7 Lessons from the Year 2020


Traditional selling as we know it has been dead for a long time but the global pandemic was the nail in the coffin for the order-taker sales model. This strategy is rooted in the days when salespeople went door to door fulfilling customer demand for products. In that era, products were limited and information was hard to obtain. The salesperson served as gatekeeper for both. With the order-taker sales model, the retailer has a one-way relationship with the customer.

Today, the power dynamic is reversed: Consumers have 24/7 access to information and an infinite number of products from which to choose. In fact, the combination of too much information and shorter attention spans has prompted customers to seek product expertise and recommendations.

In 2020, order-takers were acceptable because a record number of homeowners refinanced to take advantage of historically low interest rates. If the MBA 2021 forecast holds true, the industry will experience a 23% decline in total volume with a 37% reduction in refinance lending. While interest rates are expected to remain low, lenders will be off significantly from 2020’s unprecedented volume and income levels.

The essence of the order-taker selling model is an efficiency that fits as many consumers as possible into a company’s loan processing system. It really is a one-size-fits-all approach. As long as the consumer has an acceptable credit score and loan-to-value ratio, and there is not “too much hair” on a loan, the lender will process the loan.

As the marketplace shifts to an on-demand environment, lenders must make organizational changes if they want to survive. While no one knows exactly what mortgage banking firms will face in the year ahead, there are important lessons from 2020 that certainly will apply. At the very least, a demand-based marketplace means originators will need to be more proactive in generating leads, including entering the consumer’s home-buying journey at an earlier stage.

A recent Inman article by Christy Murdock Edgar outlined seven lessons from 2020 for real estate agents that I believe are equally relevant for mortgage lenders and their originators. They are:

  1. Expect the unexpected. Markets change rapidly, so must salespeople.
  2. Be ready to pivot. While old ways are familiar, they may not match with the current sales environment.
  3. Be sensitive to a client’s emotional needs. Not all clients have adjusted to the new world of retail selling.
  4. Cultivate a top-notch professional network. Who you surround yourself with matters — stay away from the herd mentality and complainers.
  5. Implement virtual processes. The majority of consumers have adjusted, so must originators. Virtual is here to stay.
  6. Develop a robust online presence. Being known in your market is critical for success.
  7. Find alternatives to in-person marketing. The future of origination will be tied to how well you present yourself on video. Think like a QVC host.