Loan Officer Coaching

Anytime I hear “stop begging for business” or “stop chasing business” or “stop chasing Realtors” I know that 1 of two things are true, and maybe both, or either

1. They are getting ready to sell me some magic fairy dust on how I can make sales by doing nothing, or..

2. They are a bad salesperson. 

Let me explain…

I was talking with an LO at an event and he said he didn’t want to beg for business.  I asked him what does begging look like.  He said, you know, asking somebody for a referral, them not sending you any, then asking them again for a referral.

Does McDonalds advertise to you once and then never again.  Does Ford or Chevy show you one of their cars one time on one ad, then never again?

They know that they have to offer you a new car when you need one.  They just don’t know when you need it.

When we ask for referrals, we need to ask when something has gone wrong with their current relationship. 

It’s been my experience that sometimes this “something wrong” can be something as simple as their current loan officer not asking for the business and taking everything for granted. 

We just don’t know when that moment of opportunity is going to exist with that particular agent, so we ask for the business often.

Asking for business; asking for referrals isn’t begging.  That’s salesmanship.  That’s what sales people do, or at least the good ones. 

Again… good sales people think selling is a good thing.  Bad sales people think sales is a bad thing.

Now if the reason I don’t want to ask for the business is because all their loans close late, or they have no help and they’re already working till 9pm every night, well, those things need to be fixed first.

You see, if I know that somebody is better off working with me, than it is likely with most of my competitors, I’ve always thought it’s my moral obligation to offer them my services because I’m helping them.

I put it in my mind that if I don’t ask for the business, don’t ask for the referral, then that home buyer is going to be using another lender, and with that lender closing on time, well, all bets are off. 

Perhaps that other lender will not close on time, causing stress to that family, perhaps the deal will fall through because a backup contract comes into play now, and they lose their dream home… all this because the loan officer that lost the deal simply didn’t ask for the business to help them avoid working with a less capable lender. 

It’s our moral obligation to ask for the business. 

Begging is on your hands and knees with your face at that ankles pleading as if for your life. 
Asking for business with every conversation is just good salesmanship that is practiced by top producers and it is not to be confused with “begging”….   Trust me, any time you hear “begging for business”, hold on to your wallet.

If you need help with scripting, just let me know.  I got your back, and I’ll help you for free.

We’ve all heard an LO saying with great pride, “90% of my closings are purchase deals and not refi’s…” like that’s some badge of honor…

… in reality, THAT IS A HUGE MISTAKE!!!

Now, I get it, the reason so many want to use that as their victory chant is because what they are really saying is “whether rates go up or down, people still buy houses and my mortgage business is stable and not reliant on refi’s and dropping rates”…

And that’s somewhat true, but it has a huge flaw that is likely costing them tens of thousands of $$$ PER MONTH, and they don’t even know it.  Read on..

I have found the most “healthy & stable” ratio is 70% purchase and 30% refinance. 

Here’s why…

If we are refi heavy, doing more refinances than purchases, they are right, when rates go up, these cats fall off the highway faster than a 1971 Ford Pinto on bald tires.

And the real problem with that is, now these LOs which have been ignoring Realtor relationships for purchase referrals, all of the sudden they are starting from scratch and trying to establish relationships, which doesn’t help them with closings this month..

Here’s the thing though, if we are purchase heavy, like the LO boasting they are at 90% purchase, that means they are not farming their own past database for refinance opportunities…

This has 2 problems.
#1  We have the moral obligation to help our past clients when it’s in their best interest to refinance and they just haven’t been made aware of this opportunity (our fault).

#2  We would be missing out on these closings which can add up HUGE when it comes time to the $$$ we make each month.

Last year, my mortgage team ended up closing about 68% purchase and 32% refi’s, very very close to the “Holy Grail” 70% purchase / 30% refi.

Earlier in the year, if we see that we are trending purchase heavy, more than 71% purchase, then we know we need to up our game with marketing to our past database (and / or friends and family if you are new to the business).

If we see that we are refi heavy, more than 31% refi, then we know we need to step up our game on our referral partner marketing, which is actually pretty easy.

So using that matrix, whether rates go up or down has never really had an effect on our growth.

We’ve grown every year.

Always remember that with the refi’s, a lot of our people aren’t refinancing to get a better rate necessarily…

…they are doing it for cash out debt consolidations, to cancel mortgage insurance, perhaps getting somebody off the deed, maybe to cash out to buy a 2^nd home or investment property(s), really any number of reasons.

But we don’t know how we can help them if we don’t call them, with a very simple phone script (that I’m happy to share with you), to check in and see what opportunities there are for us to help them (and make a commission check when we do).

So take a few minutes to see where your ratio was at last year, and then decide what to focus on first, marketing to your database (if you are over 70% purchase), or to focus on referral partner relationships (if you are over 30% refi).

Let me know what you find.