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Tuesday, November 18, 2008

The Economy Changes The Way We Think

It wasn't too long ago that we were a consumerist society. I think a lot of us took pride in that. We drove our extra large SUV's like a badge of pride, a statement of our success. Conservation was something that never entered our minds; at least it didn't enter my mind. Now with the change in the economy everyone, not just us mortgage guys are feeling the pinch. There's a huge surge in the green movement. Although a lot of people are genuinely concerned about the environment, I imagine a lot of the newcomers to the green movement are motivated more by economic issues than by environmental ones. We're all looking for ways to trim our budgets. I find myself driving less, walking around the house turning off lights and religious about changing the filter on my heater. The things we do to save a buck!

How does this new mindset affect all of our businesses? For me, it means I'm evaluating my resources. With this economic environment, it takes more time to process mortgages and get them clear. More unqualified people are interested in loans, because everyone is looking for some kind of relief. It's quickly become apparent that time is my most valuable resource. I'm handling these new challenges in a couple of different ways.

First I'm taking advantage of technology. I'm now able to run all of my loan scenarios, whether they are purchases or refinances through automated underwriters. These programs compare any specific loan against Fannie Mae and Freddie Mac guidelines to give an instant approval or decline for conventional and FHA mortgages. This innovation allows me to quickly determine who qualifies for a loan. No more week long wait times for underwriters to tell me if I have a loan or not. If someone initially is rejected, I can manipulate the scenario to see what has to change in order to make a deal happen. Amazingly I'm able to save a lot of deals this way by just adjusting some of the variables.

The other thing that I'm doing is using a processing company to deal directly with the underwriter and be a liaison between the lender and the client. This has accelerated the process incredibly! This allows me to let someone else handle the busy work for a percentage of my profit, which in turn allows me to focus on getting new deals. That's the important lesson that this economy is teaching business owners. It's all about volume. Are you making more money as a Rolls Royce salesman, or a Honda salesman? Honda salesmen are doing better in this economy because society as a whole has gone back to looking for value instead of looking for luxury.

Finally I have to think about marketing. With time as my most valuable asset, I need as much marketing bang for my buck as possible. I've discovered a great tool in The Value Pages Group. Those of you who are in sales or own your own businesses, or know of someone looking to grow their business would be well served to check out the website: for a time and money efficient way of promoting your business.

What can we do as consumers? At my house we have a new obsession with turning out lights (most have been changed to the new energy efficient florescent bulbs). I'm also on a strict schedule with changing the filter in the heater.

When buying gas for the car, it pays to compare. Within a 2 mile radius of my house gas prices currently range from 1.72 to 1.99. A great website to find the lowest gas prices is

Another problem we had to deal with is recently a storm blew a few shingles off the roof and peeled back some siding. In this economy a lot of home maintenance gets put on the back burner, but I knew I had to get this fixed. A friend recommended I file a claim against my homeowners insurance. I was hesitant because I had never filed a claim before, and a call to my agent didn't make me feel any better about the idea. I have a 500.00 deductible on my policy and the agent made it seem like I would need to present that money up front. Only after talking to an independent insurance adjuster did I learn that the deductible just comes out of the settlement. So if you've been putting off some needed repairs (it doesn't even matter if a storm or your own actions caused the need of the repairs) and you would like to have them looked at by a professional and see what your insurance policy will cover, call Jennifer at 856-308-2463. Jennifer only works in NJ, PA, & MD, and FL is coming on soon, so if you're in another state, ask around for a referral.

Bottom line is that we've all got to become detail oriented when it comes to money. If you have other money saving ideas, please share them by commenting on this post!