[PULSE] Emotional connection deepens trust and expedites conversion

Note: This is part two of a five-part series. Over the following weeks, Todd Duncan, sales entrepreneur and New York Times best-selling author, will showcase principles for mortgage and real estate professionals to embrace for success. To read his first piece, click here and to read his second piece, click here.

“Businesses that optimize emotional connection outperform the competition by 26% in gross margin and 85% in sales growth.  Their customers spend more, return more often, and stay longer!”

– Gallup

Emotional connection is the most effective form of influence, and creates massive loyalty in a business relationship. 

Empathy is at the center of all humanity and is the most vital element for emotional connection to show up.  Empathy is the ability to understand and share the feelings of another. Being emotionally connected is a “relationship with a person,” and profound in how we do business with each other. 

Todd Duncan
Todd Duncan
Guest Author

Emotion manifests itself in the interactions and experiences we have with others, and that they have with us. Knowing those expectations and fostering a culture around delivering them, consistently, forms the basis for loyalty, repeat purchases and perhaps even more important, word of mouth referrals.  

Emotional connection is now the No. 1 driver of a great consumer experience – outpacing ease and effectiveness. The more significant the purchase on one’s life, like mortgages and real estate, the more this emotional connection will be needed, and maybe demanded.  

Every relationship that ties buyer and seller together will thrive when emotional connection exists

There is too much promotion in the world and not enough emotion.  I tell our coaching members repeatedly to “Stop selling what you do and start selling why you do it.” High Trust Coaching equips mortgage and real estate professionals to sell less and connect more. High-performing people don’t look for sales or orders; they look to transform the purchase or buying experience.

Apple does this. They don’t sell a product, or even a list of features a product might have. 

It is about the human experience. 

They bring you in emotionally, and once you are “in,” you could end up owning many of their products. Here is one of their branding promises:

“We believe in changing the status quo and thinking different.  We build beautifully designed tools that unleash your creative potential and help you change the world.”

All they have to do next is ask, “Do you want to buy?” I am an Apple brand loyalist. I own 21 Apple “tools!”

How do we say this in mortgage or real estate speak?

“We design beautifully architected home loan experiences that give you the safest and most secure mortgage, reducing your risk, while giving you peace of mind as you make memories in your new home.”

“We design superior home purchasing experiences giving you the confidence and comfort you will get the best home for the best price and experience joy and comfort on the journey.”

The Three Tenets of Emotional Connection

Every emotionally connected relationship must have these elements. And they must happen in this order to fully develop Emotional Connection and Trust.

Tenet No. 1: Chemistry

“If two people want to do business together, the details will not get in the way.  If they don’t want to do business together, the details will not make it happen.”

– Dr. Tony Alessandra

If you are not attracted to or you don’t like the people you are working with, you will not work with them well. You must have chemistry.  If we are connected on the inside, we can be very successful together on the outside!

American business philosopher, Jim Rohn, had a governing thought on this worth contemplating.

“There are enough people who will do business your way not to worry about those who won’t.”

Oil and water don’t mix. Chemicals that don’t mix are said to be immiscible. 

Here are some examples of “oil and water:”

  • If I am honest, and another person is not…
  • If I am efficient, and another person is not…
  • If I am professional, and another person is not…
  • If I am punctual, and another person is not…

There are relationships that are “immiscible.” No matter how hard you try, the relationship will never be in sync or functional and will always require effort. You should walk away!

Tenet No. 2: Conversation and Collaboration

Have you ever been in a restaurant and looked at another couple at a table, and they aren’t talking? Or they are both busy texting?

The conversation is at the level of chemistry they have. The higher the chemistry, the more conversation and collaboration happens, naturally.  The lower the chemistry, the less conversation and collaboration there will be, naturally, for the same reasons.  If you are not “attracted,” what is there to talk about?

In business, it’s the same. If you don’t have high chemistry with people you work with, you won’t have real conversations.

Fully functional relationships desire and thrive on conversation and collaboration – it’s enjoyable, rich, revealing, and surprise, “Connected”.  The best conversations can’t be forced.  If they are, there is no chemistry.  When chemistry exists, you can’t wait to talk and converse. 

Conversations are the catalyst for growth, loyalty and performance.  Conversations are like lubrication – they allow relationship to function at easier, smoother levels.  

Conversations require four things beyond chemistry:

  1. Asking questions you have never asked;
  2. Learning things you have never learned;
  3. Solving with value things you have never solved;
  4. Insane, connected, listening!

Collaboration is built on conversation. In the High Trust Selling model, this is how relationships continue to get more and more valuable.

While there are many layers of collaboration, I will simplify it here.  I’m a mortgage originator.  I’m working with real estate agents.  In a collaborative relationship, I am meeting regularly, having deeper, needs based conversations, assessing how we are doing together, examining how to be more efficient, generate more business, create more cash flow and on and on. 

Conversation is good, collaboration is better. 

Tenet No. 3: Conflict Resolution

Conflict is real. Resolving conflict is a master skill. If two people avoid the discussions around conflict, it crushes conversations, collaboration and ultimately, connection. 

Conflict resolution requires a mutual commitment to work together and improve.  There is no higher calling than for two people to respect each other through resolving conflict.

For 11 years, I met with everyone of my agents twice a month to converse, collaborate, and yes, solve conflicts. I called this partnership planning (business reviews), and it became a twice per month discipline.  

Healthy relationships have a consistent need for both parties to make emotional deposits into the other. The deposits add up and the balance gets healthy.

If you don’t do this, you can’t make the withdrawals when you need them in the form of the “conflict resolution.” You will overdraw your account, and there is no overdraft protection, and it’s harder and harder to resolve anything in that state.  If, on the other hand, if it is full and the deposits are consistent and heartfelt, you have emotional equity! Very few things will be as important as emotional equity, ever. 

Your motive with conflict resolution is a mutual win.  When you connect at the heart, releasing emotional connection, you will have more business, less stress, more loyalty and more referrals.

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FDIC adds five to its Systemic Resolution Advisory Committee

The Federal Deposit Insurance Corporation named five new members to its Systemic Resolution Advisory Committee on Thursday.

Former Federal Reserve Chairman Dr. Ben Bernanke; former Fannie Mae CEO and current President of Blend, Timothy Mayopoulos; former President at Goldman Sachs and White House National Economic Council, Gary Cohn; Hon. Robert Drain, United States Bankruptcy Judge, Southern District of New York; and Sandie O’Connor, former chief regulatory affairs officer for JPMorgan Chase were named to the committee.

Comprised of 16 members total, the Systemic Resolution Advisory Committee provides guidance to the FDIC on systemically important financial institutions. The committee was created as part of the Dodd-Frank Act.

“The FDIC is fortunate to have these distinguished individuals join this advisory committee,” said FDIC Chairman Jelena McWilliams in a statement. “Their collective knowledge will be a tremendously valuable resource for us to draw on.”

Bernanke was chairman of the President’s Council of Economic Advisers from June 2005 to January 2006 and was a member of the Board of Governors of the Federal Reserve from 2002 to 2005. Bernanke also has experience as an educator.

In addition to being the President of Blend, Mayopoulos served as the General Counsel of Bank of America for five years, and has held senior roles at Deutsche Bank, Credit Suisse First Boston, and Donaldson, Lufkin & Jenrette. Mauopoulos also serves on the boards of directors of LendingClub and SAIC.

Prior to working at the White House, Cohn was the president and COO of The Goldman Sachs Group from 2006 to 2016. Cohn was a member of the firm’s Board of Directors and chairman of the Firmwide Client and Business Standards Committee, and currently serves on the boards of Abyrx, Hoyos Integrity, Indago, Spring Labs and Starling, as well as chairman of the Board of Pallas Advisors.

Drain is a United States Bankruptcy Judge for the Southern District of New York and also is the current chair of the Bankruptcy Judges Advisory Group established through the Administrative Office of the U.S. Courts.

O’Connor currently serves on advisory committees for the Office of Financial Research and FDIC Systemic Resolution. O’Connor is a director of Terex Corporation and is the current chair of the Board of Directors of the YMCA of Greater New York.

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TransUnion: the percentage of accounts in financial hardship began to level off in June

The percentage of accounts with mortgage loans in “financial hardship” fell from 7.48% in May to 6.79% during the month of June, according to a consumer credit snapshot by TransUnion.

The report defines accounts with deferred payments and forbearance programs as those in financial hardship and credits lender accommodation programs as a leading factor in these account’s recent stabilization.

Month over month, the percentage of accounts with financial hardship delinquency status fell in every loan type for the month of June – including those Fannie Mae, Federal Housing Administration, Freddie Mac, United States Department of Agriculture, Veteran’s Administration and jumbo loans.

However, looking at year-over-year numbers, every loan type’s percentage of hardship accounts gained in June over 2019, the report said.

FHA loans took the lion’s share with 14.98% accounts in hardship last month. However, that number was down from 16.17% in May. The next largest percentage were those with USDA loans, which fell from 11.47% in May to 9.15% in June.

“In the early months of the pandemic, unemployment benefits and relief from the CARES Act gave consumers a bit of a cushion, leaving the consumer fairly well-positioned from a cash flow perspective,” said Matt Komos, vice president of research and consulting at TransUnion. “Lenders have been working with consumers during this time of uncertainty by extending financial hardship offerings that help them understand and manage their financial situation.”

Since the beginning of the pandemic in March, consumer-level delinquency performance stayed relatively steady as the percentage of mortgage loans 60 days or more past due fell month-over-month to 1.07% in June from 1.14% in May, according to the report.

TransUnion’s Financial Hardship Survey revealed that of consumers with a current financial accommodation on a loan, the top three preferences for repayment were:

  • 32% in favor of repayment plans that will allow for paying down debt gradually while continuing regular payments
  • 21% would like extended financial accommodations for another few months
  • 18% preferred paying off all postponed payments with a lump sum

“By many accounts, we are still in the early phase of the pandemic, and there is some uncertainty still around the nature of the economic recovery we may experience,” Komos said.

“It will likely be months before the financial impacts of COVID-19 begin to materialize from a credit-performance standpoint, and some of this will be dependent on any additional government actions. During this period of time, lenders will need deeper consumer insights to better calibrate risk across their portfolios and make more informed decisions.”

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Senate amendment cuts expansion of VA mortgage funding fee

Everyone celebrated when the Blue Water Navy Vietnam Veterans Act passed Congress last year and was signed into law by President Donald Trump.

The bill provided benefits to Navy veterans exposed to Agent Orange during the Vietnam War. But hidden in the small print was a detail many legislators overlooked when voting for the bill: It was funded by hiking fees on mortgages backed by the Veterans Administration.

“These are all worthwhile benefits, and we want to see veterans get the care they deserve, but why is Congress choosing to pay for these benefits on the backs of military families?” Chris Birk, director of education for Veterans United, the largest VA lender, said to HousingWire at the time.

Now, another attempt to have active-duty military and veterans pay for benefits for other current or former members of the armed services has been derailed – at least in part – because of an amendment by Sen. Jerry Moran (R-KS) to HR 3504, a bill approved by Congress on Monday that provides funds to adapt housing for disabled vets.

The fee hike in last year’s Blue Water Navy bill temporarily increased the VA mortgage funding fee from 2.15% to 2.3% for first-time buyers and from 3.3% to 3.6% for subsequent buyers through Jan. 1, 2022. Most vets roll the fee into their loans, meaning they’re paying off their fee with interest for the time they own their property.

The original version of the bill passed this week was paid for by extending those Blue Water fee hikes through Oct. 2, 2027. That extra five years and 10 months would have resulted in VA borrowers paying an additional $529 million in fees – not counting the interest they might pay for up to 30 years to finance the higher fees.

Moran’s amendment reduced some of the spending in the bill and cut the extension of the higher fees to an extra one year and four months – through April 7, 2023.

That will cost VA borrowers an extra $118 million, versus the $529 million in the original version of the bill, saving VA loan borrowers $411 million in fees.

“For 75 years, the VA home loan has been an economic lifeline for veterans and military families,” Veterans United CEO Nate Long said after the bill passed. “We are appreciative that Sen. Moran recognized that continuing to raise the cost of using this benefit is detrimental to those who serve and defend our country.”

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Coastal city exodus continues: Phoenix, Sacramento and Las Vegas now most popular

As more people are forced to stay at home and work from home, those who live in small spaces are branching out and seeking homes with extra wiggle room. According to Redfin, 27.4% of its users looked to move to another metro area in the second quarter of 2020, a new record as it’s up from 25.2% in Q2 of 2019.

In April and May, 27% of homebuyers were looking at other metros. Realtor.com also said that listing views in suburban ZIP codes grew 13% in May.

“The factors driving a surge in overall homebuyer demand – low mortgage rates and changes in what people are looking for in a home – are lighting a fire in people who were already considering a move to a different area,” said Redfin Economist Taylor Marr.

“Add in employers’ increasingly flexible remote work policies and the fact residents of many big coastal cities can’t fully enjoy their local amenities, and the people who have long wanted to live in a more affordable area or closer to family are incentivized to make the move soon,” Marr said.

The metros with the most outflow of residents? New York, San Francisco, Los Angeles, Washington, D.C. and Chicago. Redfin noted that expensive coastal cities, like these, typically see the most out-migration.

Redfin said users are most often looking to move to inland areas with affordable housing. Most Redfin users looked at listings in Phoenix, Sacramento, Las Vegas, Austin and Atlanta during Q2.

“As we enter the second half of the year, I expect more people to move from one part of the country to another as the pandemic continues to influence people’s priorities and lifestyles,” Marr said. “But it’s also important to note that some pandemic-driven moves are temporary, and the stories about families hiding out in remote cabins won’t all result in home purchases or permanent relocation.”

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Notarize partners with Stripe to pay notaries faster

This article was written for FinLedger, HW Media’s new fintech-focused news brand designed specifically for financial services professionals in banking, insurance and real estate. Stay tuned for updates.

Notarize announced Thursday morning it has partnered with payments platform Stripe in order to pay its notaries faster.

The Boston-based digital notary platform has seen demand surge in the wake of the COVID-19 pandemic. Earlier this month, Notarized announced that it had closed on a $35 million Series C round of funding in March, bringing its total funding to date to $82 million. 

Since that time, Notarize founder and CEO Pat Kinsel said the startup has seen its business surge by more than 400% since March “ as businesses and consumers seek transaction liquidity in this new environment.” 

As part of that, the company said it has added 1,600 new notaries to its team to meet demand.

The majority of those notaries are working remotely as contractors, according to Notarize, which only has about 50 employee notaries.

By integrating with Stripe Connect, Notarize can pay those contract notaries “almost instantaneously,” the company said. Previously, payment was sent bi-weekly, every other Friday. Also, because it’s itemized, the process helps make tax preparation easier for notaries, compared to direct deposit, a company spokesperson told HousingWire. 

“The novel coronavirus has upended business as usual and left thousands of notaries furloughed or unemployed, unable to reach their clients,” said Pat Kinsel, founder and CEO of Notarize, in a written statement.  “By integrating our platform with Stripe Connect, we are giving notaries tools to get back to work, service some of the largest lenders, title companies, and financial institutions, and receive prompt payment.” 

Are you a financial services professional hungry for better fintech news and info? HW Media is proud to introduce FinLedger, a fintech media brand that will cover the critical news impacting financial services professionals — from SaaS to big data, and cybersecurity to regtech. Want to be notified when we launch? Enter your email here and follow us on Twitter.

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Jobless claims rise as COVID-19 infections surge

Jobless claims rose to 1.42 million last week from 1.31 million in the prior week, the first gain in almost four months as the widening COVID-19 pandemic cut into economic activity.

A second measurement known as continuing claims that tracks the number of Americans receiving ongoing unemployment benefits fell to 16.2 million for the week ended July 11, the seventh consecutive decline, the Labor Department said Thursday.

Wells Fargo economists described the gain in jobless claims as “one of the clearest signs yet that the U.S. recovery is stalling.” Some areas of the country have restricted business activity to prevent their hospital ICUs from being overwhelmed with COVID-19 patients.

“Watch your step, there is a cliff ahead,” the report said. “The 18th consecutive week of initial claims over one million illustrates the relentless nature of the current crisis.”

The gain in jobless claims will be added incentive for the Senate to extend the beefed-up unemployment benefits that were included in March’s CARES Act and are set to expire July 31, the Wells Fargo economists said.

Unemployment benefits, which are administered by states, typically replace about half of a person’s prior salary. The CARES Act’s extra $600 a week payment was aimed at keeping Americans who lost their jobs because of the pandemic current on bills such as mortgages or rent.

“The generosity of the federal emergency benefits, which are set to expire at the end of next week, has shored up spending power,” the Wells Fargo report said.

The House of Representatives passed the Heroes Act in May that included a provision to extend the benefit through January, but the Senate didn’t act on it and went on a two-week vacation before Independence Day that ended this week.

Because July 31 is a Friday, and many state unemployment systems have the week ending on a Saturday, it means this is the last week of the extra payment for millions of Americans.

“With layoffs rising again, unemployment still near a record high and a dearth of jobs available as the pandemic has decimated activity, we have a hard time believing Congress will let them fully lapse,” the economists said. “The labor market simply remains too weak with dire implications for spending and the rest of the economy.”

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HUD to abolish Obama-era AFFH fair housing rule

This story was updated post-publication with statements from HUD Secretary Ben Carson and NAR

The Trump administration will terminate the Obama-era rule regarding the implementation of the Affirmatively Furthering Fair Housing, or AFFH, provision of the 1968 Fair Housing Act, according to Housing and Urban Development Secretary Ben Carson.

In a press release issued on Thursday, Carson alleged the provision has proven “to be complicated, costly, and ineffective.”

“After reviewing thousands of comments on the proposed changes to the Affirmatively Furthering Fair Housing (AFFH) regulation, we found it to be unworkable and ultimately a waste of time for localities to comply with, too often resulting in funds being steered away from communities that need them most,” said Secretary Carson in the release. “…Washington has no business dictating what is best to meet your local community’s unique needs.”

The 2015 rule requires cities and towns that receive federal funding to examine local housing patterns for racial bias and design a plan to address any measurable bias.

On a related note, proposed amendments of the HUD interpretation of the Fair Housing Act’s disparate impact standard have been met with opposition from industry leaders including the National Association of Realtors and Quicken.

But a complete “tearing down” of the AFFH rule, as Carson put it, was not expected.

In its place, HUD has unveiled a new rule called Preserving Community and Neighborhood Choice, which it says defines fair housing broadly to mean housing that, among other attributes, “is affordable, safe, decent, free of unlawful discrimination, and accessible under civil rights laws.”

It then defines “affirmatively furthering fair housing” to mean any action rationally related to promoting any of the above attributes of fair housing. 

HUD added: “With the new rule, a grantee’s certification that it has affirmatively furthered fair housing would be deemed sufficient if it proposes to take any action above what is required by statute related to promoting any of the attributes of fair housing. HUD remains able to terminate funding if it discovers, after investigation made pursuant to complaint or by its own volition, that a jurisdiction has not adhered to its commitment to AFFH.”

Carson took to Twitter on Thursday morning to reiterate his and Trump’s stance on the issue, writing: “President @realDonaldTrump and I agree that the best-run communities are the ones run locally. Today, we are tearing down the Obama Administration’s Affirmatively Furthering Fair Housing rule, which was an overreach of unelected Washington bureaucrats into local communities.”

He went on to describe the AFFH rule as “a ruse for social engineering under the guise of desegregation,” which essentially turned HUD into a national zoning board.

Carson then alleged that funding subject to the AFFH rule has “been misused and abused for decades as slush funds for pet projects and causes ranging from an entertainment venue to a splash park and Planned Parenthood funding.”

Meanwhile, the National Associaton of Realtors® expressed disappointment after HUD unveiled its final rule. The organization pointed out that, following the administration’s initial proposal in January, it had publicly commented that the changes threatened to strip away the rule’s original civil rights purpose, as mandated by the 1968 law.

In a statement on Thursday, NAR President Vince Malta, a broker at Malta & Co. Inc., in San Francisco, said HUD’s decision “significantly weakens the federal government’s commitment to the goals of the Fair Housing Act.”

“The viability of our 1.4 million members depends on the free, transparent and efficient transfer of property in this country, and NAR maintains that a strong, affirmative fair housing rule is vital to advancing our nation’s progress toward thriving and inclusive communities,” he added. “With the pandemic’s disproportionate impact on people of color reminding us of the costs of the failure to address barriers to housing opportunity, NAR remains committed to ensuring no American is unfairly denied this fundamental right in the future.”

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Mortgage Tech Demo Day: MeridianLink

MeridianLink’s LendingQB® is a SaaS browser-based mortgage LOS designed to optimize the entire lending process. Our proven cloud services strengthen our lenders’ ability to deliver faster and more compliant loans using our automation, advanced features, and dedicated support staff.  LendingQB’s rich integrations connect you to more than 250 industry partners, from point-of-sale to closing.Our comprehensive suite of tools (Open API, PriceMyLoan (PML), eDocs, web portals) allows for individual customization of the end-to-end process. To learn more about LendingQB®, click here.

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Mortgage Tech Demo Day: Azimuth GRC

Compliance giving you a headache? Azimuth GRC revolutionizes the world of regulatory compliance by providing companies a single software platform that easily manages compliance AND provides automated updates on the ever-changing regulations handed down by federal and state governments.  Azimuth GRC has the largest structured inventory of laws and regulations available in the mortgage industry, creating a single source of truth that allows companies and organizations to check every box when it comes to compliance. Enjoy our demo!

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