Ten Things a Loan Officer Must Master
The purpose is to know what it will take for a Loan Officer to become an expert and differentiate themselves from the competition.
1. Learn the real estate process. I know of Loan Officers who say they don't like working with Real Estate Agents and still others who have never bought a home. You cannot afford to ignore what can be anywhere from twenty-five to seventy-five percent of the market in a given year. You are in the real estate industry and agents are a major player. Your refinance clients will purchase a home sometime in the future and an agent will be involved. You need to learn how to deal with the right agents and how to control the sales situation. Not only should you play in this market-you should take a real estate licensing class. Not to sell real estate but to understand what agents do. In other words-you must become an expert in not only your field, but in your targets' field as well.
2. Learn the three economic reasons to own a home. It is truly amazing to me that both Loan Officers and Real Estate Agents are not experts calculating and explaining the economic benefits of homeownership-leverage, rental equivalency and inflation protection.
3. Learn the economics of your rate sheet. This is another way you can distinguish a bit player from an expert. Do they know why one program costs more than another? Do they understand spreads? Most Loan Officers are reduced to general statements such as-it costs more because of risk. It is not always because of risk. And sometimes this statement sounds and is ridiculous.
4. Learn important economic concepts of real estate finance. We are not selling a bunch of loan programs. We are selling financial instruments. We need to understand how these instruments can be used to achieve financial goals. Concepts as the efficacy of different levels of prepayment and debt consolidation come to mind at this juncture. How can you call yourself a trusted advisor without mastering these?
5. Learn how to compare loan programs based upon future scenarios-including ARMs vs. fixed, points vs.no points, one loan vs. two loans, negative amortization and more. For example, do you know the three major scenarios to describe the possible future patterns of interest rates and what they mean? You need to understand the historical case, the worst case and FIAR case scenarios and how to work them into comparisons for your clients.
6. Learn how to underwrite as well as process a loan. A Loan Officer should not just learn how to process-they need to learn how to underwrite. How can you take control of service levels if every time you send a loan to a underwriter it is as if you have sent it into a black hole? You should know more than the underwriter knows with the goal of underwriting each file BEFORE it goes to the underwriter. And that includes reviewing the appraisal.
7. Learn how to control your customers and the process. If you want to deliver great service with less stress in your life, you must take control of the process. If you don't you will start with an imperfect product and an imperfect product will result in an imperfect process. How can you exceed your customer's expectations if you can't even deliver adequate service? You should know more than the underwriter knows with the goal of underwriting each file BEFORE it goes to the underwriter.
8. Learn how to market from within the loan process. Taking control of the process puts you in a position to avoid costly and inefficient marketing methods such as cold calling or purchasing leads. Do not expect a referral base to start appearing after a few years of going in the wrong direction. Every time you leave the process to market you take yourself further away from a successful business model. Experts learn where the opportunities are. What the foundation model does is help open your eyes so you don't miss these opportunities. When you are running around out of control and then marketing all over the place you will miss so many of these opportunities that are right under your nose.
9. Learn what is right and what is not. If you want to lead, you can't do so moving in the wrong direction or coming from the wrong side of the line. You may close a loan and make more money tomorrow or next week-but you will never leave the treadmill because you will not qualify to work with leaders. Leaders understand the importance of relationships. Rate shoppers do not. I believe that much of the fraud that occurs in this industry, including predatory lending, occurs because we have not clearly drawn the line for loan officers.
10. Become an expert in sales and marketing. What sounds like good advice such as "you have to ask for the business" and "you must overcome objections" actually can be counter-productive. For example, the secret to getting referrals is not asking-it is positioning yourself to ask, This is why so many of us find asking so uncomfortable. If asking were the secret, I believe many more loan officers would be out there asking instead of saying, "oh, I know I should be..."
11. In addition-LOAN OFFICERS MUST PRACTICE RETURNING CALLS!!! (thanks karen for # 11) Practice what you preach. When communicating to your clients-when you say you will call them back-PLEASE CALL them BACK!!!
12. Hire an Experienced Notary Signing Agent (thanks shannon for # 12) It's always good to know who your appointed closing agent is that will sit in for a signing-especially if their knowledgeable and experienced with great customer service. It makes things go smoothly. (my escrow officer "CP" is ALWAYS GREAT at what he does-he's AWESOME-i wouldn't trust anybody else)
When you are running around out of control and then marketing all over the place you will miss so many of these opportunities that are right there.
Even one step beyond being an expert in sales and marketing within your industry, you must become an expert in sales and marketing within the industry of your target. Loan officer actually should not be attending "loan officer" marketing seminars. They should be attending "real estate agent" marketing seminars.
If you try positioning yourself as an expert you will achieve what many keep searching for. Your efforts will help you get closer to your long-term goals of a satisfaction within your career. Those who know that they can deliver more value not only are in a great position to ask for the business, those seeking counsel approach them every day.
Loan officers hear questions every day such as "what is your rate?" Experts hear questions such as "what do you recommend I do?" How would you like to spend the rest of your career, answering the first question every day or the second question? Unfortunately we are so busy trying to chase down the next deal and becoming competent, most of us never reach that position. You must become an expert in sales and marketing within the industry of your target.