The past few weeks will likely go down in history as the tense time period when two famous people suffered health ailments that at first seemed very serious but later turned out to be false health alarms.
The first is one that all readers of this column have probably heard about. Our own president ended up in the hospital recently to undergo a CT scan for a sore throat. As anyone with kids will tell you, sore throats are serious things, but fortunately our Commander in Chief was diagnosed with symptoms of acid reflux — or what you and I refer to as heartburn. His medical team concluded that his condition may have been caused by something he ate, which some cable news forecasters will surely use to project the president blaming his wife Michelle for her lack of culinary ability. I have a feeling he may be suffering from "eating crow" after the most recent midterm elections.
The second victim of a recent medical overreaction was me. Yes, I, the famous weekly columnist for National Mortgage News known far and wide to relatives and those who find my work in this prestigious publication, was also stricken by what first appeared to be a quite serious medical malady. Not that I want to encourage you to compare me to our Democratic president too much, especially since he's been dealing with months of post-midterm doldrums while I've been having a great time on the road, making speeches to friendly crowds at two MBA conventions and completely avoiding anyone threatening to impeach me.
But there are similarities. I also spent some time in the hospital after experiencing chest pains during a recent visit to Boston. Like Barack, I'm also inclined to blame my wife as I would have just toughed it out if she hadn’t been with me (tough may be the wrong word; my wife would use irresponsible). I figure the president and I should be on a first name basis due to our similar ailments. Anyway, I ended up in a Cambridge hospital where my Harvard educated doctors forced me to endure a battery of tests, over 24 hours, and then prescribed...a Tums. Well, it wasn't quite that simple, but they did figure out it was not my heart (or lack thereof) and, exactly like Obama, it was acid reflux. It's now cured, as I chomp on a chalky tablet when needed and avoid hospitals as much as possible.
So, what do these thrilling tales have to do with our wonderful mortgage business? Actually, I've been struggling with that and hope some of you kind readers will send me your ideas via LinkedIn. I'm kidding (not about the "send me a message" part)!
These stories are all about overreacting when we’re under stress, and we’re always under stress, at least here in the mortgage lending business. As we close out the year, mortgage executives all over the country are going to be reading over their reports and comparing their company’s performance to last year's and their lofty goals for this year. There’s going to be some heartburn. But don't let it put you in the hospital.
You see, sometimes in our industry we know what the symptoms are, we know what we’re feeling, but when we analyze it we come up with a much more complicated diagnosis than is necessary. It causes a lot of extra stress and acid reflux. Let me give you a couple of examples.
Let's say your loan production executive brings in the year-end totals for origination volume and they're not what you were hoping for, not even close. You could jump to the conclusion that you just don't have enough loan officers and start making plans for more office space and computers and software and gearing up for recruiting expenses and all of the additional costs that come with more people. Your company might end up in the ER.
The truth may be that you have exactly the right number of loan officer slots, but the wrong loan officers in them. Maybe you need to provide more training to the ones you already have. A small increase in conversion at any point in the borrower loan buy cycle will make a huge difference in profitability, with little or no heartburn. Of course, the key here is knowing who you have in your shop and how they're doing. That's not as easy as it sounds, but there are tools available to help you do it — and they cost a lot less than a new building for more LOs.
And maybe it's not a personnel problem at all. It might have to do with technology. Studies have made it very clear that unless you implement technology correctly, you will never get the results you expect, just more heartburn. There is no magic Tums for a bad technology platform that will suddenly undo years of abuse. I'll have a lot more to say on that early next year when the new Stratmor technology survey results are available.
I could use compliance as a classic example of malady overreaction, but that's way too easy.
It's hard not to overreact when failure to act in accordance with the requirements of so many overlapping jurisdictions can mean the loss of your company. I get that. But when it comes to the health of your company, you need to get the diagnosis right, make the required changes and only those that are necessary to get you to your goals. It may feel like your throat is on fire sometimes but more likely than not, you’re just full of gas and need to change your diet. I know that's what they told me and Barry. So, that's what I’m telling you. Think of it as a New Year's resolution.
Thanks for reading this year. I wish you all a very happy holiday season and great success in the year ahead. Meanwhile, I am stocking up on antacids.
Garth Graham is a partner with Stratmor Group and has over 25 years of mortgage experience.