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Life After Refinances: Leaders Need to Step Up

Tom Ward
Jul 11, 2014

As a leader of your organization, the next 12-24 months are going to be challenging … or maybe a better way of saying it is this time will be “different.” If you are managing a team, a branch, a region, or are the CEO of your company, you need to consider making some in-flight corrections ASAP. Let’s flash back to the last 10 years. There are three types of producers in most companies. The top producers in any organization will thrive during a refinance market and are resourceful enough to transition into the market after the refinances dry up. Sure, they will be doing fewer loans, but ultimately, they will be just fine. The bottom of your organization will really struggle after the shift to a purchase market and some will even leave the business because that low-hanging refi fruit is gone. It’s easy to take a client from seven percent to six percent, and then to five percent and even to four percent. It’s like taking orders. The lead acquisition strategy for some was answering the phone with, “Hi … this is Tom. Can I help you?” Saving a customer $200 a month with a 24-month break-even was simple. When times change, a salesperson’s weaknesses are exposed. Like Warren Buffet says, “Only when the tide goes out do you discover who's been swimming naked.” The last group is the most important and that’s the middle. This is the one that will make or break an organization. These are the folks who were doing refinances, but knew the day would come that they would need to transition to a business model that focuses on purchases. That’s where the leadership skills of a manager get challenged. During “Refimania,” managers typically had this group on auto pilot. Sure, they played an important part in the process, facilitating lock extensions with secondary, expediting the underwriting of files, getting the file to closing, but now, things have changed. This group needs purchase leads, and sometimes, we find that the manager might be a little rusty on teaching how to make sales calls to real estate agents getting those leads. Let’s face it, in a shrinking of the market, you need to go get market share and that means taking someone else’s loans. In order to do that, you need to be really good and have some strong unique selling propositions, but that’s a story for another day. This group is looking for guidance, but not just soft, scratch the surface type of stuff. They need to know who to call on, exactly what to say, and how to differentiate themselves from all of the other loan officers who come through the door. They are starving for leadership and want someone to guide them through these tough times. They need someone they can trust and someone who knows what they are doing. When a branch manager uses old-school training tactics like “just go out and call on some real estate agents, drop off your rate sheets, etc.,” it doesn’t take long for the energy to get sapped, leading to a loss of appetite, and ultimately, production. If you require them to fill out a call report, they just fill in some names to make sure they filled your quota, knowing you won’t verify them anyway. Here is the other thing to point out. If you don’t give them the leadership they seek, they will search elsewhere and eventually leave your organization. If no one is showing them how to go and get the purchase business, then your business suffers and their future becomes an uncertainty. The secret to getting through these next 12 to 24 months is to move the middle. For more information on how we can help, visit Tom Ward is founder of the Path2Buy Homeownership Coaching Program ( He may be reached by phone at (847) 340-4295 or e-mail [email protected].
Jul 11, 2014
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