The Truth in Lending: A Time of Reflection

by 02 Jan 2013

January is a time of reflection. We look back at the prior year to determine what worked and what we could have done better.  It is also a time to plan for the New Year to see if we are still on track for success.  Moving into 2013, a cautious optimism exists amongst many mortgage bankers--the housing industry is in recovery.  The interest rate market has been favorable; builders are starting to deploy capital.  Preparing for your success in 2013 will require a tremendous amount of market analysis, sustained due diligence and a little bit of luck.  The question we need to ask ourselves is, “Are we prepared for the result?”

The mortgage industry of late requires a great deal of time and effort being “reactive” to current market conditions.  Much of the day is spent either responding to changing regulations or striving to provide a service level consequential to our business success. The saying, “Not Enough Hours in the Day”, has never rang truer.   It is easy to get caught up in daily routines and responsibilities, forgetting an important job as a mortgage professional--Business Planning.  Though a full business plan can be quite complex, four key principles summarize good business plan:  Prospecting, Process, Planning and People.

Prospecting includes everything done to secure a customer’s loyalty.  Mortgage professionals need a clear vision as to the type of business they intend to produce.  Is the focus on the purchase market or refinance business?  Do we want to specialize in a certain product?  What geography is important?  What companies should we be partnered with?  At this point, marketing is not the focus.  Clarifying the type of client one intends to target must come first.  Just as one cannot do an online search for a “widget” without including enough specific criteria to successfully locate the "widget" one desires, the targeted customer must be definitive enough for effective marketing.  Once a specific customer is targeted, marketing can begin.

Process is everything that happens after the initial engagement of our customer. Let us assume prospecting is very successful and there are now more customers than imagined.  Is there enough staff in place to handle the business? Is the origination platform robust enough to handle large volumes?

Are we aligned with business partners that will help get the loans underwritten and funded in a timely fashion?  Is there financial stability to add additional resources when needed?  Keeping the customer happy is vital to our success.  Almost anyone can cultivate enough business to have one or two good months but the goal is customer loyalty.  We need to make certain that the customers keep coming back.  We do this by reviewing each aspect of the origination process to ensure that each phase flows smoothly.  The quickest way to short circuit our prospecting and selling ability is to be caught up in trying to fix a part of the process flow.  More than likely we will end up behind, playing defense, and setting ourselves up for failure.

Planning encompasses our Prospecting, Process, and everything in between.  Execution of our business model depends on how much time and thought is spent planning for the future. First, it is important to review all that happened in the prior year and congratulate ourselves for our successes.  (One clap only, no need to get carried away here).  Hard work with achieved results deserves recognition.  But here’s the critical choice.   We can either sit back and enjoy our accomplishments, or we can take our business to the next level.  Though hard to do, it is important to examine any failures that might inhibit us from getting to the next level.  During a prior sales conference two retired Top Gun fighter pilots spoke of the importance of mission debriefing.  After a mission all pilots sat together and reviewed the results of the flight.  There are neither titles or egos present during this debriefing.  The mission is dissected piece by piece based upon facts.  Were there things that did not go well?  Were there unexpected events that we were not anticipated?  Did everyone involved do what they were supposed to do?  Acknowledging failures is paramount to our success. It is the reminder that there is always room for improvement.  Enjoy your achievements, but realize the only constant is change.

The People are what make the first three components of a business plan come together. Without the right people success is short-lived.  I have been extremely fortunate to have some of the most talented individuals in the industry work with me. We each possess individual strengths and talents, but by recognizing our shortcomings, we bring those with different abilities into our business.  Hire people smarter than yourself.  Listen to what they have to say and back them up when they fail.  If we actively listen to our people, they will fight for us and our business.  Whether it is a processor, an assistant, or any other important teammate surrounding us, quality counts.

In order for business to thrive our personal lives need to be reviewed and addressed, too.   Part of our business plan should entail doing a personal inventory. Regardless of our business outcome, we should remember that what is most important in life are those that we hold dear to us.  Did we spend enough time with our family and friends?  Are there relationships that need repairing?  Did we devote enough time to charity?  If our business plan is working correctly we should have more time to spend with our “People”.

During the holidays, my wife and I hosted a party benefitting Toys for Tots.  The prospecting, processing and planning all went well.  As the party was winding down,  we found ourselves gathered around the piano singing songs.  The most important part of the night's success was the people surrounding us.  Our friends. This year I encourage all of you to prepare yourself for success.  Focus on developing a plan that will allow you to find joy, impact others positively and sing along with those you find important enough to call friends.

Warmest Regards,

Glenn Stearns

Glenn B. StearnsFounder and Chairman, Stearns Lending, Inc. Follow Glenn at



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