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Integration is the Holy Grail of mortgage lenders, but are we there yet?

Jul 14, 2005

Helping clients succeed Tim BassettSales, Mortgage originators P> The concept of selling carries plenty of negative baggage. Sales is frequently called the second oldest profession, though it is often confused with the first! Some people experience selling as knocking on 100 doors and having 99 slammed in their face, resulting in one positive response, which doesn't qualify or appraise half of the time. We have dressed up what we call mortgage salespeople. We are now senior loan officers, mortgage consultants and business developers. Regardless of what you call it, the net result is that person A is doing something for person B and charging money for it. (Sometimes, clients fear they are having it done to them rather than with them.) The reality is that people are cautious, and buying and selling relationships are often fear-based. In the mortgage business, these feeling are often amplified because the stakes are high and the business is operationally complex. There are numerous parties and steps along the process. The information flow is not perfect. A fear exists that within the information gaps lies a trap where the homeowner is ensnared. We have all heard the horror stories. It is no wonder that homeowners have their guard up. Clearly, this is not true for everyone, as numerous loan arrangers have transcended this dysfunctional process by genuinely helping their clients achieve what they truly want and enabling them to enjoy tremendous personal and financial rewards. A Downward Cycle Homeowners don't always know the truth, and sometimes they may even misrepresent it. Loan officers are sometimes overly optimistic on floating rates, appraised values and scheduling closings. Whether intentional or not, imperfect communications excite suspicions and cause people to "hedge" or protect themselves, and the dysfunctional cycle continues. What to do about it? Gandhi said, "You must be the change you wish to see in the world." Change is a choice individuals need to make for themselves. The model of selling must change, and luckily, it is! If people have a better model, they will experience better results, and the cycle will continue and improve. The new premise of "helping your clients succeed will ultimately help each practicing mortgage originator succeed. How will you go about it? Have you ever heard that more than 70 percent of human communication is non-verbal? The expression "trust your gut" is deeply rooted in the human psychic lexicon. The only way to experience deeply held trust as a true confidant is to operate from the position that your goals are congruent with your clients' goals. You want the client to succeed, so find the best deal for their individual circumstance! Sure, this takes more work explaining the options, calculations and processes, but if you invest the time, you can gain a customer for life, even if you think this is your only loan together. Think You're Too Busy? Who wants to take the time to educate a bunch of rate shoppers? The real deal is that in order to end dysfunctional selling practices (in your life anyway), you have to authentically open your belief system and embrace this fundamental concept. The answer is not "getting more intricate selling techniques." We can feel when someone is working a technique on us. I know I don't like it. Rule Number One: Intent counts more than technique! Customers will know the difference. Getting Real Face it, you will not have a perfect solution for every person you meet, or your personalities might clash. In spite of the breadth of mortgage products, from A-to-Z credit to all kinds of expanded criteria, there will be mortgagors who will not be a good fit for you. The scope for a misfit ranges from a client's propensity to "walk for a better deal," to miscommunication of expectations on either side. The time to recognize this is now. Remember, if you and the client share mutual self-interests, only a mortgage solution that truly meets their needs can assure the best possible outcome. Let's take this apart for a minute: If your solutions do not meet enough clients' needs, they go elsewhere, and you go out of business. So, your mortgage solutions need to fit enough clients situations in order to attain your business objectives. Certainly, having a broad array of products and pricing alternatives is important. At the other end, if you force-fit your mortgage solutions on the client, regardless of whether they meet the client's needs, then over time, you are going to have a number of dissatisfied customers. We've all seen the statistics on how many happy customers it takes to overcome an unhappy one. You will struggle in business or spend all of your profits continuously rebuilding. Doing business with integrity from the start with the client's success in mind is simply a good business strategy. Recognizing Barriers If we both want the same thing, then why doesn't everyone operate with these principals? If we can create a win-win situation, why don't we? To gain some insight, let's look at some of the unproductive behaviors that can derail a mutually beneficial relationship. What do clients say about mortgage originators? *They don't listen; *They make faulty assumptions; *Originators force-fit their preconceptions; *They need to make a loan; *They exaggerate or tell partial truths; *Originators rush the explanation process until the papers are signed, then drag it out; and *They eliminate or gloss over important details. What do mortgage originators say about clients? *They don't know and/or can't articulate what they need or want; *Clients cannot evaluate a good deal when they see it; *They submit bad or incomplete information; *They are unrealistic about rates, appraisals and closing schedules; *Clients cannot decide what they want; and *They have heard of a better deal and continue shopping until it closes. Awareness and Choice It is important to help homeowners achieve what they want and feel good about it. This also marks a shift in the selling paradigm that begins with the awareness of the possible polarity in perceptions and the choice to correct the behavior patterns, hopefully achieving mutual understanding. It is often too easy to tell a client what they want to hear so you obtain the deal, instead of telling them what they need to know. Then you keep your fingers crossed that Lady Luck will find a way to push the loan through. Remember that intent counts more than technique, and every person is wired with a "trust alarm." The harder you push, the louder the trust alarm rings, diminishing your chances for a successful outcome. No Guessing If you and your client want to succeed, you have an obligation to understand the core elements of their situations and objectives. Do not guess about what the best program is or how the client will measure a successful transaction. Ask them specifically and probe for clarification. You say, "Ms. Jones, you want the lowest fixed rate and you are also planning on selling the house in a year or two. Have you examined this transaction from a total-cost perspective?" The client will confirm her reasoning or open an opportunity for you to share your expertise. Do not assume that they have all of the answers. If you discover they do, then this is a price check, a market scan, and when do you want to know that this is a rate shop? As soon as possible! Failure is not agreeing not to do business; failure is taking too long to learn there is not a fit. Trust your instincts and then use your brain, politely of course. If you feel it, verbalize it! Rule Number Two: No guessing! Slow Down for Yellow Lights The universal aphorism for accelerating seems to be a yellow traffic light. We do it when we drive, and we do it when we sell. As soon as something gives a cautionary signal, we salespeople seem to talk faster and try to overcome perceived objections without asking what they are, firing away with features hoping one of them hits the mark. The fear is that the yellow light will turn red, thus equating a red light with failure. A red light is not failure. Failure is making a red light needlessly more time-intensive. A red light is an opportunity to deal with a fundamental "make or break" issue. When you are quoting a real estate agent who happens to have a mortgage company in their office, the tendency of some people is to ignore it. Get real! Have the courage to ask the uncomfortable questions. "Look Joe, I don't mind offering a price check against your in-house loan officer, but what would you have to see for me to earn your business? Is it your decision on who to go with, or is there a company mandate? What are the hurdles for external lenders?" Give the yellow light back to the client. Often, they will have a less stringent requirement for turning it green than we imagine. Besides, if it is going to be a final stoplight, when do you want to know it? Sooner rather than later! Rule Number Three: Slow down for yellow lights. State the Obvious When you are listening carefully, your client will let you know when you have hit a yellow light. You can sense when there is incongruity between what they say and the way they say it (remember the non-verbal thing?). Politely call them out on it. Be valiant, address the issues! This will set you apart from the pack. Remember awareness and choice? Be aware of what is really going on at all levels. Choose to break the cycle of dysfunctional selling by addressing the issues directly, and get clarity! Clarity leads to understanding and then to a better-proposed solution. Rule Number Four: Politely state the obvious and find clarity. Check Your Ego at the Door You may have experiences, thoughts and belief systems that will challenge your adoption of these principles. Our ego lets us focus on meeting our own needs first. We live in an egocentric world. Another paradigm shift: Recognize that the best way to meet your needs is to meet the needs of others first. When you find yourself defending your brilliance, seeking approval or talking over the client, you are likely serving the needs of your ego before your client's needs. Remember our premise: Helping clients succeed helps us succeed. Rule Number Five: Check your ego at the door! We have scratched the surface of some dysfunctions in the mortgage industry and identified a few effective response strategies. We cannot possibly solve all challenges in 1,500 words or less. However, if this article can inspire you to be become aware and recognize choice, which will hopefully have a positive impact on your next loan origination, it will have been well worth my time writing and your time reading. Tim Bassett, MBA, Ph.D. is vice president of business development at Mortgage & Investments. He may be reached at (877) 791-4132 or e-mail [email protected].
About the author
Jul 14, 2005
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