – ok, maybe not Lady Gaga – as you are Eric Clapton. What influences and inspires us often comes from unexpected places at unusual times. Successful individuals – musicians and others – are open to influences when they appear.

Will I see Lady Gaga every year? Probably not. I am extremely glad that I did, however. She made me think about what influences me, my team and our industry. I’m glad I was open to the experience.

About The Author


Shining A Light On OPIC

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TME-PHhallFor too many years, the federal government has been doing more harm than good when it comes to the U.S. housing finance market. Strangely, Washington has been much less obvious when it comes to providing aid to housing markets in other parts of the world – thanks, in large part, to a somewhat obscure agency that rarely receives media attention.

Established in 1971, the Overseas Private Investment Corp. (OPIC) defines itself as the development finance institution of the U.S. government, with a mission that mobilizes “private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy.”

Housing and real estate finance is among the priorities that OPIC pursues. Last month, the agency announced that it was sending money overseas to assist in a number of endeavors: Up to $75 million in financing to First City Monument Bank to expand access to real estate development and infrastructure finance in Nigeria; up to $56 million in financing to Delaware-based La Hipotecaria Panamanian Mortgage Trust to expand affordable housing mortgage lending in Panama; up to $80 million to International Housing Solutions Fund II, which will invest in affordable housing across Sub-Saharan Africa, and up to $50 million to Peninsula Investments Group Fund III, to focus on investing in middle-income housing in Colombia, Peru, Panama, Uruguay and Mexico.

OPIC is intentionally vague on the exact nature of its financing, but one might assume that there are tight requirements attached – there is nothing in its literature to suggest this is no-strings-attached grant money. The agency’s website claims that it “operates on a self-sustaining basis at no net cost to American taxpayers,” so one can assume that OPIC is getting (and receiving) something in return for its outreach.

Many of areas targeted by OPIC have significant political and economic problems. For example, in November 2011, OPIC announced plans to finance a $100 million project to establish Guatemala’s first multi-bank, market-wide mortgage platform that involved both origination and securitization. At the time of the announcement, Guatemala had a housing shortage of more than one million homes.

In June 2010, OPIC provided nearly half of the funding for a $500 million mortgage finance program designed to double the number of families who are able to purchase homes in the Palestinian Territories. In May 2012, OPIC announced an agreement to provide $30 million in financing to a private equity fund designed to invest in Palestinian companies.

In regard to the Guatemalan and Palestinian projects, OPIC has not offered any public updates on how its money has been spent or what kind of results have been generated. Indeed, that is one of the more troubling aspects of OPIC – we have no idea what (if anything) the agency has accomplished.

On occasion, OPIC makes a public relations blunder – most egregiously in February 2013 when it teamed up with the U.S. Agency for International Development and the Clinton Bush Haiti Fund to launch a mortgage finance program in Haiti. This endeavor was announced while ignoring the sad fact that many Haitians were still homeless as a result of the devastating 2010 earthquake – the very last thing that the Haitian people needed at that time were home loans.

OPIC also seems to have its own Middle Eastern policy: in its press materials, OPIC refers to this part of the world as “Palestine” even though the U.S. State Department uses “Palestinian Territories.” Go figure!

And while U.S. taxpayer money is reportedly not being spent on housing finance in far-flung corners of the globe, I still cannot overcome the confusion of why a federal agency is spending its time and energy in building mortgage platforms in other countries. After all, these countries have governments – and I don’t recall ever seeing a developing country leader who lives in poverty and struggles for food and shelter. And I can’t see how these efforts improve U.S. foreign policy – really, do the Palestinian and Guatemalan people love the U.S. more because it is helping to finance a local mortgage program?

Perhaps the OPIC executives would like to take some time and present an overview of what they have accomplished recently, especially in regard to improving the quantity and quality of affordable housing around the world? The agency’s goals are noble, but their results are somehow missing from the spotlight.

About The Author


Who Is Closing Your Loans?

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TME-Alec-CheungLenders are finding it increasingly beneficial – in fact, necessary – for them to know precisely who is closing their loans and disbursing funds. This continues to be one of the least transparent parts of the lending process for lenders and borrowers alike. It is a point in the process where someone other than the lender interacts with the borrower. It is also where lenders are the most vulnerable to the results of bad actors in the settlement industry. So lenders not only want to know who is closing their loan, but they want some way of assessing history, credentials, associations, and associates.

The need for more transparency was re-emphasized in 2012 when the Consumer Financial Protection Bureau (CFPB) issued Bulletin 2012-3, stating that lenders will be held responsible for the actions of the third party service providers they use. The CFPB went on to say that they expected institutions to conduct a thorough due diligence to ensure that service providers complied with the law and monitor ongoing compliance, as well.

In addition to pressure from the CFPB (or arguably as a result of the CFPB!), lenders are also remaining very selective about whom they lend to. With low volumes, every customer has become more critical to retain. With so many channels and opportunities for customers to write reviews, post comments and share purchase stories, a bad experience with a closing agent can reflect poorly on the lender and cost them future business.

Other Drivers

Lenders are not the only ones that need to know more about who is closing a loan. Settlement agents frequently get a bad rap because of the actions of an unscrupulous few who commit some form of escrow fraud. The vast majority of settlement agents are trustworthy and professional, but there hasn’t been a universal way to differentiate themselves from the bad actors in the industry and in a cost neutral (to agents) manner.


One of the challenges to validating the status of settlement agents is that information about individuals closing loans is not static. A recent analysis by eLynx showed just how volatile information about settlement agents is. There is an average of 62 new closing professionals with a variety of closing roles, and approximately 165 updates to existing profile information every week.

Another challenge is that there is no universally adopted common repository for registering and tracking all closing participants that include independents and attorneys. Title underwriters have information about their direct agents. Third party services have watch lists or white lists developed from public and/or proprietary data. But there isn’t a standard way to uniquely identify a settlement agent across all repositories, making it quite difficult, if not impossible, to create a complete, accurate snapshot of a particular settlement agent.

Early Progress

There are industry leaders that have introduced solutions and programs to address these challenges. eLynx launched a closing platform in 1999, which began collecting limited information about who was participating in the loan closing. Significant updates throughout the years culminated in the introduction of the eLynx Closing Network (eCN) in 2009. A key component in eCN is Settlement Agent Management (SAM), which requires closing professionals, including settlement agents, processors, escrow agents and attorney agents, to register with eCN before retrieving closing packages sent by lenders. As part of the registration process, prospective closing agents must provide risk mitigation information about themselves, their business, and their role in the closing workflow. To date, there are over 98,000 registered professionals, including independents and attorneys, representing a variety of roles in the closing process. The objective of adding the SAM feature into eCN was to provide some level of transparency into the closing workflow. SAM was the first third party service in the market designed to confirm that the closing professional lenders entrust with their closing documents and disbursing funds is who she says she is, and possess the right assets to mitigate risk throughout the mortgage transaction.

Another example of how the industry has responded so far is the Stewart Title Guaranty Company’s Trusted Provider Program, which vets all of the agencies and attorney agents in their network. To qualify as one of Stewart’s Trusted Providers, the agent must pass an intensive initial due-diligence screen, submit to a third-party audit, pass an extensive review of their experience, business, policy loss history, and licensing. Stewart Title has described the intent of the Trusted Provider program as an effort to raise the bar for independent agencies and attorney agents in their network, to elevate the professionalism and credibility of the title industry as a whole, and to protect the investments of their customers.

Enter ALTA

As the industry organization for settlement agents and title underwriters, the American Land Title Association (ALTA) works to help establish credibility for their members. ALTA’s Best Practices is their most recent initiative to create a standard of practice for settlement agents. These Best Practices were codified in response to CFPB’s 2012-3 bulletin, and include a certification component where members can validate their adherence to the established best practices.

For ALTA to make Best Practices work, there has to be a common and reliable way to uniquely identify each title and settlement professional. While every title underwriter assigns their own identification number, the challenge has always been ascertaining whether “Joe Smith” at Underwriter A is the same “Joe Smith” at Underwriter B, or an entirely different person.

ALTA Universal ID

To solve this, ALTA has formed a working group of industry volunteers, including title underwriters, title agents, lenders, vendors, and software providers, to develop a registry for a Universal ID for title agents and settlement service companies. Within the current scope of the effort, ALTA will host certain demographic and ALTA-specific program data such as ALTA Best Practices Certification and Policy Forms License compliance. ALTA will not be serving as a repository for data owned by others.

The ALTA Universal ID, will be based on a unique ID used in ALTA’s constituent database. Adoption of this ID by lenders, settlement agents, title underwriters, and technology vendors across the industry will be critical to getting this off the ground successfully. As such, ALTA has enrolled key participants from all areas to jointly bring life to the Universal Agent ID. Access to the ID will be facilitated using the MISMO eAgentValidation specification, which allows trading partners to develop standards-based programmatic access to the data repository.

Building on the Universal ID

The ALTA Universal ID and the MISMO eAgentValidation project are significant milestones but they are just the foundational layer needed by the financial community. For over a decade, eLynx has worked with lenders, settlement agents, title underwriters and others in the mortgage industry. Our experience has led to a number of insights about how to build upon the work being completed with the ALTA Universal ID. Following are additional considerations that have to be addressed in order to enable the kind of thorough and actionable validation lenders seek from the title community:

>> One standard integration with all the TUs and title production systems so that lenders don’t have to learn/use a separate validation process for each TU.

>> Expanded data fields in the MISMO eAgentValidation specification and broader adoption as the standard with which to facilitate that universal TU integration

>> Normalizing how the agent or closing professional is validated across the lender and underwriting community is required for a consistent outcome

>> Automating collection of the closing protection letter (or CPL reference) and establishing the legal acceptance of the “eCPL” to streamline the workflow process and provide a transparent audit trail

>> Evaluating key metrics post close to ensure that the lender approved transaction was what was actually used during the closing process

The amount of change that actually takes place in the normal course of title business is far greater and more intricate than one would initially think. Supporting that volume of change in order to provide a usable and valuable database of settlement professionals is complex and difficult. The more centralized that data is, the easier it is to manage. The Universal Agent ID is a fundamental first step that enables key services to function more effectively, and eventually, the question of “Who is closing my loan?” will be much easier to answer confidently and with assurance.

About The Author


Are ALTA’s Best Practices Best For The Industry?

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web-tme914-jackie-hoytAs a result of the bundling, overvaluation, and selling of mortgages as an equity product that led to the real estate collapse and lending lockdown, the Consumer Financial Protection Bureau (CFPB) released a bulletin in 2012 that reminded lending institutions that they would be held liable not only for their own actions, but also for the actions of their vendors.

In the title industry, this was game-changing and the industry’s governing body—the American Land Title Association (ALTA)—responded by releasing “ALTA’s Best Practices,” a framework developed to assist lenders in satisfying their responsibility to manage third-party vendors. It is the title industry’s attempt to help forthright lending institutions have one less thing to worry about as they navigate these heavily regulated waters. Initially, this seemed like a win-win. After all, the “seven pillars” that constitute the Best Practices— including mandates related to licensing, escrow, privacy and security, settlement processes, policy production, insurance coverage, and customer care— would both elevate the professionalism of the title industry and allow compliant providers an automatic “in” with lending institutions. However, as the soft deadline (August 1, 2014) for implementing these Best Practices looms, there will be five main unintended consequences, as described below.

>> Confusion: While the Best Practices are uniform, interpretations for compliance are not. Title companies are implementing in a variety of ways and lending institutions have no standard guidelines from which to vet vendors. As a result, there is confusion on both sides of the fence, and many title companies concerned that they will not be able to compete for business without a set checklist used by all lending institutions.

>> Small Title Companies Close: A small title company cannot possibly meet the demands set forth in Best Practices. In fact, Hillsboro Title Company grew just to be able to sustain this industry change. We now have two people working full-time on Best Practices compliance. The smaller shops simply won’t be able to afford to get into compliance and will be forced to close or merge with other companies.

>> Big Guys Get Bigger: While the larger title companies will have the resources to implement Best Practices, they will undoubtedly have to add compliance staff and, as a result, additional closing offices to offset the cost of the new hires. In addition, with small companies needing to shut their doors, larger companies will face an unparalleled opportunity for growth by acquisition.

>> Less Competition, Less Choice: As a result of the consequences explained above, there will be a surge of mergers and acquisitions in the title industry. And, as smaller title companies disappear or become acquired by larger companies, lending institutions and consumers will see their pool of title companies from which to choose shrink drastically.

>> Higher Costs: Compliance with Best Practices requires a significant influx of funds; as the cost of doing business increases, these costs will more than likely be passed along to the consumer.

>> More Law Suits: With all of the money being spent to regulate, document, and verify—and all of the confusion surrounding the soft Best Practices compliance deadline, there will be an increase in litigation against lenders and title companies to take advantage of the wrinkles yet to be ironed out in discovery documentation.

ALTA’s Best Practices will undoubtedly raise the bar for quality and professionalism in the title industry. However, with good, there is always some bad. Many title companies will find themselves working “on the business” more than “in the business” and business development initiatives and profits may suffer. While the Best Practices protect consumers, promote quality service, and provide for ongoing employee education, the regulations are placing hefty burden on title companies across the country. The full effects of this industry game-changer will be interesting to watch.

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Don’t Count Out The Independent

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TME-TGarritanoRichey May & Co has released its second quarter 2014 Trend Report for Independent Mortgage Bankers. The Trend Report includes the operating results of 37 independent mortgage companies throughout the US and covers all operating models and production volumes.  According to the report, loan production among independent mortgage bankers increased by 50 percent over the previous quarter, the first increase in the past three quarters. Purchase volume spiked 62 percent, while refinance volume increased 20 percent over the first quarter 2014.

Unfunded lock pipelines increased among independent mortgage bankers as well, rising 38 percent over the previous quarter. According to Kenneth Richey, managing partner of Richey May, this uptick indicates that the improved market conditions will continue through the coming months.

“The increase in unfunded lock pipelines suggests that we can expect to see similar, if not more improved, production in the third quarter of 2014 as well,” Richey said.

In addition to the increase in production, independent mortgage bankers improved profits by an average of 57 basis points, with many realizing up to 100 basis points in improved pre-tax profits over the previous quarter.

The Trend Report for Independent Mortgage Bankers was generated from the results of Richey May Select, the industry’s only benchmarking technology specifically for independent mortgage bankers. The software, which provides up-to-date peer-to-peer benchmarking information on various aspects of their businesses—such as financial, production, employment, warehousing and servicing operations—analyzes data submitted by independent mortgage bankers across the U.S., and compiles a report of the quarter’s notable trends. The quarterly Trend Report highlights key performance indicators, such as overall volume and volume by transaction type, as well as loan margins, operating costs, labor output, and more.

The data used in the report is gathered from Richey May Select subscribers and is provided at no additional costs to the participants.  All data sources are kept confidential.

“Independent mortgage bankers’ unit volume, expenses and margins were very close to those they experienced in the third quarter of 2013,” said Keith May, Richey May’s managing director, advisory services. “However, pre-tax profits in the second quarter of 2014 were much higher than in the third quarter of 2013. This is probably because third quarter 2013 was in the middle of a declining market, whereas second quarter of this year was in an improving market.”

Richey May Select is the only tool of its kind that provides independent mortgage bankers with fingertip access to a peer-to-peer comparison of how their businesses rank against other companies of similar size and operational focus. Unlike static benchmarking reports, with Richey May Select, all information is current and available approximately six weeks after the end of each quarter.

In fact, privately held lenders that get it right are growing. For example, Mortgage Master, a super-regional mortgage lender and one of the country’s largest privately-owned mortgage companies, continues to expand its production infrastructure in New York, New Jersey and Connecticut and now has 17 branch offices and nearly 150 loan originators in the important Tri-State market. This strategic expansion is generating significant production growth in these three states, with total annual loan volume increasing over 500 percent to almost $2 billion from $388 million originations over the last five years. This growth is being driven by Mortgage Master’s more than 25 years of mortgage experience, and unique business model, which provides borrowers with the best possible pricing, products and service, and helps loan originators increase production via innovative marketing and shared ideas from some of the top originators in the industry.

“We are extremely pleased with our growth in New York, New Jersey and Connecticut, and we are continuing to strategically open new branches and hire top loan originators in these markets to help borrowers while interest rates remain close to record lows,” said Paul Anastos, President of Mortgage Master. “Borrowers are demanding experienced, trusted and caring loan originators to help them navigate the mortgage purchase or refinance process. Mortgage Master’s responsible, supportive and sustainable lending model allows our loan originators to deliver borrowers the best possible pricing and mortgage solution so they can make the right decision.”

Mortgage Master’s five New York branches employ 43 loan originators and are located in Manhattan, Brooklyn, Garden City, Rye and Tarrytown. The five New Jersey branches employ 25 loan originators and are located in Hoboken, Fairfield, Cranford, Princeton and Wall. The seven Connecticut branches employ 41 loan originators and are located in Fairfield, Glastonbury, Greenwich, Hamden, Simsbury, Stamford and West Hartford.

“Over the last few years Mortgage Master has made a significant push into the greater New York City area. In less than two years we have grown to 30 employees from just 7 and we are actively hiring quality production professionals,” said Manhattan Branch Manager Scott Bonora. “Mortgage Master is uniquely structured to succeed in the New York City metropolitan area, and the surrounding states, and communities, because of our broad product portfolio, ultra-competitive rates and excellent client service.”

Mortgage Master is enthusiastically looking to increase its branch infrastructure in New York New Jersey and Connecticut, and recruit additional high quality loan originators.

Similarly, Supreme Lending, a national mortgage banker headquartered in Dallas, Texas, has opened a new branch in Philadelphia, Pennsylvania. This is Supreme Lending’s first branch in the state. Robert Cenci, who has over 18 years of experience as a mortgage loan originator and sales leader, has been appointed as branch manager for the office. He has hired a team of six mortgage professionals, including one sales manager and three loan originators to work with him in the Philadelphia branch.

The Philadelphia branch was opened as part of Supreme Lending’s growth and expansion plans, and extends the company’s reach in the Northeast U.S.

“Supreme Lending’s growth and longevity are due in large part to hiring the best people and our customer-comes-first approach,” said Supreme Lending’s CEO Scott Everett. “By opening the Philadelphia branch, we’re making it easier for homeowners in Pennsylvania to receive not only competitive rates, but also the highest quality service. We’re so pleased to have Robert and his team representing Supreme in this area.”

Robert Cenci began his career with Washington Mutual in 1996 and has worked in the greater Philadelphia area for the entirety of his career. Prior to joining Supreme Lending, he originated mortgages with organizations that include Bank of America and MetLife Home Loans, and also led a sales team at Caliber Home Loans. He has extensive experience and in-depth knowledge of the full range of mortgage products, including conventional, nonconforming and government loans that include VA and FHA loans.

Cenci cites the support Supreme Lending provides to its branches, as well as the company’s forward approach to using technology as primary reasons for joining the firm.

“Supreme’s policies are based on providing high quality customer care,” said Cenci. “Virtually everything they do, from the marketing and production support we receive from corporate to the company’s continual investment in technology, is focused on making the loan process faster, easier and safer for borrowers. That’s very important because it enables us to provide the quality of service our customers deserve and expect.”

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Technology Puts The “Special” In Specialty Servicing

You Can Download This Full Article As A PDF HERE

Jason-SpoonerTechnology is pervasive in modern life. Our love/hate relationship with it means that we constantly poke fun at the machines that both run our lives and make them easier. But there is little doubt that technologies like smartphones and social media are here to stay, and their impact on society is profound. The machines seem to be taking over our lives, particularly as we see teenagers with their faces buried in the screens of mobile devices, oblivious to the world around them as they instantaneously (and ironically) communicate with hundreds of people on Twitter and Instagram.

Still, there are remarkable examples of how technology and human effort work together to accomplish great things, and the special/component servicing business sees them every day. Without technology, many more families would have suffered the nightmare of foreclosure during the mortgage crisis. Indeed, the recovery would have been even slower than its already disappointing pace. In many ways, technology puts the “special” in special servicing – but it needs able human users to realize its full potential.

About a hundred years ago, author and philosopher Elbert Hubbard wrote, “One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man.” The servicing industry’s approach to the rising tide of mortgage delinquencies in the latter years of the last decade was to use ordinary measures, because that’s all that was available to them at the time. The prevailing technology was basic and designed to handle occasional delinquencies, not waves of them. When delinquencies mounted, the technology couldn’t keep up, and the results were far from satisfactory.

When Wingspan Portfolio Advisors came on the scene in 2008, it brought with it not only a new servicing approach; it also adopted a new technology approach that had distinct advantages over other designs. Using a central data warehouse, for example, had the benefits of having a place for everything and everything in one place. Most of the traditional servicing legacy systems consisted of multiple data repositories and added-on layers of software that bridged gaps created in mergers and acquisitions over time. Many still do. Without legacy systems to contend with, Wingspan has been able to implement its high-touch methods with unfettered efficiency. Our technology approach has also empowered a formidable resource: the individual loan resolution specialist.

A highly trained person armed with effective methodology is a game-changer. Give them the tools and empower them with the authority to act, and they will amaze you with their achievements. Finding people who are empathetic, smart and eager to find solutions is the key to success in the industry’s most difficult segment, and great technology can never replace them. Instead, it enables them to succeed by putting the information they require at their fingertips.

There are five main reasons technology and special/component servicing go together like words and music:

Everything needs to be accessible. When working with distressed borrowers, it is sometimes difficult to get them on the phone, so when you do, you need to maximize the opportunity. Technology can betray you here: people beset by collection agents recognize the delay when they answer the phone as an auto dialer in use. We don’t use them because the last thing we want to do is seem like a bill collector. When we initiate a call, we want to make it meaningful, nonthreatening and productive, and our technology puts all the borrower’s information on the specialist’s screen to call upon as needed.

Everything needs to be immediate. We want to accomplish as much as possible with each conversation, so our information has to be current and immediately available, whether it has to do with payment histories, property values or credit ratings. We often have to reference property trends in the borrower’s area in order to point out positive improvements that are occurring. Having access to the most up-to-date information can mean the difference between success and failure in obtaining lasting and sustainable loan modifications. Sometimes the information that can help comes from a non-obvious source, such as a recent news story about a new assembly plant or factory opening up in the area, one that will drive jobs and housing demand. All kinds of information can affect success in handling distressed loans, and it has to be current.

People won’t make decisions without data. People make emotional, impulsive decisions all the time, but it is rare in our business that commitments will be made without data to back them up. For example, it is true that people have highly emotional investments in their homes that have nothing to do with finance. This is incredibly important, something Wingspan’s methodology calls “psychological equity.” While our experience has shown us that it is a main driver in understanding why and how much a borrower wants to keep the family home, it needs to be backed up with data from the loan resolution specialist. If they can accurately portray the area as seeing positive signs for stabilizing values in the foreseeable future, a negative equity default can be modified with a workable payment plan. Without good data to back up the commitment to stay, the transaction has far less of a chance. Another example might be access to information that helps foster a discussion on how costly rentals will be versus staying in the home. Most families want the single-family home lifestyle, and with the right data on hand, comparisons can be made available during a call that can produce a positive outcome.

People need time. In our experience, you simply cannot rush a process that is highly charged with both emotion and long-term financial repercussions. Whether dealing with outbound or inbound calls, we never hurry the conversations and have learned that the longer we’re able to talk with borrowers, the greater the levels of trust that can be established. This was a radical approach when Wingspan started, and perhaps the one most in conflict with traditional servicing models. For special and component servicers, it is less a numbers game than it is one of depth; superficial calls, where empathy is sacrificed for time, are harmful to our cause. The more information we have available for each contact via our technology, the greater our chances for having long and productive phone calls. We take great pains to establish early on that we are not calling to nag borrowers, but rather are seeking to find ways to keep them in their homes. Once we learn enough about their economic realities and their non-financial investments in the home, we can make real progress in retention efforts. This takes talent, patience, empathy and time – supported by information and the technology to deliver it where it is most needed.

Technology enables empowerment, and empowerment leads to success. This is not what the techies call a “squishy” concept that hinges on something from a motivational speech. The empowerment here means that the “boots on the ground” who work directly with borrowers need to be able to make decisions on the spot. Our technology makes this happen by creating economic scenarios for borrowers that are pre-approved within investor parameters, therefore requiring minimal steps before creating executable agreements. Consider this example: a borrower is defaulting because of a job interruption, but is training for a new career while working one or more part time jobs. Consistent income is established that is realistically sustainable, and with other sacrifices that would support property taxes and insurance, the amount falls within investor minimums. The resolution specialist can send an electronic document that can be e-signed immediately while on the phone and returned. A commitment is executed without the doubt and waffling that always seems to occur when a mail or courier-involved time lag is necessary. The right technology and approach include the ability to empower the person closest to the transaction to create positive results.

These days, few things are possible without technology; more often it seems that everything is possible with great technology. While futurists will have us believe that machines will be doing everything for us one day, it is more probable that for the really hard things, knowledgeable professionals will remain in the driver’s seat. Actual driving may be different – if you believe Google, it will be doing that for us. But using Google to access data that live people need to help families stay in their homes will not be changing anytime soon.

Technology is doing something else for special servicers, too, at least for Wingspan Portfolio Advisors. Where once we were best described as “special and component servicers,” we are more accurately described today as a “diversified industry outsource provider.” This has been an evolutionary step that was facilitated by technology as well as methodology. It made great sense for many banks and servicers to expand their use of our resources into other areas, particularly as their own needs changed and it was less advantageous to keep large staffs. For about 800 of these staff members who migrated to Wingspan over the last year, their roles changed little and their employment was uninterrupted.

How does this sort of adaptive scalability work in the real world? Actually, it worked seamlessly, thanks to our technology. Fifty machines may not be able to do the work of one extraordinary person, as Elbert Hubbard said, but when you put great machines together with great people, the results are nothing short of amazing.

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Embrace Changes

You Can Download This Full Article As A PDF HERE

TME-RGudobbaEveryone approaches their personal and professional life differently. Some are very organized, their calendar is meticulous with an up-to-date to-do list. Some are at the extreme opposite end. They tend to be procrastinators and appear to be scattered and unorganized. Most are somewhere in the middle. I recall early in my career where the desk of a department head was always clear except for his phone. When he was working on a project he would pull a file, work on it and return to its proper place before starting the next task. Everything in its place and a place for everything, including the pencils, freshly sharpened and lined up in the drawer. The engineer that worked for him was just the opposite. He literally had piles of folders, etc. stacked two feet high everywhere. Somehow, he managed, but was under constant criticism from his boss. One day there was a sign on the department head’s office door. “If a cluttered desk is the sign of a cluttered mind, what is an empty desk the sign of?” No more discussions were necessary. The point is, we all have our own way of dealing with the day-to-day challenges. That doesn’t mean we can’t change and make adjustments along the way.

But change can be stressful. We are uncomfortable with change. We like to stay in our comfort zone. Organizations are the same way. They are resistant to change. It’s almost like: If it’s not broke, don’t change it. However, the key to any organization’s success is embracing change, not standing pat. The organization that makes an effort signals to the world that they are open to making things better. But embracing change, for the sake of change is not enough in today’s world.

How does all of this relate to our industry? Here’s a quick example: The biggest change and accomplishment for the mortgage industry is MISMO. The focus was on the data. The development of the data dictionary was, and continues to be an industry wide effort. For the first time, the exchange of information between 2 parties was standardized. When you look at the complete loan process from application to processing to closing to fulfillment, there are numerous integration points. Many of these are simply point-to-point integrations. The MISMO standard greatly facilitates that integration. As these integrations are completed, along with e-signature adoption, we can begin moving towards the fully electronic mortgage. However, the biggest chasm has always been at the closing table because of the multiple parties in the process. No question this has been cumbersome for some time. I don’t need to go into a lot of detail, but this certainly became a focal point after the financial crisis.

How does all of this relate more directly to current events in our space you might ask. Well, “The Dodd-Frank Act directs the Consumer Financial Protection Bureau to integrate the mortgage loan disclosures. For more than 30 years, Federal law has required lenders to provide two different disclosure forms to consumers applying for a mortgage. The law also has generally required two different forms at or shortly before closing on the loan. Two different Federal agencies developed these forms separately, under two Federal statutes: the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA). The information on these forms is overlapping and the language is inconsistent. Not surprisingly, consumers often find the forms confusing. It is also not surprising that lenders and settlement agents find the forms burdensome to provide and explain.” (Excerpts from the CFPB Guide to the Loan Estimate and Closing Disclosure forms)

When the CFPB first announced the Loan Estimate and Closing Disclosure documents, I thought about the transition of the 1003 (2 pages) to the new Uniform Residential Loan Agreement (4 pages). I recall the disruption in the industry over this. But, it was not a major change. This was nothing more than expanding the sections for employment, assets, liabilities, etc. and leaving blank space for comments. There was very little new data elements added. What was all the turmoil about? First, at that time, we relied heavily on forms for the collection of information in an organized fashion. Sometimes they were filled out by hand and the available white space could be a problem. Secondly, the flow in the Loan Origination Systems (LOS) was structured around that document. And finally, the LOS needed to map the data and print that document, a tedious task at best. And there was no guarantee that everyone mapped the documents the same. It was all about the documents. So, how is this different today? Let’s look at what the CFPB had in mind for the Loan Estimate and Closing Disclosure documents.

First, the focus was on the consumer. The goal was to simplify the process, make the loan closing easier to understand and provide the borrower the opportunity to review the documents ahead of time. Closing a mortgage is something the borrower may only do a few times in their lifetime, perhaps only once. This is a major financial decision, yet many are insecure about the process. Historically, on the closing day ceremony the borrower feels a little intimidated and overwhelmed. Sometimes, there are last minute changes that the borrower sees for the first time; with the feeling there isn’t anything they can do about it.

Secondly, and probably the most important, was the architecture of the Loan Estimate and the Closing Disclosure. The Model/Forms must be followed exactly, and the TILA-RESPA Rule’s requirement that many of the required disclosures may only render when the feature applies to the loan. For example, the Adjustable Payment and Adjustable Interest Rate tables may only appear if the feature(s) apply to the transaction. There are several YES/NO questions that cannot be checkboxes. The Projected Payments table can have 1-4 columns depending on the number of payment changes, but cannot have blank columns. Many have estimated this would result in thousands of static documents.

Third is the focus on the data. The MISMO volunteers have spent an enormous amount of time analyzing the required data elements and making the necessary changes to the reference model.

Finally, they established an e-closing pilot program to test and validate these concepts. They selected a small group of lenders, vendors and settlement agents. They will present progress and results to the industry during pilot and probably start a second pilot before the implementation deadline.

The Loan Estimates and the Closing Disclosures are far and away a complex and challenging project. The solution is dynamic documents. First, ensuring all required data is present, based on the transaction type and satisfies all Federal, State and Local requirements. Second, ensuring the content necessary for the transaction is properly selected and assembled. Finally, output that document in the specified format.

I commend the CFPB for their approach. They have reached out to the industry and were very open to feedback. They have welcomed comments and suggestions, resulting in a fully collaborative effort with all the involved parties. I am absolutely convinced this project will have a dramatic and rewarding impact on the industry. Change is inevitable, so let’s tackle it head on with enthusiasm.

About The Author


Make A Connection

You Can Download This Full Article As A PDF HERE

TME-MHammondWhen it comes to marketing and sales—in particular, cold calling—one of the most attractive modern opportunities has to be the culture of connectivity, says Daniel Frances in an article that he wrote called “Twitter vs. the Telephone: Can Social Media Optimize Cold Calling?”

Why? Because everyone, it seems, is online. You have a world of digitized sales opportunities right at your fingertips. Whole occupations have been transformed, and some times eliminated because of the mass use of the Internet. For example, remember when you would call or actually visit a travel agent to book your vacations? Today nobody does that anymore. Everyone is booking their trips online.

Well, the Internet can and should be used to connect with clients, as well. Let’s be clear about one thing, though: using social media to connect with potential clients is not a replacement for cold calling. It’s a means to an end. (OK, so is cold calling, but bear with me for a minute.)

When all is said and done, there is still nothing more effective than face-to-face human interaction. This is especially the case when it comes to high-end products or services. In that situation, you need a face-to-face meeting. That’s because people buy from people. Business transactions don’t just happen in a vacuum. Like any form of new life, they are the product of a win-win relationship.

So, the rise of social media as a highly effective cold-calling tool is not just a sidebar in a sales manual. It’s actually incredibly good news for businesses that depend on cold calling to generate new sales.

Here’s some food for thought: connectivity not only allows you to leverage your time more effectively and “see” more clients, but it also allows you to intelligently manage your public image and that of the company you represent.

Using social media properly to gather information, prepare for conversations, and open doors automatically eliminates some of the most common mistakes that salespeople make.

Some common mistakes:

Not Knowing Whom to Speak To.

Being unprepared will make you look unprofessional and leave you feeling embarrassed. Imagine being in the shoes of a switchboard operator or department head. Operator: “Certainly! Who would you like to speak to?” You: “Um. I don’t really know.” Avoid this by doing your homework. Aim high. Find out who the decision makers are and work your magic from there.

How does this apply to mortgage? Sometimes people go after their “friend” or acquaintances, but they are not the decision makers. So, now your sales person has spent valuable time talking to the wrong person. If that same sales person used social media to find out who the right person to talk to actually is, that sale has a better chance of closing.

Not Knowing about the Target.

This doesn’t mean stalking their Facebook profile to find out whether they enjoy fishing on the weekend. It means learning how their business functions. Knowing their goals, objectives, and who their competitors are will score you huge points, establish personal rapport, and shift their interest toward your offers.

Too often people in the mortgage industry stick to a script that contains all the latest buzzwords. It’s like the sales person has a checklist to make sure that they hit all the latest acronyms. Well, if the buzzwords don’t mean anything to the client, just saying that you offer a Software as a Service model, for example, won’t get you the sale. You have to know what the client needs.

Not Conversing.

Sales is about talking with someone, not at them. Nothing induces boredom faster than an obviously scripted phone call. Blurting out a generic script, parrot-fashion is not going to captivate your audience. So, calm down, ask intelligent questions, and listen to the answers so that your feedback can steer the conversation.

Cold calling is like arranging a first date. You have to make the person like you before you can ask them out.

I know you’re thinking: How do I use social media to improve cold calling?

A proper strategy entails some very simple steps. Invest time in planning; it will pay handsome dividends down the line. And prospect carefully. Remember that without the right clients, you have no business. So, be smart with your research, and invite the right prospects.

Here’s a simple checklist that will catapult you into the cold calling golden circle:

Step 1: Start from scratch.

Create and set up attractive social media accounts. The four fundamental platforms you need to have profiles on are Facebook, Twitter, LinkedIn, and Google+. Write a clear company bio that includes images and key phrases that are smart, professional, and entertaining. Lure them in with a combination of eye-catching design and great copy. This is your opportunity to shine so don’t waste it. Don’t just rush through to get your social media presence live, think it through.

Step 2: Invite prospects to Like or follow you.

Activity equals popularity. So, inviting potential clients to Like your Facebook page or follow your LinkedIn profile is the fundamental stage of publically launching your business online. Where do your prospects live on the Internet? Introduce them to the possibilities of what you have to offer. Remember, the more followers you have, the more credible you’ll appear to future targets. In other words, network online. Start conversations. Follow industry thought leaders. You never know where a conversation, online or otherwise, will take you.

Step 3: Establish an online presence.

Generate content to expand your online presence. This means posting, commenting on, or sharing relevant information that may be of interest to these prospects. Emphasize the services you have to offer (without being too blatant), and target whatever your prospective clients are searching for. Clients won’t believe in your business if your Twitter feed is lonely. Have something to offer. Some companies find this hard to do. They have trouble coming up with a steady flow of good content. Fortunately, there are companies out there like NexLevel Advisors that can help in this area.

Step 4: Generate trust.

It’s difficult to establish trust when your customers don’t know whether you’re a time-scheduled drone mechanically posting away or a real person behind the keyboard. Commenting on posts and replying to clients’ responses will reassure them that you’re knowledgeable and trustworthy. Make your business likeable and personable.

This, folks, is attraction marketing. We’ve already established that people prefer buying from other people. More than that, they overwhelmingly buy from people they know and trust.

The truth is bad cold calling is as bad as email spam. That means you have to do two things: establish some kind of recognizable relationship, and make it appear as though it’s perfectly natural to ask for a meeting. In other words, start a social media dialogue and make “friends.” People trust their friends and look to their friends to provide good advice. If you become a trusted advisor, you’ll be able to set up that cold call and actually have something meaningful to tell that client instead of reading from a script.

By doing that, you’ve pre-framed the client’s perception of you. In other words, you’ve asserted your personality without your prospect even being aware of it. Developing healthy trust before the date has even been arranged will benefit you in many ways.

So, once again, social media hasn’t replaced the necessity for cold calling. But it’s safe to say that if you’re not using social media intelligently as part of your business, you’re missing out on one of the most powerful tools in your strategic sales kit.

About The Author


Problem Solving In The Workplace

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TME-Becky-BarbaraWikipedia’s definition of problem-solving is used in many disciplines, sometimes with different perspectives, and often with different terminologies. For instance, it is a mental process in psychology and a computerized process in computer science. Problems can also be classified into two different types (ill-defined and well-defined) from which appropriate solutions are to be made. Ill-defined problems are those for which we do not have clear goals, solution paths, or expected solution. Well-defined problems have specific goals, clearly defined solution paths, and clear expected solutions. These problems also allow for more initial planning than ill-defined problems. Being able to solve problems sometimes involves dealing with pragmatics (logic) and semantics (interpretation of the problem). The ability to understand what the goal of the problem is and what rules could be applied represent the key to solving the problem. Sometimes the problem requires some abstract thinking and coming up with a creative solution. To expand on this further – Problem solving from a coaching perspective is the gap between the current situation and a desired outcome. It’s an ongoing process that is an integral part of work and life and maybe it’s time to look at it some a different perspective.

In this article, we will explore techniques for leaders, management and staff to identify and define problems, move from problem oriented to solution focused thinking and finally talk about creative solutions. Problems can be looked at through the lens that shows they are really opportunities. Lessons and growth both professionally and individually can come from problems. The learning comes from the process of addressing the problem; sometimes having to stretch us pass our comfort zones. Problems can point out blind spots and make us aware that we may be doing an OK job with a particular situation but we could do better.

Empowering Problems come in various sizes:

>> Big and complicated

>> Some more easily resolved

Big and complicated problems may take some time to resolve and should include other people to help resolve the problem. Easily resolved problems occur at any time and typically someone has the answer to the problem or a process/procedure that can be followed to get the resolution completed quickly. An example of this could be the power going out, and if there is a generator, getting it running as quickly as possible or going to a contingency plan that was created so clients/customers can be notified quickly and staff understands what they need to do.

Workplaces present ongoing challenges on a daily basis that require solving problems. The problems have to be dealt with constructively and fairly. Employees need necessary skills to identify solutions to problems through knowledge, facts, data, and the ability to think on their feet. They have to have the ability to assess the problem and then find solutions. Sometimes it’s very important to not try and tackle the problem by oneself but instead involve others which is called collaboration. When others are pulled into help, the first important step is to establish ground rules. Important ground rules include no criticism of an idea is allowed; strive for the longest list – go for quantity (brainstorming); strive for creativity – “wild and crazy ideas should be encouraged and build on ideas of others. Of course this way of thinking works on problem solving that doesn’t need to be done “right now.” An example of this could be a branch office that is uncooperative and continuously turns in reports late, there are poor morale issues, there is a lack of consistent communication with the branch manager and poor performance of the branch overall.

A problem solving technique that is very effective in working with an issue such as this is called the “Fishbone Diagram Technique” which breaks down Cause and Effect. This is how it works: Gather the people together who can work together to create a solution. Then define the problem or opportunity in a brief statement that all can agree upon. In the fishbone diagram, list potential causes to verify their relevancy and impact. You may want to gather data on some of these issues. Brainstorming begins with the mindset that any idea is allowed. Ideas come from these thoughts:

>> What the team knows

>> What the team needs to know

>> What the team needs to do

>> What the team needs to know how to do

A completed FISHBONE DIAGRAM example after facts and thoughts are mapped out looks like this:


After the data gathering, completing discussions through brainstorming and filling out the fishbone diagram, the next step is to evaluate the alternatives to the problem. There needs to be an explanation of the concept/thinking behind each idea by the person proposing it. Then expanding on these ideas and “bottom line” the issue. Next numbering and ranking what’s important to be considered is a helpful technique when reaching agreement on the best solution as a team.

Then it’s time to develop an action plan which includes Goals, Strategy, Timeline, Who is responsible and Expected Outcomes. This information should be recorded on flip chart pages (each page labeled by the categories above) or on a wipe board. Someone needs to take responsibility for compiling all the information, distributing it to the parties involved and getting agreement on when the solutions will be worked on and completed; by whom and most importantly…..everyone involved should understand why it’s important that this process is being done and how it impacts the company – if it gets done and if it doesn’t get done.

Accountability is a problem for many people; great intentions but “things slip through the cracks” at times because other things get in the way of “what I said I’d do.” It’s very important to designate someone to keep everyone informed and every task tracked and recorded. Reporting the impact of the completed solution should be conveyed to everyone involved as well when the solutions have been implemented. And, don’t forget to thank the team.

Being proactive is also important before any problems crop up, especially in strategic planning. One example is Solution Focused Thinking – where the emphasis is on when the problem does not occur. Create a roadmap to success and backtrack on what needs to happen from now to then. Focus on people’s strengths and resources to construct potential solutions. Ask effective questions rather than leading questions such as “why don’t you? OR “have you thought of this?” Building on this success, it’s good practice to ask “What are people doing right?” If there are exceptions to this, you ask “When is there a time when the behavior doesn’t occur or occurs less often?” Have discussions on these key questions so you can uncover information. Future focused questions include “What will you be doing differently?” “How will others know?” “What will they see or hear that will be different?”

As mentioned earlier, problems simply happen. What you do differently and proactively during the course of managing the problem(s) makes the difference of making smart decisions, involving others and creating successful solutions vs. taking on the task yourself and getting stressed in the process. Involving others to help create solutions allows for creative thinking and new ideas that possibly may never have been thought of in the past. Our problems can show the need to include others, can show us our strengths and our limits and be a resource for being better as professionals.

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