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What’s in a phone number?

What’s in a phone number?
By Kevin Baker

Choosing the right name for your small mortgage business can have a huge impact on its success. But what about your business phone number? Does it really matter what number you have, as long as it’s printed correctly on your business cards, product literature, Web site, emails and other materials? Actually, it does. The phone number you use can have a direct impact on your mortgage business, good or bad.

That’s something you need to keep in mind as you consider which phone service to use for your mortgage business, since it could impact the type of phone number you can obtain. Here’s a guide to help you select the best option.

Toll-free Number
This term is used synonymously with “800” number because when they were first introduced, 800 was the only area code you could get. Today, their popularity exceeds the combinations available with 800, so 866, 877 and 888 have been added.

The original function was to offer a way for clients, prospects and anyone else to call your mortgage business without paying long distance charges. While the economic benefit may no longer be the top reason to acquire this type of number, having a toll-free phone number does have another benefit: it can make your small real estate business appear to be larger than it actually is.

Depending on how you go about it, a toll-free number can be an expensive upgrade over a local phone number. If you purchase the toll-free number from the phone company there is likely an add-on charge for the option, and you have to pay the toll on every call that comes into it.

The smart buyer will find that there are ways to obtain a toll-free number without added cost. There are virtual phone services for small business that include the number at no additional charge. The nice thing about this type of service is that you also get features like a virtual receptionist, unlimited extensions, voice-mail to email, smart call forwarding, call screening and more. With a bit of research you can find all the features included in one low monthly fee, a far better choice for a small mortgage business on a budget.

Local Phone Number
There are some good reasons to keep a phone number local rather than toll-free. Should your business depend on the goodwill of the people in your area, having a local number says “we are part of the community.” Since you are a small service business, whether an independent mortgage agent or a small mortgage lender, a local number may help you win business when compared to a faceless national corporation. It can also help reinforce the community presence if you are a community agency that’s part of a larger chain.

Also, when using a virtual phone service, the local number you choose doesn’t have to be the one where your office is actually located. For example, if you are a company located in a small town looking for a presence in Manhattan or Los Angeles, having a phone number in one of those cities will make it appear as though your business is located there. The caller doesn’t need to know where you really are.

Vanity Phone Number
Another option, especially if much of your business relies on referrals, is to select a vanity number such as 1-866-LENDERS. A vanity number is easy to remember, especially if heard on a radio or TV commercial, and thus more likely to be called if clients go off the top of their heads.

The only downside is vanity numbers can be difficult to dial since you have to think about which number corresponds to that letter.

Porting Over an Existing Phone Number
If you have a strong customer base that already knows your number and has it programmed into their speed dial, you may not want to change your phone number at all. That doesn’t mean you can’t switch to a different phone technology like a virtual phone service because it offers features that are more cost-effective and efficient.

While it’s not available with all services, there are some that allow you to port over your existing number to the service as easily as you would your cell phone number from one carrier to another. That option makes a lot of sense if you’ve invested a lot of time and money branding your existing number.

The bottom line is your phone number is more than just a way for clients, prospects and business partners to reach you. It is a part of your small mortgage business’ identity. Take care in selecting your business number and you won’t have to suffer the slings and arrows of lost business or missed opportunities.

Kevin Baker is my1voice Product Marketing Manager for Protus, provider of the highest quality Software-as-a-Service (SaaS) communication tools for small-to-medium businesses (SMB) and enterprise organizations, including my1voice (www.my1voice.com), the cost-effective, feature-rich virtual phone service that travels with the user from phone to web, award-winning MyFax, the fastest growing Internet fax service and Campaigner, the email marketing service that is easy-to-use, affordable and provides step-by-step coaching tips and tools. Kevin can be reached at kbaker@protus.com.

Bad Bank, Good For Economy

The Federal Deposit Insurance Corporation (FDIC) announced last night that it will create a “Bad Bank” to purchase the toxic assets on the books of the nations banking institutions.  This was originally part of the TARP plan but it didn’t work out as planned.

The idea is that because of Mark-To-Market accounting, these toxic assets are killing banks and there is no real hope for financial recovery until Mark-To-Market is repealed or an outlet to dump these assets is created.  Ideally, the best scenario would be both.

The stock market is reacting favorably to the news as it is a sign that the government is making strides in the right direction.

Bailout Bill…Round 2

The senate is putting together a new version of the bill that failed earlier this week.

Reports from Washington are that the senate has been feverishly re-tooling the bailout bill with adjustments that will make it more palatable for the public and more likely to pass through the House of Representatives.  Early reports are that an increase in FDIC insurance for bank deposits is being increased for the first time since 1980 from $100,000 per depositor to $250,000.  With the national average bank balance being around $5000, this will have little practical affect on consumers.  But, it can help small businesses feel more secure, and the overall perception is likely to show that there is more for the common tax payer than the original version.

It is not yet clear what other components have been added or removed, but there is no doubt that the pressure is on Washington to do something based on the reaction of the stock market this week.  Also, given an unprecidented amount of discontent towards any bailout plan (some reports say as many as 80% of tax payers are violently opposed to the bill), there is no doubt that those who vote for it should read it carefully as the outcome will likely dictate their fate in November.

I do find it interesting how much the public misunderstands the significance of passing legislation to help this problem.  I was listening to talk radio locally here in Pensacola yesterday, and the overall sentiment is still that there is no incentive to the tax payer and that this simply bails out millionaires that made bad decisions.  Unfortunately, the actual problem is much more detrimental to the overall economy than most people realize or even understand.  For instance, many small businesses rely on credit to run their daily operations.  For a car dealer, it is their line of credit that they use to purchase inventory to put on the lot.  For the plumber that wins a bid for a large job, they need access to credit lines to purchase inventory to be able to start the job.  Given that 80% of all americans work for a small business (defined by a company with 200 or less employees), the amount of layoffs and jobless claims as a result of the business being unable to grow could be more than we have ever seen in this country.

This problem began with the deregulation of mortgages through Congress during the Clinton administration in the late 90’s, and became a widespread problem as banks were forced to make loans to certain low income borrowers or face economic sanctions from the government.  It was understood that a percentage of these mortgages would fail at the time that they were originated, but that was understood as the cost of doing business on the part of lending institutions.  This is not when Subprime loans were born, but it certainly gave them the steroids to go into the wildly risky direction that they were 3 or 4 years ago.  I’m sure you won’t hear much in the news about this because no one in Washington would ever willfully take responsibility for something that had a negative affect on the economy.  In fact, most of our elected officials do not understand the financial markets enough to even know that they created the problem.  Now that the chickens have come home to roost, it is Congress that has to clean up its mess.

No one wants government intervention less than I do.  But, the cost of a lack of action is far greater than the cost of any bill that may be passed.

House Votes Down Bailout Bill

Much of the financial market expected the bailout bill to be passed, but the tides have changed.

After non-stop press coverage for almost 2 weeks, and a never ending jockeying for position in front of the camera by the talking heads in Washington, the wall street bailout bill has crashed and burned on the floor of the house of representatives.  With nearly a 2 to 1 vote against the bill by Republicans, and 94 Democrats voting against it, clearly the constituents negativity towards this has driven the House to vote down the bill.

Since most people on Main Street don’t understand the magnitude of the credit markets right now, perhaps they will get a better understanding after checking their portfolios at the end of trading today.  After expecting a bailout to be passed, the dow plunged down over 700 points after the vote went the wrong way.  Analysts are saying that without a bailout package from Washington, the Dow could drop as much as 2500 points before settling on a bottom, which will most certainly affect Main Street.  Even worse than the uncertainty in the stock market would be the affect that a freeze in credit would have on small businesses.

I think after seeing the aftermath, there will be another vote, and there will be some sort of bailout proposal passed.  The question remains, how long will that take?  And, have many casualties will be left on the battlefield before then?

What Does Wall Street Bailout Mean To Main Street?

With so many opinions about what is happening with the economy, what does this mean to you?

Wow, what a week.  There is no shortage of fireworks on Capitol Hill as the Senate Banking Committee continues to throw Fed Chairman Ben Bernanke and Secretary of Treasury Hank Paulson on the grenade.  The one constant that continues to be thrown around by members of the committee is that this unprecidented measure will “cost” tax payers $700 billion.  I am afraid that this term is being lost on the committee as it is also being lost by tax payers and citizens due largely to a misunderstanding of what this “bailout” actaully involves.

Let me qualify this by saying that I am a very large opponent of gevernment intervention at any level.  There is nothing that the government gets involved with that makes anything cheaper, more effective or more efficient.  That being said, we have reached a monumental point in the financial markets where intervention is necessary to avoid a total collapse of the financial markets that is nearly immeasurable by most people alive today.  Unless you are in your 80’s, it is unlikely you can truly appreciate what affect the depression had on this country (myself included).  The argument being made is that tax payers are being asked to foot the bill for mistakes made by people and organizations that they had nothing to do with, and to a limited extent that is true.

What is really going on is a total lack of faith in the system due to the unwillingness of financial institutions not only to lend money to consumers, but also to each other to keep the system fluid and capitalized.  When using the term bailout, you must see the bigger picture of what is actually going on.  The Fed and Treasury Department are proposing to the Senate Banking Committee that the government purchase certain mortgage backed securities from financial institutions that need help to liquidate these securities to continue in business.  If you own a pizza parlor, you can only remain in business if you sell pizzas for more than the cost to make them, use the proceeds to buy supplies, and repeat the process.  The same is true in the financial industry.  Banks can only lend money after taking certain securities, liqudating them in the open market, recovering the cash, and lending it again for a profit.  This is a highly simplified version of what is happening, but it has very complicated and wide reaching implications in all of our lives.

Some of these securities are owned by your pension fund, or your local municipality, or even your investment banker (as we have already seen with Bear Sterns and Lehman Brothers).  While it is pertrayed in the media and misunderstood by elected officials that this is a $700 billion line item expense to the tax payers, that in fact is not true.  It is actually the government purchasing assets with the intention of holding them and selling later.  The proposal is also suggesting that the securities be purchased in a reverse auction fashion where the banks most desperate will sell first at the lowest coupon rate, and as the value rises, the market will dictate what is reasonable to sell for each individual company.

In the end, the actual cost to the tax payer will be much less than $700 billion, in fact, it will more likely be a fraction of that.  The result of this action would be to open up a logjam in the system allowing institutions to become more liquid, be able to lend more money to consumers, and increase consumer confidence in the economy as a whole.

As you sit in Smallville, USA and wonder why you would go along with such a deal, be aware of the fact that farmers who need short term financing to get their crops to market are affected.  Car companies that employ thousands of people to build and sell cars are affected.  And, small businesses that need money to expand and grow and create more jobs are affected.  This may have originated on Wall Street, but there is a very real impact on Main Street that could create real problems if it is not done.

Where Do You Keep Your Money Safe?

In these historical times in the financial markets, how do you know that your money is protected?

Everyday there is a new headline about some other “sky is falling” scenario.  It was only a week ago that history was made when the government stepped in and took over operations of Fannie Mae and Freddie Mac, but that is old news now.  This week it was the nations largest insurer AIG being given an $85 Billion loan from your tax dollars to help keep them out of bankruptcy.  But hidden in all of the negativity are shining pockets of positive news.

If you ever watch CNBC, you may know that Jim Cramer likes to say “there is always a bull market somewhere”, and he is right.  In the constant yin and yang of the financial markets, where there is a loser, there is also a winner somewhere, you just have to know what to look for and where to find it.  For instance, if you bought into gold earlier this week, you are no doubt celebrating as the gold market had the largest dollar gain in history this week.  Equally, as confidence fades in the stock market, investors must forge ahead and put their money somewhere, and guess what just started looking really good…..real estate.  Thats right, real estate.  The dirty word that people have been scouling at for months just became one of the best places to put your money.

Think about it, if you have $1 million in the stock market and you don’t know if you will wake up one day to find that your top holdings are out of business, your money may be better served in a tangible asset that you can see, touch, get a tax break, and live in (or rent out).  At a time when real estate is at historically low prices, you could be getting in at the very beginning of a new bull market.

I find it interesting what an affect the media has on the markets.  They seem to give you just enough information to instill a panic without regard to how people will react.  I know that the AIG issue is big news, but did you know that there are 1000’s of people without homes or jobs in Galveston, TX after Hurricane Ike virtually wiped the town off the map.  Chances are pretty good that you didn’t because no one in the news is saying a word about it.

So back to the topic at hand, is your money safe in the bank?  Yes, if it is less than $100,000 per depositor per institution.  Is it safe in stocks?  I guess it depends on the stock and your level of exposure.

Even if you take away my obvious bias towards real estate (because I am an active mortgage banker), do your own home work in your local market to see if I am right.  If you haven’t looked lately, you might be shocked at the deals available now.  I my area of the Florida Panhandle, there are gulf front condos that can be stolen for prices that compare to 4+ years ago.

Good luck to you, and tell me how things are in your local real estate market.

Why Is The Government Bailing Out Everyone?

In an unprecedented financial crisis it seems like the tax payer is the real loser.

Bear Sterns, Fannie Mae, Freddie Mac, Lehman Brothers, AIG…..what does all of this mean to you?  Why are some companies being bailed out while others are allowed to fall on their face?  It is a complex question being answered by your tax dollars, and the answers change from one day to the next.  Just 2 days ago, the official opinion of the Treasury was that there would be no bailout of AIG (the nation’s largest insurer).  Less than 48 hours later they are writing a check for $85 billion.  So how is it in the best interest of the country to bailout these corporate executives that made bad decisions?

For starters, every situation is different, and the government is not bailing out every company that steps up to the bread line.  Those that are allowed to fail without creating widespread devastation in the economy is, in my opinion, good for the over all health of the economy.  The ability to assume risk and fall flat on your face is actually what makes a free market economy work.  IndyMac Bank for example was a huge financial institution.  Yet, they were allowed to fail because there are dozens of other companies performing similar functions in the market, and therefore it is not the responsibility of the governemt to step in and help.  In that example, since most depositors were covered by FDIC insurance, there was little affect to the end consumers and account holders anyway.

The Fannie Mae and Freddie Mac takeover was different.  With over $5 Trillion in combined assets, the collapse of Fannie and or Freddie could have widespread implications in the credit markets and significantly hinder mortgage lending.  But, in the case of Fannie and Freddie, the government took over operations.  Their business was significantly less risky than the subprime lenders that have had so much trouble.  But because of their shear size, they have been affected by the current housing market.

AIG is a much different situation than any other that we have faced.  The significance of AIG is that more than 100,000 employees work for the company, and a collapse would affect so many sectors of the economy that it could create a ripple effect that is almost immeasurable.  The $85 Billion being provided to them by the FED is actually a short term loan, and the collateral for the loan is the entire $1 Trillion dollar asset portfolio of the company.  From a simple bottom line lending standpoint, it appears to be a no brainer, and for me to say that is really something.  I’m not in favor of the government bailing out anyone, but, an $85 Billion loan backed by $1 Trillion in assets that also saves over 100,000 jobs just makes sense.

Ultimately, we are in unchartered territory and no one knows what the long term affects will be.  But there is a light at the end of the tunnel.  For those who are even remotely in the market to buy a home, the events transpiring are creating unprecedented buying opportunities.  At the same time, for those in an adjustable rate mortgage, the market is ripe for a refinance with fixed rates as low as 5.25% (see SteveRussellOnline.com for current pricing).  In every market, there are winners and losers.  Those who have the fortitude to seek out these buying opportunities will be in a position to build wealth like nothing we have seen in generations.