As new hires enter the loan origination business each day, there are five key tips that can help them transform a job into a thriving career. Although this is primarily geared toward those who are just getting into the industry or have entered within the last five years, many of the tips can be utilized by even the most seasoned loan originators (LOs).
1. Always ask for referrals
Seems like common sense—Sales 101. That being said, most LOs fail to realize the importance of simply asking their clients for a referral. Happy clients will rarely automatically refer others to an originator. However, if they are asked for referrals, they are more likely to search through their rolodex, tell their Facebook friends and share the contact information of their LO freely with many others. These potential new clients are already very warm leads since they trust what their friends say.
LOs have an intense and intimate relationship with their clients for 30-60 days as they work together on a loan. After this relationship is built, some LOs dismiss the client and forget about them. Successful originators continue to work with the client, keeping in touch with them on a regular basis and always asking for referrals.
Here is an example of a basic script: “My business is built on service. If you think I do/have done a good job, please give me a referral. If you have been unhappy with any part of the service I have offered then please let me know how I can continue to improve.” Saying this once at the end of the process is helpful, saying it throughout the process is even more effective. At the beginning of the relationship, when an originator first meets a client, the expectation of a referral should be clear. Towards the end of the initial conversation, say: “Throughout this process, I am going to ask for a referral,” and go on to talk about the service they should expect from you during the loan process. Then, at each high point in the loan process, remind them about the need for referrals. These high points include loan pre-approval, preparation for document signing and the final funding.
Finally, even after the loan has closed and the client has been asked for a referral, the relationship does not end. Utilize a drip marketing strategy to follow up with the client every six to nine months after the loan closes. Call them to see how they are doing and ask, “How do you like your new home?,” “Do you have future plans that may require a move or remodel to your current home?,” or “Do you have any new referrals?”
2. This is a 55-60-plus-hour a week career
Being successful takes time. Being a successful LO is a minimum 55-60-hour work week. It takes additional time to read blogs and articles like this one in National Mortgage Professional Magazine while you’re at home in the mornings, after work or on the weekends. Every originator needs to be able to do their job with clients and stay informed about the industry, and keep up with new regulations and economic trends. All of this cannot be done without coming in early and leaving late. The only exception to this rule is if you’re an hourly employee.
This is a career choice. It is not just a job where you clock-in and clock-out. There will be a lot of phone calls, a lot of in-person meetings and a lot of keeping clients, potential clients and past clients informed on mortgage rates, the status of loan documents and checking on referrals. The bottom line is the more time an LO is willing to invest in their career, the more income potential there will be. Remember … nothing happens without hard work.
3. Put the customer over the commission every time
Oftentimes, LOs, especially young LOs, think that a $450,000 loan deserves more of their attention than a $60,000 loan. The reality is that both are customers and both deserve the same attention to detail and wise counsel. It even pays off to provide counsel to prospective clients who might not currently qualify for a loan. Working with these clients early to help them get their financial footing grounded will make them a good client in the future. These people, and those who have lower loan values, will see the quality service that the originator provided them, and in many cases, could give some of the best future referrals. Remember that taking an extra few minutes to help everyone is worth a lot in the long run and helps to “pay it forward.” After all, there is a little bit of good karma that comes along with doing the right thing.
4. Everyone you know should know what you do
There was a running joke on the NBC television show “Friends” of people guessing what the character Chandler really did for a career. It was not until season nine, when he quit, that his friends and wife Monica, finally learned he was an IT procurement manager. If the people originators are closest to do not know or understand what they do, they cannot be a source for referrals or come to the originator when they need a loan. It is the successful LO’s job to ensure that every single friend and family member know what they do and how they can help send referrals in their direction.
This does not mean making a sales pitch during every conversation. It does mean using basic conversation techniques to ensure that the loan originator gets to briefly describe what they do. When at the gym, hanging out at a backyard family barbeque and getting dinner with friends, ask them what they do. That question and the subsequent answer will almost always end with “and what do you do?” This is the perfect opportunity to give a 45 to 90 sec. elevator pitch on what an LO does, how they can help, and close with, “I’m always looking for referrals, so if you or someone you know needs a loan, contact me.”
Facebook and Twitter also offer opportunities to let others know what an LO does. This does not mean posting “I need referrals” every day for friends and family to see. It does mean posting useful information that friends and family may find interesting about your industry. Then, every few weeks, remind friends and family about sending referrals if they or someone they know needs a loan.
5. Take every mistake and challenge as a learning opportunity
Some of the best lessons come from mistakes made while on the job. There will be a time when an LO forgets to ask for a financial document, misses an important deadline or even gets two clients mixed up. Making a mistake is a difficult realization for anyone, especially in a detail-oriented career field like this one. Mistakes do happen and can be learning opportunities.
It is not enough just to fix the mistake. LOs need to go back and look at why the mistake was made in the first place. Is there a process that could be in place to prevent this mistake in the future? Since the LO business is a process-oriented business, the same factors that contributed to one mistake or challenge will be in place again. Learning how to spot those factors and identify the issues that lead up to the challenge will be one of the most helpful things that an LO can do throughout their career.
Jim Harbaugh, head coach of the San Francisco 49ers said it best when he said, “We’re trying to improve in all areas. [We need to] see where the heck we can get a mile and half faster and one percent better each day. That’s the way we go about things” (Inside the 49ers, Santa Rosa Press Democrat, Nov. 9, 2011). If each LO becomes one percent better each day, in a month they will be 30 percent better. There is always room for improvement. Being an LO is about learning from mistakes, creating new, more accurate ways of completing processes and always asking for new referrals.
Leif Boyd is senior vice president of production for American Pacific Mortgage. Since joining American Pacific Mortgage, Leif has taken an active role in overseeing all aspects of mortgage origination, including the oversight of the production department and 114-plus branches. He may be reached by phone at (916) 960-1325 or e-mail [email protected]