Surviving and Succeeding in a Hyper-Competitive Mortgage Market

If you're doing that, you're a moron. Stop it. You're not going to have the production you had in 20 and 21.

Let's be honest, everyone. This market has really exposed a lot of loan officers the last three or four years. We're going to dive in that today while some people are riding the struggle bus, while some producers are having some of the best years of their careers and how some newbies are absolutely crushing it. Now I have Robert Philiai here. I'm Dave Holland with Lending leadership with the mortgage pros. Robert, how you doing today?

I'm good, brother. I appreciate this topic. I'm excited to chop it up. We switched it up a little bit with the opening and you crushed it, man. Good job.

Job well, hey, I, I've been practicing for five hours this morning to make sure I nailed it. Did you do my 15th take?

Did you do your voice exercises? How now brown cow. How now brown?

Of course I did.

Liar.

Very short lived dips. Nothing you can build a business on.

Yeah, very short, very short lift. So a lot of people were refi dependent. Refinances, let's be honest, are just easier than a purchase and especially now, purchases seem to be a lot harder. You know, more than half of our transactions just aren't easy layup deals.

And all of the things that it, that you used to have to do to be successful kind of went by the wayside. Absolutely.

I mean, we've seen people go from 100 million to 15 million. I mean, people were talking to. We've seen people gone from 50 million to like 6 million, 30 million to add of the industry. Right. Refines were easy. The sales cycle was relatively easy because everyone was so overloaded with business. You really didn't need to sell. You just needed to close within 60 days.

That's it.

And you won the deal a lot of times.

Well, and it's not. Listen, let's be real. It's not just the business coming in the door in this market. It's the financials of this market as well. Right. Like, because margins were so fat and there was an abundance of business and we had stability, like rates were better, Right. We know rates drove it, but the margins really empowered companies to have more staff, to give more consideration, give more support. You.

You made more money on every deal, right? So then you start coming into this market where margins Starting getting squeezed and now your support maybe starts getting pulled back a little bit and it's a dog fight in the street for that deal because now you're competing on rate and now maybe you have to adjust your comp plan and this whole easy peasy lemon squeezy life that you've had because of the market booming has shifted and went away and now you're scrambling and you either can't adjust, don't know how to adjust, didn't adjust fast enough. It's, it's a real problem. It's, it's interesting to me. Like I think of an originator we had in Texas and she called me one day because a lot of our originators are having their best years ever because they didn't shift away from focusing on the purchase business. I know this was something I preached during the boom. It's something you preached during the boom. We're going to grab all these refis but you have to stay engaged with your agents. Right.

But I had, I had one of our lenders in Texas call me and she was thrilled because she'd picked up a new agent who was super loyal to lender in her market. He just completely left the business. He decided it was too hard and went and like was doing asphalt repair or something. Something crazy. So it's definitely been a shift.

Yeah, it's been a shift. It's a different skill set from purchases to refinance. I mean I would say big picture, it's two things. Number one, you need a specific set of sales traits to work with the buyer. Right. That's different from a refinance. That's number 102, you need a different skill set to connect with realtors. Right.

So it's, it's completely different if you were just a refinance loan officer or that was, you know, an overwhelming majority of your business. I mean a lot of those people are, are toast and they're out of the business now, unfortunately.

Yeah. Which I'm not, I'm not mad at. Right. Like I, this may be an unpopular statement, but I'm going to put it out there like the part time loan officers, the loan officers doing, you know, eight, ten units a year. Like you're not a professional in this business and you're never going to deliver the same amount of value and knowledge and guidance and wisdom as a true professional in our industry. And those 8, 10, 12 deals a year, you're taken from a true professional. Absolutely. I feel the way, you know, our profession, realtors, financial planners, like either Be all in or all out, That's a whole nother topic.

Right?

I mean it's a full time job for sure.

It's a full time job. All in or all out. So we know that this market's kind of shifted. Right. We see people having boom years, we see the people that had boom years, having bust years, the top producers that we see what makes them different, what makes them stand out? Dave. And maybe more importantly, what did they stop doing that they were doing? What did they start doing that they weren't doing?

Well, you know, number one, one of our top branches, they never hardly did refis. They didn't market themselves. The refis. They didn't go after the database really hard. If something landed in their lap, they'd certainly do it because they were so busy with their purchase business. I think with top los, it comes down to a number of things. Number one, they have a business plan, slash plan. They actually have a plan that they want to execute on a quarterly, on a weekly, monthly, quarterly and annual basis.

We've talked about that a lot.

Yeah, they follow the plan, right?

Yes.

They have visibility within the realtor community, within the financial plan, in the community, on social media. Right. So they're visible in customers. Right. So a lot of times if a realtor they call, call on a realtor, they'll already know who that person is through their, you know, their community and marketplace. Yeah. And they execute the plan every day and they're not afraid of the phone. I mean those are, those are the big things.

I, I would say.

Well, and it goes back to what we were just saying about being a full time job, being a professional, being focused, being driven and you know, having goals, having a plan. Not just, oh, happenstance, maybe I get a lead today. Like you have to drive that. You know, the other thing that I think I see in our top originators is they're not like they stopped looking for the easy way. Most of them never looked for the easy way again, it was the gravy. But they're not looking for this shiny, you know, new object, this magic button to make business just appear. They're grinding. They're putting the work in, they're doing the day to day and, and it's not on low value activities.

They're doing high impact, high touch, high value activities and they're trying to shift all the other crap off their plate so they can focus on just the high value activities. You know, the other piece that I see with them kind of goes to mindset. They don't sell like the rates are the rates. They really focus on controlling what they can control. And I'm using a ton of cliches today, but so be it. Like, they sell what's on the shelf. If the rate is here, well, the rate's there, and that's what I have to sell. And they don't let that get in their head and deter them because again, they're consummate professionals.

They know the value that they're bringing is guiding that buyer through the home buying process and providing a high level of customer service. The rate's, the rate. We don't control it. You don't control it. It's, you know, within a quarter of a point in most cases across the board. So they don't let that be a, a deterrence to them in their ability to go win business and sell.

And they don't stress on. I mean, we're, we're in a conflict with Iran right now. Rates have obviously gone up and our top producers hardly mention it.

You know, we have, we have one, we have one that does. Yeah, I love her. She texts me weekly about something. All right. But the rest of them, they're just putting their head down and selling what's on the shelf, man.

Yeah. And you talked about, you know, there is no shortcuts to the top. Right. You may get lucky once in a while. You know the cliche, you make your own luck. Right. But it's, I always like to say, it's one of my favorite quotes. Motivation is waning.

Right. You can't wait to be motivated. You need to be disciplined. You need to do sometimes the boring blocking and tackling day in and day out. And for our top people, they have assistants or teammates, all those, you know, low value activities that you can hire, you know, a lower paid person to do.

They hire.

They hire that person to do it, which is okay because they're going to do those activities. 80, 90% as good as the loan officer or maybe sometimes better.

Sometimes better.

A lot of times more focused on it. And they enjoy doing it.

Yeah. And a lot of times the person that makes the phone. I've said this a lot. The person that makes the phone ring has a different skill set than the person that puts together the perfect file and gets it submitted in. Right. Usually those are kind of two different personalities, two different kind of skill sets. But all of this is just like we're saying the same thing. I feel like we've said a lot is that the fundamentals don't go away.

And the way that you Build this business is systematic, it's intentional and you have to be diligent. And what we're seeing is the people that are thriving today have those things in place 100% across the board. It is, it's a blueprint. They have some level of blueprint to make sure that they're dealing with call reluctance. They have follow up discipline, they're working their database, they're doing realtor outreach, they're using conversations to create momentum, build relationships. And the ones that are doing that are winning.

Yeah. And we have a couple newer loan officers to the business that don't know any better. They're not scared to use the phone and they're doing amazing right now because they don't know any better. They don't know to call Sally Ride Whale agent and Tallahassee because they just think it's normal to call that person and ask for business.

Yeah, they're, they're, they're naive just enough to be, to be successful.

And they don't have any pride or any preconceived notions either.

Yeah.

Like this is a whole new age. You better get your butt out there and work.

Why do you think people just generally avoid the phone?

Well, I think it's, you know, the same thing that we've talked about over and over. It's call reluctance. And that comes basically from a fear of rejection and self doubt. They don't have enough confidence. Like the more, the more no's you get though, people, the more money you're gonna make because that means the more offers you're making, they're not telling you no. They don't know you. They have, they have no idea. Most of the time they don't even hear you enough to get to know you or what you're offering.

They're just saying no because we're pre programmed to say no to calls that come in. Right. So you got, you got to not take that personally. You got to have more confidence in yourself. You know you're going to get some no's, but you got to keep taking shots. Like it really comes down to confidence. And the fear of rejection is why people are scared of the phone.

Yeah, yeah. I mean there's so many easy phone calls to make.

Right.

When you're involved in a real estate transaction.

Absolutely.

You know, you have your buyers, obviously, easy call to make to update them. As for business listing agent, easy call to make. They're expecting your call.

Like when you call, they want your call. They want you to call them.

You're not bothering them. I had one lo tell me years ago, well, I don't want them to have my personal sell. So if the deal goes sideways, which, you know, we, we have very few deals that go sideways, they're going to call me or text me. Like that doesn't, you know, if you go in with that mindset, you should probably get out of the business.

Yeah, this probably isn't the business for you. I want you to have my personal cell phone because not only I don't want you to call me when my deal goes sideways, because we're going to make sure it doesn't, but when that other deal goes sideways, I want you to call me because I'm going to tell you how to fix it. And if they can't fix it, I'm going to save it for you. Like, that's such a narrow, weak mindset. I can't.

And then usually the deals that go sideways, right, and we pull out of it and it's for any reason, appraisal, title borrower, you know, misrepresented something. If you're honest and you own it, you have conversations with everyone. I have, you know, got an agents, you know, one agents over because of this conversation. Because I was upfront and lost about it.

Yeah, I've, I've had negatives turn into positives and have been the foundation of long term realtor relationships because I owned it and I was front and center. I didn't disappear. A lot of people disappear because again, they're scared they can't have a difficult conversation. Oh, they're going to yell at me. So what? Yeah, it doesn't matter.

We deserve to get yelled at to

a certain, like a little bit. Right? You probably deserve like, and I, I know like, I've been yelled at a lot in my life in the Marine Corps, so my mindset's probably a little different, but still, like, this is not for the faint of heart. This is like this business takes a little bit of tough skin and you are the professional, you're the consultant, you're the bus driver. Like, you're the one in charge. Without the money, nothing happens. So like, take that to heart, have a little pride in that. And that should give you a little oomph, a little pep in your step to be okay with having conversations. Now, you better know Your shit.

You better be right. Don't be wrong. That's important.

Well, before you get on a phone call with any hard conversation, have a plan and have the facts.

Yeah, have a plan. Here's what's wrong, here's what we're doing to fix it. Here's how I think it's going to end. If you use that, that three part framework to tackle any problem that you have on a loan file, you're ahead of the game. You're ahead of 90% originators in America. Here's what happened, here's my plan to fix it. Here's what I think the outcome is going to be. That works 100% of the time, every time, that works.

So, Dave, one thing that I think is interesting, and we're seeing this more and more, we're hearing it talked about more and more. You know, we're talking about the ellos that have adapted, the ellos that, you know, some of this is rooted in old school. They're still doing things, kind of putting the grind in, putting the work in, being consistent and intentional. But some of this is shifting with the way relationships are evolving. And you touched on it a little bit in the beginning, you know, about adding value, about kind of building that personal brand, being visible, being seen before you're known. Right. Being a true resource, all of this kind of thing. So I think we're seeing a lot of the originators also in this market that are thriving have latched onto that and taking it to heart and are really kind of running with it.

Yeah, I, I would agree. I mean social media plays a big role in it having events, you know, for the Realtor, community plays a role in it being out there at industry events. I mean, all that has mattered. I just think it matters more, more now.

It, it's just shifted to where that used to be like that. It used to be like 10%, 15, 20%. Now it's more like a, like a 50, 60% I think. And I think we've talked about this a little bit in the past recently. As AI continues to evolve and come into play, it's going to be even more important. So this is, this is your warning flag. This is your siren to everyone listening. If you're not doing these things, you need to start or you're going to get left behind.

Personal branding, building your content so you have social proof that you're the expert. You know, Gary Vee has been saying this for years. Content, content, content, content. Right. It doesn't matter. Create more content. Building consumer trust. And creating that whole hierarchy of online visibility that today matters more than it ever has, and tomorrow and in the future, it's going to matter more than it does today.

If you're not doing those things, you're

about to get left behind and things like having your CRM dialed in and owning your database and having regular outreaches to your database. And I'm not talking about Happy Memorial day or happy 4th of July. I mean, that, that, that's going to move the needle just a little bit.

Listen, Dave, I posted on Facebook, on my business page, happy Secretary Day. You mean that's not going to drive tons of business into me?

If you want to hide. If you murder someone and you want to hide a body in the evidence that you did it, just put it on your business page and no one will ever find out.

I teed that one up for you. You owe me.

Yeah, I know.

So, you know, I talked about this a little bit. Touch on a little bit. I want to, I want to circle back to it. Like, some of this is just emotional discipline and, you know, having the fortitude in tough markets, you know, it can be tough out there. Burnout's a real thing. Like the. You and I were talking, Dave. We say, we don't talk about rates, and we don't let it define the business.

Rates still play a part in the business, guys. Right? And I am not like, we agree that when you're in a market like this and it gets hyper competitive, that can wear on you. When you're fighting for every deal to try to win it. And everything is a price battle that can wear on you. The difference between the great and the not great is the great. Don't let it stop them. They keep going, they keep engaging, they keep building, they keep trying to win. They keep bringing the deals in the door.

It's impossible.

It's impossible.

Unless you were starting off early in your career, Right? And when you compare, what's the euphemism? Comparison is the thief of joy.

Comparison is the thief of joy. That's it.

And you need to move on I was singing the blues to Robert last week how I lost a number of transactions in competitive situations. Well, four actually came back this week that I thought I lost because they got imagine switched. Yeah, imagine that. And I was honest.

And what did I tell you? I said, first of all, I gave you shit about not being able to sell because I just like giving you a hard time. Secondly, I said, go get more, Dave. Suck it up. Like you know what the market is. You're. Don't, don't. And this is a little bit of what you were doing. You were questioning a little bit the value you bring to the transaction because you feel like you're losing.

Well, now look at the turn of events. You, you should not have ever questioned your value.

I just needed to complain for like a day and I was back.

That's fair. Guys, we're not saying that you should never have done down moments and you should never have moments of self doubt and you should never have call like, we're not robots, we're human. And that's part of this business. It's why it's a little bit of a roller coaster, frankly. It's what I part of what I love about it. So yeah, you did bounce back. That's what makes you different than a lot of the other people in the industry, right? Because you didn't get into a three week funk and let it send you into a tailspin. And now look, that was, I remember that conversation.

That was five deals, four of them are back. That's an 80% recapture rate. Because you are the professional and you probably had some level of follow up with them or something, right? And because frankly guys, if something sounds too good to be true out there, I remember you telling me one of the deals, you're like, I don't understand how they're offering this. If something sounds too good to be true, it probably is. It's probably a bait and switch. They're probably not. That competitor's probably not super ethical. And don't burn a bridge.

Stay in touch because you might get it back. Or I've had this happen. You lose it, they go into process with the other lender and they call you a week before closing, 10 days before closing because the lender can't get it closed or it's dragging operationally and they totally poop the bed and then you swoop in and save it and guess what? Rate doesn't matter then. Doesn't matter.

And to your point, I didn't burn a bridge within the customers. I was really respectful, best of luck. If anything changes, let me know. And I didn't burn, you know, never burn a bridge with a realtor partner either.

Yeah. And look at you now. Would you look at that? Just look at it. Well, man, listen, this has been a great conversation. You know, I miss Millsy a little bit on here today, but I kind of like just you and me mixing it up too. So.

Same.

Yeah, all good. You guys have. I think you guys did one recently without me, so it's all good. I think that the reality of the future as we face it is this market's going to be around even still a little bit longer than we expected. And when it does shift, it's going to be a slight shift and, and it's going to be shifts, I think, in short bursts. I don't know when we're going to see another like sustained, you know, refi market. It's going to come, but when and how long is it going to last and all that. So the reality of that, guys, is this, this market isn't killing everyone.

There are people out there that are thriving in it. And I actually love markets like this because it creates separation. The cream rises to the top. Right. And we get rid of some of the riff raff. So embrace it. I would. We used to have another saying in the Marine Corps.

It was embrace the suck. I think that kind of applies here.

Yeah. I mean, hopefully we get a refinance market. I mean, we have a new Fed chair in now. I'm not sure if he's coming to save us. There's a lot of levers that the Trump administration could pull.

Let's not get political. Let's not get political.

There's a lot, there's. I don't think it's really going to move the needle that much, but there's some levers they could pull, right? They could buy more mortgage backed securities. They can eliminate loan level price adjustments or cut them in half. There's a lot of things that could be done. We're sitting here end of May right now recording this. There's midterms coming up. The Trump administration's gonna want to win on housing and interest rates or at least a perceived win. They can, you know, they can tout during, during the midterm.

So who knows? We could see an amazing market in the third and fourth quarter and there's gonna be less loan officers in the business because it's, it's, it's hard, it's, it's hard right now.

Well said.

I mean, there's, there's people out there now thriving because they're doing the, they're doing the right things. The daily disciplines, day in, day out, making the phone calls. They have a, they have a plan. Weekly, monthly, quarterly, annually. I mean there's, you know, there's a bunch of cliches there. You need a plan.

You need to have a plan.

What you're doing day in and day out, it's, it's so important.

Well, and I mean I said a minute ago, this market creates separation, right? And this is a tough market. And tough markets reward discipline, systems, relationships, consistency, leadership, right? So many people out there are kind of twilling their thumbs and waiting for this market to change. Oh, the market, the market, the market, the market. Top producers are saying screw that. And they're adapting, they're evolving and they're building anyway. They're, they're doing what they need to do regardless of what the market is. And that is why they're thriving.

So I mean the sum it up for some of our listeners like no one's coming to save you. You need to save yourself.

Save yourself. You need to take action. I said this the other day on a call, right? It reminds me of this joke that I heard in church a long time ago, this, There's a flood and the dude's on his roof and a helicopter comes to save him and he goes, no, no, no, God's going to save me. And then a boat comes to save him. He says, no, no, no, God's going to save me. And then he drowns and he gets to heaven. And he asked St. Peter, he's like, what happened? He's like, you idiot, we sent a helicopter in a boat.

You got to get in. You gotta like, you have to participate in your own rescue. Save yourself. Absolutely. Great, great talk, Dave. For Dave Holland, I'm Robert Filyaw with Lending leadership with the Mortgage Pros. Hey, listen, we're pretty exclusive club but we're always looking to connect with like minded Los. If you have some thoughts on this or want to chat about it, we'd love to have a confidential conversation with you.

Make sure you leave us a great review and smash that like button. We'll talk to you next time.

Thanks so much.

Sa.