I started a mortgage brokerage company in 1991. During the refi boom years of 1992 and 1993 I closed a ton of loans and made a lot of money! However, during the refi bust of 1994 I almost went out of business. I then discovered that the Internet was an ideal tool for mortgage brokers and went on to found Myers Internet, Inc. to help mortgage brokers generate loans using the 'Net. Since 1994 there have been a few more refi boom and bust cycles. I have watched hundreds of mortgage brokers come and go and only a few survive! The purpose of this article is to help brokers learn how to make the most money in a refi boom and then survive the ensuing refi bust!

The most important thing to do in a refi boom is to create loyal customers. This is the time when it is very easy to acquire new customers with little or no marketing. Most mortgage brokers are too busy chasing new customers that they forget to take care of existing clients! It is very important to provide state of the art tools to your customers to keep them coming back. If you focus on providing the best rates and service your clients will refer their friends and family members to you.

So how can you provide superior service and stand out from the rest? The key lies in fast, responsive service. In today's day and age customers want instant answers and not your voice mail. Do you hate it when you need an answer urgently and you call your wholesale rep and get their voice mail? How do you think it must be for customers who need a mortgage and they call you and only get your voice mail!

Satisfied customers will come back to you again and again and refer everyone they know to you! That will generate a lot more money over time! But how do you generate satisfied customers when you are so busy?

One way to provide fast responsive service is to hire more loan officers and processors. However, that will increase your overhead, which will kill you during the refi bust cycle which will come in a matter of time! Instead you need to provide better service with the same staff!

Another easy way to do this is to upgrade your voice mail by using the latest technology:

Instead of saying "I am sorry, I am not available right now, please leave a message and I will call you back" you could say "I am sorry that I am not available right now. If you need an urgent rate quote including available loan programs, rates, points, monthly payments and fees, please go to my web site at www.mysite.com. If you have already applied for a loan, please visit my site to check your loan status. Otherwise please leave a message and I will call you back as soon as possible."

Yes, it's hard to provide fast responsive service during a refi boom. But by acquiring the latest web site technology you can make life a little easier for yourself, your business associates and your customers. Best of all your web site can multi-task! It can quote rates and take applications from hundreds of customers at the same time!

How many customers can you handle at a given time? One, maybe two! So how many customers can you quote rates to in a day? How many applications can you take in a day? How many calls can you return in a day? Did you know that a web site can quote rates to thousands of customers, take hundreds of applications a day and not complain at the end of the day!

The reason why mortgage brokers go out of business, is that they fail to service customers during a refi boom. They wind up hiring a lot more staff and getting a bigger office, to provide better service. This of course increases overhead! Then one-day with no warning rates go up and over 50% of their pipeline evaporates! Soon they find out that their costs are higher than their income. Next they start cutting costs but find that it is hard to do this overnite. The only alternative in many cases is to shut down! Instead of all this, isn't it much better to upgrade your technology - which can let you handle more business and provide better service - without increasing overhead?

The secret to thriving in the refi boom is to handle all the business possible without adding a lot of new staff. When rates are low it is hard to find good people and it also takes your time to train and manage them. Rather than spending time trying to find more people, with today's technology, you can buy a state-of-the-art web site and back office processing tools at a cost of 10% of what you would pay a loan processor! You don't have to worry about benefits! Your web site will never call in sick or go on vacation! It is never rude to your customers!

Many brokers say that Internet consumers are shoppers and they would rather do business the old fashioned way. However many brokers are using the Internet to provide better service to existing customers. They are getting the email addresses of their customers. When it's time to refinance they are sending out refi offers via email to their customers. In addition, through the use of powerful tools like Rate Alert, they are able to notify customers automatically when it's time to refinance.

Today over 50% of US households have computers and Internet access. In addition, just about everybody has Internet access available at work or at the library. That's why surveys show that over 80% of consumers shop for a mortgage online today! Can you afford not to provide good service to over 80% of your customers?

Within minutes after the Fed cut interest rates on October 2nd, I noticed that mortgage applications submitted on our mortgage broker clients web sites were up over 300% from September levels. Over the next few days consumers applied for mortgages on the Internet in unprecedented numbers. Gone are the days, when it would take weeks and months for consumers to know that rates were moving downwards. Today, consumers are empowered to react within minutes, and often rush to refinance even if rates drop by 0.25%. The Internet is an ideal tool to shop for a mortgage and today consumers have a lot of choice.

So how do you attract new business on the 'Net? I often get asked the question, "How can I get my web site found? How can my web site be listed in the first position in the search engines?" While getting a good position in a search engine is helpful to getting more hits, there is little evidence that this is a sustainable way of generating business. Search engines constantly change their algorithms to determine the order in which sites should be listed. To survive the brutal Internet shakeout most search engines have been forced to find new ways to make more money. As a result, the days of free listings are soon becoming history. Many companies now sell the first few listings to the highest bidder!

So what is the best way to reach Internet consumers? Interestingly enough most successful companies report that the best way to generate traffic to a web site is through a combination of online and offline media advertising. The best use of the Internet is to market to existing customers and service clients better at a lower cost.

What are the essential tools on a web site to originate loans? Successful mortgage companies generally provide (1) up-to-date-rates (2) online and offline application options (3) instant communication via telephone or chat and (4) online loan status. With today's technology it is relatively simple and straightforward to setup a web site and originate loans.

The other reason why mortgage brokers go out of business during a refi bust is that they do not provide good service to their Realtors and other referral sources during a refi boom. This is because brokers are so busy that they cannot return calls or offer the high touch that Realtors need. You have to find a way to provide great service to Realtors and your other referral sources during a refi boom so that they send you business during the refi bust! How do you do that?

Again, one way is to hire more staff and increase your overhead. However a much smarter way is to upgrade your technology. Empower your Realtors to use your web site to get rates and apply with the borrower in their office. It will probably take you about an hour to train a Realtor how to shop rates on your web site, how they can help their customer to apply online and get loan status online!

To summarize, to thrive during the refi boom you need to be able to do more business without hiring staff and increasing overhead. Stay lean and mean but close a ton of loans by taking advantage of the latest technology. Keep your customers happy by providing fast, responsive service. Keep your Realtors loyal by taking care of them. Your business will multiply. Because you have not increased your overhead, your profits will soar! Then when business slows down, your satisfied customers and Realtors will keep you in business by sending you referrals!