In Search of the Silver Bullet

The Never-Ending Quest for the Easy Answer
by Bob Williamson

It has been said that “desperate times call for desperate measures.” That would explain a lot of the extreme anxiety I see in loan originators who are frantically looking for the Holy Grail of Mortgage Lending: The Easy Way to Close More Loans.According to Wikipedia:
“The metaphor of the silver bullet applies to any straightforward solution perceived to have extreme effectiveness. The phrase typically appears with an expectation that some new technology or practice will easily cure a major prevailing problem.
“The term originates from folklore. Traditionally, the silver bullet is the only kind of bullet for firearms that is effective against a witch, vampire, monster, or a person living a charmed life.
“It should be noted that actual silver bullets are less dense than lead bullets. As a result they have less momentum after being fired from a gun and cause less damage. Because of this, silver bullets are in fact less effective than lead bullets.”
 
The Allure of the Easy Answer
If your income is down, your pipeline is empty, and your prospects are bleak, it is understandable that you’d be looking for the quickest possible fix, and attracted to the idea that a particular product or approach would solve all your problems simply by virtue of your buying (into) it. But think hard for a moment here: when in your life has something like that actually worked for you?

• Did the Charles Atlas kit you ordered from the ad in the back of the comic book keep bullies from kicking sand in your face at the beach?
• Did those miracle diet pills magically shed pounds without your having to exercise or change your eating habits?
• Did that language CD you bought really have you speaking fluent Russian in an hour?

A quick internet search produced the following promises:

• How to Make Your Loan Originatons Soar in 30 Days or Less!
• Tested and Proven Mortgage Sales Letters … Increase Response Rates by Up to 300%!
• Mortgage Leads That Convert Referrals for Life – In Only 15 Minutes per Month!
• Fresh Mortgage Leads That Close
• Let Our Websites Direct Thousands of Motivated Borrowers to You Now!
• Discover the Secrets to Growing Your Mortgage Business Now!

Now the companies advertising these claims may very well be offering quality products and services. The point is that so many loan originators are focused on finding the easy way to success in this business. They literally create the demand for products – legitimate or otherwise – that promise quick and easy results.
 
The Realities of This Market
Mortgage professionals are facing the most challenging market in at least 30 years. Hundreds of companies – some of them pretty big – have gone bankrupt or been acquired in the last 3 years, and hundreds of thousands of people have lost their jobs or left the industry. Entire product lines have disappeared. The MBS market has been rocked by scandal and incompetence and the credit markets are in crisis and chaos.

But it’s not all bad news. The shrinking of the industry has made more market share available for those who’ve hung in there. Home prices have been dropping for a couple of years, and in most markets, opportunistic buyers are taking advantage of reduced prices to buy homes. And interest rates will likely remain relatively low as a result of the federal government’s takeover of Fannie & Freddie.

For my assessment of the best strategy for loan originators in this environment, see my free webinar video, How to Succeed in This Terrible, Awful, No-Good, Lousy Market here.
 
If You Really Want to Succeed, Understand How Marketing Works
If you understand and apply the following 6 Fundamentals of Marketing, you can survive, and even prosper, in any market:

1. Identify Your Customer (Target Market). You have to understand who you’re designing your product, your offer, and your message for. A single woman buying her first home is different from a married couple in their early 40’s with 3 children moving up to a bigger home, or a 50 year-old man looking to buy a property for investment purposes. They all have different objectives, different needs, different priorities and different problems to be solved. You can’t expect to be successful, to rise above the crowd, unless you can tailor your approach to the specific kinds of people you want to attract. So you first have to make up your mind who you want to target (you can target more than one niche, but you need to tailor your product and your marketing to that niche). Then you answer the questions: What do they want most, that you can possibly provide (especially what they want that your competitors don’t provide)? How do they think? Where are they? How can you find them?
2. Build a Better Mousetrap. What you offer has to be better (or faster, cheaper, etc.) than other existing solutions. In other words, you must create a superior product or package of services. Who decides what’s superior? The market (your prospective clients). The more significantly better you can make your product/offer, the higher the likelihood that your target market will respond when they find out about you. And again, it has to be significantly better from the point of view of the prospective client – not just because you think you’re better.
3. Tell Your Story in a Compelling Way. Having a superior product doesn’t make you successful if nobody knows about it. You’ve got to find a way to get your story out to the people you’re trying to attract (see Fundamental #1 above). And the story you tell has to be compelling – interesting enough to hold their interest in this fast-paced world where people are constantly being bombarded with advertising messages. The best way to hold their attention is to make it about them, not you. That’s why it’s so important to understand who you’re targeting, how they think, and what they want (again, see #1 above).
4. Make it Easy for Them to Choose You. Leads can be expensive to generate, and at any rate, they are not an unlimited resource, so it’s critical that you design a sales system that makes it easy for prospects to move from the “I’m interested” stage to the point where they’ve committed to you and the transaction closes. I’m astonished at the number of loan originators who will expend the time, effort, and money to generate leads, but have not thought about designing an efficient and effective system for converting leads into prospects and then clients. They simply have not imagined or visualized what will happen after the phone rings. They “play it by ear” and just sort of spontaneously come up with the game plan after the game has already started. If you design a sales system that moves prospects forward methodically, you will be much more effective over time. When you try to invent your strategy while you’re talking to the prospect, your results will be inconsistent at best. The greatest sales professionals have a knack for inhabiting the brains of their prospects – they have taken the time to understand how these people think and feel. So they know what they have to do to make it natural for the prospect to take that next step, and the one after that. They’ve mapped it all out into a system, which they practice and refine until they are unbelievably good at it. Their resulting success is no accident.
5. Over-Deliver. Whatever you promise people, make it your mission to deliver it -- on time, plus at least 10% more. We live in a world where most people don’t fully keep their promises. And despite all the overwhelming evidence that this is the case, we are still disappointed when you don’t do what you say you are going to do, when you say you are going to do it.
6. Create Evangelists (Raving Fans). Having a superior product and over-delivering on what you promise will pay off dramatically if you complete the circuit and ask your now-pleasantly-surprised and/or thrilled clients to do you the favor of telling their family and friends about you. A lot of lip service is paid in our industry to the idea of asking clients for referrals. In my view, most people make two mistakes: First, they have merely satisfied their clients – they haven’t wowed them. Satisfied clients don’t refer. Only enthusiastically thrilled clients go to the trouble of referring. And secondly, everybody seems to want to automate the process of asking for referrals. We seem to think sending out a canned newsletter is going to make Joe SixPack say, “Wow! I really appreciate my loan officer sending me that incredibly boring article about home equity loans! I need to remember to tell everybody at work what a terrific human being he is!” Look, there is nothing wrong with sending people canned newsletters (although some of the stuff I’ve seen is really lame). But if you want to create raving fans who will go out of their way to tell people about you, your need to wow them with your service up front, and you need to personally ask for their referrals. If you have an assistant who is outgoing, can connect with people, and is capable of having an intelligent conversation with your clients about their finances, you can delegate these calls. But if you don’t, you should do it yourself – at least twice a year, and preferably once a quarter. If your clients are raving fans of yours AND they feel they have a personal relationship with you, THEN they will feel it’s their personal responsibility to tell others in their social circle about you. Otherwise … not so much.

 
 

Key Skills of a Successful Loan Originator In Today’s Market
Having worked closely with more than a hundred loan originators over the last 20 years, I think I can offer some useful observations about the qualities common to the best ones.

The most successful loan originators are:

• Financially Literate. It’s one thing to understand the ins and outs and the pros and cons of different loan programs and how they will affect your client’s well-being. It’s another thing to be able to explain it simply but accurately to a client who doesn’t share your interest in numbers and loan details. If people’s eyes glaze over when you do a loan comparison, or if your clients frequently hesitate or procrastinate after you’ve made a recommendation, you either have a financial literacy problem, or a trust problem, or both. The good news? You can fix it if you commit to it.
• Technically & Technologically Competent. Are you proficient with LOS and Loan Comparison software? Can you create a spreadsheet from scratch with charts & graphs? Do you know how to quickly put together a professional-looking flyer or ad with graphics and pictures? Can you find any file you need on your computer in seconds? Are you an expert in the use of your contact management/calendaring software? Do you have the ability to generate an email blast to a group of targeted prospects in your database? Do you know how to create a website, how to drive traffic to it and get visitors to your site to volunteer their contact information so you can sell to them? And if you don’t know how to do these things, do you have someone working with you who can do those things for you when you need them done? And if you don’t have someone like that, and you realized you needed to hire someone, would you have the first clue about how to separate the gems from the posers? I’ll be blunt: it is no longer possible to compete in today’s environment without the effective use of technology. You don’t necessarily have to personally be able to use these tools skillfully, but you do have to be comfortable enough with technology to be able to efficiently cause these things to get done. Your rolodex and your friendship with the guy at the local print shop are just not going to cut it anymore.
• Savvy about Marketing. Marketing is simpler than most marketing professionals make it sound, but that doesn’t make it any less crucial to your success. Review the section above on how marketing works. If you’re not doing those things, and you don’t know how or where to start, I can recommend a good coach.
• Strategic Thinkers with an Entrepreneurial Spirit. The best loan originators see the big picture in their market. They know what’s happening with real estate, they know the real estate agents, and they know their own competition. As market conditions change, they adapt to focus their efforts on helping those who can benefit from those conditions. They invest a portion of their income back into their businesses. And they’re not afraid to take intelligent risks.
• Sales Professionals. Properly understood, sales is not an activity, it’s a calling. True professionals have carefully chosen their product, and they believe so much in its value that when they lose a sale they feel they should have made, they actually feel like they’ve let the customer down. They are extremely effective communicators, which means they know that listening to and understanding their prospects is more important than the skill with which they present their solution to the prospect’s problem. And they understand that the skill with which they present their case is important enough that they practice and refine and rehearse their presentation(s) until they can do it in their sleep. I have known competent loan officers who knew their loan programs. They understood the underwriting process. They could put together a very tight loan file. They had a lot going for them, but they weren’t sales professionals, they didn’t want to become sales professionals, and they had mediocre careers at best. To be truly successful in this business regardless of market conditions, you have to be both a mortgage professional and a sales professional. Being either one but not the other just won’t work for you. As a mentor of mine once colorfully put it, “Being half-assed is just as bad, regardless of which cheek you’ve still got left.”
• Empathetic towards their Clients and other Stakeholders. Do you really like your clients, your referral partners, and key people like processors, appraisers, underwriters, and wholesale & title reps? If you don’t like them, are you dumb enough to think they haven’t picked up on that?
• Competent Time Managers. Assuming roughly equal skill sets, the difference between an originator who closes 5 transactions a month, and one who closes 10, is what they do with their time. This business is a magnet for distractions. If you don’t adopt the discipline of making a detailed plan every day that is based on your highest-payoff activities, you will consistently fall far short of your potential.
• Goal and Measurement-Oriented. Winners are goal-oriented, and their focus on accomplishing specific, measureable goals helps keep them motivated to do the little extra things that get them over the top. As a coach, I require my clients to track every week the number of leads they generated, the number of contacts made, the number of applications taken, and the numbers of submissions, final approvals, and closings. I encourage them to treat each week as a game, where winning is defined as reaching their goal for each of those six critical result categories. When you treat it as a game, it becomes a lot more fun, and knowing the score will help you keep your head in the game.

 
 
Who Do You Have to Be to Pull All This Off?
Notice I didn’t say, “What do you have to do.” That’s because the things you do (and how well you do them) flow directly and naturally from who you are.
Each of us has a self-image or identity. This is your own very personal and private view of who and what you are – the idea you have of yourself when you are alone, and there’s no one around to try to impress.

When you’re with other people, you may present yourself in a particular way in order to make a desired impression or protect yourself from criticism, judgment, etc. But your self- image – your identity as you see it when you’re alone – determines the set of behavioral options that are available to you, and that set of options both drives and limits what you will be able to do consistently over time.

For example, if you see yourself as a shy or introverted person, you may be able to force yourself to make some cold calls. But you won’t enjoy it, you probably won’t be very good or successful at it, and you won’t be able to sustain the activity long enough for it to produce any meaningful results. You will find some reason to stop doing it. If someone convinces you that you really ought to make cold calls if you want to be a successful loan originator, you will guiltily conclude that your problem is that you don’t do cold calls. But that’s not your problem. Your problem is that you don’t see yourself as someone who is outgoing and resilient and hungry enough to be a master cold-caller. Until you can be that person, you will never do the things that a person like that would naturally do.

So the first step is an honest self-assessment. It may also be helpful to ask people you trust and who know you well how they see you. When you recognize limiting aspects of your self-identity, you simply choose to become a person who possesses the qualities you currently feel you lack. In the wake of that choice – if you have truly committed to it – you will make a plan of action to acquire the desired traits and skills – by hiring a coach, getting trained, reading books, listening to audio training on the subject, etc. When you really want to learn to do something, you figure out how to acquire the skills. (Do you remember when you were prepared to move mountains to get your driver’s license?)
 
If what you’ve read here motivates you to improve your self-identity and your skills so you can better rise to the challenges posed by today’s mortgage marketplace, I’d suggest you start with an honest self assessment. Measure yourself against the standards of someone who gets what marketing is all about. (See the section, “If You Really Want to Succeed, Understand How Marketing Works”,above.)

Measure yourself against the standards of highly successful loan originators. (See the section, “Key Skills of a Successful Loan Originator In Today’s Market”,above.)

With your completed list of things to work on, start working on acquiring and/or improving the skills that will help you become the kind of loan originator you really want to be.
 
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