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Mortgage Broker Business Plan for Growth



This guide was written in an effort to help mortgage business professionals systematize the marketing arm of their business. Taking larger corporate level marketing applications and modifying them to fit the smaller, more nimble mortgage broker business model, we offer a much more advanced way of thinking about your business and your role as a service provider.


Our goal is to shift your thinking from how you currently view the building and managing of your business to one that is for more efficient, manageable and profitable. No doubt, if you are reading this now, you’re probably working vigorously to grow your business. By applying the same passion to change, you’ll be rewarded with a clear plan of action for building your business, a more manageable system for measuring your progress and a more rewarding and more successful career. You ’ll soon find that this plan is not one in which we try to give you a booster shot in the arm to pump you up with excitement. Rather, what is offered is the framework for growing and managing your business. Wishing you continued success and prosperity,


Your Team at BB Direct




The vast majority of mortgage brokers suffer the same challenges; too few incoming leads to work and not enough time to find new leads.


The idea of building a functional, manageable, measurable and evolving lead generation program is beyond most business professionals, including mortgage brokers. Most believe that to make more money, you must make more calls, invest in more mailings, place more advertisements, visit more real estate agents and banks or simply reduce fees to attract new business. Although any of these investments, in both time and money, can increase your business activity, unless you can manage both-in addition to increasing your marketing and systematic qualification process-your new potential prospects will not get the attention they require.


Regardless of how difficult lending requirements become, how few prospects will qualify for loans or how many competitors are vying for your market, there will always be only a handful of extremely successful mortgage brokers and an exceedingly large number of mediocre brokers who are working just as hard. As a mortgage broker in today’s market, whether you are a one-man shop or a multiple location franchise, it is imperative to do all of the following:


1 See yourself as a business entrepreneur and act accordingly.


2 Think in terms of marketing, management, accounting, labor costs, sales, budgets and how to measure the likelihood that your current prospects will want to refer business to you again and again.


3 Build a database of prospects, customers and referral agents.


4 Regularly communicate with your prospects, customers and referral agents.


5 Deliver an abundance of specialized communication that has perceived value by your prospects, customers and referral agents. Our Fundamentals of Mortgage Marketing will help you:


· Create a clear and uniform message that will increase the likelihood of attracting new business and new referrals

 · Spend less time and money on unproductive marketing efforts


Building Your Database


There is no better mailing, telemarketing or email list than your own internal prospect, customer or referral agent list. Your internal database is only as good and as current as you keep. Starting out, you may not have many prospects in your database, but it’s important to start out on the right track. When building up that database with new prospects, keep detailed records of where the prospects came from, who they are and then devise an executable plan to reach out to them again.


This is key to building a successful mortgage business. Proactive selling and pipeline management discipline separate average performers from top producers. Everything you say - in person, over the phone, via email or postal mail-should be updated in your internal database. Every potential referral agent knows someone who may need your services, but not all referral agents are the same; in fact, each one is very different. The more you know about them, the better you can deliver the appropriate combination of messages that will cause them to not only think of you, but to recommend you.


There are a number of contact management software programs available today in a variety of price ranges. These programs can prove to be extremely helpful in managing your database but aren’t necessary. If you don’t currently have a budget for contact management software, at the very least, create an Excel spreadsheet to house all of your contacts’ vital information.


Things to Include in Your Database


1 Name

2 Address

3 Phone Number

4 Alternate Phone Number

5 Fax Number

6 Email Address

7 Alternate Email Address Additionally, you may want to capture and record:




This might be in code, such as:


Inv0107 - Invitation to mortgage refinance seminar in January 2007

Inv0307 - Invitation to mortgage refinance seminar in March 2007

COC - Chamber of Commerce member RefCust - Referral from previous customer

DMRef3 – Direct mail refinance letter #3

UN – Unknown


Date of Capture The day they were added to the database

Status Prospect Previous Customer Repeat Customer Referral Agent Repeat Referral Agent

Perspective Cluster Rate Shopper Retirement Saver Investor Curious Homebuyer Life Changing Event

Next Communication This is the next time you plan to send a message or place a call to them.


This should also include the preset communication, such as: 1 Call to see if they are ready to resume the application process 2 Schedule a time to get together for lunch 3 Mail a birthday card 4 Mail a holiday card 5 Email an article that will hit home with the particular person 6 Send a reminder message of an important, timely event about to take place 7 New tax laws that will effect them 8 Investment opportunity


Their Preferred Method of Communication

In person Phone call Email Postal mail Text Message




Notes should include information that will remind you about this person. Their hobbies, interests, the name of their spouse, occupation, political affiliation and anything that is important to them. Everyone has something that drives them and makes them unique. This is the place to include that information. When talking with them, you’ll want to read over these notes first so that their interests are at the top of your mind.


You may also want to include transactional items in your database, such as the commission you earned on their closing. Your goal is to include information that will help you quickly assess who this person is and what’s important to them. The primary purpose of this database is to help you save time, allowing you to spend more time on prospecting.


This database should be opened and updated on a daily basis. You’ll be able to sort by various elements of information which will allow you to cluster your prospects into groups. In doing so, you’ll be able to customize your messages to fit each of these groups which will, in turn, allow you to more effectively communicate to each of them.


Finding New Customers


For your business to survive and grow during any market mood swing, you need a steady stream of new customers. There are a number of natural ways in which to capture and bring in new customers (i.e., friends, family members, church, the Chamber of Commerce, your country club, etc.) There are also marketing campaigns you can invest in that will increase your exposure and bring about new prospects. Your lead generation program should encompass both natural and invested prospects; all of which are potential advocates for your business.


Remember, your goal is to nurture these relationships in an effort to change their current perspective into that of an advocate for your business. Selling begins with your leads. Whether you use your lists for direct mail or to cold call prospects, getting information about your potential customers should be the core of your sales and marketing plans. Some of these leads may become your customers and some will not be interested in what you have to offer. Nonetheless, looking for people or businesses that may need your products or services should be a vital part of your day-to-day activities.


It’s All About Perspective Building Your Sphere of Influence


It’s been said many times; pick the low hanging fruit first. Your family and friends are all potential referral sources, if not potential customers. Each one has a different set of priorities and a different perspective. The more they understand your dynamic approach to helping people, the more they will feel confident in telling others about you.


Life-Changing Events that Create Mortgage Opportunities


You have the knowledge and experience to understand how many of your customers are using their home mortgage to plan for the future. Anyone and everyone who doesn’t have a perspective about how their mortgage can be used is an ideal candidate.


Everyone is facing financial choices. Below are several life changing experiences in which one’s financial priorities evolve:


1 Graduating from college and landing your first job


2 Buying your first home


3 Selling your home


4 Getting fired/laid off from your job


5 Starting a business


6 Growing a business


7 Selling a business


8 Getting married


9 Getting divorced


10 Legal battles


11 Having a child


12 Having more children


13 Retiring


14 Terminal illness


15 The death of a loved one If your prospect isn’t in the midst of one of the above changes, they might be dealing with another type of event that affects their mortgage or they know someone who is facing a life-changing event. Each of these experiences changes one’s priorities and causes them a shift in their financial needs. Some are easier to deal with than others, but each change poses a unique set of problems that require resolution.


Your job is to excel at staying interested in other people’s life changes.


Naturally, you’ll want to grow your knowledge base on each of these subjects-how disasters can be avoided and how one’s mortgage is related to the problem or solution. The key to increasing your referral agent base is to speak in abundance. Give away as much information as you can to help that individual. Your goal is to set them on a clear path with a safe and smooth transition through their change. You want them to thank you over and over so they will become loyal fans eager to tell others about you. Business owners, related directly or indirectly to any of these life-changing events, are also excellent candidates for becoming referral agents. This is especially true of those who spend personal time with potential prospects getting to know them on a personal level.


Examples of these business contacts include:


Graduating from college and landing your first job HR personnel personal at any large corporation

Getting fired/laid off from your job Credit repair agencies

Buying your first home or selling your home Real Estate Agents Title Agents Builders Remodeling services

Starting a business Bank loan officers (may offer you their turn downs on difficult loans) Business owners

Growing a business Business owners

Selling a business Business brokers

Getting married Church ministry Financial Planner Travel Agency business owner

Getting divorced Divorce attorneys Receptionists in attorneys offices

Legal battles Attorneys

Having a child Doctors Dentists School faculty

Having more children Real Estate Agents

Retiring Financial Planners

Terminal illness Doctors

Death of a loved one Attorneys

Never do Lunch Alone Your job is to perfect the art of taking people to lunch and getting to know them. Developing engaging conversation demonstrates your ability to actively listen and provide an abundance of mortgage solution strategies that pertain to their particular situation and, of course, may be helpful to the people they meet on a daily basis. Always ask for someone’s name and number that may be about to experience one of these life changing events. Don’t be shy in telling them that you attempt to take someone to lunch on a daily basis.

Professional Talking Points There’s an abundance of information to help others better understand the wealth of knowledge you can provide. You don’t have to give a speech over lunch, but you can work to have an engaging conversation that brings about an interest in financial mortgage related options.


Your job is to give them the feeling that you truly enjoy talking about this stuff and want to help others. At the same time, you don’t want to dominate the conversation with your sales pitch. Your job is to connect with people on a personal level that shows that you respect their human side and are not there to simply sell them.

Graduating from college and landing your first job


1 There are several ways to go about financing a home


2 I can help you improve your credit


3 How to properly evaluate what you can afford


4 I can recommend a good Real Estate Agent


Buying your first home


1 There are several ways to go about financing a home


2 I can help you improve your credit


3 How to properly evaluate what you can afford


4 I can recommend a good Real Estate Agent


Selling your home


1 I can recommend a good Real Estate Agent

2 Capital gains tax strategy


Getting fired/laid off from your job


1 How to protect your credit

2 How to restructure your debt loans

3 The advantages/disadvantages of short selling

4 Avoiding foreclosure

5 Refinance options


Starting a business


1 Home equity loan information

2 Recommend a bank with good rates

3 Refinance options


Growing a business


1 Home equity loan information

2 Recommend a bank with good rates

3 Refinance options


Selling your home 

1 Capital gain income tax reinvestment

Getting married   

2 Recommend a good Financial Planner

Getting divorced

3 Recommend a good attorney

4 Mortgage strategy for a divorce process

5 Keeping your credit clean

6 Refinance options

Legal battles

1 Recommend a good attorney

2 Home equity loan options

3 Refinance options

Having a child

1 Refinance options

2 Mortgage solutions for college savings plans


1 Refinance options

2 Reverse mortgage options

Terminal illness

1 Refinance options

2 Home equity loan options

Death of a loved one

1 Refinance options

2 Recommend an attorney specializing in Estate Planning


Building Your Referral Network


Referral leads come with time…or they don't at all. If managed properly, the value of a referral lead source increases as the number of referrals grow in relation to your overall influx of new customers.


The goal is to start today to set into motion a plan for identifying, winning and nurturing your referral agents. Provided below are a few categories of referral agents explained. Certainly there are many more, however these will hopefully help you begin to work your most immediate day to day contacts immediately.


The Builder Referral Agent

One of your best referral agents is the residential home builder. This referral agent relationship is built on long-term mutual trust and respect. When managed properly, you can expect a high level of loyalty from builders; even in a down market. Planning and Sales Skills The goal here is to differentiate your competitive advantages from the builders’ perspective.


You'll want to ensure that your message addresses the builder’s business needs. Value Points


1 Identify what makes your product and services unique to the builder.


2 Spell out the advantages your products and services have over your competitors.


3 Communicate your experience and commitment to the home building industry. Create relationships based on trust that provide advice that a builder can expect from their financial partners. It's imperative that you gain a thorough understanding of the building industry and prospective builder's specific business challenges, needs and vision. Value Points


1 Gain visibility and learn more about the building business by joining your local Home Builder Association and attending community functions.


2 Position your mortgage products with the builder’s business goals in mind. Preferred Lender Competition Getting your foot in the door takes time and discipline. Strong relationships may already exist between prospective builders and your competitors, so you'll want to create a sales plan that puts you in front of key decision makers and influencers including the builder’s sales managers and sales agents. Initially, you may want to offer yourself as the alternative to the first-call lender and provide advice or unique solutions to prove yourself.


Be persistent by always giving a reason for you to call on them again and again beyond the initial appointment. If they've given you an appointment in the first place, it is a sign that the window of opportunity is ajar. Create an organizational chart for each builder’s business and fill-in the key information with regards to decision making and responsibility, to information flow, to influencer. General Advice Given the rapid pace and variety of product offerings in the mortgage business, even the most experienced mortgage broker can get caught up in pushing the latest product and rate while neglecting valuable, need-based consultative dialogues.


Some steps to take to avoid doing this are:


1 Prior to meetings with builders, do your research on the builder, the industry, and the current market conditions. You may want to visit the builder's home models and talk to agents.


2 In your first meeting, focus on their business goals, values, priorities and challenges and not on mortgage products.


3 Once you better understand the builder's needs and priorities, you're better able to offer ideas for supporting the builder's goals or differentiate your mortgage solutions.


4 Be prepared to address questions and concerns.


5 Be sure to gain feedback on any ideas or solutions discussed.


The Real Estate Agent Referral Agent


Behind every successful realtor is a successful mortgage lender. And equally true is mortgage brokers can lose their spot as the lender of choice faster than winning an opportunity to earn their referrals. Be sure you can serve both their needs and their clients needs. Marketing to realtors can be easy and quite rewarding. As with the builder referral, your ability to successfully grow your realtor referral network is dependant upon first understanding your top real estate agents’ business. High producers position themselves differently than their competitors and even though their customers may be the same, your appreciation for their unique differentiation goes a long way in winning their business. Your top producing agents want to know their customers will view your customer service as an extension of their service.


Taking care of their clients with the same sense of urgency that they would provide will win you new business. Additionally, you do not want to outshine your real estate agent referral, but carefully position him or her as being the best in town. In essence, you'll want to return the customer to the real estate agent in the same condition as they were referred to you. The ideal scenario would be for the customer to refer friends and family to both you and your referring real estate agent.


The Real Estate Office Manager Referral Agent


Seasoned office managers are called upon by every mortgage broker in town. The best way to get an appointment is to shoot straight. Ask them for a few minutes of their time to learn what you might do and ask for advice on getting your foot in the door with the top producers.


The Escrow Officer Referral Agent


Impress escrow officers in larger title companies with “raving fan” customer service. This can be done by requesting the escrow officer to administer simple customer service feedback. Send both a thank you letter and a gift to the escrow officer for their good work. Follow up with a face-to-face meeting and request the names of top real estate agents they work with and ask for permission to use their name. Mailing letters to title companies can get you a list of top producing real estate agents in the area. Make sure to mail a couple of custom letters each day-the more personal, the better.


You may even want to mail the letters via FedEx to get extra attention. Include the following in your letter:


1 Offer your unique selling proposition that can help their business.


2 Tell them something about you.


3 Tell them of your interest in having a face-to-face meeting with them to lean more about how you can work together in a mutually beneficial business relationship.


Offering Seminars Nothing will get a group of hungry real estate agents in the same room for 30 minutes faster than a free lunch.


Below are a few possible topics for a 30 minute discussion:


1 How current underwriting requirements will effect the real estate industry


2 How to get more leads from your website 3 Pre-qualification for the good, the bad and the ugly Be sure to conduct a mini raffle to collect business cards. Also consider offering mini seminars to your local Realtor Associations.


The Exit Interview


Again, express the importance of referrals and your interest in remaining their financial Q&A person for those upcoming life-changing events. By no means do you want to be pesky or annoying. Instead, you want to connect with your client on their terms and follow their tempo during conversation. Understand that trust, as well as referral agent building, takes time.


You want to be sure your "new friend" will accept your call and offer to go to lunch some time in the future to discuss upcoming events in their life that involve a shift in financial priority. Remember, if you're not a licensed Financial Planner, don't act like one. However, that's not to say you can’t steer your clients education of how their mortgage can be better utilized. Take inventory of who you meet on a daily and weekly basis, as well as who you meet during the loan process from start to finish. Determine the goals of your referral agent and link your goals with theirs to build trust.


Changing Perspectives


Consider the friends you’ve made that started with a purchase of goods and/or services. I’ll bet most all of them have met you through a variety of places, events and happenstances. Likewise, the lending business is one in which you are making friends while servicing your client. There's considerable time spent talking about very personal financial information. Many mortgage brokers only ask the very basic questions to complete the application, get it on paper, and show their client where to sign. Your perspective must change in order for your clients’ perspective to change. As you probably already know, you're best business has come from the almighty referrals.


There's nothing better than someone calling you from a referral. The clients are generally easier to work with, have a heightened sense of trust with you and will rarely get a second opinion or shop rates elsewhere.


Changing Your Perspective

Current Perspective New Perspective
Filling out the application and getting a signature. During the application process, look for clues that offer information about your clients upcoming life events. Ask exactly what they would need to experience with the loan transaction in order for them to become a raving fan and repeat referral agent.
Telling your client how the loan process works with you. Ask your client about his/her schedule, preferred method of communication and ideal closing location.
Little to no follow-up after the loan is closed. Keeping the client informed according to their preference. Include an exit interview.
Qualifying, closing and feeding random bits of information to the processor and underwriter. Qualify on current and future potential as a referral agent. Prepare and provoke long-term planning and educate them on options.


The Prospects’ Current Perspective


Remember that as a mortgage broker, your perspective on the mortgage industry is vastly different than your customers and referral agents. Never assume, but rather ask what’s important to your prospects, customers, and referral agents. Only then can you begin to understand how to position the value of your service.


Cluster One Many of your clients perceive the mortgage finance process as something to get them into a house and avoid paying rent.


Cluster Two Many others see a mortgage as a savings vehicle with tax benefits and, if correctly utilized, can be a strategy to optimize their retirement savings.


Cluster Three Perhaps still others perceive their mortgage as a painful process in which they will never qualify because of credit score, down payment requirements, or lack of income.


Each category of customer has a different viewpoint and, therefore, each customer has special needs.


Your job is to understand the science behind bringing each of these people to a viewpoint of raving fan and referral agent. The million dollar question to ask each potential referral agent is: “What would it take to cause you to become a referral agent?” If we were to assume that all people are the same, we could easily predict the right message that would work for all people. Many mortgage brokers fail to understand the subtle differences between the various potential prospects. They continue making the same error in assuming that all people have the same perspective. In today’s market, the successful mortgage professional must do one thing very differently. They must get very good at systematizing the qualification process of categorizing their prospects.


Then they must set them on a communication path to alter their current perspective to one of an active referral perspective.


Communication Path Qualify Current Perspective

Identify the stage in life they are in and the path that they are on.


Building a Baseline

All referral agents begin somewhere. They start with liking you as a person, then see you as someone with an abundance of knowledge and experience. Ultimately, they will see you as someone who grows their book of business from people like themselves.


Education, Customer Service, Education, Customer Service, Education

You want to be a wealth of information to all who might need it. Never withhold information. And if you don't know the answer, offer to go find it. You'll grow your customer base and, at the same time, grow your understanding of the industry.


Rewards for Referrals

Nothing outside the obvious here, other than if you start giving away $100 gift certificates for referrals, you'll always have to give $100 gift certificates for referrals. It's better to say thank you and tell them how much you appreciate the referral, take them to lunch on a regular basis, and connect with them on a personal level.


People & Places

Generally speaking, there are people who find it easy to develop relationships with others and there are others who have a difficult time reading people. If you’re the latter, you’re probably in the wrong business. A successful mortgage broker does more than evaluate an applicant’s credit report. They identify with the applicant and can communicate with them in a way that influences their perspective.



Measuring and managing direct mail campaigns, email campaigns, previous customer referrals, telemarketing campaigns and realtor referrals should all be managed the same way in that you should only communicate what's measurable.


Cost Per Customer Analysis

Measuring your cost per customer is helpful for determining where best to spend your time, money and energy. Acquisition costs vary across industries and mediums, but for a mortgage broker the process is quite easy.


Channel Comparison Approach

Simply add up all of the costs associated with the particular campaign, then divide this cost by the total number of new customers.


Direct Mail Example

$0.60 Creative, printing, mailing list, mail service and postage cost 5,000 Number of letters mailed


$3,000 Total Cost

12 Number of new customers (not applications)

13 $250 CPC ($3,000/12)

Therefore, the cost per customer for this direct mail campaign is $250.00.

Purchased Leads Example

$5.00 Cost per lead (ex: ARM Reset Leads) $1.00 Cost per lead for mailing and calling one time 500 Number of leads purchased

$3,000 Total Cost

30 Number of new customers (not applications, new customers)

$100 CPC ($3,000/30)

Therefore, the cost per customer for this purchased leads campaign is $100.00.

Home Show Booth Example $600 Booth space $1,000 Media print, signs, and giveaways


$1,600 Total Cost

4 Number of new customers (not applications, new customers)

$400 CPC ($1,600/4)

Therefore, the cost per customer for this home show booth is $400.00. Obviously, a simple comparison of the above calculations show you that, all things being equal, purchased leads generate the largest quantity of leads for the least amount of money.

Time Frame Approach

This approach takes into consideration all of your new customers from all your marketing campaigns. Additionally, it incorporates your referral generated business. The purpose of measuring over time is to quantify the cost per customer over a given period of time, in hopes to make improvements by both cutting costs and increasing revenues. As an example - for the period of one year, you want to track the origin of each new loan. Let's say you invested in a direct mail campaign in 2005, which brought a prospect to you asking questions about your services, but did not close on a loan until 2007. The greater portion of this commission should be represented in 2005.


If there were any additional costs incurred in 2006 or 2007, then these costs should ideally be measured to determine how much revenue should be calculated for these years. However, for simplicity’s sake, place the entire revenue into year 2005 and consider ongoing email and ongoing customer nurturing activities as a cost of doing business outside of the lead generation cost. Ideally, you want to easily identify your most profitable lead generation program and determine where you can best invest to generate new customer prospects.


Customer Service 101


WOW Your Clients

The first step to generating referral business is to go out of your way to demonstrate a high level of service to EVERYONE who comes in contact with you and your business-not just clients. Be honest, knowledgeable, friendly, professional, and keep your word. Exceed their expectations. Provide proactive communication. Give unexpected gifts. This can be in the form of valuable information to them. It can also be in the form of unexpected gifts, like sending a $5.00 gift card to a coffee shop or mailing cookies to both spouses at their places of work with a thank you card so their co-workers might take notice and think of you when they are looking for a mortgage professional.


Collect Testimonials

Testimonials generate more referrals when you mail them to anyone with a sphere of influence over the person giving the referral. Some of the people you might consider sending testimonials to: HR Manager at their work Listing Real Estate Agent and that agent’s entire office Selling Real Estate Agent and that agent’s entire office Their CPA Financial Planner Insurance Agent The seller of the home on a purchase transaction Title Company Real Estate Appraiser Neighbors


Sample Customer Service Feedback Questionnaire


1. Why did you choose to do business with me/my company?


2. Was your transaction closed on time? YES/NO


3. How would you rate my/our courtesy?


4. How would you rate my/our efficiency and speed?


5. How would you evaluate the competitiveness of the price you received on the product?


6. Overall, how would you rate the service you received during this transaction?


7. Have you ever purchased a similar product from a company other than my/our company? YES/NO


8. If you answered YES to questions #7, would you say we were BETTER/SAME/WORSE


9. Would you recommend me/us to a friend or relative? YES/NO


10. The majority of my business comes from referrals from satisfied customers. What more could I do for you today, that would cause you to refer your family, friends and co-workers to me?


11. If you can think of anyone who may benefit from talking with me about their mortgage planning, please list them here: Name Phone Name Phone Name Phone I truly appreciate the opportunity to help you with your mortgage needs. Thank you for completing my Customer Service Questionnaire. Information gathered from these feedback questionnaires will serve as testimonials for the next step in the creation of your referral business.