I know it's cliché for a mortgage person to say so, but it’s a great time to be in the mortgage business. We have near historic interest rates, an increasing number of products, and rising home values that are encouraging homeowners to pull the trigger on their next home purchase.
And yet, because we talk to mortgage professionals every day, I constantly hear stories about loans not funding when they were supposed to—or that they don’t fund at all.
With the technology and tools available today, the situation is not only troubling, it's unacceptable. Mortgage professionals certainly shouldn’t put up with it, especially when their reputations only as good as their last closed loan. And yet, lack of funding confidence is why many longtime mortgage professionals are jumping ship and hitching their wagons onto new companies.
But how can they know their next company is any better? Among the lenders I know that fund loans consistently, here are the common denominators:
Transparency. Every lender needs a strong defense against risk, particularly in today’s market. But this defensive strategy should also be clearly understood throughout the entire organization so that can each sales person can properly set his or her customer’s expectations with transparent realism. For example, by explaining why certain information is needed to protect both sides of the transaction in this era of repurchase demands and ATR requirements.
Technology. Every lender has an “engine” of some sort under the hood—but not every engine provides the same acceleration, durability, or gas mileage. From the salesperson’s point of view, the engine has to work, every time, period. And it must offer protection in terms of compliance, data quality, security and storage, so loan officers have the tools to do their jobs safely. Every lender either invests properly in the right systems or inherently places the reputations of its sales force at risk.
Performance. Offering great service should be the focus of every lender, but today it’s more important than ever. For example, in many markets, buyer demand has far outstripped inventory, creating bidding wars in which each buyer is trying to gain an advantage. One of those advantages is the ability to close quickly, so buyers and their agents naturally flock to lenders that offer early loan approvals, fast response times, 15-day closings and automated approvals with the GSEs. Mortgage professionals need lenders that can help them give their customers an edge in today’s marketplace.
Really, it all boils down to shared values. Deep down, do the salesperson and the lender believe in the same principles? Do they place the customer first? Do they invest in systems that work? Do they do things the right way or not?
Never underestimate the importance of funding confidence. When you're confident that your loans will close—when you are utterly convinced of it because you know the company has its act together—you don’t even consider that things will turn out any other way. There is a bonus, too: true confidence creates an emotional energy that your customers can feel. When they feel it, they are eager to refer you to others and doors start to open. And when doors open, you can take your career anyplace you want it to go.
David Williams is the vice president of RightStart Mortgage in Pasadena, Calif.