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7 Habits of Highly Effective Mortgage Bankers

By
Mortgage and Lending with Agent Mastermind NMLS # 160983

Have you ever wondered why some loan originators are wildly successful and others fail
miserably? Over my 14+ years in the real estate and mortgage industries, I’ve seen some meteoritic rises and some cringe-worthy crashes. Everyone has the same 24 hours, and many had access to the same resources. It was a head-scratcher.

It wasn’t until after reading a report by Corky Watts and Joe Garrett entitled “Seven Habits of Highly Ineffective Mortgage Bankers” that I decided to take a hard look at how these same principles could be applied to loan originators and not just organizations.

So, for the past four years, I set out on a mission to identify what made some originators so successful. After a ton of research, I’m finally ready to reveal the seven common habits found in the most highly effective mortgage bankers.

Here’s a set of strategies you could personalize and incorporate into your normal routine. Implementing these habits and strategies can grow your business, expand your network, and enhance the quality of your life. Really. Let’s dive in.

Habit #1: Create a Business Plan and a Budget

SUCCESS #1

Do you have a written business plan?

We conducted a survey and found a direct correlation between written business plans and success.

Here’s the twist. In “up” markets, everyone does great, even those without a business plan. But what happened when a market shifted or experienced a downturn. You guessed it. Those without a business plan fail right along with the market.

Why?

You can’t expect to create a solid business plan out of totally random activities, or throwing spaghetti on the wall to see what sticks.

On the contrary, it takes rolling up your sleeves to set up a framework and budget. But of course, that’s not all. You also must operate within that framework and budget. It’s not enough to have a business plan tucked away in your file cabinet.

Successful performers don’t tie their success to market conditions. Instead, they understand that a nearly religious adherence to their budget and business plan kept them afloat no matter what the market did

Takeaway: Write your business plan and review it at least quarterly. Also, edit it regularly as market conditions dictated.

Habit #2: Get Focused on the One Thing

Focused #2

Here’s the thing: You’re not going to be able to be all things to all people. So, why even try? We all know originators who haphazardly label themselves as Reverse Mortgage “Specialists,” 203k “Pioneers,” and VA “Enthusiasts” without even knowing how any of these mortgages actually work. It’s all an attempt to fit every possible need of every possible customer who they stumble across.

In our research, we found that this “Jack of all trades but master at none” mentality created surprisingly negative outcomes, mainly these two:

  • It decreased client referrals
  • It also decreased referral partner relationships

Why?

Trying to do too much actually increases poor performance. Instead, the best mortgage bankers hone in on one area and become an expert in one loan program or product. The most successful don’t accept all the work that comes their way. Rather, they refer out a loan if they feel someone else in their office (or network) is better suited to handle the deal.

Takeaway: Focus on what you are passionate about to the exclusion of all else.

Habit #3: Leverage Outside Experts

Coach #3

Effective mortgage bankers use an outside business coach. We’re not talking about fringe here, either. In our research, the vast majority use a professional business coach.

So, you may be wondering, Why should I pay for someone else to tell me what to do? Is it really all that helpful?

I’ll answer your last question first: Yes, it is extremely helpful.

A business coach can provide a long list of help, including:

  • Helps you establish your goals
  • Supports you through the process
  • Helps you align your behavior with your goals
  • Advises you if you go astray
  • Provides a sounding board
  • Enforces accountability

That’s just for starters. We found that, among the top performers, accountability scored very high on the benefits list of hiring a business coach.

Now to answer your other question on why you should pay someone else– think of it as more of an investment than a cost. You’re investing in your business by doing everything possible to make it succeed. A business coach is a smart start.

Takeaway: A business coach can help you become a top performer by improving your processes. Like we discussed earlier, you can’t do it all.

Habit #4: Know Your Numbers

Reports #4

If I asked you, could you quickly recite what percentage of your business came from referral sources? And then could you define which referral sources?

Here’s the one thing that every single high performer we researched did: they knew their numbers. Backwards and forwards. Each one could easily produce current and accurate reports concerning their business. Impressive.

Do you know the answer to any of the following:

  • Your average loan size
  • Total monthly, quarterly, and annual closed volume
  • The percentage of government vs. conventional loans
  • The number of units closed

All of the top performers knew. Most of the lower performers did not. The difference between the two could not be more glaring. We were shocked by the lower performers’ failure to present any valuable data.

Takeaway: Without proper reports and statistical data, you’re not running a business, you simply have a job.

Habit #5: Don’t Focus Only On Volume

Focus on volume #5

Here’s something that surprised us: the most effective mortgage bankers don’t focus on volume. That’s not to say that volume isn’t important, but rather it’s not a guarantee of success.

Success relies on getting profitable loans, not just getting a large amount of loans. We note many times that the highest income earners closed a smaller dollar volume than the other group.

In our conversations, here’s what we heard from top performers: “Cheap service is seldom great and great service is seldom cheap.”

And here’s what we heard from the other group: “I will take any loan, even if I have to cut it to the bone– I have to make a quota.”

Not surprisingly, the low performing group rarely ever received referrals from their clients. These types of clients aren’t interested in building relationships or referring others– they’re just focused on price. And, if you’re playing in that field, the volume will matter more than anything else.

Takeaway: Instead of focusing on volume, focus on providing excellent service and forging relationships with your clients as a result.

Habit #6: Understand the Technology that Supports Your Business

Technology #6

How tech-savvy are you? In our research, we discovered that most (although not all) top performers engaged in the technologies that produced results for their business.

So what technologies are we talking about here? It’s everything from the LOS system, the CRM system, social media outlets, and reporting systems. Most top performers can operate these technologies on their own. Although most top performers had assistants who were mainly responsible for working within these technologies, the top performer also knew how each system worked.

We found that 95% of the top group embraced systematized marketing, software generating reports, and the proper use of their loan origination software to avoid costly mistakes.

Going back to not doing it all, the top performer created a team (or, at least, an assistant) to operate the technology. However, the top performer could do the work in a pinch, if necessary.

On the other hand, under performers had self-defeating thoughts like:

  • Our software stinks, that one of the reasons I am doing poorly
  • No one ever got a loan from social media
  • Sending out useless e-mails is a waste of time

This mindset is so pervasive in low performers, it’s almost funny– if it wasn’t so sad.

Takeaway: Technology isn’t going away, folks. In fact, it’s becoming an inescapable fact of life, so it’s best to figure out how to work within it to create a smart business that serves your clients.

Habit #7: Be Positive

Be positive #7

One trait truly set the two groups apart. Care to make a guess on what it was? That’s right– positivity. Here’s how the highly effective group approached their businesses:

  • They saw opportunities instead of challenges
  • They were passionate about their product
  • They could communicate why they were in business

These top performers were likable because positivity is contagious.

On the other hand, lower performers were difficult to be around, for real. The constantly complained and criticized themselves and everyone else. Everything was someone else’s fault. They took almost no responsibility.

The successes of one group and the failures of the other came as no surprise.

Takeaway: Your mindset will undoubtedly affect your outcome. As the saying goes, “If you want to soar with eagles, you can’t hang around turkeys all day.” The culture and the company you keep matters, but so does your outlook. What do you say to yourself and others about your business?

Final Thoughts

I hope you use this guide to understand what separates the best from the almost. Remember, it’s not too late to become a highly effective mortgage banker. Instead of only focusing on the deal or the transaction, remember that experience and relationships matter.

It all starts with creating a plan and implementing that plan with focus and positivity. What you do matters and sometimes how you do it matters even more.

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 Scott Hudspeth, Agent Mastermind | T: 269-217-4481 | Email: scott@scotthudspeth.com | Website: Scott Hudspeth |MI NMLS # 160983 |

 

 

 

 

 
 

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