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I have a “Grinch” t-shirt that I wear around the holidays. People assume it’s because I don’t like Christmas, but they’ve got it all wrong. The story of “The Grinch,” I explain, isn’t about his grumpy attitude at the beginning, but rather his transformation at the end, when his heart grows three sizes and he radiates more holiday spirit than anyone. The Grinch’s transformation takes a gloomy, foreboding situation and turns it into an utter celebration. He changes and he finishes well. As we come to the end of another pandemic year in the mortgage industry, and the end of a prolonged refinance boom, lenders and loan officers alike should be looking for ways to tap into that same transformational energy. Our question this month: How can lenders tap into their “Grinch energy” and set up a spectacular 2022?
There are plenty of nervous loan officers right now, particularly the ones who feasted primarily on refinances for the past 18 months. The most recent forecasts are calling for refinances to make up just 25 percent of originations in 2022, which would certainly justify some sour grapes attitudes out there, not to mention some anxiety about loss of income. The good news? There’s still time to strategize and put a game plan into action that will ensure you get your fair share of the 75 percent of loans coming from purchases next year.
As we learned from Guild Mortgage, who bested Rocket Mortgage for the top J.D. Power honors in Customer Satisfaction for 2021, winning on the customer experience battlefield takes intentionality. Simply knowing there’s a major shift to a purchase-driven market coming is only the first step. Strategic planning is the second step and execution is the third. If your current plan is to passively “go with the flow” while the market shifts, you’ll soon find yourself watching more proactive competitors pass you by.
Remember the ending of the Grinch when all the Whos join hands and sing? It turned out it wasn’t about the presents at all – the true joy was in the personal connection. We would do well to remember that lesson in the mortgage industry. It’s the personal connections with colleagues, referral partners and with the customers themselves that drive our success and give us a reason to get out of bed in the morning.
Channel your inner Cindy Lou Who. Translation: be kind to everyone, even if they’re grumpy! Let’s get real for a second. Processors and underwriters shouldered much of the extra work that came from the windfall of refinance loans in 2020 and 2021 yet received very little of the benefit when compared with commissioned loan officers. They deserve a little more than the overtime pay they may have received. At the very least, have patience with them, thank them, speak kindly to them and show them the respect they’ve earned for working so hard to increase your paycheck. After all, these people represent the engine that you will need to power your brand and business into purchase market success in 2022. Remember, happy processors have a way of turning out delighted customers who will ultimately refer their friends and family.
Give referral partners the gift of trust. If an originator wants to delight a referral partner, trust is paramount, and transparency breeds trust. Originators must make a habit of looping partners in on all major milestones, especially if the loan hits a major bump. This may sound counterintuitive to originators, who often consider it part of their job to shield referral partners from having to worry about loan issues and process missteps. However, relationships live and die with effective communication, and amid all the potential miscues that can happen in the loan process, communication is the one thing you can control.
According to MortgageSAT data, three in five loans experience at least one critical error in the loan process that jeopardizes the likelihood for a referral. Originators fare much better with their referral partners when they are open and honest about these issues in real time rather than letting their referral partners hear about problems later from their borrowers.
Gaining a referral partner’s trust goes beyond transparency. The most successful originators strive to be a trusted source of knowledge and wisdom on all things mortgage-related and even finance-related. In a word, they are trustworthy. It begins with being well-versed in all options available to borrowers, including underwriting guidelines. From there, originators can begin to share curated information with their referral sources about the economy, forbearance, mortgage industry trends and capital markets. This is a great way to grow into a trusted advisor and to build sustainable loyalty. Lenders can help the cause by gathering and sharing this kind of thought leadership with their originators on a regular basis.
Show your customers a heart “that grew three sizes.” A big heart is an empathetic one. As we move into the purchase market, remember that for an estimated 75 percent of borrowers in the coming year, the mortgage loan process will come with a flurry of emotions. The refinance factory-mentality and transactional muscle memory must go and an emotional connection with customers around the anxiety, hopes and dreams, and high-stakes of purchase loans must take its place. This starts in the very first conversation with a prospective borrower. Originators need to become guides (and sometimes even therapists) for their clients. This may mean asking a completely new set of questions than they’re used to – questions that acknowledge and address the whirlwind of emotions that borrowers bring to the table.
Here are some quick tips for tapping into your “Grinch energy” and finding success in 2022:
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