Blog Post #16 Mortgage Originator Primary Referral Targets

MORTGAGE ORIGINATOR PRIMARY REFERRAL TARGETS

 JB:  So talk to me now about the Loan Officer. 

 MM:  The Mortgage Originator’s primary referral targets are the Financial Advisor and the Property & Casualty Insurance Agent. 

There are four points with the Mortgage Originator refers the Financial Advisor. 

 JB:  Let’s go over all four because I think this is a really big opportunity.

MM:  Okay great.  The first opportunity is right when the Mortgage Originator speaks to the client at the Consultation.  It segues into the Referral Generator. So here’s how it sounds when first speaking with a client, “Mr. Smith, I take a different approach than most Mortgage Originators, and I want to make sure the mortgage you select is integrated with your overall financial plan.  How is your relationship with your Financial Advisor?”

 This opens up the opportunity to refer many times right here.  Many times they don’t have a Financial Advisor and it opens up the opportunity to mention that you are going to refer one. 

 JB:  So this is right at the beginning of your consultation.  Is it the first thing you say? 

 MM:  Absolutely.  The first thing I say is, “Mr. Smith, I take a different approach than most Mortgage Originators, and I want to make sure the mortgage you select is integrated with your overall financial plan.  How is your relationship with your Financial Advisor?”

 JB:  Alright Mark.  What is the second opportunity to refer the Financial Advisor?

 MM:  The second referral point is the Cash Flow Cross-Sell and it is done right when the Mortgage Originator lets the client know they will be issuing a Pre-Approval. 

 Here is how the Cash Flow Cross-Sell sounds,

“Mr. Smith, I’m going to issue a Pre-Approval letter and I just want you to know that to get this loan amount, myself and all Lenders use something called Debt to Income ratios to calculate what you qualify for.  This includes your mortgage payment and what we have on your debt based on your credit report. 

 It doesn’t include some of the lifestyle expenses, like going out to dinner and travel, so what I’d like to recommend is that you speak with the Advisor on my team who is willing to do a Cash Flow Analysis for you just to make sure this mortgage fits into your overall financial plan.   Does that make sense?”

 JB:  So then the third thing to refer the Financial Advisor?

 MM:  The third opportunity for the Mortgage Originator is what we call the Closing Cross Sell.  At every purchase Closing, the Mortgage Originator makes a call congratulating the client on their new home and makes the suggestion to speak with a Financial Advisor. 

 It’s done very easily at the Closing of a new purchase.  Simply, the Mortgage Originator calls the client and says, “Congratulations on the closing of your new home.   It’s probably your largest expense to date.  You have an estate now and want to make sure you protect it.  How is your relationship with your Financial Advisor who specializes in that?”

 JB:  That makes a lot of sense.  Buying a home kicks off a lot of financial responsibilities that have to be protected. 

 So now let’s talk about doing a refi and the refinance frees up monthly cash flow.

 MM:  Great question Justin.  On a refinance where the client’s interest rate has been dropped and cash flow has been freed up on a monthly basis, the Closing Cross Sell is much simpler.  It’s actually just an email with a spreadsheet that shows what their previous rate and payment was to their new rate and payment and suggests speaking with a Financial Advisor to review options on how to best reposition the savings to improve the overall financial plan. 

 JB:  Let’s go over that.  So, you can show how the old loan compares to the new loan and bring the Financial Advisor back in.  So if you freed up, let’s say $100 a month, they can immediately start investing it.

 MM:  Absolutely.  As you know, that can grow to a very large amount over a 30 year period. 

 JB:  So what’s the fourth referral opportunity?

 MM:  The fourth referral opportunity for the Mortgage Originator to refer the Financial Advisor is what we call the Mortgage Review where a few key questions are asked that lead to the Referral Generator. 

 JB:  This is a big one.  Let’s review some of the questions to create referrals for your Financial partner. 

 MM:  Okay, so the most important question that a Mortgage Originator asks at this point is “What are your 2-10 year financial goals?” 

 Whatever the answer is, whether it be saving for retirement, protecting your family, or building cash reserves, every Core7 Mortgage Originator should ask, “How is your relationship with your Financial Advisor who specializes in that need?” 

So let me give you an example.  Let’s say they want to save for college.  So you ask the question, “What are your 2-10 year financial goals” and the clients says they really want to save for college for their children.  You would say, “That’s great.  How is your relationship with your Financial Advisor who specializes in college savings?”

 JB:  So that could lead to a lot of opportunities, like protecting your family, building up cash reserves. 

 Let’s say that your client says saving for retirement is a priority.  Talk about how that would go. 

 MM:  Absolutely.  It’s very easy.  Just plug it in to the Referral Generator, “That’s great Mr. Smith.  How is your relationship with your Financial Advisor who specializes in retirement savings?” 

 JB:  Alright.  So the second opportunity that the Mortgage Originator needs to focus on is Property & Casualty.  Can you talk about that?

 MM:  Absolutely.  The Property & Casualty is a very, very easy cross-sell for the Mortgage Originator.  It’s really just a simple email that’s sent during the process recommending the Property & Casualty Insurance Agent.  We provide the insurance binder language that the bank requires.  We also blind copy or copy the Property & Casualty Insurance Agent so then they can respond to the client to set up a time to speak about this. 

 JB:  There are obviously going to be multiple secondary opportunities that emerge for the Loan Originator in the natural course of doing business.

MORTGAGE ORIGINATOR SECONDARY REFERRAL TARGETS

MM:  Absolutely.  There are multiple opportunities that we look for as a Core7 Mortgage Originator.  The secondary professional referral targets for the Mortgage Originator are the Real Estate Attorney and the Real Estate Agent. 

 JB:  Talk about them.  Let’s start with the Real Estate Attorney. 

 MM:  Okay.  That’s pretty simple.  The Real Estate Attorney can easily be referred on refinances and when the Mortgage Originator has closings that were referred by past clients or other partners that may need a Real Estate Attorney referral.  Obviously, that would be the Lender’s decision. 

 What I like to do is to keep the Core7 team together as much as I can.  I don’t like to fracture any networks that people have.  I want to be sure that every client has a full Core7 team in place that they trust. 

 JB:  That makes a lot of sense.  Alright, now let’s talk about the Realtor and discuss how rare it is, but possible to make these referrals.  I know you have had great success with this individually, but it is rare from a Loan Officer’s standpoint. 

 MM:  Yeah, that’s true.  Believe it or not, the Realtor can be referred by the Mortgage Originator pretty frequently.  This is how I was able to give 18 referrals that closed to my Realtor.

 There are two points in the Core7 process where this is possible.  They are what I call the Refi Referral and the Mortgage Review that we discussed earlier. 

 So let’s start with the Refi Referral.  The Refi Referral is an opportunity that presented itself when the new appraisal rules came about.  It happens when discussing a refinance where it really makes sense to know what the property value is beforehand to see if it even makes sense to move forward with the refi.

 So let’s say the client, for example, is looking to refinance, and they need to know what the value is to see if the loan makes sense.  For example, if the appraisal were to come in low, the client would now need mortgage insurance and the additional cost would make the refinance a bad move and it wouldn’t save the client any money. 

 I don’t want the client to move forward and take the chance of losing their deposit for the appraisal because when this happens, you most likely lose the trust of the client and their future business.  

 So, this is a perfect opportunity for me to refer my Core7 realtor partner to do what we call an Equity Assessment before moving forward with this refinance.

This will help the customer make the decision if attempting the refinance is even worth it and risking their deposit. 

 JB:  That’s a good point.  Without even knowing the value it will come in at, you can’t be sure the refi even makes sense.

 How do you explain to your client why your Core7 Real Estate Agent is willing to do this? 

MM:  Great question.  There is very specific scripting when introducing the Assessment and also to address why your Core7 Realtor is willing to do this. 

Here is how I suggest it.  After I discuss that my Realtor will provide the Equity Assessment, I’ll say, “Mr. Smith, I want to let you know why my Realtor is willing to do this.  Number one, it’s a great service to help my clients, and secondly, he does this to add value to you so that if you are every buying or selling a property, or have a friend or family member who is, he’ll have the opportunity to earn your business or your referrals.  Does that make sense?”

 JB:  That’s just awesome.  Who wouldn’t want something like that if the refi makes sense? 

Tell me about where the other opportunities are for the Loan Originator to generate referrals for their Realtor partners.

MM:  Another great opportunity is at the Mortgage Review.  It’s very simple to refer the Realtor just by using the Referral Generator question.  When I do this review, I ask “What are your 2-10 years goals regarding real estate”

Now, whatever your client tells you is important, whether its buying a second home, purchasing an investment property, downsizing, or moving to a specific city like Boston for example.  You just plug the answer in to the Referral Generator. 

 Let me give you an example. If the client says they are looking for a second home, I’ll say, “That’s great.  How’s your relationship with your Realtor who specializes in second homes?” 

If they are looking for an investment property, it’s the same thing, “How’s your relationship with your Realtor who specializes in investment property?” 

People may not be buying right away, but the key to the Core7 System is that it’s designed to stay in touch long term so that by saying this, if they don’t have a Realtor relationship the introduction and contact can be made over time.  When that need presents itself, they are there to take the ball and run with it. 

 JB:  As I said earlier, all the scripts are really great.   Now I can really see how you are able to give your Core7 Realtor so many referrals.

 MM:  Yeah, it’s not easy, and it’s something you always have to remember, but it’s critical and can be so valuable. 

 For all the Mortgage Originators, how much more valuable would you be to your Realtors if you were able to give referrals back?  Being able to do this changed the way my relationships were with my Realtor partner.  It creates a true partnership and it doesn’t need to be tit for tat.  That fact is that most Realtors aren’t receiving any referrals from their Mortgage Originator partner.  If a Mortgage Originator is to give a Realtor one or two referrals that close a year that would be a huge improvement.  

 JB:  So when do you do you do these Mortgage Reviews?

 MM:  That’s a phenomenal question and I’m glad you asked.  The truth is, anytime I can.  Even when people call to inquire about a refinance that doesn’t make sense. 

Like if someone calls me and their rate is 4% and the market rate is 5%, I’ll still speak with them on the phone and right when I assure them they are doing great on their mortgage and have locked in a very low rate, I immediately segue to the Mortgage Review.  I ask if they have time for a couple questions to make sure I am keeping up with their needs. 

Then I just pull out my mortgage review and ask the questions that I’m systematically looking for referrals.  That’s the point, to find a need that I can plug into the Referral Generator. 

JB:  The Financial Advisor and the Property & Casualty Agent are primary referrals for the Loan Originator.  Can you talk again about when these are reviewed in the Mastermind Groups? 

 MM:  Yeah, these are the primary referral targets that should be discussed; tracked and monitored at each Mastermind Group Meeting to be sure the referrals are executed properly. 

MORTGAGE ORIGINATOR ACCOUNTABILTY QUESTIONS

These are the questions that are on the Agenda.

Question #1 – How many clients have you pre-approved in the last month?

Question #2 – How did the referral opportunities for the Financial Advisor go at the Loan Consultation, specifically the Cash-Flow Cross Sell?

Question #3 – How many Closings did you have this month?

Question #4 – How did the Property & Casualty Cross Sell go?

Questions #5 – How did the Closing Cross Sell go on refinances and purchases?

Question #6 – How many Mortgage Reviews did you do this past month?

Question #7 – How did the Referral Generator Cross Sell go?

These questions will create great dialogue that everyone in the group can learn from. 

JB:  Again, I’m going to emphasize the fact that all these questions focus on the primary referral targets NOT the secondary. 

MM:  Yes, the secondary referral targets happen organically, and when they are going to happen it’s great, but what we want to manage is the primary referral targets so that we can make sure that it’s a predictable, systematic, accountable action that happens with every single client so we can really track referrals.