Refocusing Loan Officers On Relationships

Also, focus on your local markets and not national trends for success

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A.W. Pickell

The last few years have been really good for the mortgage lending industry. Anyone who got into the business in 2018 or 2019 found it to be a great time to be a mortgage loan officer. Rates were low, homes were selling like crazy, and the phones didn’t stop ringing. The new people who entered the business this year are finding a much different market.

In 2020 and 2021, it was about how much business could you close how quickly? Today, it’s about relationships. How new LOs manage their relationships will determine whether they succeed or fail.

Understanding The Potential

I was working with a couple of the loan officers I mentor and helping put their plans together for the next quarter and there was some concern that loan volumes would be falling so much from last year.

So, I asked if they knew how many loans were originated last year. They weren’t sure, but they knew volume would be down almost 50% this year. I asked if they knew that this year’s number would be. Again, uncertainty.

This is very common in the industry. Loan officers read the headlines, see how much the business is changing and immediately translate that into difficulties for their own businesses. The details get lost, but the fear, uncertainty and doubt remain.

I explained that we were still going to see about $2.5 trillion worth of business this year. They only needed to close five or six loans a month to be successful. That’s just 60 over the next 12 months. Suddenly, it didn’t seem so difficult to them, and it isn’t.

If the loan officer can focus on their own business and not the national trends, they’ll see that there is plenty of business in the market to allow them to be as successful as they want. As long as they have the right relationships, that is.

The relationships you need and don’t

Professional salespeople are managed by their numbers. How many prospects did they find? How many applications did they get into the system? How many did they close? So, it’s natural for them to think about relationships the same way and try to build them with everyone.

The truth is you don’t have to work with everyone to be a success in this business.

The truth is you don’t have to work with everyone to be a success in this business. Of course, it’s hard to think this way when you see loan volumes falling industry wide.

When I work with loan officers and talk to them about building the right relationships, I always advise them to seek out people they like, people who are like them. The way to find them is to be involved in things you like. That’s where you meet other people who are like you, who like the same things you do.

This could be almost any organization. It could be Rotary or a wine club. What my wife and I have recently picked up is Pickle Ball, of all things. It’s actually fun and we’re meeting people who like to have fun like we do. Who would these people go to if they needed a new home loan?

Loan officers often underestimate how effective these relationships are at bringing in new business.

Business referral relationships

In addition to this, there are people in the neighborhood who work in a handful of occupations that every loan officer should know.

Number one is real estate agents. The loan officer and the real estate agent should have one of the most symbiotic relationships there is out there. We are both trying to help people get into new homes.

But beyond that there are attorneys, accountants, insurance agents and financial planners. These professionals have all earned the trust of the people our industry serves, so it makes sense to build relationships with them. The business will continue to come through these partners for years to come.

I don’t originate today, spending my time consulting, but I still get calls from people I worked with five or even six years ago, who are asking for a new loan. Any loan officer getting into the business today can do the same thing.

Refocusing the loan officer’s attention on the relationships that matter to their business is the best way to overcome the fear, uncertainty and doubt that always come with a down market so they can achieve success in the year ahead.