Over and over again in my sales training classes, I encounter originators who do not understand their fundamental role as mortgage loan creators.
While many producers believe their main purpose is to service their lender’s current customers, they must also generate new business.
Originators who fail to create new loan demand are essentially customer service reps – order-takers, not sales professionals – and in my opinion, should not receive the same compensation as someone who is bringing in new business.
The confusion surrounding the originator’s role and responsibilities is partially due to the recent refinance boom when borrowers were plentiful and producers didn’t need to have the skills to generate new business. Refi customers were breaking down the doors to get loans!
As interest rates rise and we shift to a purchase money environment, attracting new customers and referral sources will be mandatory if originators and their lenders want to succeed in the long run.
The Order-Taker Disconnect
One of the biggest mistakes I see with order-takers is that they believe their job is to manage every potential borrower who contacts them. When a transaction stalls out, order-takers hold on like “angry dogs” when they should let go and move on to a better prospect. Instead, they blame the lender’s pricing and want to make the deal happen even if it doesn’t make any financial sense to a lender. The reason why they hang on is that they do not have enough referral sources or a full pipeline. In selling, the best sales professionals understand that not every potential customer will match to their product or service. Of course, there is always the timing issue when prospects just aren’t ready to pull the trigger right then.
Order-takers won’t make it in the new environment if they don’t recognize that their job is to generate volume by increasing their referral sources and prospecting efforts. Yes, this means they must meet people they don’t know and influence them.
Order-takers should also understand that spending all their time with price buyers is not a good use of their selling time. Originators can take an important lesson from the Stephen Sondheim song Move On from the Broadway hit, Sunday in the Park with George: “The choice may have been mistaken/The choosing was not/You have to move on/Look at what you want/Not at where you are.”
Prioritizing Your Selling Time
To be sure, retail loan officers have a lot on their plates. They are tasked with generating referral sources, delivering great customer service to borrowers and handling a deluge of administrative work. All are time-consuming efforts. Real estate agents are still the primary referral source for mortgage leads. Certainly, real estate attorneys, financial planners and other professionals can be viable referral sources too.
Developing referral source relationships takes valuable time that shouldn’t be wasted on price buyers who won’t pull the trigger because they can receive an eighth of a percentage point lower from someone else.
The bottom line is that top originators understand that not everyone is a match to what they are selling. Great originators also know that sourcing referral business must be done continuously to achieve results. They operate on the premise that real estate agents are their main customers and that their relationships are only as good as their last transaction. This is a high standard that involves time and hard work. Order-takers resist this part of the job. Inevitably, they will not be able to meet their budgeted goals when a purchase money market dominates and they must source referral business.
Establishing and nurturing referral source relationships takes work each and every day. If order-takers are unable or unwilling to do that, mortgage managers must replace them with producers who will.