chrisj

On every deal that we do, we have got to get better at the business that we’re in.   The old saying goes: there are loan officers with twenty years of experience, and then there are loan officers with one year of experience twenty times in a row.   What helped me to separate myself from the pack (besides Tony’s advice about returning phone calls) was to DELIBERATELY learn something with every loan that was funded, and to document my processes.

It’s a way to catch trends in underwriting.

It’s a way to figure out where your business is coming from.

And it’s a way to get better almost automatically.

Really simply, at the end of every file (if closed or not) we ask a few questions of ourselves.  You can make your own, but the ones I’ve been using are:

1. What were the unmet stips after submission?
2. What were things that cost us time?
3. What things did we have to go back to the borrower for?
4. What can we do better every time?
5. Is it worth adding to our process?
6. What did we do well?
7. Did we adhere to our processes?
8. What impacted the borrower?
9. Overall, how would we grade ourselves?
10. How many passes did the underwriter take? (Hint: you want an average under two…30% of the time you should be clear to close on the first pass).

Those are the broad strokes.  If you’re a niche player, you might have more details you want. So many loan officers reinvent the wheel on every single loan, and those morons make us all deserve our reputation.  (What, you mean I needed my 1003 signed?)  That’s not the way to survive at all.  That’s a failure path and a way to lose the game in spectacular fashion.  Those basic questions was the start of how I codifed my operations manual in 2006.  Basically, I had a bunch of loans that didn’t QUITE go smoothly.  So I started to wonder why. 

If you take responsibility for getting better, and deliberately open your eyes, you will get better.  A lot of little ticky-tack things add up.  And once your packages improve, you have stories to tell.  You can improve your borrowers chances of getting approved at the margins, and have something of value to give.  Some people will always see you as a middleman with nothing to add, more people will understand that you’re doing the job that the wholesale channel was intended to do: help buyers close safely and securely.

I made a rare trip into my office the other day, and by the time I got done, I felt defeated and confused.  From my way in the front door back to my office, I heard 4 different ‘the sky is falling,’ conversations: 

“The guidelines have changed and they won’t take a good deal anymore.”

“Flagstar didn’t like my appraisal,”

“That’s bull***, the Realtor referred MY client to the in house lender.”

We have a smallish office–about 15 originators.  In all of these instances, there was a conversation involving at least one other originator.  This was all at 10:15 on a Tuesday morning.   At the very least 9 people were having a conversation together, so about 60% of our office was in a pity party, and I think the LOs in my office are way more proactive than most.  But what good can be had from the conversations above?

Look, I’m never going to say ‘be a Pollyanna,’ by any means.  But there is a radical difference in being a ‘victim,’ and being a ’survivor.  A survivor is a powerful and elite warrior.  A victim?  Not so much.   We can observe and predict the future.  If we see a guideline change, it can be an excuse to whine…

Or an excuse to call our clients to lock another loan, or call our Realtors to amp up the urgency for our deals.

We can survive with the assumptions that product guidelines are going to be MUCH tighter today than they were six months ago, that deals will take longer, and that appraisal guidelines are tighter.  All that stuff is true.  You can do three things:

1. Whine to other people and screw up their mindset, too.
2. Feel defeated and take an early lunch because it’s march madness
3. Prepare to survive the new rules.

It doesn’t really matter why it happens.  Loan Officers (and Realtors) congregate and complain.  The market has changed, it’s not 2004 anymore.  It might even get ‘worse.’  Individual deals will get sideways for any number of reasons.  You don’t have time to dwell on it.  You’ve got your own goals to achieve, and none of them are advanced by the hashing of bad experiences.  I’m guessing that in your office, most loan officers are going backwards.  I’m guessing that, in your office, most people are not succeeding.  (That’s a national trend, it’s safe to say at this point). 

You Walk Away.   Seriously.  Be polite if you can, but make it seriously clear that you’re not on this path.  Do not let them suck you into adult failure spiral.  Do not catch their disease of victimhood.   Do not associate yourself with losers.  And do not let them to manipulate you.  They will call you names, because you’re not failing like them. Consider the source before you take it to heart.   If you need a peergroup, Lenderama, Bloodhound, Agent Genius, The Cicerone all have great sidebars and people that are standing up in this industry and surviving.  But walk away from people that are bringing you down.

Chris Johnson is an Originator in Columbus, OH. 

In my office the other day, a Loan Officer was complaining about how the Realtor was trying to ship his client (that he had the relationship with) to the in house loan company. The Realtor had a slick presentation “does your mortgage company have X novelty widget? No, well, you need to work with us.” The LO in question was incensed. Livid that a commissioned Realtor would do this to a fellow real estate agent. These were his clents, and he was being positioned as the ammeter.

Well, the above transaction was 100% his fault–not the Realtors.

Affiliations are stupid. They are money grabs, and the consumer and the agents both get screwed. Agents have to defend milquetoast morons that seek the easy life of captured business. Consumers have to be served by burnt out people that stood in line for the opportunity to work in a Branch Realty office, and, and don’t get to work with people that rely on skill, knowledge or novelty to sell. (I’m talking to you, Real Living,) Oh, affiliations should be 100% legal, but they are a quick trip down the path to mediocrity.

The Loan officer from Paragraph one though, could have handled it a lot differently with only a little more work. The LO knew his clients were looking at houses, and hadn’t been committed to a Realtor. The LO coulda and shoulda done it this way:

1. Refered his clients to a Realtor that’s on his team, or one that he wanted to work with.
2. Vetted the Realtor By Asking Pointed Questions.

Let’s assume #1 is impossible; it seems that the clients are interested in a particular house. Imagine the dialogue if the LO had called the Realtor/Real Estate Agent early in the process, and said this: “Hi, I’m Joe Loans with Money Funding. I know that you met my clients, Jim and Sally, and they have expressed interest in working with you, and they asked me to call you up to get a few questions answered so I can help them choose their Real Estate Agent.”

From this point, it doesn’t matter that much what the questions are. It changes the permission to influence the client. Agents are well trained to control (ahem, steer) their clients. They’re used to doing it, and good at it. They’re not used to answering any types of interview questions, especially regarding closed transactions,their process, their experience, and compliance. The other idea that this communicates is that you will be in charge of what happens with the clients. Most agents won’t jeopardize a paycheck to use the in house company. When this situation comes up, I also take the time to call the in house loan company and ask a few questions, namely, how many transactions did you close last quarter from Non Realtor Referrals. If the answer is less than ten, that is something to point out to the clients.

What’s important is to not be adversarial, or as if you’re putting a Real Estate Agent in their place. That’s not the point. You’re asking questions in a routine, matter of fact way to ensure that the Agent respects your relationship. If the clients seem likely to use a Real Estate Agent, gain some good information about them. At application, tell them that you will be vetting the Real Estate Agent for free to make sure that they have ”

Yes, I know Agents would hate getting this call “from a broker.” At first.

However, I have converted more than a couple agents into referral partners after making calls like this initially.

Stake out your turf . Have Equal Business Stature.

Train your processors to think like salespeople.

I used to get livid with people in this business that were apathetic, or non involved. I would be mad: HOW CAN YOU TRUST A TITLE COMPANY TO ACT ON OUR ORDER. My type “a” was showing.

Then I thought of a better way–let’s look at the process I use to work with my vendors (this is an early draft from my Operations Manual)

1. Stay Respectful of the Vendor at All Times. Especially when they ’screw up.’
2. Set deadlines: Make sure the deadlines are (a) 2 days from today and (b) 2 days before you need it; if you are on a tighter deadline, please communicate it and ask for help on the deadline & explain why it’s not the way we do things.
3. Send an order over via fax. Make a custom sheet that says what the request is for with your deadline.
4. Call to confirm it:
   

   “Hi, This is Chris, I just sent a request for insurance over to you for the property on X, did that come through?”

   “Yes It did”

   “Great, I appreciate that. I want to know–100%–when we will get that back so I don’t call you before then.”

   Usually, you’ll get a date out of them. If the date doesn’t work, propose a different one, then confirm.

   “OK, so we’re 100% that I will have this insurance dec page ready no later than Tuesday the 11th, at 1pm, right? Will you call me if there are any problems so I know in advance? Great. I’m going to send an email to you and the clients advising them of this commitment, thanks so much.”

5. Send out the email. “Deb at Amerinsure has committed to getting the insurance back by 2pm on Tuesday. She can be reached at X, and if there is any information she will need, please call).
6. If a deadline is missed (it won’t be NEARLY as frequent as before), You have notes, call, and insist that the item is delivered by the next business day, and that they send out info to the realtors.
7. ADD them to your database if not there and set a reminder. Also, put them on your email lists, and have a ‘vendor club’ for people that fulfil requests quickly.
8. 100% of the time, send ‘hank you notes to your vendors for doing what they said. Thank yous will get you business, and strengthen relationships.

Now–nobody is perfect,–not even close, having a policy introduces accountability. That makes things go WAY faster.