There’s a huge opportunity for you to take real advantage of the market right now, today. We are in an environment where interest rates have been rising. Refinances, although they haven’t quite slowed that much, we know that we’re getting to the tail end of what we’re going to be doing in the refinance market. Why?
Because the majority of the refinance market right now is the individuals or families who waited and waited and waited thinking that rates were going to come back down. And they finally realized the party’s over, and if they don’t act now, they’re going to miss out.
In fact, Freddie Mac just recently reported that the loan quality of refinances has steadily been declining ever since rates started rising. So we know it’s not the borrowers. It’s the homeowners who have been waiting and waiting and waiting.
What is Originator Purchase Lag?
Originator purchase lag is the delay between the time that loan officers say I need to go after purchase business, which is happening right now, versus when they actually take action.
For over three decades, I’ve seen this over and over and over again. In fact, this is my eighth cycle. We start seeing interest rates rising, and every single time, loan officers behave exactly the same way.
And what that means is they hang on for dear life, trying to get every last drop of refinances because they don’t want to prospect. They are not ready to go after purchase business. They don’t know how to deal with the challenges and the objections when a realtor says, “I already have an existing relationship. I have an in-house lender.”
They don’t know how to go after the referral partners: attorneys, accountants, and financial planners. And now because of COVID-19, they don’t know how to network or sell virtually either. So purchase lag is the mindset that loan officers know what they need to do, but they’re going to do everything they can to avoid doing it.
The Opportunity Purchase Lag Creates
Purchase lag creates an opportunity for you to take action today, mastering the skills, mastering the positioning, mastering your ability to ask the right questions, and listen for the keys that will allow you to win the relationships. Learning these skills will allow you to network and sell, more effectively, virtually, or in real life.
It’s really not as hard as it sounds. It’s all about asking great questions. When you work on scripting your questions, you can beat the majority of loan officers who will start pounding on their referral partner’s door in the next 30 to 60 days.
And when that happens, it doesn’t mean that your competition will be any better than you. It just means that when everybody’s converging on all of these referral partner sources at the same time, it’s going to be that much harder for you to get noticed.
So the opportunity for you right now is don’t delay. Start taking advantage of the purchase lag that exists with the majority of originators, and you will be amazed at how many new relationships you can establish in the next 30 days.