The New Generation of Loan Officers

The 2008 financial crisis was second worst behind the Great Depression in the 1930s. It affected not only the U.S. but countries worldwide, making stocks crash and calling for contentious government bailouts.

Following the bailouts, the government put into effect heaving regulations that has made it more difficult to obtain a mortgage. It has helped but also has hindered the process.

How have these new mortgage loan standards affected loan officer jobs?

Much like various other businesses, the mortgage loan originator industry will be hiring millennials, who will comprise 40 percent of the labor force by 2020. The challenge is, a small amount of millennials find the industry attractive as a job.

Additionally, the truth is millenials are typically not as concerned with securing financing on a home. This is relative to past generations. Studies have shown that millennials are looking for distinct experiences, exceptional support services, and powerful marketing. Similar to how automobile dealers have made car financing commercials somewhat exciting, so too can the mortgage lenders if they want to attract that audience.

Businesses overall are applying more of their marketing efforts toward the younger generation, utilizing the items that pull them in. Millennials prefer to have options at their disposal. The older traditional methods are a turn-off. As a result, mortgage companies are providing mobile applications and efficient software to draw in more millennials.

Residential lending companies aren’t just trying to persuade millennials into applying for home loans—they’re hoping to get them to become loan officers. As discussed, a career as a loan officer may certainly be attractive to a good amount of millennials. While it may not be the new job at an exciting start-up tech company, it features many of the important aspects millennials want in their careers, like flexibility and the chance to rise in the ranks.

Based on data from the Mortgage Bankers Association, the average age of a loan officer is 54. As soon as these mortgage originators get close to the age of retirement, younger faces will need to fill in the vacancies.

Despite what millennials think about mortgage loans now, they may need them in the years to come. According to a 2015 study by Mortgage Bankers Association, roughly 16 million households will be ready to make a move into their own home by 2024. That demand for housing will come from millennials, baby boomers, Hispanics, African-Americans, and Asian-Americans. Logically more licensed loan originators are needed and it’s likely that, those will be millennials.

What You Need to Do to Become Successful as a Loan Originator

The following are some tried and true tasks that mortgage originators need to implement to achieve long term success in the residential lending industry.

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Consistent Business Tips for Loan Officers

Starting your career as a new loan originator will require some consistent lead sources. Many experienced mortgage originators will tell you hands-down, their best source for business is from Realtors.

There are two simple reasons why that is:

Realtors deal with people every day who need your services!
Realtors alone don’t usually earn a commission unless their client is approved for financing. The exception are when they represent all-cash buyers which happens a lot in California and high-cost areas in the country.vlo-672x3721

What many loan originators have been doing to work with Realtors is to establish and cultivate a great relationship. The following are some strategies where some Realtors will respond and some will not respond. The thing is you only need to have 5 to 10 good relationships to keep you busy and earning a comfortable living every month.

1. Schedule a Meeting with the Agent at their Office
Nothing can replace face to face contact. Quality relationships develop more in PERSON than they through the email, text messages or the phone.
Trust is built when someone see your face, knows your voice, gets a sense of who you really are in person.  Don’t be fearful, too much of a salesperson. Just be yourself,friendly, and wanting to know them as a person and what their goals are.

2. Once you feel there is a mutual friendship, ask them to have a quick coffee. The objective here is to make a calm and friendly conversation and then you ask, “Is there anyway I can help you sell more homes?”
The agent will usually share a not so good experience and you can find a way to solve it. Maybe there’s an open house you can sit on to generate buyer leads for them.

3. Do Informational Workshops for those in your Realtor network

Have you noticed ares where Realtors are not well informed about a particular loan product? Organize a workshop and see if you can go over it with agents in nearby Real Estate Offices. Organize the meeting, with snacks, and be sure to consider some Q&A afterwards. Subject areas could be: Co-borrowers, Credit Scores, Allowable down payment funds, Self-employed borrower income and deductions… each one of these can help Realtors be more knowledgeable when the topic of income arises and multiple buyers.

Top 10 Traits of a Successful Loan Officer

Improve Your Pipeline By Doing the Following Below :

  1. Have a strategy!
    Is your pipeline where you want it to be? If not, know what you must do immediately to improve that by the end of the week. Schedule your day, week and month! Do not do something without preparation! Medical doctors and Airplane pilots don’t do this. Be the ultimate professional and be prepared and know very well what you have to do.home loan products
  2. Understand your Products and Guidelines Inside-out!
    How can you sell a loan to someone if you don’t really know your products? You should have a product in mind after you talk qualify your customers and pull their credit. Do not continue to take the 1003 loan application and pull credit if you know they don’t qualify. You should not waste people’s time and money not knowing your products.
  1. Raise Your Goals!
    A great number of Loan Officers do not succeed because of setting their personal production levels low. Why give yourself low limits?   If you don’t ever see yourself closing 10 loans, then how are you going to get there? If your goal is to close 3 or 4, then you will not attain the top production honors. Set your production level higher than everyone else!
  1. Don’t be scared to give bad news!
    The fact is that this industry has good and bad news for consumers. Too many times Loan Officers work on problem files too long. This is the huge mistake because it creates a lot of excessive time working on “problem files”. When you make that unwanted call, be definitive about the decision! The earlier you do it, the faster you can move on to next deal.
  1. Provide Great Service!
    Return phone calls immediately to your clients! Regularly call your customer during the loan process just to let them that you are handling things. Stay consistent on a daily basis and provide the customer service required to receive referrals down the road!

6   Drive & Determination
Top producing loan officers are always asking for business, and “no” just means “not yet” to them. They don’t view themselves failing; rather, what they offered wasn’t perceived right. If the Realtor doesn’t give them business, they feel they have not shown a good deal of value. If the client chooses some other lender, the loan officer analyzes what he or she needs to do to get a desired result next time. Competitiveness, drive, ambition and a healthy self-image are what counts.

  1. Product Discipline
    Don’t try to be offer all types of loans to all consumers. You want to deliver great service and offer the best borrowing experience for the clients, so trying to do one local down payment assistance program loan every year will never make you an expert. The best originators would never work on a loan they can’t originate 8-10 times a month, which likely eliminates these type of loans. They simply refer out loans they don’t shine in.

8. They Have Proven Systems and Disciplines
The best originators adhere to a strictly outlined sales process and a sales funnel to keep clients coming in their system. There have clearly laid out requirements and systems to maintain high quality files so the customer experience is familiar and known. The loan officer’s goal is to originate loans that are going to be clear to close on the first submission.

These LO’s don’t have stacks of post it-notes, or 40 to 50 separate papers of client notes. They manage a database or CRM software for their contacts. To maximize every possible opportunity, there is a follow-up strategy. Just by never neglecting an opportunity, some loan officers have added 2 loans each month to their average annual production.

  1. Accountability!
    Challenges and problems are your own to conquer! Be resilient! There’s no excuse to fail when you dropped the ball. Do not blame it all on the loan processors or underwriters for your failures!
  1. Ask for Referrals
    Top originators don’t have problems asking past clients if they know anyone else that may need to refinance or buy a home? The question should not be asked until the loan officer provides a great customer experience.

2 Huge Mistakes Mortgage Professionals are Making

Mistake #1: Conducting Business as Usual Like the Old Days

A big mistake that lenders make is with their compliance in originating loans. Many companies that need to be allotting time and staff to remain compliant are lax. Be certain that the enforcement division at the CFPB is not.

1st-lo-marketing-mistakes-300x180We are living in an era when communications coming from lenders can be determined as an offer to provide financing, with a simple tweet or post on social media.

Although the majority of mortgage loan originators (MLOs) in your company have the borrower best interests in mind when they send out emails, promotional flyers, or texts selling your products, MLOs generally do not have the legal expertise to be sure these communications are compliant with the CFPB.

Why the fuss? Just look search the mortgage industry news to learn about the significant fines, penalties, and charges assessed by Dodd-Frank’s provision known as the Unfair, Deceptive, or Abusive Acts or Practices Act . Most of the industry blindly thinks they are fully compliant. It is far from the truth.

Mistake #2: Resisting Change Due to Potential Decline

Many managers & VP fear their MLOs will pushback if they enact restrictive measures and there will an exodus of originators opting for companies that are not so rigid. In that scenario, their competitors will grow stronger and production will fall.

There’s no replacement for leadership, especially when it comes to compliance. MLOs and branch managers need to be partners of compliance, not enemies. The choice to resist change can be critical for a business.

Small Tips to Generate More Referrals

Ask for Referrals Continuously
A large number of realtors and loan officer tend to not ask, or plainly forget. Studies have shown that the best time to do this was prior to the loan or home purchase closing. The key here is while the licensed individual was still actively involved with the client and had their complete trust and attention.

You need to at all times believe that your clients would be delighted to refer someone to you. However, don’t expect or ask a client if their transaction with you was very stressful.Ask your circle of influence

Make it easy for past clients to refer you. This can be solved by giving them:

  • Your brochures that lets people briefly know about what you do and why they should pick you.
  • Instructions about how to go to Yelp.com and other review sites to input a review
  • Your business card, with a request on the back to refer a friend if they ever need financing.

Incorporate Referrals into Agreements
Many client relationship start with an agreement. Realtors have buyer and seller exclusive or non-exclusive agreements and depending in the state you are in, there’s a mortgage broker agreement. The objective of this document is to define the expectations, fees, and any other measure ahead of time, so there is not any misunderstanding going forward.

So, although you are making a request for them to provide you with a referral, there is not a stipulation it must be given at that moment. A really good way to do this is to add the following phrasing like this:

“If XYZ company meets or surpasses a minimum of 75% of the described goals by the end of the second quarter, Client John Smith will provide at least three qualified people looking to buy or refinance.”

This method makes certain that your client has the chance to see how well you deliver on your word firsthand before they agree to providing you with a referral.

Exceed Expectations
This is similar the written agreement and is fairly easy to do. Although, there is no guarantee, when you exceed someone’s expectations in a large transaction, you have earned their trust and they will certainly send people your way if you simply ask. Keep them pleasantly surprised as you over-deliver on a promise.

Picking a Strategy and Sticking with It for Success

Ensure Your Website is Mobile Friendly
Were you aware that two-thirds of all emails are opened on a phone or tablet? How about the fact that mobile website traffic makes up around 30 percent of visits? As you can imagine,  having a mobile website definitely is important. Any real estate professional will greatly benefit by having a responsive designed website, especially in terms of creating a professional image. mobile frinedly design

As an owner of a responsive website , it means that no matter what screen size a user is on, the content and design will be displayed properly so it can be read on any device. The navigation menu on smaller screens also adjusts to become finger-friendly. Always test each web page on multiple PCs, tablets, and phones.  Additionally, any emails you send out need to be properly made and displayed to understand on any email platform.

Obtain Customer Reviews
People search for reviews about local restaurants on Yelp. Before making a purchase on Amazon, they read customer feedback and ask their friends for guidance on big purchases. To summarize, people want to see other people’s experience on things that concern spending money. Being in real estate industry where people make some of the biggest purchases of their life, reviews can certainly help a mortgage company or individual loan originator gain some extra clients with a good experience.

A good way to capture these highly coveted reviews is to set up a strategy to ask your customers for feedback (and  too) just prior to the closing date on a loan. As soon as you know the date of closing, get in touch with your client face-to-face and by email to ask them for a review on a website where you can be found.

The optimal time to do this is just prior to closing or in a few weeks afterwards. The reason is they still have good thoughts of working with you. So, the goal is to make it as easy as possible for them to do this. Create a special post closing “thank you email” guide them to link(s) where you want them to leave a review for you.

Valuable Nugget: Send a gift card after they write a review.  Be sure that you’re doing this as a means to saying thanks and not as an incentive.

Characteristics of Top Producing Loan Originators

A very successful loan originator shares some traits that he links to his ongoing success:

One needs to be self-motivated, extremely competitive, and maintain high energy. In essence, don’t have “low energy” which real estate billionaire Donald Trump points out as well. There will be ups and down so you can’t let problems bring you down and lose your composure. You have to remain dedicated to your goal.

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To be successful in this career needs to be your passion and not treated like a part-time job. In fact, HUD does not like FHA mortgage originators who have another job in the real estate industry no matter what field ( HUD Handbook 4060.1 Chapter 2: Section 2-9).

Full, Part-Time and Outside Employment. A mortgagee may employ staff full time or part time (less than the normal 40 hour work week). They may have other employment including self-employment. However, such outside employment may not be in mortgage lending, real estate, or a related field. Direct endorsement underwriters are included in this provision.”

You need to be aware of loan product guidelines, and compliance regulations, because you want to be an expert in the field so your clients (and their friends) can use you again and again.

You will always be an average mortgage originator and not a top producer if you are not a disciplined person. A top producer will focus on generating new business and not on paperwork or documents for loans in process. There is a reason the industry has processors and loan assistants and that is to handle that part of the business.

Clocking in just five hours a day of low energy and not meeting with referral partners is a recipe for failure. During business the focus should be growing new business.

Potential Motivators

If a mortgage originator is in an environment that gives them challenges: a company with numerous opportunities to flourish, to grow, to emerge as one of the best. Quite simply, a place with many opportunity which is what America is all about. Grow your career and profession with a mortgage banker and broker to take your business to the next level.

Keys to a Prosperous Career as a Mortgage Originator

Mortgage originators, often called loan officers, have to employ a variety of strategies to keep their loan production flowing monthly as well as create beneficial relationships. Associating yourself with licensed real estate specialists, business professionals, former clients, your circle of friends, and prospective borrowers utilizing marketing and promotional strategies are crucial if you wish to succeed in this profession

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Establish Relationships
Make an appointment to visit brokers and realtors in their offices, introduce yourself and hand out leaflets often. Flyers should feature a quick outline of the mortgage products that you offer or distinct loan programs, along the lines of “100 Percent Financing.” Go to real estate events, conferences, seminars,  and regular meetings; find out where these events happen from your local real estate organization. Become a member of local groups, organizations and associations; build up a referral network with other like-minded professionals. Connect with other professionals by becoming a member of professional groups like the local Building Industry Association, Chamber of Commerce, and Municipal Rental Organizations.

Give Out Valuable Information
Organize a weekly or convenient seminar or class for new homebuyers, realtors, homebuilders, title agents and new loan officers; educate them on the fundamentals of home financing and credit. Inform them about the significance of appraisals, what’s needed anytime you’re applying for a mortgage and simple tips to comprehend the transaction from start to finish. Create a newsletter for your referral base as well as clients and prospective clients. Keep it short and simple with just one to two pages, and incorporate a few popular areas of interest, an question and answer area, and something for the family. Subject matter can range from school, family holidays, and recipe ideas.

Don’t Forget to Ask for Referrals
Include the phrase “I Love Referrals” on all marketing materials you prepare and send out. It’s important to put it in your newsletters and flyers and on the back of your business cards and brochures. If time permits, join your local church, sports, or arts organization. Create relationships with other members and keep your business cards on hand to give out at a moment’s notice. Another important thing to do is send out a card and thank-you gift to past clients. Basic closing gifts can be plants, flowers, chocolates, gifts, or even VISA/Mastercard gift and retail store cards. And like the other materials, place the slogan “I Love Referrals inside the card.

How Lenders and Originators Can Become More Successful

The headline news that may have rattled the feathers of mortgage industry professionals.

– Feb 3, 2016 – Wells Fargo is laying off 87 additional mortgage workers in Raleigh.

– Sept, 2015 was that Wells Fargo laid off 182 mortgage originators in Raleigh, North Carolina.

– Just two years in August 2013, Wells Fargo let go of 763 home mortgage employees.

In order to not jump around so much in the volatile mortgage industry , you may want to carve out your own destiny by managing your own branch under a solid mortgage company regardless of the dynamics in the economy. In addition, you want to stay ahead of the competition and understand the trends.

TRENDS
In 2016, the Mortgage Bankers Association (MBA) expects year-over-year home purchases to increase by 10%. By knowing this, there are lots of ways for that buyer’s transaction to fall out. As a mortgage expert, you need to have some type of technology to assure that does not happen and lose successful closings.

INTERNET PRESENCE
Another big trend is that lenders, not real estate agents, are increasingly becoming the first person to speak with when it comes to shopping for a home, and lots of home buyers are locating their lenders on the internet. While having real estate referral partners is still very important, the simple fact is that an increasing number of borrowers are applying for and getting loan approvals online, a trend that is only going to grow in the future.

QUICK TO ADAPT
Lenders typically sell “fast response” times to borrowers. However, the truth is many lenders don’t understand what “fast” today actually means. Calling back a borrower’s by phone or email in just a few hours might have been great in 2005. Not so anymore.

Millennials, people age 34 and younger, are one of the largest groups of homebuyers. Their idea of waiting a few hours is not acceptable so they go with convenience and responsiveness. If it takes a lender an hour or longer to respond to a prospective buyer who’s a millenial, he or she could have already visited 5-10 other websites, and filled out a 1003 application and is ready to make an offer.

The solutions is not let leads sit in your email for hours or worse, days. People understand they have options. So, as a lender, you need to be there when they call or inquire online.

FLEXIBILITY
Lenders need to be make it convenient with how they offer their services. Due to advancements in mobile technology, people and businesses communicate completely different from a decade ago. Millenials and most adults have embraced technology prefer their method of communication over phone calls, voice mails, or fax. Your prospect may only text you which comes to your email and you may never get their actual voice until closing. The key here is to be flexible.