The July 4th holiday is behind us and the heat of the summer buying season is in full swing. Any professional loan originator who isn’t busy right now closing loans has only one person to blame, himself. All areas of loan opportunities are bursting at the seams with activity, rates are at all-time lows, and the ability to get loans closed couldn’t be more specific. So why are some mortgage originators dealing with full pipelines and multiple closings and others are not? Simple, they don’t have a system by which they identify and work on the business that will really close.
As a business coach to some of the best loan originators in the country, I get to see on a daily basis what the best of the best do, that the others don’t. The difference isn’t as big as the numbers would indicate. Here are five very simple things you can do that will improve your ability to work on the deals that will close, instead of wasting time on rate shoppers and wannabe buyers.
1) Utilize the ten minute rule. If you spend more than ten minutes speaking with a potential client without seeing qualifying documentation, you are wasting your time.
2) Set clear and specific expectations about what can be done and how long it will take.
3) Do NOT lock-in a rate or terms of a loan, until you have a deal you know is going to close.
4) Make sure all your file submissions into processing are “bullet proof” when you submit them.
5) Keep consistent and scheduled communication with all parties and hold everyone accountable for their obligation to the loan time line.
If you don’t set the value of your time, others will set it for you. You must accept the fact that people want to go at their pace of events, and that you need to lead them toward the path that tracks the result we all want; a closed loan transaction. All the loan scenarios in the world are meaningless without knowing if the people you are talking too can qualify for the money.
Simple Loan Strategy #1 is to be sure you spend no more than ten minutes or so with a prospective borrower until you have seen the five key items:
1) Tri-merge credit report on all borrowers
2) W-2s on all borrowers last two years
3) Paystubs on all borrowers last month minimum
4) Bank statements showing all funds, even those not needed for the transaction.
5) Last two years tax returns for all borrowers, all schedules
Why engage in a conversation without know the facts? Some borrowers may want to shop from place to place before they commit to supplying this information. It is up to you to share the wisdom of having a real factual conversation about what they can really do, verses a hypothetical conversation about thing that may, or may not happen. You may “lose” a few opportunities in this process, but the time you save in working “real deals” will far outweigh any you might “lose”.
Simple Strategy #2 is to be very clear about time expectations. All markets and companies are experiencing different time lines to close both purchase and refinance transactions. Between appraisals times, processing times, underwriting times, and the ability to get a closing scheduled, all need to be clear and well within a predetermined set of reasonable expectations. The phrase “under promise and over deliver” comes to mind. If you get a purchase contract into your office for 15 days for a firm commitment, you need to be very clear with ALL PARTIES as to what will be needed and BY WHEN to meet this time frame. If you get a purchase contract calling for a 21 day closing on an RDA loan, and your RDA region is running 9 day turnaround time, you need to get the contract changed on day one, not day 20!
Simple Strategy #3 is to be very careful about when you lock the terms of your deal. Once you tell the customer their deal is “locked”, you lose all leverage in getting that client to supply any additional materials you may need. Also, once you have “locked” the terms of the deal, the client now has full ability to “shop” your terms in a fluctuating rate market. You need to have a clear and specific conversation about rate locks and lock extensions before making the commitment on your terms, if the borrower isn’t as committed as you are.
Simple Strategy #4 is to get your loan files “bullet proof” before submission. Nothing is a bigger waste of time than chasing conditions and documentation. Know what you need and get it before it goes into processing. Create a checklist with your processor as to what they need from you to make the file flow smoother. Solid and complete files take a little more time upfront, but are well worth it down the road. Be a professional and turn in great files!
Simple Strategy #5 is to have a clear and specific communication schedule with everyone in the process. Certain specific points of communication are required and easy to schedule. A few things you want to include would be:
1) Connecting with both Realtors® on a purchase transaction within 24 hours of file submission to be sure about appraisal issues.
2) Appraisal review with the client and obtaining all need insurance information so the policy provided meets the requirements set in the application.
3) Commitment conditions and clear to close dates to be certain everything is tracking the schedule.
4) HUD-1 review prior to closing.
5) Wire receipt confirmation with Realtors®
Five simple steps that take you from being busy, to becoming productive!
You can learn more by visiting http://www.ImproveMyTomorrowCoaching.com