The mortgage and real estate markets are changing. You can survive this change, you can even thrive in it. Just make sure you aren’t making any of these tragic and most common loan officer mistakes…
You may not be able to change the direction of mortgage rates, convince the majority of renters that it’s a good time to buy a home and take out a loan, or even get those underwriters and insurers to see your common sense in approving applications. Fortunately, when the mortgage and housing market contracts there is plenty you can do as a loan officer, mortgage broker and business owner to control your destiny. Check out our full article on what to do when the mortgage market slows.
That starts with avoiding the blunders many of your predecessors have made and the pitfalls your competition is stepping into.
Pulling Back On Mortgage Marketing
Fear kicks in, the pipeline might start looking a little skinnier than last year. Reducing spend on marketing is only going to compound the problem. When you stop marketing you stop filling the pipeline. Eventually closings will dry up.
If anything you may want to be marketing harder to keep up loan application volumes. You may need to invest more in educating consumers on what’s happening and their best money and real estate moves. According to Google, you may need to get better at showing up more often and consistently as prospects advance and step back through their mortgage shopping and research journey. Be there when they open their email, hop on to Facebook, are browsing YouTube, are commuting, and when are actively Googling their options.
Doing Less, Asking For More
Nothing will destroy trust and relationships faster than offering less service and asking for more money. Banks have been notorious for this. If you start charging more, while delivering poorer service, and have to give inferior loan deals than were available last year, it is going to be a roadblock to converting more prospects. It will push them back on the fence. Or to the competition.
Interest rates may be up. The LTVs you can provide may drop. You might need to cover your overhead with fewer loans. Just make sure you are providing even better service to make up for it.
Not Investing in New Technology
Do be careful about spending on more hardware that may require more hard overhead. Yet, also look for affordable solutions that can help you stand out, win more customers, bring back past clients, and operate more efficiently.
If you are desperately strapped for marketing dollars, and can’t afford sizable PPC campaigns or direct mail, look for cost efficient ways to work your database through your CRM. Perhaps upgrading your mortgage CRM to help you send out surveys, email newsletters, SMS messages and make better calls. Then use those profits to invest in a better digital mortgage experience for new prospects.
Shedding the Wrong Talent
You can get frustrated when business isn’t going as well as you hoped and the stress level is up. That can make it tempting to fire those who make simple slip ups fast, and justify it by saying you are cutting costs. Remember, they are probably under the same pressure and are facing the same challenges you are.
If you’ve got team members that have been great and are talented, don’t let them go. The competition will be glad to snap them up. It is very hard and expensive to find good help. If the budget is that stretched, find new models to keep them.
Hand out better job titles. They cost you nothing, but can inspire your workers. If you can’t provide the same lead flow, then increase commission splits and have your loan officers do more of their own marketing. When trimming processing teams, make sure you are keeping those who are loyal and are planning to stay, versus those who have already been blasting out there resumes.
Failing to Scale Correctly the First Time
It is better to scale correctly the first time if you’ll be downsizing and making cuts. It can be painful. Though there is nothing that will cause more fear among the ranks and send your best talent searching for new gigs faster than ongoing cut backs.
Trim the fat once. Enough to absorb any more tightening in the market. Have a transparent conversation with your teams about it. Then get to work leaner and more profitably. Focus on a scalable model you can quickly expand as your business bounces back and extends into new areas.
Paying Vendors Slowly
This industry is notorious for paying people late and stretching out invoices on terms. Once you are behind, all it takes is one bad month for loan closings and you might not be able to dig yourself out of the hole and deep well of red ink.
If you lose access to the best vendors for title, appraisals, inspections, legal help, or processing, everything else will suffer. It’s going to be even harder to close loans and serve borrowers.
Strive to be different. Don’t order work from third parties unless you have the cash on hand to pay for it already. Pay faster than your competition. Make sure you are their best customer. It will pay off by giving you a great edge.
When business disruptions happen things can get heated in a mortgage office. The emails can stack up. Your voicemails can be full of frustrated and angry messages. You might not be able to fix everything. You may just want to disconnect your phone and hide under your desk.
If you let yourself get burned out, you might quit. Don’t do it. As much as you may feel you need to work harder than ever, be sure to take breaks.
Set a time that you’ll unplug every day. Guard your weekends carefully. Even take a vacation. This is the best time to do it. Not when your pipeline is overflowing with new applications. Chill out. Get focused. See the long game. Come back and deal with the mayhem and close more deals.
This is temporary. Better times are ahead if you can keep your cool, be objective and avoid these mistakes.