If we’ve learned anything from 2022 and 2023, even 2024, it is that they are not 2020 and 2021.
Volumes and margins have dropped, as have profits. The number of lenders and originators have dropped as well. And those originators, whether they are brokers, IMB loan officers (LOs), or bank and credit union LOs, have had to adapt to a shifting environment where they not only can’t sit at their desk, waiting for the phone to ring, but must go out and actively look for new business.
Seeking The Elusive Purchase Borrower
Many lenders have originators who are looking for leads in unconventional places. LOs are making the rounds at remodeling shows, as often builders may know of someone in need of financing before anyone else, or garden shows.
Some LOs teach classes at local community colleges and high schools to put their name in front of future homebuyers. Originators are contacting human resource staff at local companies, as often they will know of someone who has been recently hired and is searching for a home.
Originators need to focus on the future market and talk to borrowers in that way.
LOs tell buyers that they need to think about the long term, and not to bail out because rates are high now, because of course it will not last forever. You can probably find a house now at a lower price than you will be able to a year or 18 months from now. If someone has a house on the market at this time of year, with the holidays approaching, and with current market conditions, you can bet they are a real seller, and are likely to negotiate.
Rates are cyclical, and are expected to come down again. When they do, LOs tell their previous clients they can refi at a lower rate. And when their monthly payment goes down, it could be like getting a raise! When rates fall, there will probably be another frenzy to get in, and prices will be bid up.
If someone bought a home now, they will already be in the house when that happens and can reduce their payments though refinancing.
LOs should treat real estate agents as partners, and vice-versa. Real estate agents seek out LOs with good follow-up skills and a system in place that is predictable. How do you systematically keep in contact with leads that the agent provides the LO? How often do you contact them? Do you handle leads differently during the process of securing a loan? And those leads the agents give a loan officer, how does the LO learn that they are not ready today, but with your help, can be ready in 12 to 36 months?
Competition for the attention of real estate agents is intense. Loan officers are attending broker open houses, cozying up to agents, and asking for (or, in some cases, making an attempt at) business. Real estate agents look for LOs who are not merely transactional. They sit down with clients and educate them on the best products for their situation. They return calls and communicate throughout the transaction, keeping the agent updated.
Rates Aren’t Everything!
A good loan officer will know about insurance companies to contact, for example. Or, be able to offer buydown products, non-agency loans, teacher’s loans, doctor loans, etc.
Experienced loan officers know that good real estate agents like to be educated about the economy, interest rates, and the lending environment. MLOs will take the time to explain the differences between owner-occupied and investor products. They open the real estate agent’s eyes to new products, and are pragmatic so they will tell clients that they cannot beat their competitor’s products right now, so they should go with them. They continue to be informative, educational (but not pedantic), and a collaborator.
Looking Ahead To 2026
Some LOs may be suffering from burnout, and actually looking forward to some down time over the holidays and coasting.
Others, however, know that “the seeds they sow now” will yield something in the spring and stay busy. Those LOs are arranging sit-down meetings with potential buyers and new realtors to help them understand the mortgage process, products, and preapprove them. Those LOs will have a stack of buyers in the pipeline for the following year without caring when they might take the leap into home ownership.
Things are historically slow heading into the autumn and winter months, and with rates where they are, we can expect business to stay slow. Yet many lenders and originators spend this time training themselves on products, familiarizing themselves with their company’s software, staying in touch with previous clients, and continuing to improve as subject matter experts for future clients.
