As a loan officer for a number of years, I realize the importance of consulting with the client more than ever. The poor economy and troubling housing market make the loan professional's expertise even more valuable. As interest rates continue to rise, mortgage loan officers face many varied challenges in their ability to earn a living.
Many loans are falling in the sub-prime market. These transactions can be difficult and trying at times. Be patient and understand the concerns of your clients in working on all deals.
Here are some valuable considerations for the success of the mortgage professional:
-Listen to the needs of your prospects, such as the length of
time they may stay in the home or any down payment gifts they may
-Ask your clients to order their annual free credit report in their respective states. This is a tool that can quickly identify potential problems.
-Remind your customers to be cautious of up-front credit repair services. Many participants have received little benefit from these programs. They are often in the least position to afford them.
-Advise your applicants of options to increase their scores. Be prepared to advise. For example, paying off recent collections may boost a credit score. Remember, you are the expert!
-Explain to the prospective client that a pre-qualification is not ironclad, just a tool. Shopping around and pulling credit numerous times will decrease the scores. Many borrowers need every point they can get.
-Educate the applicant on the important decision he is making in the purchase of their home. This is likely the most significant financial decision they will make in their lifetime.
-Coach clients on the ongoing importance of meeting their financial obligations in a timely fashion. If they had poor credit in the past, they must learn to change their credit lifestyle. The responsibility of building and maintaining good credit is an individual practice.
Here is a formula that I would recommend using when dealing with any kind of customer in most industries:
The KEF Formula
-The customer is king
From his perspective, the client is always correct (even though he may not really be). In selling over the last 25 years, I have come across many types of customers. Even though it was on the Internet or his neighbor told him, it does not mean anything. Customers profess to know more about the rates, underwriting, appraising and the loan process. How many times has a real estate agent quoted your rates, told you what to do or complained about closing costs? My suggestion is to grin and bear it. You will show them the money in an approval when you are prepared. Respect them, but remember that you are in control. You are the professional.
-Educate the client
You are trained as a loan officer. You continued mastery of your skills, and your understanding of the economy makes you the best-trained broker around. Your diligence in speaking with various lenders and assisting the client is part of your tough job. The loan programs, creative financing and seller concessions you suggest will help the customer find the best package. In short, you will work to accommodate the client to best handle his needs.
Quickly assess what your client needs and gain his confidence. In my many years of selling, I have found it useful to utilize the feedback to facilitate future business. At my former bank, customer surveys determined increases in compensation. Be sure to ask him in a professional manner how you are doing and what you can do better. Of course, ask for referrals!
As competition increases and rates rise, your role as a consultant has never been more vital. The KEF formula ensures your success.
Jeff Barr is a competent toastmaster and speaker in Louisville, Ky., an adjunct professor of communications at the University of Louisville, consultant and a mortgage loan officer. He can be reached at (502) 777-9555 or e-mail at [email protected].