There’s a common misconception among mortgage originators that whoever’s processor is handling the most loans is the winner. The opposite is true: If your processor is closing more than 20 loans per month, you’re actually losing big. It sounds counterintuitive, but it’s not.
There are several reasons why mortgage originators shouldn’t want their loan processors and assistants doing too many deals each month. Savvy originators will see why this is the case.
Many people in this business believe that a successful closing is when a loan closes on time. This shouldn’t be the gold standard anymore. The way you should define success is whether you have asked for and received a referral during the time you worked with the client and the real estate agents involved in each and every transaction.
In the past, mortgage professionals were taught to ask for a referral at the end of the transaction. There’s a better way. When your client is in the middle of the process and things are going well, that’s the prime time to ask. Once they close, you’re old news to them. They’re too busy moving and getting on with their lives. Get the referral while they’re in the middle of the deal and have homebuying on the brain.
You shouldn’t be the only one asking for referrals during the loan process. Your team should do it, too, which can result in dozens of extra loans closing each month. If your processor is juggling 20-plus loans each month, they don’t have time to ask for business on your behalf. They’re too busy trying to close the loans already in the pipeline. Why would they ask for more loans? They’re already at or beyond their capacity.
Processors are talking to borrowers, co-borrowers, listing agents, buyers’ agents, title companies and insurance companies on a daily basis. Each of these sources have the potential to supply many new loans if you give your processor a simple script to use at the end of each call to ask for more business.
This simple activity could be responsible for a large chunk of your new business. But processors need to have the bandwidth to ask for new business from the people they’re on the phone with every single day, or you’re wasting a lot of great opportunities.
Think of your processor as a “free” employee. If they make $75,000 a year and you charge a $500 processing fee, they only need to close 13 files per month for you to break even. Why would you want to overload a “free” employee to the point that they can’t ask for business on your behalf? You shouldn’t look to overburden a system that’s been proven to work.
You may think that you are saving money by overloading your processor. In actuality, it’s likely costing you a fortune in additional income each month.
When loan processors are overloaded, they start making mistakes. This is just human nature. Anytime someone takes on too much and is trying to juggle too many balls at once, something’s going to get dropped. Consider working your team at 70% to 80% capacity. There’s probably no scientific way to measure this, but figure it out together.
When people work too hard and they start making mistakes, it’s not because they are incompetent at their job. But when you’re trying to do too much and have too many irons in the fire, you can’t give your full mental capacity to any one thing, so you start messing up. And these mess-ups can get costly very quickly
It’s impossible for your processor to give their best service to every single one of your clients if they have too many deals in the pipeline. You want your branch to have a reputation of caring for clients. This can’t happen if your processor is overwhelmed.
When your loan processors are too busy, you get pulled back into the file and away from your money-making activities. At this point, the mortgage originator starts to get involved with the loan details, chasing conditions and putting out fires. If you’re chasing conditions, in essence, you’ve become your processor’s assistant. Is this the best use of your time? Of course, it’s not.
When the loan officer gets pulled back into the files, they can’t focus on the very activity that brought in the loan in the first place. If you’re not working on this money-making activity, you’ll find yourself back on the proverbial roller coaster — up this month, down the next month, up the following month.
There’s no way your team can close its full potential of loans each month if you are doing everything on your own. The only way to achieve true freedom as a loan officer is to delegate all activities that aren’t money-making activities. These activities include developing relationships and getting referrals.
Give your processor a manageable number of deals each month so you aren’t falling back into the tasks that someone else can do. If you have too many loans for your processor to handle, it’s time to hire another processor.
You want your employees to have a balanced lifestyle and not be workaholics. This final reason sounds really unselfish and altruistic, but it actually isn’t. A burned-out loan processor might quit, and hiring a new employee is expensive. It’s much more cost-efficient to keep your current employees happy rather than dealing with a high rate of turnover.
But there’s an unselfish part to this as well. You want to live a balanced lifestyle, and you should want your employees to have a balanced lifestyle, too. When you overwork your processors, you’re robbing them of time with their loved ones. Most people don’t want to be that kind of boss. You don’t want to be the reason why a parent doesn’t have time for their kids, or partners don’t have time for each other, or someone never gets to hang out with their friends and family.
Think about your values and the values of your company. If you believe in living a life of freedom, then live this life of freedom. But don’t do it while everyone who works for you is struggling to survive.
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Take some time to evaluate your loan processor’s workload. Sit down with them and ask them how they’re feeling about the number of loans they’re doing each month. Assure them that they won’t be penalized for their honesty. Some employees might be afraid of getting fired if they’re not churning out enough loans.
Let them know you care about them and their well-being, not just their job performance. Work out a plan where they have just enough loans to be working hard but aren’t being overworked, and they’re still getting all of the amazing referrals that will grow and scale your business in leaps and bounds. Everybody wins. ●