Oct 4, 2019 The Guide to Becoming a Better Mortgage Loan Officer

As prices have continued to climb in many markets, new and long-time MLOs (mortgage loan officers) alike have run into significant challenges in recent years. For much of the decade, one of the most frustrating trends was the climbing home prices and decreasing inventory. In recent years, we are starting to see a shift, with some regions seeing more homes staying on the market longer as prices stagnate, while there is also evidence of another inventory drought on the horizon. On top of this, mortgage refinance applications have continued to slow.

More than ever, MLOs are feeling the pinch between declining lending opportunities and increased competition from ever more MLOs entering the industry. To thrive in these market conditions, MLOs must carefully examine their approach to finding and qualifying clients, marketing themselves, and expanding their networks.

If you want to be a more successful, more productive MLO, this guide is for you. Some of it will apply more to those new to the fray, and some of it will be more relevant to veterans. But everyone will find something that can help them become a better, more profitable MLO.

If you’re a new MLO, find a job as a loan officer in a call center, and find a mentor.

Call centers are certainly not low-stress places to work, but they provide training wheels while you’re still finding your feet as an MLO. You’ll get the opportunity to make mistakes and learn your trade without worrying about putting food on the table because you hit a dry spell.

Try to find a job with a lender that offers all the basic bread-and-butter loans: conventional/conforming loans, VA loans, and FHA loans. If at all possible, find a lender who doesn’t tack on overlays, as these can throw a wrench in otherwise promising opportunities.

You may be tempted to go with whoever offers the highest commission (basis points / BPS), but you need to take a close look at how much support they provide. If all you get is a desk and a phone, then everything else is on your dime: advertising, training and education, promotional collateral, and Nationwide Multistate Licensing System & Registry (NMLS) fees. That gets pricey, fast. At the end of the day, you’ll likely make more working with a lender that provides a lot of support—which also means you’ll be less likely to make costly mistakes.

When you’re a beginner, education and support are worth far more than your margin for originating a loan.

While you’re working, keep an eye on the experienced MLOs, and identify the ones who seem to be most successful. See if any of them are willing to take the time to mentor you. If nothing else, see what you can glean from their habits and strategies, and experiment with incorporating them into your approach.

Rubbing elbows with MLOs is fine, but you really need to network with Realtors and real estate agents.

It may be tempting to swim within your school of fellow local MLOs. Yes, this is a good way to get a better understanding of your market and the strategies that work best—and you may even find a mentor this way, but you really need to break out of the clique and start connecting with your local real estate agents and Realtors.

Don’t know how to get face time with agents? Google is a great way to research local real estate offices and Realtor organizations. Each market will have a local chapter of the National Association of Realtors (NAR). Many of these local Associations will offer Affiliate Memberships to industries that service the real estate market, such as lenders, inspectors, licensed contractors, etc. Their websites often have information about upcoming events, some of which will allow open attendance. Industry events are always a great way to network. Broker opens (also known as ‘broker caravans’ or ‘agent caravans’) are also a great networking opportunity. These are open houses where real estate agents are invited to check out one or more homes that are on the market, in the hopes of getting the word out and attracting buyers.

Bear in mind that if you’re still a fledgling MLO, your goal shouldn’t be to pitch them. Unless you’ve really got something special to offer, all you’ll do is annoy them. This is your opportunity to ask questions, and to learn from them. Find out what their frustrations are when it comes to helping buyers connect with a lender and originate a loan. Pick their brains. Learn how you can help them make their lives easier to structure your services for success. If you learn enough, you’ll eventually become a valuable resource, and if you are genuinely helpful and gracious with your time, you will close deals.

Sponsoring a booth or event at a Realtor’s convention is an excellent way to connect with large numbers of real estate agents and Realtors.

If you really want to have a captive audience and are willing to spend a few bucks, one of the best ways to connect with real estate agents en masse is by sponsoring a booth or luncheon at a Realtor’s convention.

If you do a booth, you’ll need a teammate to help you out. That’s because, in just about any industry, business reps will often hide in their booth the entire time, waiting for potential clients to come to them. That’s not how it works. If you want to build connections, you need to be out in the crowd. Have one person manning the booth and assisting anyone who visits. Then another person, ideally you, should be out in the crowd, connecting with agents and making appointments to talk or grab lunch, and referring them back to the booth for additional materials or information if necessary.

Oftentimes, Realtor events and conventions will offer the opportunity to sponsor lunches. In exchange for providing a simple lunch, you are allotted a few minutes to speak to your target audience before they dig into their meals. Use this opportunity to pitch them on your special programs or your approach to marketing, and how you can help them make more money. You need to deliver a clear value proposition, as this is the only thing that is going to make your audience want to connect with you. If done properly, this can be a very effective means of outreach.

Have multiple loan scenarios in mind ahead of time.

When you’re working with a customer and putting together a mortgage loan estimate, at the very least have some optional loan scenarios in the back of your mind. If Plan A falls through and you don’t have a backup plan at the ready, there’s always another MLO who will be happy to come to the rescue.

Don’t let that happen. Be prepared. Have multiple loan proposals at the ready. If nothing else, the customer may surprise you by asking to compare multiple options. Being able to immediately meet that need keeps them in your office and betters your chances of closing a loan.

Keep your lines of communication open with customers, processors, and agents.

It’s easy to get overwhelmed and let leads drop, or not follow up with a customer. That’s a good way to let opportunities slip away. Set aside an hour every day to make phone calls and fire off emails regarding anything that’s in your pipeline. You’ll be more productive, you’ll make more sales, and you’ll develop a reputation among real estate agents for being an open and communicative business partner.

Always dress well—remember that families are not only trusting you with their money, but their futures as well.

This is an issue that can affect MLOs at any stage of their careers:

  • Young MLOs fresh out of school can forget that t-shirts and shorts are not the standard uniform during business hours.
  • MLOs experiencing burnout can start to let things slip, opting for comfort instead of a professional image.
  • A successful MLO who has made the transition from working for a mortgage company to being their own boss may want to celebrate no longer working for The Man by abandoning the professional attire.

Whatever the reason for the temptation, don’t do it. People are trusting you with hundreds of thousands of dollars, as well as their hopes and dreams and the future direction of their lives. You need to dress accordingly, and be just as organized about your appearance as you are about your business. Not only will you look more trustworthy and successful, but it will also keep you focused and on the ball.

Don’t neglect the Internet and social media for marketing yourself—these are great ways to connect with real estate agents, as well as educate yourself and stay up to date.

Yes, real estate agents are old fashioned, but in recent years they have definitely moved into the digital world. Many of them do a great deal of online networking on Facebook, LinkedIn, Twitter, and Meetup.

Use the search functions on these sites to build a list of relevant real estate industry groups in your area, and then start participating. You should understand that different social media sites have different strengths:

Facebook: Best for discovering and participating in groups dedicated to the industry. Try to find groups dedicated to your local market. It’s okay to join MLO-centric groups, but also be sure to seek out the groups where Realtors hang out. Facebook is also a great place to show off when you close a deal for a client. Sharing that photo of the happy new homeowner in front of their beautiful home is a great feel-good moment. You may even be able to get the happy customer to take a photo, share it on their own account and tag you in the post. Their friends will see and may decide to drop you a line. It also shows the agents who have friended you that you’re closing loans.

LinkedIn: This is where you leverage the strength of your existing network of contacts. Make sure to send invitations to everyone you work with in a professional context. LinkedIn is a way of showing your bona fides, especially when an agent discovers that you have connections in common. Writing and sharing the occasional informative post is also a great way to elevate yourself, as good pieces of industry-relevant content can get a lot of traction.

Twitter: Twitter is definitely the most loosely knit social media platform. This is a great way to quickly get caught up on industry news at a glance —both local and at the state, national, and even international level. Follow relevant industry and news outlets, as well as people who are in the know. As you explore the platform, you’ll stumble across professionals in your market who really know their stuff and readily share their knowledge. For instance, in the Sacramento area, Ryan Lundquist is a well-known residential appraiser who runs one of the best-known local real estate blogs, but who also happens to be very active on Twitter.

Meetup: Meetup has been around forever, and is still an excellent way to discover local real estate groups. Chances are there are several groups in your community. Don’t pick and choose. Try them all out and see what works for you. You can stumble onto a lot of opportunities through these groups.

A warning: You need to make sure that any social media account that you use to bolster your career as an MLO needs to be professional. Clean up your profile, and make sure it has a good headshot and header image, with all the relevant business information. You should also recognize that your social media activities need to be carefully curated. Avoid discussion of topics and opinions which could be divisive or offensive to someone with a perspective different than yours. Don’t talk about activities or misadventures which could put you in a questionable light. Never use your professional social media accounts for off-the-clock stuff (and be sure to lock down any personal accounts).

Real estate agents love it when MLOs share their marketing costs.

Real estate agents have to buy a lot of marketing materials—door hangers, folders, brochures, realty cards, signs, flyers, sell sheets. The Internet is important, but real estate agents still rely on a lot of old-school materials to get the word out. Agents are often cash strapped for these materials, and this isn’t helped by the fact that by law (RESPA Rules), real estate agents can’t accept referral fees or financial kickbacks from MLOs in exchange for sending homebuyers their way.

You know how you can help agents? Offer to share their marketing costs. First, you need to make sure that your own sales materials are up to snuff. Work with a marketing firm—or if you’re on a budget, an independent designer—to put together some really professional materials. Once you have put together some materials that look good, and you know you have a printer you can rely on and that charges a fair price, then you’re ready.

Once you have worked with a few loyal agents who send a loan your way now and then, show them your materials, and ask if they would be interested in sharing in some co-marketing materials. If your stuff looks good, they will be. They’ll tell you what they need. Get their logos and any info they want featured on the materials—folders, doorhangers, whatever—and have them printed up. Lenders are allowed to share any and all production and distribution costs of co-branded marketing materials with the agents. This represents a tremendous value to your loyal agents.

Right off the bat, this will help you get your name out there. The agents you work with will be helping you expand your marketing reach.

On top of that, agents are a jealous bunch. When they see that a competitor has professional looking materials, they’ll ask questions, and eventually they will come your way. Realtors and agents generally love working with MLOs who understand their needs, and who will share the burden of marketing.

Build up your list of customer reviews and referrals.

First of all, make sure that you have business listings on Google, Yelp, and Facebook, at minimum. Google is especially important, as registering your business—even if you’re working out of your home office. Listing yourself—on Google My Business and verifying your location will ensure that you show up on Google Maps, and if you have a website it will help your search rankings in your local area.

Once you have all your listings set up, encourage your satisfied customers to provide a review of your services following their closing. You can do it in person, or you can do so in a follow-up thank you card or email.

As you develop close working relationships with agents and Realtors, you can also ask them to leave a honest reviews of their experiences working with you.

Ensuring that there’s good word of mouth about you and your business online will not only potentially help future homebuyers find you, but also shows other real estate agents that you can close a loan and keep everyone happy while doing it.

Real estate agents love MLOs who are willing to help qualify homebuyers.

There is no situation that a real estate agent fears more than investing hours and hours into a client—interviewing a buyer, finding suitable homes, showing the buyer around the neighborhood, negotiating on their behalf with a seller—only to discover that the buyer doesn’t qualify for a large enough loan, or has such bad credit that they can’t get a loan at all. These situations cost valuable time and money, and exhaust resources that could have been directed towards better prospects.

Agents are stuck, as they do not have the proper training and authority to collect and analyze the financial information necessary to properly vet and qualify a potential buyer. That’s where you, the MLO, come in. Reach out to Realtors and real estate agents that seem promising and offer to qualify their clientele.

The process is pretty simple—early on the Realtor refers new buyers to you for pre-qualification. You get on the phone with them, collect basic financial information, run calculations based on their income and debt, check their credit scores, and determine their ability to qualify for a home loan. If they qualify, you can provide them with a prequalification letter and a maximum loan amount. In the meantime, you connect with the Realtor and give them the rundown on their prospects: those who are golden and good to go, those who might need to lower their sights a bit, those who need a little help but might be ready to buy in a few months, and those who are lost causes due to bankruptcies and other black marks on their credit.

This information is absolutely invaluable to real estate agents, as they can then better set their priorities. Clients who can buy now become the agent’s first priority. For the qualified buyers who fall short of their desired loan amount, the agent can discover whether they want to look at more affordable homes, or wait a bit and clean up their credit history. The agent can shift buyers to the back burner who definitely need a few months or years to qualify, and break the bad news to those who aren’t going to be buying a home anytime soon.

You can see why this makes an agent’s life immensely easier, and more profitable. You can generate a lot of business by working with successful agents in helping them grade their prospects, and you’ll eventually find other agents turning up at your door, wanting a piece of the action.

Don’t waste time on poor quality prospects that you know will never close.

When you’re in a rut where the pipeline has run dry, it’s very tempting to lower standards and let agents throw hopeless prospects your way. If you let real estate agents think that you’re willing to take anything and everything, they will give you the trash. Hey, they might get lucky and make a sale, and it’s not costing them anything to let you try and make the numbers work.

Don’t do that. Time you spend on hopeless leads because you want to feel like you’re doing something can be much better spent making calls, marketing yourself, or something else where you’re investing in your long-term success.

Maintain your standards. Loyal and valued agent partners can provide some simple pre-screening that will keep you from receiving leads who have no chance or intent on obtaining a loan. This is a great time to instead start reaching out to agents, as we discussed previously, volunteering to help them prequalify their homebuyers. This helps you cut to the front of the line and get access to the best-of-the-best prospects that you know will close, because you’ve already prequalified them.

If you find a home loan specialty that you find you enjoy and are good at, commit to it, and make sure real estate agents know about it.

Over time, as you develop your networks and get a lot of loans under your belt, you’ll find that you’re particularly skilled at either closing certain types of loans, or closing loans on certain kinds of homes.

You’ll recognize it when you see it, that certain set of conditions—loan amount, home type, type of loan, special mitigating conditions—where you’ve got that sixth sense. Where everything falls into place and you turn into the loan whisperer.

Once you’ve identified it, run with it. Make sure your contacts know that you have a good track record with that certain type of loan, and that you’re hungry for it. There’s no better way to ensure a continuous pipeline of deals than to become “THAT MLO” who’s a stone cold closer on a certain type of loan.

If you offer specialty programs, such as low and no down payment loans, you’ll be that much more attractive to agents.

Real estate agents always have a few buyers who struggle to qualify for a loan because the popular loan options for those with less-than-ideal credit—FHA loans, VA loans, and USDA loans—are inapplicable or out of reach.

Many MLOs don’t want to get into the weeds with specialty programs. But you can make yourself very attractive to Realtors if you participate in some of the more popular loan assistance programs available in your state. For instance, the California Housing Finance Agency has a variety of education and assistance programs, such as CalPLUS and CalFHA, that helps lower income households qualify for loans by lowering down payment requirements or providing deferred-payment loans that can be applied towards down payments and closing costs.

If you’re looking to drum up business, call the Realtors in your network. Ask them about their buyers who just need a little help to get their foot in the door, then research and identify the programs that can help them. While you don’t necessarily want to become the MLO known for closing particularly challenging, time-intensive loans, being a troubleshooter will make you the treasured partner of many agents.

If you refer business to a real estate agent, they’ll pay it back ten-fold.

The relationship between agent and MLO is rather asymmetrical—agents can refer much more business to MLOs than vice versa. Referring a friend, family member, or a prospect you stumbled over to agents you’re looking to make inroads with, can quickly make you an agent’s favorite MLO.

Market yourself every day, whether in person with real estate agents, or online.

If you’re reading this, it’s because you want more loans than you are currently closing. The only way you’re going to change that is by getting out there and applying what you’ve learn in this guide. Every day you need to be at a meetup or industry event where you can network. Make sales calls (don’t forget about the basics!), post a new loan closed on Facebook, write an article for your LinkedIn account and/or website, or connect with an agent about producing marketing materials.

Commit yourself to some form of outreach every day, even if it’s just something that takes a few minutes. Be sure you aren’t doing the same thing over and over. Doing a two-minute Facebook post every day won’t cut it. On some days, do some type of in-person networking. Once in a while, put out a blog post. Keep it rotating. Always have something new going on.

If you commit to marketing yourself every day, without excuses, you will see a profound difference in the amount of loans you are getting, and in your visibility within your community, and in your online networks.

PMG will work with you to balance your homebuying goals...

...against your financial circumstances, and help you identify the mortgage loan that best meets your needs.