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As they say in New England, if you don’t like the weather, just wait a few minutes. Similarly, it seems as if our industry is changing by the hour, as well. Then again, there are some things that remain constant in our particular arena, primarily the loan officer position. And though our industry has undergone drastic change, the key fundamental practice of a loan officer is today what it was 20 years ago: Focusing on a purchase business. Sure, the ways to capture business have evolved over the years, but the fundamentals remain the same. And after all, we’ve endured throughout the past 15 years, I still believe the loan officer position is one of the best careers around. Projections look good for a strong purchase market and rather than panicking about the unexpected blip of refinances going away, it’s a great way to embrace the purchases.
The more things change the more they stay the same
Twenty-five years ago, the average size loan amount was approximately $155,000. Today, that number sits at $295,000.Twenty-five years ago, a loan officer who produced $12 million per year was considered a steady producer. Those production numbers still hold true today. That’s almost 50 percent fewer units. To think, loan officers didn’t have the luxury of technology, assistants or marketing departments back then. From this perspective, it should be much easier to become a solid producer and capture purchase business today. Production of $12 million annually should be a layup!
Know your market
In many markets, it’s cheaper to own than it is to rent right now. Many prospective homeowners don’t think about how much money they have cumulatively spent on rent when they are considering owning a home.
It is a relationship business
I know “self-serve” is the latest hot issue. I can also remember back in 2003 when someone asked me what I was going to do when a machine replaced me, as consumers would be getting their loans through ATMs. It’s evident that the market is changing and online mortgage management will continue to be a growing factor, especially for the next-generation of homebuyers. However, there will be a large number of consumers who realize their home is one of the largest investments they’ll ever make and will, more likely than not, want to work with someone who is an expert in the process.
You often get what you pay for
How many times do you hear loan officers crying that they need lower rates? I’ve listened to countless loan officers blurt out rates before they even ask a single question. Now, more than ever, getting a clearer picture of your borrowers is more important than throwing out a generic rate. Loan officers that spend the time getting to know a borrower’s situation tend to recommend the better rates and programs, which, in turn, alleviates push back on rates and cultivates a stronger relationship. Getting a loan to the closing table on time and providing good service is imperative. Loan officers must recognize that they’re more likely to be rewarded with clients who want to work with them as opposed to ones who think they’re going through a drive-thru window for one of the most important purchases they’ll ever make.
Underwriting starts with the loan officer
You cannot expect to establish relationships and proliferate business if you don’t do a great job on a consistent basis. A good loan officer that desires to grow their business should never “hope” a loan gets approved. Hope is never a good plan in this industry. Not only will loans get approved faster with fewer headaches, but also your operations staff will likely be more willing to work on your files. When it’s 4:00 p.m. on a Friday and an underwriter has time to review one more file before calling it a day, do you think they want the well-documented file or the disaster that was thrown together with duct tape, dental floss and prayers? Of course, we all have loans that are submitted in “hopes” that underwriting agrees with our thought process, but loan officers have a lot more credibility when they are diligent in their originations as opposed to order-takers. Many years ago, I was given the advice to treat my loan files as if I were a presenting a case with one shot in front of a judge. Sadly, there are a lot of innocent people who suffer bad outcomes because they simply had lousy attorneys. Be an ardent advocate for your clients’ best interests and you won’t have to work so hard to create new business.
Loans breed loans
Ever notice how top performers are always busy in any market? I don’t care if it is purchase, refinance, or generally slow times. Loan officers who do a great job and garner strong relationships get more business by simply doing a better job than the rest of the competition. When people are experiencing good service they are happy to talk about it. When they are experiencing bad service they feel compelled to talk about it. On which side of the coin do you want to be?
Be a trusted advisor to the real estate community
There no need to deliver donuts or host luncheons to build relationships with real estate agents. Be the expert they can confidently call for guidance when needed. Even when it’s not your transaction, always present yourself as the expert. There’s the distinct possibility that a real estate agent may have clients dealing with an unfamiliar lender and may want reassurance. Don’t take that as an opportunity to “steal a deal.” Instead, do the right thing and it will surely come back to you tenfold.
There are always refinances in purchase markets
If you ignore them, someone else will be happy to take them off your hands. There are countless loan officers who “don’t like dealing with refinances.” That’s something I never quite fully understood. A loan is a loan and a client is a client. The more you have, the more you will continue to accumulate. It doesn’t matter where rates are, there will always be people who need to refinance because of life’s circumstances. If you stay in touch with your clients on a regular basis, you enable yourself to be there for them when such issues arise.
Technology is your friend
I wish we had CRM’s and other great inventions way back when. It’s easier than ever to stay in front of your clients, and most of them appreciate hearing from you every now and again. It takes minimal effort and the rewards are exponential.
The role of the loan officer has certainly evolved from taking a handwritten 1003 to licensed individuals working with ever-changing technologies, guidelines and compliance requirements. It’s not an easy job, not by any stretch of the imagination. It seemed a lot easier in 2005 and look what happened. Loan officers should be rejoicing in this purchase market where knowledge and expertise is once again valued. Successful loan officers can still make it to see their kid’s soccer games while earning a great living. If you aren’t doing everything you should be doing, the concept isn’t rocket science and you can start instituting change today. Most people get fired for not doing a good job. Loan officers can often get away with mediocrity, yet it would only take a few simple steps, such as the ones mentioned above, to stand out as one of the best. With “self-serve” getting all the attention, it might be a good time for some self-assessment to start taking those necessary steps to go from good to great.
Sarah Valentini is a leading mortgage professional with 20 years of experience in residential and commercial lending. In 1999, she launched radius financial group inc., where she serves today as the company’s president and principal. Under Sarah’s leadership, radius has grown from a small, local lender to one of New England’s leading, private mortgage banks.
This article originally appeared in the May 2016 print edition of National Mortgage Professional Magazine.