It’s clear you need a team to close more loans – that’s just how it works. Think of yourself as the rainmaker who circulates in your community and gets loans in the door. From there, your team needs to handle the details. There are two primary operating models for such teams; I like to call them the Assembly Line Model and the Pod Model.
The Assembly Line Model means that, when a lead comes into your team, someone takes the application – usually you, the loan officer. From there, that file gets handed off to a team member who orders out the file, then hands it over to another team member to print the documents, which the client
signs. Then these signed documents are passed on to another person, and someone after that, until the loan is closed.
In other words, it’s borrowing the concept of efficiency from manufacturing – think Henry Ford assembly line. There are a lot of different people doing individual things. Each does what they do and passes it down the line to the next ‘specialist’. Now, I have to say I’ve never cared for this model. Why? Well, first, because it’s based on a product assembly model which is very different than what it takes to serve people well. It’s incredibly inefficient for a services-based business, and it costs more than it’s worth agonizing over. It’s also hard to scale when each team member is a specialist (what if that person is out and something happens on that file?).
Top all that off with the fact that, if a loan doesn’t close on time, we don’t know who to look at for what potential oversight or problem affected the file because there are too many hands on it. You don’t know what part of your system is compromised or broken. The picture in my mind is the file becomes a ‘hot potato’ where each person wants to get their part done and passed down the line. There aren’t any checks on quality at each step, and nobody is responsible for overseeing the whole file.
However, with the Pod Model, you know exactly where to look for issues because one person shoulders a lot of the responsibility. The loan officer takes the application, sells the deal, and then hands it off to someone who becomes the ‘crew chief’ of that file. That person oversees the details, even if they are delegated, so there is consistency and clarity about the status of that file. So the ‘pod’ within the Pod Model is that the file has its own ecosystem (think of an egg, where everything is self-contained). This pod / file is monitored, maintained and accounted for by one loan officer assistant, regardless of how many hands touch that file.
There are two methods by which the Pod Model can function: Lead to Closing and Contract to Closing.
You, the loan officer, are in charge of making the phone ring and bringing in new business. Once that phone call comes in, your receptionist answers it and directs your client to your loan officer assistant (LOA), who is now in charge of that client and file. Your assistant (LOA) will take that application and get that information back to you so you can call that client back and sell the deal. This is the Lead to Closing method and, on average, we’ve found that LOAs can handle about eight files monthly this way.
In the Contract to Closing method, you – the loan officer – takes your clients’ applications, meets with your clients and sells the deals, then hands the deals off to your assistant. Using this method, we’ve found that LOAs can handle about 12 files per month. Once you get anything higher than that, it’s a good idea to hire a second (or third) LOA to keep up with the new clients coming in your business door.
The good news is that it’s much easier to spot a problem within the Pod Model than it is with the Assembly Line Model. For example, if you have three LOAs, and each of them receives a lead as they come in (the first goes to LOA1, the second to LOA2, the third to LOA3, the fourth to LOA1, and so on), they’ll have the same amount of leads and closings. In my company, we close about 25% of all our leads, so if each of our LOAs has about 40 leads, they should have around 10 closings per month. If one LOA has 40 leads and has only closed four loans, we have a problem we can see and fix quickly.
In my opinion, I believe the Pod Model is a much better way to form a team. It’s far easier to spot a mistake and correct it than when using the Assembly Line Model and allows everyone in your team to learn the ropes of each step. If someone goes on vacation, there is coverage within the team to pick up the slack because they’ve been trained in multiple areas – unlike the Assembly Model, where people are only tasked and trained in one area.
If you have experience with either model, I’d love to read about it in a comment below. Does your experience echo mine or have you learned how to do something cool with the Assembly Model? Share your tips on managing a team so we can all learn from you because that’s how we roll here. Thanks in advance.
Carl White, Chief Officer of Coolness
Article Originally Posted on LinkedIn
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