Six Steps to Mortgage Loan Originator Success

A police officer graduates from the police academy on Friday.  How comfortable would you be with that officer entering a patrol vehicle and patrolling your town, by himself, on the following Monday?  Probably not too comfortable, right?  No rookie police officer would ever be allowed to assume patrol duties, on his or her own, right out of the academy.  That would, in all probability, prove disastrous.  The police officer’s real training begins after he or she graduates from the police academy.  Rookie police officers must go through extensive field training, partnered with a seasoned training officer, for often up to a year before being allowed to independently protect and serve.

On a, perhaps, more relatable level, imagine you’re a seasoned mortgage loan originator who’s regularly pursued by newly-licensed real estate agents, all wanting you to refer your buyer-borrowers to them.  Would you honestly feel comfortable referring your valued customers to a professional of such importance who has little-to-no experience other than having earned a license to practice real estate?

I regularly find myself shaking my head at the seemingly-endless postings I encounter over social media where brand new mortgage loan originators are desperately searching for ways to secure Realtor referrals.  And every time I encounter such a posting, I imagine this loan originator’s mortgage industry tenure to be short-lived, at best.

Let me make this clear.  Any mortgage loan originator who victoriously emerges from the NMLS exam realistically expecting to earn six figures in his or her first year is, quite frankly, acting the fool!  Now please don’t get me wrong.  I am not trying to discourage, disillusion, or burst anyone’s bubble.  Successful loan originators can and do earn well over six figures in the mortgage loan origination business.  But, the next time you encounter such a loan originator, please ask him what the secrets to his success were.  The answers that you receive will generally be the same.  Knowledge, patience, dedication, and service.

New mortgage loan originators who endlessly chase Realtors will find themselves disillusioned faster than a hunter on a snipe hunt.  Few Realtors will entrust such important matters as their clients’ financing to someone who they barely know or don’t know at all … especially if that person is freshly licensed.  And can you blame them?

“I know!” you confidently declare.  “I won’t focus on Realtors.  I’ll just buy mortgage leads from the countless lead providers who incessantly contact me soliciting business!”  Wrong!  More times than not, buying mortgage leads is a complete waste of your time and money.  Don’t fall for clever marketing schemes full of worthless promises and reckless assurances.  Buying mortgage leads rarely works.  Even if the leads that you buy are of people seeking home financing, by the time the leads arrive and you actually contact their subjects (if you’re even able to get through to them at all), they’ve either committed to someone else or they’re grossly unqualified.  By the way, there are definite benefits to working with those who are unqualified.  I’ll get to those shortly.

If pursuing Realtors right out of the gate and buying leads aren’t good options, how can a new mortgage loan originator actually become successful?  I’m sure glad that you asked!

As I previously emphasized, anyone entering the mortgage loan originations industry must enter it guided by the appropriate expectations.  Even though you might currently be desperate for money, you can’t make earnings happen any faster than they’re naturally going to occur.  Therefore, there’s no sense in acting desperate.  Plus, customers and referral sources can smell desperation a mile away.

Many new loan originators work at part-time jobs to supplement their income while building their mortgage origination business.  And yes, as a mortgage loan originator, you’re a business owner … even if you’re employed by a mortgage lender or broker.

The following six steps will help you embark upon the right track to mortgage loan origination success.

Step 1 – Strive to Understand … Not Listen

Just like the rookie police officer fresh out of the police academy, your first days on the job as a licensed mortgage loan originator are not to originate loans.  They’re to learn.  You must know products, product parameters, processes, and solutions.  When you go to see your doctor because you’re feeling sick, does your doctor simply greet you, write you a prescription, and walk out?  No!  At least not if she wants to retain her medical license.  The doctor has to take the time to thoroughly identify your ailment, accurately diagnose it, and prescribe the applicable and appropriate course of treatment.  In order to do this, the doctor must be familiar with what the various treatment options are and how they work.  And she must accurately understand what’s ailing you.

There’s a difference between hearing someone and understanding their issues and concerns.  There’s a definitive reason why they’re meeting with you and not someone else.  Recognize and appreciate the honor in that.  Yes, they’re most likely in need of mortgage financing but it’s up to you to accurately understand their wants as well as their needs in order to thoroughly identify and help them to reach their goals.  To do this, you must empathize with their circumstances instead of simply listening to what they say.  And empathy requires understanding well beyond hearing.

Step 2 – Product Knowledge

Imagine someone visiting their doctor because of a persistent headache.  The doctor enters the exam room, hears that they have a headache, prescribes them aspirin, and leaves.  What if the headache’s cause is something more serious?

No self-respecting physician who wants to keep his or her medical license would ever prescribe something without understanding the underlying problem.  As the mortgage doctor, you have the same responsibility.

Dozens of mortgage programs exist that will all finance homes.  But these various loan types all cater to different needs and circumstances.  Once you thoroughly understand your client’s wants and needs, your time has come to offer appropriate solutions.  In order to do this, you must be familiar with all of the available mortgage programs that could help this client.  And, by “all,” I mean just that.  Even the products that you do not personally offer.

Would a doctor ever prescribe the wrong course of treatment to a patient when he does not specialize in that patient’s illness or injury simply to get paid?  Only if he craved a malpractice suit!  Not only is referring your customer to other providers the right thing to do when their wants and needs are best met by a product that you do not offer, you could also find yourself accused of violating your fiduciary responsibility to that customer if you didn’t.  Therefore, in order to ensure that you always match the customer with the appropriate mortgage product, plan to spend the first few months of your career learning and familiarizing yourself with all available mortgage programs.

Once you’ve mastered all available programs, you’ll want to learn how to recognize when the appropriate course of action is forgoing the transaction and referring the borrower to someone else who can, more appropriately, help them.  Establish referral relationships with loan originators at other companies who originate the products that you do not (especially when those loan originators only originate those particular products).  Doing this can prove an enormous boost to your business.  Afterall, who do you think will get the referrals when that loan originator’s clients need a product that they don’t originate but you do?

Step 3 – Differ From the Competition

“I offer the best products!”  “I provide the best service!”  Everyone makes those same tired claims.  In today’s tightly-competitive market, there is no room for poor service.  Failing to provide quality service, even once, could destroy your reputation and your business.

The bottom line is to never tell something to someone simply because it’s what they want to hear.  Never promise what you can’t deliver.  Always come through with what you say you’re going to do.  Always follow-up as promised (and, if you can’t, be certain to have someone else follow-up with them to explain why you can’t).  Never leave a customer or referral source hanging.  And always under-promise while overdelivering.

Will Rogers is alleged to have declared, “You never get a second chance to make a first impression.”  I encourage you to take that to heart.  In fact, consider posting that somewhere in your immediate work environment to remind you, daily, of the importance of following through with what you’ve promised.  Lastly, always remember that it’s far easier to recover from immediate disappointment than it is to recover from disappointment incurred after a prolonged period of excited anticipation.

Step 4 – The Currently Unqualified

There is no such thing as an unqualified borrower.  There is only the borrower who is not currently qualified.  Do you realize how many loan originators miss out on endless business opportunities simply by “throwing away” unqualified customers?  Can you recognize how short-sighted this is?  Long-term is the key to success in this business, baby!

Whenever you encounter someone who is not currently qualified, take the time to help them understand what qualifying entails.  Even if their circumstances render financing completely unrealistic at that time, at least advise them of what they would need to do to eventually become qualified.  Create a plan for them to follow.  Provide them with the blueprints for success.  And then, once you’ve done that, follow up with them three months later to assess how they’re doing.  If they’ve been following your advice, you’re just about guaranteed a customer when they’re finally ready.  Schedule another three-month follow-up.  No, this doesn’t provide instant results.  But building a business takes time and there’s no other way around that.

Even if it takes you a year for currently-unqualified borrowers to become qualified, once they finally do, you will have a consistent pipeline of people with whom you started working a year prior.  And they will be far more likely to refer their friends and family to you than to the others who simply discarded them at first.  If, however, when checking in with them three months later you discover that they haven’t followed your advice, ask them if there is anyone else they know who might be able to benefit from your services, let them know that you’re there for them when things change, wish them well, and move on.

Regardless of whether they’re willing or able to follow the advice and path to success that you’ve mapped out for them, they will always remember you because, unlike all of the other professionals who didn’t recognize their worth and value and who cast them aside without a second thought, you treated them as people, with genuine care, and with respect.  And acting like that goes a long way in this business.

Step 5 – Create Your Own Destiny

What do you say when you’re asked what you do for a living?  The next time this happens, try replying, “I make peoples’ dreams come true!”  Boom!  Now they’re actively engaged.

Realtors and mortgage leads are far from the only sources of business.  Everyone who you meet, even in the grocery store line, is a potential customer or referral source.  Creativity is endless and, as such, so are your opportunities for generating new business.  Think outside of the box.  Look differently at circumstances that you would never typically consider to be business-generation opportunities.  Do this and I guarantee you’ll uncover and generate new business.

Step 6- Set Boundaries

The average rookie loan originator gives up and leaves the industry in less than a year.  Why?  Because they burn out.  Customer service is critical.  But providing solid customer service does not mean placing yourself at everyone’s disposal 24/7/365.  Yes, you need to be available at key times when your borrowers and referral sources are most active – weekends, evenings, and, of course, during the weekday.  But there is nothing wrong with establishing boundaries and sticking to them.

People tend to want immediate gratification and will typically reach for a yard when offered an inch.  Expecting you to be available for them whenever and as often as they want is not fair to you, your business, and will most likely lead to burnout.  Successful loan originators are not desperate for business.  Without being cocky, they approach their business from the perspective that their valued customers and referral sources need them more than they need their valued customers and referral sources.  How long would your doctor tolerate you calling her at 5:30 a.m. on a Saturday morning?  Do this, even once, and she’ll drop you like it’s hot.  If you want that particular doctor’s expertise, then you’ll need to play by her rules.  Sure, there are lots of other doctors on whom you could spend your money.  But, for every patient that she loses because she refuses to compromise her boundaries, there are three others waiting to secure appointments with her.

Become a top name in the industry.  Build your stellar reputation.  Know your stuff.  And help many.  Always honor your boundaries.  Otherwise, you’ll find yourself in the pile of mortgage originator “has beens” before you’re even able to mouth the words, “negative amortization.”

For specific, creative, and proven tips and strategies for building a successful mortgage loan originations business in challenging markets, grab your copy of The Mortgage 101 Boot Camp” at https://www.lulu.com/en/us/shop/rich-leffler/the-mortgage-101-boot-camp/paperback/product-14mym5w5.html?page=1&pageSize=4.