Countrywide’s Big Finale

I am going a little off-topic today because of a huge news release in our mortgage industry.  Please feel free to RSS Feed this, or E-Mail Feed as I will be getting back to the Pre-Qualification 2.0 Series on Monday.

 

I’m sure that we have all heard about the news on Bank of America’s acquisition of Countrywide Financial Corporation.  Angelo Mozilo has sent out a memo to the employees of Countrywide implicating that there will be minor changes within the company structure, but will full integration will not take affect until 2009.

 

However, here are some of the articles that have been published today with regard to this, and I’ll go into a brief summary after:

• Bank Of America’s Tax Break
• Borrowers May Make Out for the Better

The first article is essentially going over the tax implications of what is happening to Countrywide and BofA’s acquisition.  Apparently, the U.S. taxpayers will be partially responsible for covering the $4 billion acquisition cost because BofA is using Countrywide’s losses to offset its own income.

 

However, this isn’t the first time that BofA has done something like this, either.  In 1988, they acquired FirstRepublic Bank of Dallas under their former name of North Carolina National Bank (NCNB).  NCNB ended up structuring the purchase of the defunct bank so that they saved approx. $1 billion.  So, Bank of America is also making out on the deal in the short term as well as the long term with regard to sheltering their income from taxes.

 

The second article goes over (briefly) that current Countrywide clientele that are having issues maintaining their mortgage payments could possibly have a better situation ahead of them.  These loans, primarily sub-prime, are under discussion right now to be converted into conforming loans which will save quite a few people from foreclosures and more defaults that would sting their credit.

 

It is looking like Bank of America has come out on top with this one when you look at the long term standings.  Along with this, they have managed a way to really offset their taxable income as well as promoting clientele wellness by claiming to expand the loan modification teams.

 

I would love to hear what your thoughts are on this, and please tune in on Monday (RSS Feed or E-Mail Feed).

Pre-Qualification 2.0: Selling Emotion After The Objection

The title of this blog really sums up the Pre-Qualification process and is the start of how you can really maximize the time between now until the close of the loan (and after the close as well).  As I mentioned previously, Overcoming the First Objection is a task that will help you establish an initial rapport and really show that you are a professional in the field!

Now, when we get past that first objection of, “I’m already pre-qualified”, you should have two objectives in mind.  (1) Learn As Much About Your Client’s Real Estate Search As Possible, and (2) Build The Strongest Relationship With Your Client Through Questions That Trigger Emotional Responses.

A Pre-Qualification has very little to do with loan programs, and everything to do with emotion and that warm fuzzy feeling called trust!  If you can have a trust-building conversation with these clients and insert the pre-qual questions throughout the conversation, you aren’t selling the loan anymore, but you are selling emotion!

Instead of going straight into the questions on the pre-qualification, use a “tell me about” scenario (i.e. Tell me about the neighborhoods that interest you (pro’s and con’s).  These will open the conversation by the client telling you about their interests.  As Mark Madsen pointed out to me recently, people do not enjoy shopping for a mortgage, but they do enjoy shopping for a home. 

So, alter your sales approach and have the client talk about what interests them in the Real Estate process!  David Bartels points out in his blog Five Keys to Selling Smarter with Great Questions to care about the answer after the question is asked.  This means that you should write them down and know the answers that your client gives.  You will be able to utilize these later in the process as well!

After you get past the why’s of the neighborhoods, go into a visual question that will allow the client to see their family in a specific locality (i.e. So far in your search, which neighborhood can you see you and your family living?).  Not only does this show you care about the client’s overall views on their prospective Real Estate, but it is gives you an insider’s idea with regard to the Real Estate Agent.

Ask the client to describe their ideal home (i.e. Tell me a little bit about what you are looking for in this home).  This taps into more depth on the property description section of the 1003 asking the technical questions.  However, notice the difference between that, and “how many bedrooms and bathrooms are you looking for”?  There is definitely a significant difference there!

If there is a portion that was missed in the description, bring it up within the conversation, and avoid getting into the stringent questions like “Year Built”.  Instead, switch the approach to, “Now, do you see yourself in a newer home, or do you like the older homes”?  Just try to stay away from the actual 1003 questions.

After you find out that information, you can ask the question that will drive one of the better emotional responses, “How would it feel if you were to actually find that home tomorrow in that neighborhood with _____, _____, and _____.  Those blank spaces are the pro’s that they client mentioned when you were talking with him/her about the neighborhood’s that are preferred.  This is really starting to drive that emotion, and it really shows that you were listening and caring about the answers the client was giving!

In conclusion, after that first objection has been taken care of, it is extremely important that you go into something that interests the client; preferably a topic related to their home purchase.

The next segment to this will be about collecting the employment and income information from the client via conversation and not technical 1003 questions, and building a stronger relationship with the client while that is all going on!