Here we are five months into this series, the Dentist Diaries. Time flies when you are having fun, but not when you are having dental work done, nor when you are working on a tough loan file. This month I will share with you about some “unintended consequences” in both cases.
At this point in my Dentist Diaries, I want you to know I was anxious, in pain, angry and disappointed. And the dentist was clueless that he was about to experience some “unintended consequences” in this ordeal.
No. 10—Unintended consequences. We all have those great clients with 800 credit scores, ratios of 21/28, and hundreds of thousands of dollars in reserve. Well, sometimes.
And then there are those clients we work with for several months assisting them with credit repair, spend dozens of hours in mortgage planning sessions guiding the first-time homebuyer through the steps to homeownership, the liquid assets necessary for down payment and closing costs and prepaids, and direction on collections and judgment. You almost feel you become a part of their family and rejoice when the credit score and the bank account have come up, debts are paid down, and they are truly ready for homeownership.
For the most part, those clients are grateful for our services and will stick with us throughout their lifetimes, using our company for every purchase or refinance thereafter. But, sometimes the pain that is caused through the above process, although through no fault of ours, if we are not mindful of how we treat our clients, we can become the object of our client’s anger and frustration rather than their appreciation and loyalty.
“Unintended consequences” are those outcomes we do not expect. According to Wikipedia, these can be roughly grouped into three types:
• A negative, unexpected detriment. For example, the borrower ignores your advice, pays off a three-year-old collection and his credit score drops 25 points. Now you start over.
• A perverse effect contrary to what was originally intended. This is when an intended solution makes a problem worse. For example, you counsel the borrowers that they must have at least $10,000 saved in order to purchase a home. Three months later they appear with that exact amount in the bank and all is right with the world. Until you check their credit again and discover they have borrowed the money and now their debt ratio is too high.
• A positive, unexpected benefit. You need the borrower’s credit score to be 15 points higher. After credit counseling, and much work, the borrower’s credit score dramatically increases and the interest rate is significantly better than you had hoped. Whoohoo—you are all happy!
Although there may be times when the “unintended consequences” are positive, most times they are not. There are “unintended consequences” when our clients may experience pain and anxiety during the mortgage process just as there were “unintended consequences” with my dentist. He and his staff were clueless that there might be any type of consequences to their actions, much less “unintended” consequences. Can we be operating in that same mindset?
Pain can be powerful, dental or otherwise. Three of the “unintended consequences” of pain are:
1) Anxiety. Pain causes anxiety, which intensifies the pain and thereby complicates its management. When I was in pain, I was extremely anxious. But this anxiety decreased the chances that the dentist could manage my pain.
When our clients come to us, many come with anxiety already in place because of negative media coverage and doubts that a home loan is possible for them.
2) Anger. In the event our clients experience “pain” from our inadequate or substandard customer service, or just the process itself, many will “vent” their anger on the nearest target, you! Maybe it’s your fault; maybe it’s not. Maybe a closing date is missed because we failed to take care of business, or we give false hopes that a loan can be approved and it ends up denied. Whatever the “pain” is—that “pain” leads to anxiety, which increases the pain, and the pain feeds the anxiety and the anger builds with the client—the cycle goes on and on.
3) Disappointment. Although we have no intentions of causing hurt, harm and disappointment to our clients, it is the nature of the business that sometimes we just do. If we are attempting to refinance a client’s home from 7% to 4.25% but the process comes to a shrieking halt because the appraisal comes in $50,000 low, the client is disappointed.
Back to the Dentist Diaries—I was anxious. I was in pain. I was angry and disappointed. The dentist never saw it coming when his receptionist received the call that I wanted to cancel all future appointments, pay for the work already done, and just like that, he was $17,000 poorer. My termination of his services was the “unintended consequence” of his lack of communication, his apathy and arrogance, and just plain bad service from the entire office.
We should be mindful when we have clients experiencing those same emotions: anxious, pain, mad, disappointment. And just as it was with the dentist, “unintended consequences” can be costly.
Next month, the final chapter of the Dentist Diaries—“Sometimes, things just have a way of working themselves out.”
Louise Thaxton is a producing branch manager with Fairway Independent Mortgage Corp. Call 866-960-9115 or subscribe to her blog at
