Welcome to the “Millionaire Loan Officer” podcast with your host, Scott Hudspeth, sharing tools, tips and strategies, so that you can go from a mortgage loan officer to a millionaire loan officer. It's your host, Scott Hudspeth.
Scott: Hello, everybody. This is Scott Hudspeth with Millionaire Loan Officer, powered by Mortgage Marketing Animals and the Loan Officer Breakfast Club. Super excited to have my brother from another mother, Doug Cadaret. Holy smokes, man.
Doug: Good morning to you.
Scott: We’ve been around 10 years, is it? Is it the 10-year anniversary?
Doug: It's been 10 years. It makes me look back at everything that we've been through and it's kind of shocking that everything happened just in 10 years, just like we've known each other a lot longer.
Scott: A lot longer. Doug, man, you're kind of special to me. I know you're not going to agree with me on this, but seriously, bro, you've taught me more than probably I’ve ever even dreamed of giving you. [01:04.5]
You've taught me the C.A.R.E. model, which I talk about daily. You have tweaked, made better. You just come out with a new tracker that's unbelievable that the world is using. The C.A.R.E. model, C-A-R-E, creating a referable experience, looking for words of affirmation that most people just waste. Not me anymore. Not me.
Doug: Right.
Scott: And then you're an amazing Freedom Club coach, which, everybody, I got to witness every one of your coaching members, hang out with your coaching members. I went to an opening of one of your coaching members. She couldn't stop talking about you. Man, dude, you're pretty awesome, man.
Doug: I'm humbled, buddy. Thank you. Thank you. I mean, I’ve never sought that attention and affirmation, but it feels good to hear it. It really does.
Scott: You're just a giver man. You're just always, always, always giving. When you and I get together, we can't stop talking about you. You just give back. You give us good. It's like, dude, I'm tired, man, too much, too much.
Doug: It's hard sometimes, right? You’ve got to have a passion for it. If you're not, at the core, a giving type person, it makes it really hard to be authentic with as many people as we get to hang out with. [02:10.2]
Scott: Right.
Doug: And I think a lot of that has to do with you as well, brother. You've taught me authenticity. You've taught me about the ability to market yourself, and, equally, I'm honored to be a part of your life. I'm honored to be a part of your business and share in what you're creating, and I just can't thank you enough for introducing me to everything that you've provided me, including my wife. I mean, we can't gloss over that, brother.
Scott: I know, I know.
Doug: You're absolutely responsible for why my wife and I are married, so in more ways than one.
Scott: And you're going to probably throw people into a tizzy just saying that, so we'll just leave it at that. If you want to know more, call Doug. If you want to know more about what we just talked about.
Doug: No, no, if you want to know more, you’ve got to call Scotty. He'll give the low-down. There's a funny story that goes along with it.
Scott: There's a funny story. Yeah, I don't even like to talk about the story, but it is what it is. Your wife says, “Hey, it's the best part of it.” I'm like, no, no, no, I don't think so. I don't want that to be the best part. [03:02.0]
Doug: It truly was the best part. It's one of those things that it’s so memorable that it just brings it all together.
Scott: Doug, you talk to loan officers, literally, I don't know how many hours a day, but it's every single day, 50 weeks out of the year. What are you seeing? The industry is changing. Rates are going up, but values are up. I've seen more success, I think, than ever before because of the Freedom Club. I've seen more freedom because of the Freedom Club, but what are you seeing right now with the industry changing the way it is moving into 2022?
Doug: I’ll tell you, for the last couple years, we've got really comfortable answering the phones. It has been very easy to wake up and be really profitable. I mean, success is defined differently for everybody, but it's been really easy to wake up and be profitable in this industry for the last couple years.
The conversation I think I'm having more and more that people keep asking me is, how do you prepare for 2022? Everybody knows that the market compression is happening. Everybody expects, according to the very smart people who say, that we're going to see about a third reduction in total closeable volume in loans in 2022, right? 3.6 trillion in 2021 and they're expecting 2.6 trillionish in 2022. [04:16.3]
But I honestly feel like, with all of that headwind that's coming at us, the tailwind is going to dissipate and we're going to be faced with a headwind. I keep believing that. We've been in the industry long enough, right? We've seen these headwinds before, and I find that if you're prepared and have a plan to be consistent and predictable and unwavering, I think this market poses a great opportunity to do better than what you did in 2022 or 2021.
I just think that we can't look at refis as being a staple in our business anymore. If anybody out there right now has a business that's 50% or greater refinance, you need to be in a position to really focus on building a plan. My clients know that, right now, if they're not 60, 40, 70, 30 purchase to refi, they're in a different mindset. They're really focusing on crafting a daily success plan that they're going to focus on and build out, and stay resilient with for the first quarter. [05:13.7]
Just being honest, I don't think it requires any shiny whistles. I don't think it requires any major revamping. I think it comes down to not how many people you meet, but how many phone calls you have a day. Picking up the telephone, saying hi to those people that have supported you, and introducing yourself to people that haven't met you yet, I think is going to be the reason why loan officers, MLOs, CEOs are going to find success in 2022, because if they go after those realtor relationships and those referral-partner relationships, they're going to find success because there's still going to be plenty of purchase business out there.
The compression is just going to get rid of or it's going to trim the fat, so to speak. Those outlier LOs that have been in the business for the last couple years, they don't really have a plan; they don't have a structure—and this brings up another question or another comment that we could talk about later, but there's really no leadership in this industry. [06:04.8]
The reason I think the Freedom Club has become so powerful, I mean, we've seen our membership triple in the last nine months, literally triple. We had standing room only at the event that we just had San Antonio and the processes and the systems are unbelievable. But Carl and Tammy and you and Steve and Frank, and so many others have touched a nerve as it relates to leadership in this industry.
It is so grossly absent that, if you don't have somebody whom you can lean on or a mentor, that's what we're here for. That's what we provide our clients, our friends and our partners, and I think between having a plan in leadership to hold that accountability is what holds it all together. We've seen it several times. I've been in the business since the mid-90s, and in every headwind I’ve experienced, I’ve buckled down and focused on my relationships, and then that goes back to what you were saying earlier about the C.A.R.E. model.
Scott: Yeah.
Doug: But it has stood the test of time, at least since I’ve been in the industry, just focusing on those moments of gratitude. [07:06.8]
Scott: I know.
Doug: Really just focusing on being a giver. When you hear the phrase “givers gain”, I know it's cliché, but the truth of the matter is it really does matter to people. It really does. I mean, I'm thankful for being here. You're thankful for me being here and I genuinely appreciate who you are because of how much you give, and that dynamic happens in every relationship that you have in your business today. Whether it's an employee to you or a partner to you, or a referral partner to you or your family to you, it all matters. It all really does. That's why I think if you focus on caring for your partners and you focus on caring for your team, and focus on caring for your business, it's …
Scott: Life-changing.
Doug: It's the catalyst, right? It's everything. Everything from that moment is possible, the moment you focus on caring for your business and your partners and your relationships.
Scott: I love it. You talk about the C.A.R.E. model, which was life-changing for me. It took me a while to get it, but then once I started dissecting it, pulling it apart-- [08:03.6]
Doug: Me too.
Scott: Right?
Doug: Right.
Scott: One of the things I think that COVID has done to us is we've just become like robots, because there's so much, so much business, and I keep telling people, man, you have to stop. You have to slow down. You have to make sure that the people you're working with think they're your only client, and the C.A.R.E. model has done that for me. I keep thinking about “create a referable experience”, and you can't do that unless you stop and slow down and truly appreciate. Carl taught me this. Carl taught us this. We all walk around with “Appreciate me” on my chest, right? Everybody.
Doug: Yeah, everybody.
Scott: And the C.A.R.E. model, tell us a little bit about the C.A.R.E. model, man. I know this is your creation, man. It's unbelievable and I think it's so life-changing when you get this, and then the moments of gratitude, not wasting them, that pulls in more relationships than you can ever imagine with the people you already know. Tell us a little bit about the C.A.R.E. model, man. [08:57.7]
Doug: The C.A.R.E. model. I changed the “A” from “a” referable experience to “abundance”, because I really do think that it requires more than just one moment to generate that relationship or that opportunity of gratitude, so creating abundance referable experiences I think works towards our favor a lot more.
If you jumped ahead six months from now, and if everything comes true that the really smart people are thinking is going to happen, we're going to wish we had the relationships today to talk to six months from now. We're going to wish we had all these people to talk to just because they're in the process, they're pre-approved and they're looking, they're under contract, or we're doing a refinance with them. When the market slows down and those opportunities are there, I remember sitting in my chair after 2008, going, “Wow, that … man, I really wish. I wish I had those relationships to call on. Now I’ve got to pick up the phone and find something meaningful to share with them.” [09:57.4]
I don't think I can stress what you just said enough, slowing down and realizing that 90% of the success that we can have, we're already laying the framework. We're already laying down all the groundwork, all the work we've put into our relationships—and here's how I know this. There are probably many of you who are listening to this or watching this can probably look back at yesterday and go, I probably heard the word “thank you” and “I appreciate that” or “that was awesome”, or “wow” or “that wasn't expected”. We've heard some moment of gratitude at least five times in our day.
But you know what's truly unfortunate? If you can't think of those moments, that's something that needs to be fixed, right? If you're not getting those, we need to fix that part of your business, and that's something that could be changed pretty easily with some conversations and some mentoring.
The more frustrating part is if you're getting them and I hear “my pleasure”, “no problem”, “glad I could help”, “anytime”, “that's what I'm here for”, “that's my job”, it's like politely shutting the door on somebody who is standing there going, “How can I help you?” [11:00.0]
I think, right now, we move at such a fast and furious pace that we gloss over these amazing opportunities that we've orchestrated for ourselves. Our team is orchestrated for it. Our clients have helped us orchestrate it and we're orchestrating them, only to leave, at the end of the day, unemployed after that deal closes.
That was such an eye opener for me earlier in my curve. When a loan closed, I sat there for that moment going, “Great. Now what?” and the, thankfully, I had a pipeline, but, for many of us, that last closing, that's the end of the relationship, and the C.A.R.E. model came out because I hated that feeling of waking up unemployed the next day.
Scott: Interesting.
Doug: I focused on creating those moments and really understanding the importance of capitalizing on giving your best effort, generating those or orchestrating those moments of gratitude, paying attention to the thank yous. If you ask a loan officer what the definition of “productive” versus “busy” is, it is amazing how many people don't say the same thing. It's not a consistent answer across the board. [12:10.0]
My clients know that the definition of a successful day of being productive is how many names they've added to their referral tracker. Your success isn't predicated on how many hours you time block. It isn't predicated by how many conversations you've had. It's the output of all that effort, right? And so the referral tracker is tracking the effort of being productive.
The crazy part about the whole thing is people wake up every day and they go into the business with no game plan, right? They don't have a plan to go into their business and generate that business. They know who they need to call or they think they do. They follow roughly a plan of action, like calling realtors or calling their clients and process, but they miss out on the purpose, right?
The purpose of calling them is to generate that “thank you”. It's to provide that proactiveness, to be able to get them to say, Thanks for the call, because it's largely not consistent in our industry. I mean, Scotty, how many LOs do you talk to that say they call realtors who have never had an LO call the listing agent and give them an update? [13:12.4]
Scott: All of them.
Doug: We think about it. We think about it every day.
Scott: Right, every day, yeah.
Doug: Because we talk about it every day, it’s normal. But the moment you step out of our world, try, it's not constant. Most agents don't even experience that, and so these moments of gratitude that we go after, they're so easily obtained.
I'm reading this book by Shep Hyken called Be Amazing or Go Home. Great book, by the way, just a great book, easy reading, and he calls the definition of being amazing is just being above average consistently. That's the definition of amazing in 2022. So, we don't have to walk on water to get these moments of gratitude. We simply have to just be aware, right? We can't Charlie Brown it.
Charlie Brown is always looking down, kicking stones, and so he is never really looking around him for the opportunities that are there. We're just in this daily grind but when you slow down and you pick your head up and start looking at what's around you, and listening for those moments of gratitude, which most of us are doing anyway. We all lead with our best effort. We all lead with our best foot forward. [14:12.5]
The tragic part is I hear “no problem”, “my pleasure”, “anytime”, “glad I could be there”, “it's my job” more often than I hear “hey, thank you for noticing. Can I ask you for some help? Can you just not keep me a secret? I'd love to be introduced to someone you care about who could use the same level of service and advice I'm giving you in lending in real estate?” and there are a hundred different ways to cut it up, but you have to be able to take that moment of gratitude. It's the door being open saying, How can I repay you? and all we have to say is, Don't keep me a secret.
I'm constantly impressed at how many times the audience that we're saying that to goes, “Oh, yeah, by the way, my brother, my aunt, my uncle, and you taught me this about it.” If you think about a funeral, one person passes away, or you think about a wedding because that’s more of a happy occasion. [14:59.8]
Most people have at least 25 individuals that they send Christmas cards to. One spouse has about 25 and the other spouse has about 25. You don't think for a moment that if they're buying a house, they’re telling other people the same thing or they know about somebody who is thinking about doing something in real estate? All I want to be is the Google for lending. I don't want to be the best lender for everybody. I just want to be the best person for everybody to talk to about lending.
Scott: It’s funny, you taught me this and it changed my life. You said that the definition of a successful transaction is to have asked and received a referral during the time that you're working with the client.
Doug: Exactly.
Scott: It changed my life. I'm like, okay.
Doug: Thirty percent.
Scott: Thirty percent?
Doug: You should. If you think about your pipeline, if you're not generating three names and numbers from out of 10 clients in process, pre-approved to looking and under contract, you're not asking, you're not doing consistently enough, and those are the two biggest reasons. [16:02.5]
Think about one client for a second, Scotty.
Scott: Okay.
Doug: One client if you just narrow it down to just their network. They either have or need one of these three or four businesses, CPA, attorney, financial planner and insurance agent. There are four businesses right there, all of which are synergy partners for us. Then you have neighbors, family members and coworkers.
So, there are seven people, seven people at any point in time that your clients have in their rolodex, in their mind, that they can introduce you to, or they need one of them, which then perpetuates the opportunity of you being a connector. At the end of it all, it ends up with a moment of gratitude, which then continues to further the ask in the growth of your business.
We may or may not be able to talk about the tracker in this session, but if you go back and track business like I have for so many years, there's a hierarchy of referral sources that have the highest conversion rate and we've tracked this for two or three decades. [17:04.7]
Current clients have the highest conversion rate of referral sources. Past clients, past client referrals. Then you have your referral partners like affiliated referral partners, like attorneys, financial planners, and CPAs, and then you have your realtors. When you finally understand the power of the opportunity to ask, knowing that instead of converting one out of five with a realtor, not everyone has that, but on average, most realtors have a 20% conversion rate, not all, but it's a good guess, a good range. Past clients and current clients, anywhere from 70% to 85%. The only reason we're not seeing more in our pipeline from those pillars, it’s because we don't ask, because we don't define a successful transaction as getting an introduction to someone new before closing. [17:57.3]
Once you connect those dots, the entire mindset of why you do what you do or why your team does what they do changes, and you become more clear on your service level agreements and you become more clear on how to hand the baton off to your next team member or the next partner that you have.
One of the fun things that I love doing with my clients is asking them if they have a team. Ask the team the question, what's the definition of a successful transaction? I am still not getting the answer of an introduction to someone else before closing. I hear everything else under the sun, but I don't hear that. Once you find alignment in that, once you believe that a referral from every client and a client from every referral is the mantra that beats the drum of your business, man, it is eye opening. It is transformative.
Scott: When I start peeling back the curtain and going, all right, definition of a successful transaction is during, and then the only way you can expect that or that as your definition is if you're creating a referable experience and if you're looking for moments of gratitude. Dude, you tied it. It's all one. [19:07.0]
Doug: All high-end.
Scott: You can't do the C.A.R.E. You can't have the definition without the C.A.R.E. You can't have the C.A.R.E. without the words of reference. You can't if none of it works.
Doug: Right. What if? What if? When you talk to people, Scotty, what if every person we talked to had already built 70% of what we're talking about? What if they've already got the infrastructure, they've already got the process, they've already got the systems, they've already got all the pieces in play? You've got all the ingredients of this amazing meal out on the counter. Now you’ve just got to organize it and put it into a mixture so that you can put it in the oven and bake it, right?
The problem isn't that we don't have the tools. The problem is nobody is holding us accountable. We don't have the leadership and, more importantly, we don't have the definition as our compass per se, right? It's not in alignment with us yet. We're doing all the hard work. We're just not taking all the pieces and putting it together, and that's the one thing that I find keeps missing. [20:07.2]
Going into 2022, brother, that is probably going to be and that is currently the biggest conversation I'm having with my clients, but, more importantly, I think that's the biggest reason you're going to see massive success, not mild success, massive success by certain people, because they've aligned themselves with that mindset, knowing full well that after all that we've done in the last two years, it's really your to come back to just being able to have conversations and being able to ask for the business.
Scott: It's funny, the best part about this C.A.R.E. model, the words of affirmation, definition is you can hire this out.
Doug: That's a whole other conversation, right?
Scott: It's a whole podcast in itself. Literally, I kept peeling away at like, okay, C.A.R.E. model, definition of a successful transaction, words of affirmation, holy crap, and then like, whoa, wait, whoa, wait, can someone do this for me as me and have as good a success? And what are we finding out, Doug? We're having better success because that's their job, right? [21:12.5]
Doug: And you know what? There's a secret to that and if everybody's listening, if you guys take nothing away from this, the opportunity to delegate this power to someone else is a hundred percent transferable, but you’ve got to find not an LOA, not an LP1 or an LP2, or a processor or an underwriter. What you've got to start with is finding a caregiver. I look for caregivers in my business. I don't look for loan partners and processors. I look for a caregiver first who can do the job of a processor, an underwriter, a loan partner, an LOA or an LP2.
Scott: Hey, you just changed my life again, man.
Doug: Just sprinkle it, brother. Just sprinkle it, right? Just a little bit at a time.
Scott: It’s no longer going to be called LP or LOA. It's caregiver, because that's really what it is. [21:59.2]
Doug: That's the mindset of the person you want in that position. The fact that you know how to do loans is great, but if you don't possess that caregiving mindset, then you're lacking what is going to be necessary for me to be able to let go and hand off the power to you because I need you to be able to do the same thing as if you were me. That only comes from the belief that you create abundant referable experiences in everything that you do to be amazing just as being above-average, and consistent.
I'm not asking you to walk on water. I'm just asking you to create those opportunities, so we get referrals from a higher caliber of people. We can talk to fewer people, be more profitable, and have a bigger impact on people's lives.
Scott: It's unbelievable, man, and I wish we had another hour because I want the tracker. You've literally developed it. You've tweaked it. You've made it better and better and better.
Doug: We’ve talked about doing a series. I mean, I really think that there are at least several more topics.
Scott: We should be serious about that, yeah.
Doug: If it resonates with the audience, I think it would be awesome.
Scott: It has to resonate, because if you can't track it, nobody can track it for you, right? [23:04.3]
Doug: You can delegate the tracking. You can have somebody track it for you and hold you accountable to certain things, but if you don't know, you don't have anything you're tracking, how do you even know what to do when you get up in the morning?
Dougie, I know we're running out of time, but how does somebody get ahold of you? I know that because you're just a wealth of knowledge. The conversation, every time I have it with you, is just off the hook amazing. What's the best way? Come to an event would be one because you're going to be there.
Doug: Obviously, come to an event. We're doing, obviously, in St. Pete, we're doing another bootcamp. I'd love to see anybody there that’s interested in having a conversation, reaching out to Doug@TheMarketingAnimals.com.
Scott: Perfect.
Doug: That's my email address. Cell phone, texting me is always good at (248) 568-5083. You can put it up on the class and whatnot, but I love what I do. I love being able to give back and share information with people. I don't have to be the best coach for everybody. I just am the right person to talk to about coaching and helping you grow your business, and really thriving in this market. I don't want people just to be a really successful MLO. I want them to go from being an MLO to the CEO of their freedom and their life and their business. [24:09.0]
Scott: Amen, brother, and you become so instrumental in so many people's lives. I don't even think you know what you've done for so many people that I talk to all the time. Amazing. Guys, MastermindRetreats.com. We’d love to see you there. Doug is going to be there. Frank is going to be there. Carl, Tammy, Steve, you name it.
Doug: Yeah, always.
Scott: We’re all going to be there. It's going to be epic. It's always epic. It's always so fun. You learn more at the lunches and the dinners than you do. You learn a ton during the day, but the stuff that people talk about after hours is great. Dougie, I appreciate you more than you know man.
Doug: Thank you, Scotty, man.
Scott: You're unbelievable, instrumental, inspiring, all the above. Thank you for being you. Please don't change and I'll see you see you in February, brother.
Doug: It's too hard.
Scott: Hey, guys. Thanks for listening to Millionaire Loan Officer powered by Mortgage Marketing Animals in the Loan Officer Breakfast club. We'll see you same time, same place, right here on the web. Be safe. Happy holidays, everybody. Take care. [25:01.7]
Thank you for tuning in to the “Millionaire Loan Officer” podcast with your host, Scott Hudspeth. Don't forget to visit MLOLive.com to have your questions answered. See you next time.
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