Written by: Fouad (Fobby) Naghmi, EVP

Written by: Andy Tabag

What is Financial Forensics, you ask? Simply put, it’s knowing your numbers. There is a correlation to financial forecasting, the process of estimating or predicting how a business will perform in the future. Financial forensics combines the investigative work of forensics with the practices of accounting. In the broader world, financial forensics professionals are used to detect fraud, gather evidence, and bring criminals to justice. In the world of mortgage, you as a business owner can use the same investigative technics layered on a solid base in accounting to gain a deep understanding of your company’s financial standing by digging into historic numbers to forecast future expectations.

Financial forensics is also known as forensic accounting. Professionals in this field analyze the financial records of both individuals and corporations. Financial forensic investigators do not always investigate money relating to criminal activity. They also work to determine the value of a business based on its accounting records as well as gathering and determining information regarding a bankruptcy.

The main steps of a financial forensics analysis are data collection, data preparation, data analysis, and reporting. A forensic accountant collects data. They then organize and prepare the data so it can be properly analyzed. The forensic accountant goes through that data carefully. Finally, they report their analysis to whoever requested it. They must have the ability to put complex financial information in simple terms for others to understand.

Increasingly, financial forensic investigators are being called upon to perform preventative work by designing systems and procedures.

And that brings us to why I, Andy Tabag, am writing this article in the Coaches ConnXion. As a consultant for 20/20 Vision for Success Coaching clients, I have created a system that allows me to bring my financial and forensic skills to bear for the mortgage and financial community we serve.

Many of the coaching clients I work with are either business owners or leaders in businesses who will benefit from understanding their numbers and forecasting for growth. This knowledge may come from forecasting what is expected in sales and learning how to evaluate these predictions over time. It may be understanding what activities are required from social media posts, realtors’ calls, or referral sources to produce a credit order ultimately producing a submission for a funded loan.

An example of a financial forensic for your realtor sales funnel. could be, “I called 10 realtors a week over the course of a month or 40 realtors every month to produce one contract in 30 days and this led to three credit orders and one submission in 15 days and a closing in 60 days.”

If this was your consistent average, we learned your forensic in this area is to “call 40 realtors a month to produce one closed loan in 60 days.”

Another example, a financial forecast, could be, “I want a certain profit or revenue for the year; how do I objectively formulate a plan I can follow to achieve this goal?” We can prepare a monthly tactical plan to ultimately navigate your business to reach your goal.

The biggest challenge many business owners share with me is the feeling that they are not a numbers person and doubt their ability to learn the fundamentals. Financial Forensic is in reach of any business owner or business leader. Beginning in February 2022, 20/20 Vision for Success Coaching is offering a Financial Fundamentals symposium specifically designed for non-financial people.

I will be leading this course and it will be available both to 20/20 VSC clients and as a stand-alone purchase for non-clients. The course is live on Zoom divided into four, one-hour sessions over four months. It is interactive. You will be certified in financial fundamentals when you complete this course and ready to use this knowledge as the foundation of your business. And who knows, it’s a prerequisite for additional learning. You may find you are more of a numbers person than you believe.

I certainly hope to see you in the symposium come February! Registration links and additional details will be available in January and published in both The Vision and the Women With Vision Magazines.

Written by: Laila Khan

We are all attracted to different leadership styles and for leadership qualities to resonate and be impactful, something about the message has to be aligned with our goals and core values. As I continue my professional journey, oftentimes I reflect and think back to the handful of individuals who have made a positive impact on me throughout my career and reflect back to these same questions.

What attracted me to them?

How did I benefit from the experience and engagement?

How did they benefit from me?

What message did I walk away with?

How can I apply this knowledge and pivot?

Leadership, defined in Miriam’s Webster dictionary, is “the action of leading a group of people or an organization.”

John Maxwell mentions, “Leadership is influence – nothing more, nothing less.”

But how do we make the leap from where we’re at to empower others?

How do we identify those influential traits?

How do we transition into leadership and what are those steps?

Good leaders help guide us to make large-scale decisions keeping us alive and the world moving. Great leaders make impactful changes for generations to come.

While pondering over this topic framed by my own personal and professional development, I’ve compiled five essential qualities and characteristics I admire in leadership. I credit my growth in recent years as a leader to my mentors, my husband, my association with 20/20 Vision for Success Coaching and, in particular, to the decision and commitment I made to coach with Christine Beckwith. I can say, without hesitation, Christine embodies all five of what I call the Five Essential Qualities of a Leader:

1. Integrity
2. Self-Awareness
3. Empathy
4. Strong Communication
5. Gratitude

There are many additional traits identified and expanded upon in books, by leaders, and even by our peers, all adding to a never-ending list. These five are top of the list in my view.

Integrity

Integrity is a challenging metric to measure. This is especially true with employee evaluations, which are often the only metric in use. Integrity is the foundation on which leadership is built and directs our moral compass, our North Star if you will.

Integrity is needed in leaders and followers. If there is no integrity, leadership influence will crumble. Lack of integrity renders all other leadership traits ineffective. People want a leader who practices what he or she preaches, who follows through on promises, and is motivated when we work. Integrity allows us to live in accordance with our deepest core values and share that vision with our teams.

“Leaders who act with integrity and treat people well help maximize the contributions of their employees and build goodwill for their organization,” said Tim Hird, executive vice president of Robert Half Management Resources. “As important as these attributes are for managing a team, they also drive business by attracting investors, customers, and prospects.”

I found working with Christine refreshing because the 20/20 community promotes their core values through action. The honesty and resoluteness to execute and ensure there is no compromise in the quality and process is admirable and valued. I continued to see this through the classes, masterminds, and coaching sessions.

Self-Awareness

I associate self-awareness with the ability to recognize our strengths while embracing humility to identify and accept our weaknesses. Self-awareness is inwardly focused and is paramount for leadership.

There are two types of awareness, according to research done by the Harvard Business Review. There is internal self-awareness (private) which is a reflection of our own perception of ourselves through our lenses, in accordance with our experiences, feelings, emotions, values, and aspirations. How do we impact others? Internal self-awareness is also associated with purposeful work, personal and social control, and happiness; it is negatively related to anxiety, stress, and depression.

External self-awareness (public), can be defined as recognizing other people’s perception of us, our reputation. For leaders who see themselves as their employees do and have clarity on where they stand, their employees tend to have a better relationship with them, feel more satisfied and comfortable with them, and see them as more effective and approachable in general.

I appreciated this a lot during my coaching with Christine because she isn’t reluctant to dive deep and share some of the more challenging experiences and difficulties she faced to teach and inspire us. In her book Breaking the Cycle, Christine shares many examples of resilience, and my takeaway was no matter how much progress we make, there’s always more to learn. As we keep learning through life, it’s one of the many positive steps we can take to make our journey to self-awareness exciting.

Empathy

“Without empathy, you can’t build a team or nurture a new generation of leaders. You will not inspire followers or elicit loyalty. Empathy is essential in negotiations and sales it allows you to know your target’s desires and what risks they are or aren’t willing to take.”

This statement, written by Prudy Gourguechon in an article on Empathy in Forbes, resonates with me in a way I believe it should with all good leaders.

In the professional arena, empathy is usually correlated with job performance and is critical when assessing leadership effectiveness and emotional intelligence. Leaders are directly responsible for championing a vision, creating a safe space, and ensuring inclusion amongst teams.

Empathy allows us to assess if the people we’re trying to reach are actually reached. It also allows us to have insights into the future surrounding the effects our decisions and actions will have on core audiences and to strategize accordingly. One of my favorite lines from one of Christine’s videos is,

Part of being a good leader is being brutally honest without being hurtful. If we truly care about people, we have to be honest with them in a caring way. If we’re not honest at all, we are actually hurting them.

(https://www.youtube.com/watch?v=J22NkDw_bNc).

Empathy and honesty are very much aligned with my roots and upbringing, and I appreciated the familiar path.

Strong Communication

What are we if we can’t understand one another? A great leader must be an honest communicator and have the ability to adapt your communication style per your audience.

Examples of effective communication include active listening, receiving, and implementing feedback, asking open-ended questions, being transparent, and providing clarity on expectations. I recall when I first began coaching with Christine and the 20/20 Vision for Success Team, the very first question I had was about communication style. I needed to be in a program that adopted these traits so I could be comfortable being vulnerable for the sake of growth and professional development. It was her leading by example rather than speaking at me that allowed me to truly benefit by adopting my own communication style.

We know an organization’s talent should be able to trust their leader will share information, whether it is good news or bad news. Corporate goals need to be communicated throughout all levels of the company. It is important everyone has a basic knowledge of the overall plan and how they contribute to the accomplishment of those goals. While this is known, it’s not always practiced and its loss creates a disconnect, deterrence, and discord. Effective communication also comes in many forms and my favorite saying by Christine is, “Show up with results and that will do the talking for you.”

Gratitude

Gratitude is sacred and powerful.

Recognizing the power of gratitude and adopting it in all facets of life speaks to an abundance mindset. My husband always reminds me that the glass is always half-full and we must never lose sight of that. At home, my daughter asks each of us daily, “what are three things you’re grateful for?” Just being cognizant of this brings more value to everything and it’s when we lose sight of this, gratitude is forgotten.

Having gratitude makes us better people. The best leaders know how to demonstrate sincere gratitude in the workplace. By appreciating the people behind your or your organization’s success and acknowledging the contributions they make each and every day, we create a thriving environment.

When gratitude comes not only from leadership but from within at all levels, it fosters teamwork and cooperation and promotes empathy and compassion. From that, we create a space to translate positivity and this energy can be very contagious and uplifting. Thriving communities like this attract more like-minded people and is what I truly appreciate about 20/20 Vision for Success. It’s all about the journey and appreciating each moment as growth and an opportunity to be better than when we started. This journey has embedded a renewed appreciation and gratitude for my family, my 20/20 family, my colleagues, and our industry. We are doing so much and continue to make great strides.

Leadership Development Leads to Sustained Success

While we’re all on a learning path in life, each milestone is a cause for celebration. To be in the company of leaders and trailblazers is invigorating and being awarded the Women With Vision Award earlier this year was truly a memorable moment for me. I was proud to share this achievement with my peers and family. I attribute a part of my growth to the lessons and community 20/20 has provided and to walk on stage with my daughter in hand is something I’ll always cherish. We are the sum of our parts and it’s through relationships and the investment of time we recognize characteristics and align with traits we see within our peers, leaders, and communities. These opportunities provide us a chance and courage to put our ideas into action, grow together, make mistakes, and come through better than how we started.

Laila Khan is the assistant vice president of marketing and communications for Guidance Residential where she brings her unique talents to promote success for both the company and the team she works with. Her emphasis on the customer journey and marketing strategies directly impacts her company’s visibility and brand awareness generating more leads and building partnerships.

Laila believes home is where the heart is, and with her 24+ years of experience she has found her heart is in the “niche” space. Her network is broad and strong. She loves working with her company teams to secure home financing and help customers meet their needs, goals, and dreams of home ownership. She focuses on enhancing the customer experience, lead generation and conversions, and optimizing digital presence across platforms.

“I simply love building relationships, learning from others, and closing the gap.”

Laila believes in leading by example and doing all she can to ensure team members are personally and professionally fulfilled. She considers these basic tenants of a servant leader to be the core of her success and strengths, personally and professionally.

“I believe in legacy building, purposeful work, and servant leadership. As an advocate of a balanced work-home life and giving back, I value spending time with my husband and raising our three children.”

Laila’s downtime is dedicated to volunteering, tutoring, and investing in community building. She also enjoys being a Tae Kwon Do mom, a DECA mom, and a Girl Scout troop leader, serving and paving the path for our future leaders. 

Laila is a contributor to several industry magazines. She has been recognized and received numerous awards including Top 20 Sales, Marketing, and PR Trailblazer Progress in Lending, 2020 Women With Vision Award, and the Path to Diversity and Inclusion.

Written by: Ruth Lee, CMB

When leaders in the mortgage industry ignore the signs of employees or even their own stress and burnout, it can have devastating effects on absenteeism, staff turnover, creativity, and raw stamina. As such, it is a business requirement to understand how to recognize the warning signs, and to have policies and a plan in place to mitigate and combat them when they occur.

Recognizing stress and burnout is challenging in the mortgage industry because we are problem-eaters by trade. All day, every day we triage and solve problems in deals with our client’s home, clearly one of the most sensitive, emotional, and life-changing investments in their life. We slay dragons from borrower expectations to fickle underwriters to compliance demands; from dips in volume to being hyper-busy, the “why can’t I find a flipping underwriter/processor/closer on Earth?” type of dragons.  And after a serious refinance boom like the last two years, the pressure can be intense. One punch in the arm is an eye roll, three hundred a day for two years well, it’s enough to make you consider becoming a dental hygienist.

Recognizing stress and its best pal burnout is about looking at how you and your team are responding to what is our natural state of problem-solving. Leadership must be hyper-vigilant for changes in the atmosphere, which is a cue to look deeper. For example:

• Stress can cause over-engagement in a problem, using a cocktail of will and time to resolve
• Burnout leads to total disengagement, where it’s hard to find the will to put in any effort at
• Stress leads to an inflated sense of urgency and
• Burnout leaves a sense of despair and
• Stress is characterized by anxiety and can be physically draining
• Burnout can lead to depression and become emotionally
• Stress leads to a loss of energy
• Burnout leads to a lack of

Burnout can be severe, to the point where a high performer suddenly can’t seem to get it together. Those approaching burnout exhibit chronic fatigue, they can’t focus and make unexpected mistakes, and the star employee starts getting sick and staying home more, enough that you and others notice it. They become cynical, negative, and disruptive around the office, indulging in mean-spirited behavior and outbursts.

After almost two years of running at top speed, most of my clients and their teams are pretty burnt out.  But the challenges don’t actually end, they just shift to new priorities, like finding purchase business, new investors/products, or improving processes and technology.

Regardless of boom or not, it’s important to ensure you foster an environment to stave off stress and burnout. Take a corporate retreat and then don’t meet about anything. Insist your employees take their time off. While it may seem counterintuitive, it’s important to take time to rest and recharge the batteries. And no, taking time off between the holidays is NOT taking a vacation. The holidays, with all the shopping, decorating, wrapping, cooking, and cleaning, is NOT time off; it’s just a different type of work.

This will sound obvious, but it is surprising how often work culture discourages taking sick time.  Make sure your team knows they are allowed to take a sick day. If you are sick, be sick. Go home, rest up, take care of yourself, then come back ready to work. Don’t try and work through it. If you cannot rely on your team to have your back for a day or two, you are doing it wrong. If they can’t rely on you to have their back while they recover, you are doing it wrong. Sick days are a critical component of working with others to keep yourself, your clients, and your other employees safe. If your employees fear reprisal or disapproval from taking sick days, you need to fix it immediately. If you fear malingering, then you need to hire an “A” team who wants to be there.

Finally, have a plan to combat stress and burnout when they occur. Be honest and open about it and ensure your team knows you are available to have the discussion. Be empathetic and solve the problem. Do they need a different role for a while? Can you clarify their job expectations or their development? Can you stamp out dysfunction, such as political gamesmanship and aggression? Pull it out by the root. Send them on a vacation; it will be the cheapest $3500 you’ve ever spent if they are a great employee or leader. There are a zillion ways to address it but be quick and decisive.

A new year always brings new opportunities. It’s the time of year where we begin to think about the future. What’s next for us? What goals need to be readjusted? It is also the time of year where we reflect on the past to see where we excelled and where we fell short.

Aside from our personal and business goals, a new year can also bring a new market. In this month’s article, we will discuss important ways to plan for the new year, along with crucial MBS Highway tools to help you and your business thrive and make a positive impact on your clients in any market.

Knowledge Breeds Confidence

One way to thrive and make an impact in any market is to embody and exude confidence. When we feel confident, our clients and referral partners sense it and they, in turn, trust us. People do business with people they know, like, and trust. Having confidence helps us build relationships and increase conversion.

A few years after I started working at MBS Highway, Barry Habib asked me to be on the Morning Update video. This is a daily video where we break down the various economic and housing reports and how they could affect the market. We advise originators on when to lock and float.

The first time we filmed, it took me ten takes and the second I went off camera I burst into tears. I felt uncomfortable and lacked confidence. I wanted to give up, but instead of saying no to an amazing opportunity, I chose to study. I woke up early to read about the reports. I continually reviewed the Certified Mortgage Advisor course to really understand the various reports and why they mattered.

By studying, practicing, and being willing to learn, my confidence increased. Today, a few short years later, I’m asked to speak at conferences all over the country on market outlook and forecasts.

In today’s world, it is not enough to simply get mortgages done. You must be a financial advisor to be competitive. You can do this by starting how I did, watch MBS Highway’s Morning Update video every day. And after you watch it, try to articulate what you learned to others around your office.

The more you teach market information, the more you begin to understand it. The more you understand it, the more confidence you’ll have. And the more confidence you have, the more likely clients and referral partners will want to do business with you.

Overcoming Points of Friction in the New Year

Now let’s discuss some issues we’ve been experiencing which will likely continue into the new year and how you can overcome these points of friction to grow your business.

Nationally, we are short on housing inventory while demand has been growing exponentially. This tight inventory has left many potential buyers asking themselves, “Should I buy, or should I continue to rent? And if I do buy how much better off will I really be?”

Be honest with me, can you answer that? And if you can’t who is supposed to? After all, aren’t we supposed to be the trusted advisors? This is where MBS Highway’s Buy vs Rent tool and the Morning Update can help.

For example, during the Morning Update we talk about rental prices. Apartment List reported rents rose 2.1 percent in September and 16.4 percent year over year. This is the fastest rent growth on record and is on a 22 percent pace if this growth continues.

To put this in context, rents from January 2017 to September 2019 averaged just a 3.4 percent rise. What’s more, rent renewals are going up 5.8 percent year over year! This rise in rents can have a significant impact on your clients’ cash flow over time.

But if your clients were to purchase a home their mortgage would amortize, building wealth and equity. Plus, with a fixed-rate loan their monthly payment would remain relatively stable into the future.

Another great feature of MBS Highway’s Buy vs Rent tool is we give you the annual rent increases for specific counties or zip codes. Let’s take for example a $400,000 home in Hillsborough County, Florida.

Based on the cost per square footage for both renting and purchasing in this county, a comparable monthly rent on that home would be around $2,500 per month. Let’s say the client is receiving a discount at $2,100 per month. We know rents are rising 5.5 percent annually in this particular county.

Now, let’s say your clients were to purchase a home with a fixed rate of 3.25 percent, putting 10 percent down and they are thinking about living in this home for nine years.

Now that you have all this information, can you tell me what option is better and by how much?

If not, no fear. MBS Highway is here!

With our Buy vs Rent tool, you can show your clients that just on a cash flow basis they would be better off purchasing by $29,000 and that is just the beginning. They could expect to gain $208,000 through appreciation alone!

And then there is the best-kept secret: equity through amortization. Make sure your clients know part of their monthly mortgage payment is principal and interest and while some of it goes back to the lender, the other portion is basically a forced savings plan taking money from one pocket and putting it in another. Overall, they might be surprised to know they would be $267,000 better off purchasing over renting.

More Market Volatility Ahead?

We talked about a new year bringing a new market, and it appears we need to strap in for more volatility and a rise in rates. The MBA came out with their forecast for 2022, which stated they see rates going to 4 percent and refinance volume dropping 62 percent. So how are you going to keep your refinance business in a higher rate environment?

Of course, clients don’t just refinance to receive a lower rate. They may need cash for unexpected expenses or emergencies. The first step to keeping your refinance business thriving is realizing you have the power to help change people’s lives during difficult times. Not just that, but the strong appreciation we’ve experienced has created a wonderful time for cash-out refinances.

Let’s say your clients bought a home three years ago for $500,000, with their original loan for $400,000 at a rate of 3 percent. What if they need to refinance, but the rate is 4 percent and the closing costs would be $4,000?

At first glance, it would not make sense for your clients to refinance. Their current principal and interest payment is $1,686 and their proposed principal and interest payment would be $1,802.

However, since they purchased their home, they have been building equity and we can use the equity to help them financially.

Let’s say in this scenario your clients are hoping to pay off credit card debt. You can show your clients how they can use the equity to pay off this debt, which would save them $1,776 per month.

Now let’s say your clients are beginning to get excited but they stop you and say, “This is great but I’ve been paying down this 30-year mortgage and I don’t know how I feel about another 30-year commitment.”

This is when you can show your clients the power of debt consolidation. Advise your clients that instead of pocketing the extra money they are saving they can instead invest the $1,776 back into their mortgage.

Nothing is going to change. They are going to keep making the same monthly payments they have been. But since they are putting the money back into their mortgage, they won’t have 30 years left of payments. Instead, they would have 11 years and 11 months. And since they are paying that mortgage off sooner, they are able to amortize much more.

The bottom line is this: To keep your refinance volume in a rising rate environment, it’s crucial to be able to articulate the financial opportunity and be a debt manager.

Making a Real Difference With Social Media

Lastly, if you want to really make an impact in your business next year, it is important to amplify your message. By mastering social media and social video, you can have a greater reach answering common questions and concerns, building your reputation as an expert and advisor in the process.

MBS Highway’s Social Studio tool is here to help. We create scripts bi-weekly on engaging topics like “Making the Right Choice Between Buying and Renting” and “Understanding the Latest Data on Home Appreciation.” You can even create your own scripts. I have seen originators multiply their business four times over in a few years simply by adding social video marketing to their communication strategy.

Want access to the tools that can give you the confidence and knowledge to thrive next year? Sign up for a free 14-day trial of MBS Highway and see for yourself the kind of impact they will make.