Quality mortgage originators must understand the homebuyer’s psyche in today’s lending environment. With the proliferation of data accessible via the internet, borrowers will shop interest rates until the very last day on a refinance transaction and, sadly, loyalty is never guaranteed. So, originators need to stay in constant contact with the borrower throughout the entire lending process. The best way to do that isn’t with a text or e-mail, but with a conversation over the phone.
In today’s low-rate setting, borrowers feel entitled to nab the “best rate,” yet they may not understand the complexity of what goes into having that delivered. On a refinance — especially a cash-out refinance — the borrower can and will shop until basically the last day.
To improve your success rate and to increase your company’s profitability, it is incumbent on you to stay in touch with the borrower over the phone at least once a week. In today’s business world, electronic communication may be the most common way to stay in touch with a borrower, yet it breeds a lack of trust and/or loyalty with a client. The personal tie to the broker or loan officer isn’t there.
By answering every text or e-mail right away with another text or e-mail, the originator feeds into this problem. Over the next one to two months — a fair amount of time to create a barometer of success — reply to text or e-mails with a prompt phone call. See if you can establish a personal tie with your borrowers by engaging with them in this manner.
Many consider the mortgage business a commodity industry. If you allow people to walk away with that mindset, you’ll breed shopping. It is the responsibility of originators to change the perception that price is all that matters in the art of structuring a loan. Analyzing the proper financial alternatives and making sure the loan closes on time are lost in the price-first thought process. Originators need to establish their value and one of the best ways to do that is constant communication until the loan closes.
Critical relationship
With the unexpected windfall that lower rates have provided to the industry in 2019, many mortgage brokers and loan officers fell into old habits. That can be extremely harmful if there is a rate increase, which could lead to a drop in the number of client inquiries. The most important long-term relationship an originator has is with their partner, the professional real estate agent.
To avoid mistakes many have made in the past during refinance booms, remember these basic tenets and you will be in good shape not only finishing this year with a high level of production, you also will be set for a fast start in 2020. It is critical to protect existing relationships with the real estate agents who give you referrals.
The agent who sends you a client at least once every other month is trusting their commission check with you. And you need to keep in contact with them on a rotational basis at least once a week.
By committing your time, you’re showing them the value of the partnership. By doing so, you will not lose this key ally. The purchase market is still a significant part of all mortgage originations in 2019. By keeping agents in the loop, you increase the odds that your business partners will steer the next loan opportunity your way. You also establish their belief in the value you offer by providing consistent support for their buyers. The Realtor will remember who kept calling on them when they are in the midst of their busiest home-selling period (April 1 through Oct. 31) of every calendar year.
If you get lost in the immediate gratification of a refinance boom and forget your long-lasting industry partners, it opens the door for competition to capture your Realtors’ attention. It gives your competitors an opportunity to prove their abilities. You could find your relationship with the agent in deep trouble.
On the other hand, opportunity may be presented to you with the same business dilemma for your competition. As lenders see short-term success, they also may lose sight of their individual Realtor relationships, which is why being in the field at least once a week is so important.
The phrase “out of sight, out of mind” comes into play, as you need to remember the importance of one touch point per week of some form with your business partner. This may include a weekly in-person visit and a handwritten note, or a voicemail that will remind them how much you value the partnership. If your competition neglects these relationships, your golden opportunity may arise by being out there because you kept your eye on the sustainable prize: multiple Realtor partners to help weather any rising interest rate environment.
Achievable success
Many mortgage companies produced record sales months this summer due to borrower confidence and lower-than-projected interest rates. With the rare combination of lower rates and a strong housing market for most of the U.S., originators have to realize they have been presented with a most fortuitous moment in time — the perfect place to make sure 2019 ends with a fabulous finish.
Although it’s easy to enjoy the fruits of the current market, do not let yourself or your team become satisfied. Instead, make one to two calls a week to current or past real estate partners through the end of October. If you’re in management, provide internal support so your sales team can make the required calls and drive sales activity over the next three or four months.
The one constant in sales management is the old phrase, “manage activity and results will follow.” Never get fooled by a production month that is rate driven; value the months that are activity driven and you will build a company that will be profitable for years into the future.
Sustainability in the mortgage industry can be broken down into managing two core skillsets: communication and contact. Take care of those two things and success is achievable. As a manager, make sure your loan originators are engaged with the borrower on a consistent basis and that they never lose touch with their real estate agents.
Little things matter in sales. The ability to execute on those two items will lead you — as an originator and as a manager — to finish 2019 with a bang and be set for a strong start to 2020.
