The memories of 2007-2009’s lending environment are long-lasting.
Mortgage professionals remember the Implode-o-meter, the shifts in loan programs’ availability and the lingering sense of unpredictability.
And while industry veterans said 2020’s lending market is dramatically different than 13 years ago, they’re drawing on lessons from that time to guide their actions today.
To learn about those strategies, HousingWire profiled 12 real estate and mortgage “industry warriors” who were successful before and after the Great Recession. They described how they’re adapting amid the coronavirus pandemic, tactics they used during past downturns and advice for fellow industry professionals.
Their approach both in today’s lending environment and through the last recession echo common themes.
Navigating now
Amid stricter lending standards, veteran mortgage professionals said their biggest adaptation in the last several weeks has been keeping pace with the changes and relaying that information to their clients and Realtors. It’s a method to stay top-of-mind to their network.
“I’m sending out daily updates to Realtors saying, ‘This is changing in the marketplace,'” said Todd Bitter, branch vice president of JKS Mortgage in the Phoenix-Scottsdale area. “The Realtors appreciate hearing it from someone they trust.”
Others have taken less-traditional approaches to staying in contact throughout stay-at-home orders. Steve Barker of Movement Mortgage said one of his teammates paid for an online yoga class for her team and 10 of her Realtors, and the feedback was “amazing.”
“Think outside the box and don’t think, ‘Now I’m going to do a Zoom meeting, and I’m going to do a Zoom happy hour.’ Great. What else can you do to connect, to engage and to listen?” said Barker, a market leader in Delaware and Maryland for Movement.
Barker, for his part, has used Zoom as a virtual office to keep his team connected. With a Movement Mortgage tablecloth pinned to the wall behind him, he streams a video conference line from 9 a.m. to 5 p.m. Employees join to ask questions, check in or even work alongside – digitally – their colleagues.
“Frankly, there’s like five or six people of those 22 (on my team) that just come in and stay all day,” he said. “I don’t want anyone to feel isolated right now and that’s easy, considering what we’re all going through.”
Several mortgage veterans also stated that they’re doubling-down on marketing plans and increasing their social media to capture people scouring Facebook and Instagram while stuck at home. Mark Dodson, for example, is adding more marketing videos and social media marketing for his firm.
“We’re trying to stay focused on the future, 60 days out, so when the business starts back, we’re ready to roll,” said Dodson, founder of Atlanta-based Mortgage Capital Advisors.
The last recession
Among the industry veterans profiled, the actions they’re taking today rely on skills sharpened in the last major downturn.
For Andy Harris, who opened his mortgage company in 2007, navigating that time was about ignoring the naysayers who predicted independent wholesale brokers wouldn’t last. His firm, Vantage Mortgage Group, has been profitable every quarter since 2007, he said.
“I always look to the same things: facts and math. They’re non-debatable and so everything I kept researching and everything I knew was wholesale is not dead,” Harris said.
“The biggest thing that made us successful was my mindset, my focus and determination on ‘I only believe in this channel and I’m only going to support this channel,'” he added.
Several said they succeeded during the 2007-2009 recession by pivoting to the mortgage products still available.
“Somebody told me a long time ago, ‘Sell what you have,” said Tracie Southerland, a California-based senior loan advisor, personal finance advisor and wealth advisor with Opes Advisors, a division of Flagstar Bank. “I don’t mean give (a client) something they don’t want. I mean: What do you have to help them do what they want to do?”
Bitter has been at that crossroads before. Prior to 2008, he focused about 75% of his lending business on non-conforming subprime loans. When subprime lending imploded and refinancing dried up in Arizona, one of the hardest-hit areas for home valuations, he had the dilemma of refocusing his business model or leaving the industry, he said.
“It feels like we woke up one day in 2008 and found out, ‘Okay, you have one product and one product only to sell,’” Bitter said.
He chose to develop a conventional loan pipeline.
“I started pounding the pavement. I was going to networking groups, BNIs (Business Network International), every insurance agent, title company, anybody who would listen to me,” Bitter said. “It was either that or get out of the business.”
Industry advice
The mortgage professionals shared advice for others navigating today’s lending market. Here are some of their tips:
- Focus on the products you have now to sell, not what you had two months ago, “then help (your clients) make a decision about what’s going to be best for them going forward.” — Tracie Southerland
- Build your business by diversifying the loan types you specialize in. “If you’re doing jumbo loans, well, you better start going into conforming. If you’re a government (loan) person all the time, that market has really tightened up. Start looking at other avenues to build your business.” — Mark Dodson
- Control your professional and personal finance sheets. “If you don’t have leverage, if you don’t have the reserves, both saved as an individual for your own family as well as a business, then you’re going to make emotional decisions.” — Andy Harris
- Stay connected with your team. “Give them the sounding board to be heard. I think it’s important to validate people’s feelings, not always to solve the problem, just to listen.” — Roger Strecker, regional manager, field mortgage operations for Navy Federal Credit Union who oversees Washington, D.C., Maryland and Virginia
- Go “old school” with connecting to your Realtor contacts. “Every loan officer should be getting every Realtor’s home address right now because after this is over, I think a lot of people are going to discover that they don’t need to go into an office to work. … How are you going to let them know you care about them? How are you going to educate them? I think the mail could be a great way to do it right now.” — Steve Barker
- Build more contacts now that will benefit your career in future years. “Maybe you’re going to pick up a couple Realtors who are going to be really great referral partners in the future because right now, those two Realtors have a loan officer with a negative attitude. There’s going to be people coming out of this, better for it.” — Todd Bitter
