A gun wielding man confronts a reporter in Arkansas, Rick Santorum says that voters should pick Obama over Romney, Kim Kardashian gets flour bombed, it’s 68 degrees and expected to be sunny this afternoon in LA, and traffic is a mess right now on the 405 heading north so circumnavigation is a must. Additionally, Andy has a great new prospect in Miami and I need to be on a conference call in 18 minutes. This news of the moment acquired in three seconds from apps on my smart phone for around $3 a day—money wisely spent.
Being in my 28th year of our frenzied industry, I sometimes wonder how I lived without this must-have tool that keeps me in the global communication loop—all for less than the price of lunch at McDonalds. Certainly I think all would agree that communication and information is the elixir of our existence in the modern world.
So what happened to communication in our business world? Sure, we chat “about” each other as deals flow through the many facets of our machine but are we placing emphasis on chatting “with” each other, and more importantly acquiring and utilizing the information necessary to prevent loss and fraud in our environments due to a lack of needed intelligence?
We’ve recently placed a plethora of regulation on our industry to incent or perhaps force us to do the right thing but, regulation or not, are we really developing channels that allow information to cross-flow so as to mitigate problems at the onset?
In our world at Interthinx we get to be both soothsayer and Monday morning quarterback understanding from review why portfolios fell during the bust, and applying that learning to the future. Thus, my advice to you is to make sure that best practices in your organization flow from front to back and that all areas have the necessary intelligence tools to adequately ensure quality.
For example, a conforming neighborhood property is appraised at $255,000. The appraisal provides five sales at or above $240,000, however it doesn’t mention the 14 proximate and statistically similar homes listed at or below $200,000, and that overall neighborhood exposure time is on the rise. The appraisal sails through the lending process and the maximum loan is made. Two years later the property falls into REO and is listed at $145,000 due to an abundance of foreclosure activity. However, the BPO probably doesn’t mention that the foreclosure activity is in another phase of the subject’s development and that the subject’s area, popular for its proximity to all area schools, is holding its own. The property sells in two days at a colossal loss. In both scenarios, a little chat and the use of a few good tools could have provided intelligence that would have identified flaws in the communication of the appraisal and BPO that were essential to making a good decision.
So in 2012 live by what Ronald Reagan said—“trust but verify.” Re-acquaint yourself with the fine art of flowing communication and wisely invest the cost of lunch in that $200,00 loan so that it doesn’t cost an exponent of that down the road. And text me if your instant message says anything about how the Lakers will do in their next home game…I need to know right now.
