I’ve Received My First MLO License. Now What?
Life likely seems surreal. After, what’s seemed like a lifetime of pre-licensing education, exam preparation, finally passing the NMLS National MLO Licensing Exam, gathering up all of your information, applying for your license, and waiting, the day has finally arrived. You’re now a licensed mortgage loan originator who has just been hired by your sponsor. After weeks of training, preparation, study, and stress, it’s finally all over. And the silence is deafening.
So what now? How do you transform all of that blood, sweat, and tears into the productive career you’ve so long envisioned? How do you find customers? What does building referral networks entail? How do you attract business? What do you do to become a trusted and respected member of the mortgage lending community? Oh Lord! You’ve just uncovered an entire new species of worry!
Ok. Hold on. Don’t panic. Breathe. I got you!
The path down which you’ll now need to travel begins with patience.
Now is When the Learning Begins
The brand new MLO’s first responsibility, and little beyond this, is to learn and train. That’s it. Nothing more. See? With those few words, I’ve quieted a lot of the “what nows?”
Just as a rookie police officer who graduates from the police academy must complete a six-month-to-one-year training regimen under the constant oversight of a field training officer (FTO), the MLO cannot be expected to jump into the patrol car, the day after becoming licensed, and patrol on his or her own.
Hopefully, you’ve landed a position with a company that properly values training and invests the time, money, and resources into affording their new hires the best opportunities to succeed. If your company does not offer a formal mentor program where the new loan originator shadows a seasoned MLO to learn the ropes, suggest to your manager that he or she assign you to someone. At least for two to three weeks.
Learn as much as you can about mortgage products, underwriting parameters, the documentation you will be using, and mortgage processing systems. Make it a point to get to know your processors and underwriters. Get involved in community organizations, especially those comprised of key players and referral sources. Author articles for industry publications. Maximize social media efforts and engagement. Create a podcast. Get creative. Think outside the box. Be flexible. Stand apart from your competition. Following these suggestions will drive you closer to success.
The Big Bucks Don’t Git Got Overnight
If you want success in the mortgage lending industry, you must be realistic with yourself. Yes, there is a tremendous income earning potential. But if you think that you’re going to be earning $110,000 within your first six months, you’re setting yourself up for a huge disappointment.
Like anything rewarding, the fruits of your labor take time to ripen. It’s important to enter this industry understanding that you may have to temporarily supplement your income through other endeavors while you learn, develop relationships, build trust with referral sources and customers, learn the processes, establish your routines, and hone your expertise. Although it’s possible for an MLO to earn over six figures in his or her first year originating, that is far more often the exception, not the norm.
Customers Don’t Always Come Through
I will never forget my first loan. Or so I thought. After becoming an originating mortgage professional, I spoke with seemingly countless prospective applicants without anything manifesting. I’m not going to lie. My frustration soared. And then it finally happened! A potential borrower, with whom I had had several conversations, called me one afternoon to advise me that he was ready to apply and would be calling me the very next day to do so. I was ecstatic, to say the least! I remember walking to the elevator with my supervisor on the way out of work that evening and sharing the good news with her. She smiled at me and said nothing more.
The following day the phone never rang. Over the next several days I made numerous attempts to contact this “borrower” only to receive his voicemail and leave messages that were never returned. The moral of this story is that nothing happens until it actually happens.
All throughout your career you will encounter potential customers who will assure you that you will be taking their applications. If you’re lucky, 65% of them will ultimately apply. Don’t take it personally. Simply understand that, just because someone tells you that they’re ready to move forward, does not guarantee that they will. This happens more commonly than you might think or want. After one or two unsuccessful attempts to catalyze someone who previously indicated their intent to act into acting, simply let go and move on. It’s nothing personal. It’s just part of the business. Accepting that this happens from the start will help you avoid unnecessary disappointment down the road.
People Smell Desperation
Why aren’t your referral sources calling you back? Why aren’t they giving you the referrals that they told you to expect? Why aren’t customers to whom you devote time structuring the deal-of-their-lifetime not moving forward? If you find yourself plagued by such annoyances, it’s time to stand back and take an objective look at yourself. People can smell desperation a mile away. And desperation is rarely appealing. Could you be impressing as desperate?
The ultimately-successful MLO never reveals that he or she is in dire need of closed loans. The successful MLO approaches every situation, whether it be a meeting with a potential referral source or with a customer, from the perspective that that individual needs them more than he or she needs that individual. You’ll know that you’ve mastered this type of impression without portraying yourself as cocky when your phone begins ringing constantly.
Rejection is Natural
If you expect to be a successful salesperson, you’ll have to know how to accept rejection. Rejection is an inherent part of any sales job. Ultimately, years down the road, you’ll hopefully have developed a reputation such that customers and referral sources are actively searching you out but, in the beginning, you must pay your dues.
Frequent rejection is never pleasant. Even the most seasoned sales professional can get burned out hearing “no” after “no “after “no.” The best way to avoid premature rejection burnout is to commit to 10 – 20 sales attempts every day. By limiting the amount of times when you can hear “no,” you’ve established a definitive end. Complete your 20 sales attempts. If you’re told “no” twenty times or leave 20 unreturned messages or send 20 unanswered e-mails, you’re done for the day. Pick it up again the next day all the while reminding yourself that every “no” received brings you one step closer to that coveted, “yes.” In the beginning, it’s said that you can expect one “yes” for every 100 “no’s.” So get cracking!
Set the Appropriate Expectations
Just as the quarterback directs the offense, you are the quarterback of every transaction that you originate. The customer needs you more than you need that customer. You would never tell your doctor how to treat you would you? Of course not! You go to the doctor to benefit from his or her expertise. Well, the borrower seeks out the MLO for the same reason.
Just as the doctor would never permit the patient to formulate the treatment plan, the MLO should not allow the customer to call the shots. Be straightforward from the start. And never cut corners just to make the process easier for the borrower upfront. For every corner initially cut, days get added to the transaction’s back end.
“I am going to do everything within my capabilities and expertise to get you the financing that you want and need. But, in order to do so, this is what I need from you. If you don’t come through with what I need from you, please understand that delays, inconveniences, increased costs, and the potential for loan declination are likely to result. Does that all make sense? Great! Please sign this document acknowledging that we discussed this.”
By insisting that the borrower has all of the appropriate documentation with him or her at application, by holding him or her accountable to quickly provide you with the things that the underwriter may need, your transactions will run smoothly, your customers will be happy, and the referrals will eventually seem endless.
Unique Relationships Are Golden
One of the most creative and important things that an MLO can do to propel his or her success to the next level is to align with MLO partners who offer loan products to which that MLO does not have direct access.
It’s your responsibility to know about all available loan products, even those that your company doesn’t offer, and to ultimately identify and describe the proper customer solution. Just because a doctor does not specialize in the treatment of a particular illness or injury does not give him or her the freedom to improperly treat that patient in order to get paid. A doctor is required to refer a patient to the most appropriate specialist should the patient’s condition warrant it.
Let’s say that you work for a company that does not offer VA loans. After meeting with your prospective borrower, you determine that the VA loan is the borrower’s best option. Your fiduciary duty to that customer is to advise him or her of the benefits of VA financing while ultimately recommending that that borrower find a loan officer who can offer that program. Yes, you’ll lose the transaction, but you’ll be honoring your legal obligation to act in the customer’s best interest.
By developing partnerships with loan professionals who offer products that you do not, and ideally who only offer products that you do not, you’ll increase your book of business through the referrals that that individual sends back to you in appreciation of all of the referrals that you send to him or her.
Sometimes the Square Peg Does Not Fit Into the Round Hole
I always find it frustrating when I encounter desperate loan originators doing everything that they can to find the perfect loan to offer the unemployed borrower with a 420 credit score. Although I profess that there is no such thing as an unqualified customer, only a currently-unqualified one, the successful MLO knows when to cut his or her losses. The bottom line is that not every loan is going to fund and not every borrower is going to qualify for home financing.
Although federal law prohibits a lender from discouraging someone from applying for a loan, the MLO can clearly describe loan qualification criteria while offering the opportunity to apply. In such a case, the MLO may alternatively opt to draft a plan for future qualification. Whether achieving it is realistic or not, there is always a path to success.
When confronted with a borrower who clearly does not qualify, always offer the opportunity to apply but make clear to him or her how his or her credentials differ from the loan’s qualifying criteria. Instead, the borrower may agree to allow you to develop a plan for him or her to overcome his or her obstacles in such a way that makes loan qualification a future reality. Follow up with this customer in three months. If he or she is actively following the plan, continue following up. If he or she is not, then wish him or her well and move on.
There Are Other Referral Sources Than Realtors
Most Realtors and real estate professionals actively avoid mortgage professionals. Imagine trying to perform your job while your e-mail is constantly exploding and your phone is blowing up by every mortgage originator within a 50 mile radius who wants your referrals.
Don’t get me wrong. Developing a few key partnerships with real estate professionals is essential. But why not focus on other low-hanging fruit?
Accountants, divorce attorneys, home contractors, and bridal consultants are some of the other professionals who can benefit from a partnership with a good mortgage professional.
Distance Yourself From the Unethical
Even with enhanced regulatory enforcement, you are guaranteed to encounter individuals who prefer to skirt the rules in the name of profit. Should you, at any time, encounter someone who thinks nothing of violating the rules, run! I recently encountered a mortgage loan originator who shared a story about a Realtor who she recently met who would only give referrals to mortgage professionals who paid her for those referrals. My response? “Here’s the CFPB’s whistleblower contact information. Please report this person.”
The successful MLO always abides by the rules and aligns with like-minded rule followers. One seemingly-trivial transgression can ultimately cost you your reputation, your career, your license, your money, and, perhaps even, your freedom. Is it worth it?
Stand Apart From Your Competition Through Niche Products
How successful could you imagine yourself becoming by being your area’s number one “go to” condo expert? Or second home guru? Or the person to see when a rehabilitation loan, government loan, or first-time homebuyer Community Lending program is needed?
Give borrowers and referral sources incentive to seek you out. There’s a reason why specialists often earn higher incomes than generalists.
You Must Believe in Yourself
Henry Ford said it best. “Whether you think you can or you can’t, you’re right.” Faith during the slow times is crucial. Getting up and moving forward, even by one step, when it’s the last thing that you might otherwise want to do is critical. You must be willing to pay your dues and faith will be your fuel source to making it through the trials and learning curves of newly-licensed mortgage professionalhood. Remember, you’re now working in an industry for which there will always be demand; regardless of the economy. People will always want to buy homes and most will need the financing to do so. The business will always be out there. The creative and ingenious will find it.
Just like a child learning to walk has to take a few tumbles, it’s all a part of the process. Be realistic with yourself. Believe in yourself. Approach everything that you do from the perspective of making a positive difference in someone else’s life, and I’ll be there to shake your hand when you cross that finish line.
