The Many Excuses of Loan Officers

In the real estate industry, where 80% of the business is done by 20% of the players (my guess is the numbers are more skewed toward the top 10% doing the lion's share), there are a few realities I've learned over the years when it comes to the differences among top producers and average or low level sales people. The differences lie mostly in attitude, and the vast sea of excuses that sales people have to fall back on. Within the companies I've been a part of, I've seen many of them first hand. Sales people that have come and gone, and with them their excuses as they move from one company...to the next...to the next. All the while, the companies they work for house several top producers and sales people doing great - and with them lie their unique mindset.

Here are some of the more common excuses, and how I personally feel they should be dealt with:

The excuse: There's not enough inventory!

The reality: You don't have enough market share!

You're not getting your ass kicked by a lack of inventory, you're getting your ass kicked by your competition. In a tight market, survival of the fittest takes hold. If you're not surviving, you're not the fittest. I've always said my ultimate goal as a sales person would never be to get 100% market share. All I want is 1% of the market share IN EVERY MARKET I WORK. Just 1 out of 100 Realtors sending me their buyers. 1 out of every 100 potential borrowers or prospects finding me. Could I survive like that in a town of 500? Probably not. I'd have to look at neighboring communities, or perhaps the nearest metro area with populations in at least the 10's of thousands. Your options are really simple and really limited - you either increase your market share where you are, or you expand your market.

The excuse: Rates are too high!

The reality: You don't understand what's important

I'm going to preface this with the obvious: the rates you're offering have to be competitive. You can't offer people 6.5% when everyone else is offering 5%. But if you're losing deals over .125 on rate or a couple hundred dollars in cost, your rates don't matter. Let me repeat that for the people in the back: RATES. DON'T. MATTER.

I just locked a deal for a couple where my rate was .625% higher than my competition's offer. On a fairly large loan amount. How? I recognized what was important. To them, having some money in the bank after closing on their home was important. How did I learn this? I asked questions. I explained the economic climate and the fact that it's likely they'll have a refinance opportunity within 24 months, so paying a higher rate and saving a few thousand dollars at closing may be more prudent. I laid out their options, educated them, and let them make the decision that was right for them. The better loan had a higher rate. That's the case for a lot of people. But too many loan officers don't know how to be an adviser - they know how to quote a rate, pat the borrower on the back and say "y'all come back now when you find a house and have a contract".

Most people aren't going to have their mortgage for more than 3 years from today. Moves, refinance opportunity, the need for cash out - there are tons of variables, but the average mortgage lifespan isn't 30 years - STOP SELLING A 30 YEAR VALUE FOR A 5 YEAR PRODUCT. Your rates. don't. matter. (as long as you're competitive)

The excuse: Ops staff are killing me! (or, ops is holding up my deals)

The reality: You don't know how to package a loan and/or communicate

Like the rate excuse, there is some reality sprinkled in here - underwriters can blow it and condition for things they don't need. Clerical staff can miss things. Processors can think they requested something when they haven't. This happens even more in a low rate refi frenzy where ops teams get overwhelmed quickly by a sudden influx of volume that hiring can't keep up with (companies have 2, very simple but imperfect options: operate understaffed while trying to bring on the right new hires to lighten the load, or hire quickly and hope people can be trained up to be the right people, which also takes time and could involve some bad hires). But for an experienced LO, these things should be expected - it's how you communicate and handle the issues that determines how big a deal this is. And this is the exception, not the rule.

The rule is, you don't know how to package a file. You send something in incomplete, not fully structured, or worst of all, something that has no chance of being approved. As a loan officer, it's your job to establish a workflow with your processing/origination team to make your loans flow seamlessly through ops. If things are crazy with volume, communicate that to your partners and clients (Spoiler alert, every other lender is experiencing the same thing at the same time, so it's not a unique issue). Underpromise and overdeliver. If your underwriting times are 24 hours, let everyone know you'll have a response within 72 hours. Then when you get an approval in 36 hours, you're not behind, you're ahead. Ops will never be perfect. As sales people, I can confidently say sales will never even be close to perfect. Build room for errors and delays into your processes (BUT, ensure ops errors are the exception and not the rule - if they're consistently wrong or making mistakes, it may be time to talk with the ops manager)

The excuse: We don't have a local presence!

The reality: You're not strong enough to build your business.

Fact: In the history of every business that's ever existed, the day before they opened, they didn't have a local presence. Before McDonald's opened, it didn't have a local presence and no one knew what the hell the golden arches were. "But John, Real Estate is local!", you say? Yes, it is (somewhat), but mortgages are not. I work in 15 states (and counting). I have real estate agents that trust me with their clients from 3000 miles away, and clients from around the country writing me 5-star reviews. You don't need a local presence, local corporate, whatever. You need to be good at what you do, and know how to bring value to the people you work with. And you have to (this is the part where most people get lost) be willing to put in the work to get people to know you. The face time. The follow up. The delivery of what you promise. You know.....sales stuff.

This will become more true as technology and the internet become the places people go to start their home buying and refinancing process. You don't need a local office. You need to be good enough to build your brand. If people don't know who you are, SHOW THEM.

The excuse: Them! Them! Them!

The reality: You! You! YOU!

The industry is littered with 'jumpers'. Looking at the NMLS history of many LOs, you can see they've moved from company....to company....to company. Usually it's a "new year, new company" kind of history (my guess is whenever the draw money runs out, the LO runs out). Talking with these people, the story is the same - they leave because ops were bad. They leave because there wasn't marketing support. Rates sucked. It's always them, them, them. But each company on their long list houses top producers who are happy, cranking out loans, and they've stayed put for 4, 5, even 10 years. Why?

Because the reality is a good loan officer with a good loan system in place can function effectively and make a lot of money at nearly any company in nearly any climate. A loan officer that's disorganized, flying by the seat of their pants, and wants everyone to do all the work for them can't survive in most environments. If you're not a call center loan officer, then you are your own small business, regardless of the fact that you get a W2 and benefits. That means you're responsible for your work flow, your systems, your scripts, and your schedule. For better, and for worse. I repeat, YOU. ARE. RESPONSIBLE. If you've bounced around to more than 3 companies in the past 3 years, you need to take a look in the mirror - are you a good loan officer? Are you a good business person? Are you a good sales person? Do you have drive/ambition/motivation/self-respect? All the things a top producer needs. If not, I'd suggest changing you, not your employer.

This isn't a rip on Loan Officers, but a reality check for anyone struggling and bouncing from company to company. Stability is one of the more important aspects of creating a flourishing business - moving from company to company is a bad look to your clients, your referral partners, and it takes it's toll on you, too (how can you grow a business if you're constantly learning new systems and working in new processes? The loan process needs to be similar to an assembly line - imagine an assembly line where you come in each day and have to learn new machinery before you can start working?).

Take a look at your processes, at your systems, at your scripting, and at your effort. Look in the mirror and see if there are things that need to change there. And after you do that, if you find the place you're calling home still isn't a good fit, give me a call. Nearly 4 years here, I can confidently say MasonMac has been a great place to build a career - the customer reviews, the increased volume, and the company growth is the evidence that we're doing a lot of things right, and our high level LOs stay here for a long, long time.