I have an idea for a new soap opera. Please, Brad Andersohn, bring on the flip cam, and be my producer. The name of the new soap is "Romancing the Loan".
Stock is rising for mortgage brokers who KNOW HOW TO ROMANCE THE LOAN. In the past, very little emphasis was placed on these skills. Why? Because honestly, there were no skills required to close a loan except calcualting a debt to income ratio and matching it to the number the bank wanted.
No doc, low doc, what's up doc? Gimme a subprime, sub-slime, sublime loan, please.
Fund and games.
With so many other loan officers competing for business, the skill set that was naturally nurtured and emphasized in previous years was FINDING THE LOAN (not funding the loan). Hence, every day the average Joe came home from work and sorted through 10 pieces of mail from mortgage people proclaiming to have the lowest rates, or the lowest payments, and by the way? Don't you need some cash for a vacation, car, or remodel?
Has anyone else noticed that most of those mailings have disappeared?
Instead of focusing on reading tax returns, calculating income, and understanding basic lender guidelines, along with learning solid strategies that would get loans approved, everything was about marketing. Figuring everything else out was left to some well paid people we called processors, or some characters that have since disappeared from the drama: lender reps.
Dumb mistake. Bad move.
When it became clear in this little drama that closing a loan would require much more than casual flirting and a little bit of wink-wink, the fallout of mortgage brokers began. Some claimed it just wasn't FUN anymore. I guess FUN is when you spend the day addressing mailers?
With every sale precious, Realtors naturally have gravitated to loan officers who have learned the art of ROMANCING THE LOAN. There is a commission at stake here as well as a trusting buyer who has NO concept of how difficult it is to get financing in our current economic climate.
Is it better to pay the SKILLED LOAN OFFICER who can actually CLOSE THE LOAN, than pay less for someone who is still licking envelopes?
They say knowledge is POWER, and I cannot think of a more appropriate application of this than our industry today. It is not about who has the best marketing. It is not about who can network, who is related to you, or who did your loan in the past.
The cold hard harsh truth is this: closing ANY loan, no matter how "perfect" the scenario, requires a specific skill set that has nothing to do with marketing to borrowers or Realtors. The most successful mortgage broker in our office does zero marketing and Realtors flock to him.
If a loan officer is not equipped with the knowledge that it takes to market the loan TO THE LENDER, then your loan could be DOA.
The ones that will triumph in this drama (who are already emerging victorious) are the mortgage brokers who KNOW THEIR STUFF. Don't settle for someone who is hanging around waiting for things to change, and throwing spaghetti on the wall, hoping it will stick.
It probably won't.
Written by Janet Guilbault, California Mortgage Expert Based Out of the San Francisco Bay Area.
Confidential to FM: For always being the inspiration, and the thought leader in the office. Enjoy the oranges, which were a small price to pay.
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