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Why Do Loan Officers Play Musical Chairs?

Sales Training Makes Them Less Likely To Jump

Megan Marsh
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Megan Marsh
Loan Officer Musical Chairs

The Good Vibe Squad, a marketing agency for loan officers, shared in their blog that the average loan officer closes 18-25 loans per year.

That is 1.5 to 2 loans a month!

No wonder so many loan officers are playing musical chairs among mortgage companies! But it doesn’t have to be this way if you zero in on building a culture focused on sales activity, accountability, and prioritizing people’s needs.

As a former producing loan originator who was closing one loan per day, I don’t know how one loan per month is even possible if a loan officer is doing only 20% of what they need to do to get business.

This brings up the real question all mortgage company leaders and loan originators should be asking themselves:

“Are loan officers being taught, supported, and then held accountable to sales activity?

The key to growing and maintaining your mortgage origination business comes down to fundamental sales practices, something that is missing in many mortgage companies.

It seems as an industry, we bring young or new people into our organizations to “get business” (sell), teach them a little bit about mortgage stuff, the systems used, and then assume they know and are proficient at the life skills that have taken seasoned veterans years to establish. Skills such as:

  • How to connect & build rapport
  • How to make clients & referral partners feel heard
  • How to add value
  • How to control emotions
  • How to manage time
  • How to close the deal

The first six months are vital in setting the stage and determining if you are going to survive when starting out! Focus on actions that have a direct correlation to referrals and loan applications. For this reason alone, mortgage companies must have a laser focus during the first 90 days of new loan officer ramp up, on prospecting and sales activity.

Loan Officer Initial Success Path

Usually newcomers are brought in to mortgages one of the following ways:

1. You were hired to become a mortgage loan processor or LOA for a busy loan officer, which helped you get a foot in the door, but you were dying to become that loan officer. You finally took the leap and now are trying to become that loan officer, but bringing in business is something you aren’t quite sure how to do correctly and there is no guide!

2. You were presented with an opportunity where you were told you could make your own schedule, work from where you chose, and make six figures your first year, right?!? Riiiiigggghhhhhttttt!!! Now you are six months into this new career and you have closed only a few loans, and you are getting tired of ramen noodles. You cannot and will not ask mom and dad for help. They were the first to tell you that you are crazy for taking a fully commission-based job.

3. You worked your way through many positions at a local bank, and lending was where you excelled. You got a call from someone who recruited you and now you are working as a fully commission-based loan officer and business isn’t coming to you like it did at the bank. You need to figure some things out quick!

Before moving forward, I want to mention a few things to the group of you who aren’t newbies. That ship has sailed and you understand mortgage info and process, but you have been disappointed with your lack of success. You might be frustrated that your company isn’t giving you any leads.

If this is your reality, ask yourself the following questions to figure out if you are working at the right company, with the right resources and leaders, and ultimately are in the right line of work:

1. Does your company have regularly scheduled training and practice sessions on who and how to reach referral sources? Scripting? What sales activity is?

If they don’t, your problem starts here.

2. If they do, are you attending all of them? And then taking what you learned and putting it into practice? (and not just trying something once, but for 90 days at least. There is some self-accountability involved in this)

3. Does your company owner, sales manager, or another loan officer spend time with you each week, month, or quarter? Do they give you a hard time and hold you accountable?

4. Are you expected and held accountable to sales metrics and KPIs?

5. Are you provided tools or services that give you the WOW factor beyond just sending a bunch of numbers?

Wait a second. You thought you were becoming a mortgage expert, not a salesperson

Managers, leaders and mortgage company owners need to take a good hard look at how they introduce and prepare the role of the modern loan originator. There is always a big push to learn products and processes. Instead, there is a need to put a lot more thought and emphasis on the training and development of new team members, especially those entering into sales roles for the first time.

Yes, you are in sales. Loan originators fantasize about flexible schedules and big checks for advising first-time homebuyers and helping families build financial wealth. Both are byproducts of being able to sell yourself, but before you ever get to advise, you first need to build trust and get your phone ringing. This is sales and you need sales activities!

Help Your Loan Officers Close More Loans with Sales Activities

Styles Comparison

In 2020 when we onboarded our first 10 loan officers, my business was fortunate to have the guidance of Rene Rodriguez, CEO of Volentum. He showed us what so many mortgage companies neglect and helped us outline the road to success.

Since then we have built training that is centered around learning how to sell. This means that the topics, activities, and accountability tracking are centered around the things that are most important:

• Building an initial database of people who know, like & trust you.

• Communication & scripting techniques.

• Finding ways to add value (beyond the normal “I have great rates & service” line).

• Holding new salespeople accountable to six things and six things only:

  • Prospecting;
  • Appointments;
  • Presentations;
  • Closing;
  • Aftercare, and
  • Repeat.

I am sure that there are many of you scratching your heads wondering why we would cover such topics when a loan officer has so much to learn and soak in. The systems alone make their heads spin and then figuring out all the rules that are hidden in the thousands of pages of Fannie & Freddie guidelines, leaves no room for sales stuff.

If you have developed any sort of training, first pat yourself on the back for being 10 steps ahead of much of the industry. Then go and review it to see if it looks like most mortgage company training:

The first few weeks of training typically covers:

  • Systems & technology used on the job;
  • Products and loan types;
  • The Loan Process, and
  • People who will be working on your loans.

Also, review how training is structured & taught:

  • Training? My company said there is no training, just on-the-job learning.
  • Monkey see, monkey do. See this button in this LOS system, you enter this here and click there and then this screen will bring you over here, which is where you submit the request, that goes to the lock desk. They will send you a PDF, which notifies you to go back into that screen and … you don’t catch half of what is said or done.
  • One week of onsite training with a workbook and videos.

Where is the SALES training?

Since your earnings potential is only limited by the number of loans you can close, you need to figure out the best ways to generate more leads and earn the trust of the clients and their friends.

Some of the best strategies we teach our new sales team members:

  • Pick a niche to focus on and become known for.
  • Pair new hires with an experienced mentor.
  • Creating a Sales Playbook with scripts and ideas for prospecting.
  • Discipline and accountability through tracking activity and accountability meetings.
  • Gamification — come up with a way to make it fun.
Prospecting Tracker

Strategies for Adding Sales Team Members Who Succeed

As the owner of a medium-size mortgage brokerage, we have onboarded several new and experienced loan officers during the past few years. Figuring out what works and what has ended in failure continues to be our teacher in an industry that has no clear cut guidelines and rules.

The things we have found work really well are the following:

1. Hire the right candidates. We all have worked at companies where they will hire everyone and anyone to try and build a pipeline, but that is a disservice to the LO and is costly to you. The average person is going to experience sales-call reluctance and it is your job to coach them through that.

a. Depend on personality & sales assessments

There are many out there and finding the right ones are key to assessments helping you make the right business decisions. When you find the assessments that work, you need to create rules for what your team looks for, for each position, and not deviate based on your gut feelings. Here are a few assessments we have tried:

• DISC Assessment;

• SPQ Assessment, and

• Strength Finders.

2. Bring new loan officers into the business by first training them in the key roles that will give them on-the job-learning experience. This includes:

a. Loan Processing;

b. Loan Closing, and

c. LOA — Loan Officer Assistant.

This doesn’t mean you need to have them spend a year in each role. It can be as much as three months in each core position before moving into full-time origination.

You will have a much more well-rounded loan originator who understands and respects your operations team after their rotation. The employee will also have the knowledge and be able to focus on selling when they make the transition into sales.

3. Have a sales process & plan in place for new loan officers. Training new loan officers is time consuming and expensive, but if done correctly will return 10 times the investment. Create a plan with milestones, check-ins, accountability tracking, scripts, and a way to hold them accountable to sales activity.

Make sure they don’t get tangled up in “wanting to know everything” before being willing to sell. Mortgage knowledge is a deep pool that you can drown in and make you never focus on the activities needed to get business in the door.

4. Lean on the resources & partners you work with that can help save you time.

a. Mortgage insurance companies.

b. Wholesale lenders (if you are a broker).

c. Tools like Leadpops and Mortgage Coach have resources, videos, and information that will teach your loan officers how to sell with their services.

5. Build two types of sales positions: one with more hand holding that provides leads and opportunities at a lower pay structure and another for those that want to be fully commission-based and have the confidence to take off right out of the gates.

a. Inside Sales Team. For the loan officers who might take a little longer to develop their sales skills. They usually are great at customer service and connecting with your company’s incoming leads.

b. Outside Sales Team. For the more experienced loan officers and new hires who are the perfect profile fit for a super seller. They are self starters who are driven by money and accomplishment.

The heart of the matter (and the reason for this article) is many loan officers jump into a mortgage career with the wrong expectations, followed by disappointing results. They blame the company or team and begin looking for another company to work for.

It wasn’t until I had been originating mortgages for over 10 years, that I came to the understanding I sold something. Yes, I originated mortgages, but I sold myself. I sold my business model, a mortgage brokerage, and I sold the benefits that a combination of the two could provide the real estate agents and clients they were working with.

I didn’t go out and sell FHA mortgages. I sold bank managers on the fact that if they couldn’t help their customers, they would go to another bank and move all their accounts and investments, without being presented another option. I was the perfect option because I didn’t want any checking or savings accounts. I could help them be the hero!

I didn’t go out and sell renovation loans. I educated real estate agents on saving time and money when a homebuyer found a perfect home in the neighborhood of their dreams, but it lacked the three-car garage and updated kitchen they had to have. They could still consider buying this home with a niche product.

Therefore, if you want to be an organization or team that sets people up for success, retains your loan officers and helps them close more than 18-24 loans a year, it starts with identifying and looking within your company’s core foundation around who you are and what you do for your people, specifically your sales people.

Once you can do this, it’s time to take action!

This article was originally published in the Mortgage Women Magazine March 2022 issue.
Megan Marsh
Megan Marsh,
Owner, Keystone Mortgage Alliance

Megan Marsh is owner of Keystone Alliance Mortgage

Published on
Mar 31, 2022
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