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Monday, August 11, 2008

Slowing Foreclosures May Mask Woes

Blogging From The Desk of Alicia Lagarde-Craig

When the research firm RealtyTrac Inc. releases its latest foreclosure report Thursday, don't be surprised if the number of filings declines again.
Dusan Petricic
Last month, RealtyTrac reported that foreclosure filings totaled 252,363 in June, down 3% from the previous month. Some analysts are expecting the July data to show another decline or very little change.
If that happens, could the improvement be a sign that the foreclosure problem is ebbing? Probably not. The data may reflect several developments aimed at reducing foreclosures, including new state and municipal laws that put a temporary moratorium on foreclosures. Such laws are designed to give homeowners more time to work with their lenders and modify troubled loans. Some cynics say the laws are designed to give the appearance that the housing crisis is easing ahead of the November elections.
Whatever the reason for the laws, they are starting to kick in. A new state law in California requires lenders to wait an additional 30 days after a homeowner misses the first payment before filing a default notice and use more "due diligence" to attempt a loan modification. The law took effect July 8.
In Massachusetts, homeowners now have a three-months grace period after they default on their mortgage before the lender can file to foreclose. The Massachusetts law is credited with an 84% drop in foreclosure petitions -- the first step in the foreclosure process -- filled statewide in June from a year earlier, according to the Warren Group, a Boston-based research firm.
"The 90-day cure period will lead to more dialogue between borrowers and lenders and increase the prospect that loans can be modified," says Dan Crane, Massachusetts's undersecretary of Consumer Affairs and Business Regulation.
Several other states are following, including New York which passed a bill last week that requires lenders to send a preforeclosure notice to certain borrowers at least 90 days before foreclosure proceedings may be initiated.
Mortgage companies and lenders on their own are also showing more patience with borrowers who fall behind. Mortgage giant Fannie Mae, for example, said it will increase fees it pays loan-servicing companies, which collect payments, for "workouts" that prevent foreclosures. Freddie Mac also said it will give servicers more time to pursue workouts.
Critics, however, say the new laws are only delaying inevitable foreclosures and may signal a false bottom in the housing market.
"It's all smoke and mirrors," says Vincent Valvo, group publisher at the Warren Group. "People are going to trumpet this and say foreclosures are going down. But three months from now it will surge right back up."

Tuesday, August 5, 2008

Why You Lose Customers & What To Do About It

Blogging From The Desk of Alicia Lagarde-Craig and Jeff Craig

Do you know the reasons businesses lose customers?

I'll bet you're going to be surprised about what a major survey showed.

1% die - guess there's not a lot we can do about that.

3% move away - not much you can do about that either if your business only sells locally.

5% follow a friend or relative's advice and change suppliers for what you do. If you were doing a good job of communicating your Unique Selling Point (USP) and why they should do business with you, this shouldn't happen - in fact, you should be getting referrals from satisfied customers.

9% change because they perceive a better value is available elsewhere - same response as the last one.

14% change because of product or service dissatisfaction - you can't please everyone, but you shouldn't lose that many for this reason. All these reasons combined only add up to 32% , what about the rest?

You are not going to believe it, but...68% leave because they don't feel "wanted" or valued. This number should be zero! If you are not contacting all your customers frequently with offers, "what's new", or other reasons to do business with you, they'll leave. Contact your customers at least once per month, this is a must!

Dan Kennedy has a great way of explaining this. He says your customers are your "herd" and you're a rancher. It's your job as rancher (business owner) to grow your herd and fence them in to prevent others from stealing them! Ignore them (don't build & maintain fences) at your peril - they'll wander off or someone will steal them from you!

It is MUCH more expensive to get a customer than to keep one so my advice to you is:

1. If you are not contacting your customers at least once a month but you are spending money to get new customers, STOP! For most businesses, your first priority should be to nurture and build relationships with your customers with frequent contact.

2. Your second priority should be to set up systematic referral and word-of-mouth programs to bring you referrals from those customers.

3. Next, and only AFTER you have done steps # 1 and # 2, test different methods to acquire new customers. Do this only after you have tracking set up to evaluate the cost effectiveness of every dollar you spend compared to the business that results.

To Your Success!