Skip to main content

Putting Freedom and Motivation Back Into Retail Lending

David Williams
Jul 18, 2014

A few years ago, researchers from the Victoria University of Wellington in New Zealand studied data from 63 countries over a 40-year period and determined that it’s actually true: Money really doesn’t make people happy. Having freedom and autonomy, on the other hand, is much more effective at putting people in a positive mental state. Sure makes sense to me. In fact, I see the truth behind this theory everywhere I look. Let’s face it, most of us who got into selling mortgages do so because of the independent nature of the business and the opportunity it offers to carve our own path. There is no uniform, no clock to punch, and for a great majority of folks, no single technique for going out and selling loans. Of course, with freedom comes responsibility. Because a house is the single largest investment most people ever make, our profession needs ground rules. And today, increasing regulatory pressure—coupled with a challenging origination market—is placing many industry professionals in a tough spot. Right now, we’re seeing a lot of migration of the professionals within our industry. As the opportunities for selling purchase loans grows, retail lenders everywhere are looking for top performers. Likewise, experienced loan officers and managers—and even people who are new to the business and are hungry—are looking for a strong “home” that will put them in the best position to excel. But few retail lenders seem to be rising to the challenge. Some just haven’t been able to figure out the current market or change the way they do business fast enough. Others have tightened up processes so much that their salespeople have lost the ability to create business on their terms. Many are simply not doing what it takes to keep great people once they find them. The fact that origination volumes are down and housing is struggling so far in 2014 has put everyone more than a little bit on edge. It’s also contributing to a low pool of quality managers and loan officers in the market. And yet, when retail lenders give mortgage professionals reasonable freedom to do what works for them, everybody wins—the lender, the manager, the loan officer and the consumer. It can still be done, too, even in today’s more rigidly-controlled market. Here’s how. Give them protection It’s not sufficient to just be good enough to avoid the attention of regulators or investors. Great loan officers who have been around for a while can tell when something doesn’t feel “right” about a lender, and they will take no chances when protecting their greatest asset—their reputations—on a company that will not do the right thing when it matters most. It should go without saying that lenders should do everything possible to protect themselves and mitigate risk. However, they should be transparent with their sales people about their compliance strategy, too, so that everyone is on the same page. This way, a lender’s salespeople are fully equipped to explain any requirement to the borrower, and perhaps even make it a marketable asset, a la “here’s how we are protecting you.” Power under the hood Every mortgage business has, or should have, an engine that keeps running smoothly, so that loan officers have everything they need to sell loans quickly and efficiently. But there’s a huge difference between providing the basic technology to manage customer information and loan files, and solutions that actually empower loan officers to excel. In today’s market, the bare minimum that a retail lender should provide loan officers includes a web-based automated underwriting platform and the capacity to lock rates instantly. But they should also be providing a flexible, easy-to-use CRM solution that enables loan officers and managers to import partner and client contacts and help them nurture those relationships for new sales opportunities. More than anything, loan officers require technology that lets them spend more time communicating with customers and less time performing tasks that can be automated, streamlined or outsourced. Great customer service Weaker-than-expected origination volume is a challenge for everyone. But it is a particular problem for lenders that have not quite figured out a strategy that works in today’s market. Of course this situation is creating opportunities for other companies to separate themselves from the pack by simply being faster, more reliable and consistent—basically, by providing better service. In areas where buyer demand far exceeds the supply for homes for sale, lenders that are able to close loans fast have a tremendous edge. Likewise, the loan officer that can market 15-day closings and automated approvals with the government-sponsored enterprises (GSEs) will have a huge advantage in areas where buyers are going head-to-head on hot property listings. As we all know, however, it’s one thing to market such features and another to deliver them. When a loan officer has a qualified and motivated borrower, few things are more valuable than knowing that the lender is able to perform. In fact, lenders with fast response times and quick underwriting instill confidence in their salespeople that is infectious. It rubs off on borrowers and referral partners, which in turn creates more enthusiasm, more referrals and more sales. By reducing risk and providing better and faster service, each of these traits provides mortgage professionals with greater freedom in how they market and go after sales. Each characteristic removes some sort of encumbrance that many in our industry feel—from the complexity and confusion of new regulations to the concern that one can’t offer the best range of products and service, or that one might find oneself in the position of overpromising and under-delivering. Yet, there are many other intangibles that are important. For example, how experienced is the lender’s leadership? What does its past performance say about its ability to “pivot” when the market changes and stay on top of new trends? Do they push electronic signatures and have a simple online application process? No matter how long they have been in business, the best lenders continue to innovate and change, whether it’s identifying new products and services for underserved borrowers, or finding new markets or channels through which to deliver service. Mortgage professionals can always control their own destiny When loan officers and branch managers are free to focus on origination and not worry about risk, processes and systems, or whether they will get loans funded on time, or whether their company is looking for new lines of business, you can tell. They are just happier. They smile more, they have fun with their customers, and they feel good about what they do—which they should. But the key is creating a truly effective environment where their time and expertise is always maximized. As my own company continues to grow our retail lending business, the traits I’ve listed above are exactly what are helping us attract new branch managers and build an amazing team. Of course we pay well—but we want to take care of all the tangibles and intangibles so that our folks don’t have to fret about them. We want them to go after business in ways that work for them, within a framework of compliance that protects them and their borrowers. We know that when that happens, they’re capable of anything. Money may not buy happiness, but freedom, success and fulfillment do.   David Williams is vice president of RightStart Mortgage, a mortgage lender based in Pasadena, Calif. that provides a full range of conforming, non-conforming, FHA, VA and USDA products. He may be reached by e-mail at [email protected]     
Published
Jul 18, 2014
PenFed CU Sees Record Annual Mortgage Lending Volume

PenFed Credit Union announced it's financial highlights from 2021 which includes record annual mortgage lending volume.

Industry News
Jan 21, 2022
Angel Oak Lending Platform Reveals Record-Setting 2021

Last year was a record-setting year for many companies in the mortgage lending space, especially for the Angel Oak lending platform that consists of Angel Oak Mortgage Solutions and Angel Oak Home Loans.

Non-QM
Jan 21, 2022
What Are The Biggest Deal-Breakers For Homebuyers?

The housing market is holding strong but that doesn't mean homebuyers don't have their fair share of deal-breakers when it comes to purchasing a home.

Analysis and Data
Jan 20, 2022
Popular Bank Names National Director Of Residential Lending

Popular Bank named Adam Dejak as its national director of residential lending for Popular Mortgage.

Industry News
Jan 20, 2022
Total Expert Appoints Gaydos As President

Former Talkdesk and SAP senior executive brings extensive cloud, go-to-market, sales, and operations experience.

Industry News
Jan 20, 2022
Sagent Appoints Thompson As Chief Product Officer

Founder of fintech managment consulting firm Consigliera will lead and expand product development.

Industry News
Jan 20, 2022