As most of you know, I like to write about my family and the various ways my family members inspire me—or at least give me fodder for these columns. They shower me with gratitude for this, as I’m sure you can imagine.
Earlier this year, I spent three columns talking about my daughter’s college application process and how that compares to the process consumers go through in getting a mortgage. She still gives me grief, and I warned her my impending empty nest may well lead me to a series of depressing columns as I think of my perfect child leaving home for college.
I am sure my readers (and my daughter) can’t wait. Well, this past weekend, I experienced a different, though similarly stressful situation, with another family member, and it too gave me insights about our business.
This past week, my wife woke me up in the middle of the night, but not for a good reason. We ended up in the local hospital emergency room at about 3:00 a.m. dealing with a painful belly. Talk about a bad dream. Little did we know, it was about to get worse. Like a mortgage loan applicant, we found ourselves in a situation fraught with emotion, frustration, and fear—even though, ultimately, the outcome was positive.
Going to the ER is never good, but if you’re planning a trip there and you live in Florida, the trick is to try to show up midweek in the off-season. So, when this event occurred last week, I felt that my wife was being very efficient by having us show up in the middle of the night on a Thursday. I thought this would insulate us from the crazy weekend people who break their arms trying to ride surf boards as well as the crazy tourists who drink too much and show up at the hospital every weekend.
Best of all, you'll avoid the influx of geriatric snowbirds who inundate South Florida during the winter season, hoping to survive long enough to head back north before it gets too hot.
This being the off season, I figured we wouldn’t have a problem getting in and quickly figuring out what had my wife doubled over in pain. That hope was bolstered when we arrived and didn’t feel like we were entering the set of an "ER" episode. Nobody was yelling, "stat," nobody was having paddles mashed against their chest in the hallway, and no one was obviously bleeding or suffering from a gunshot or other dramatic injury. And, by the way, there were no great looking doctors or stunningly beautiful nurses roaming around, like we see on the television.
Of course, none of that has to do with why this experience reminded me so much of the mortgage industry.
Like the ER, the mortgage process starts out with a high degree of both anxiety and frustration, especially at the beginning. We don’t know exactly what’s going on. We're not positive what the ultimate outcome is going to be and we are relying on an expert or a series of experts to communicate with us and guide us through a process that ultimately has an uncertain end. It’s not a comfortable place to find oneself.
Try as you may to be rational, a medical emergency and a home buying process are both emotional situations. Buyers are hoping for a certain outcome, but have no idea how to get there. If you’re a move-up buyer, what you’re really committing to emotionally is that you want a bigger home and you want a bigger home for a number of good (to you) reasons. Some need more space for a growing family, while others just want a bigger home to show off their success and overcome feelings of inadequacy that they have harbored since childhood (of course, that also sounds like a medical issue or at least a psychological one...).
The first-time homebuyer wants a piece of the American dream, that first home and the stability that creates. These are all emotional things that make borrowers emotional participants in our process. They need good, clear, empathetic people to guide them through an uncertain process toward that end. That is where they start at the process—so our job, as well as the job of medical professionals, is to deal with these emotional people and guide them through a tough process.
And ultimately, that's where this hospital failed. We entered the ER in a highly emotional state and were told to, "Go over there and wait." Despite the fact my wife was in obvious pain and certainly anxious about the potential outcome, we proceeded to wait in that room for three hours. During that time, they never once proactively provided a status update, despite the fact that this hospital advertises that their average wait time for an emergency room visit is 30 minutes.
Now, I'm sure that some statistician in some tiny, artificially lit back office would be able to prove to me that, on average, wait times are only 30 minutes at this well respected hospital. But there was nothing average about the situation we found ourselves in that night. No one at this facility actually promised me a half hour wait, so I'm not claiming they lied. But I'll bet you a stack of cash that if our industry made a claim like that in mass market advertising and then failed by such a margin, we'd have at least one federal regulator breathing down our necks.
To add insult to injury, there were only about a half dozen folks waiting in that room with my wife and I. As you can imagine, this led to a high degree of frustration. When we became proactive and approached the desk for a status update, we were told that they couldn't be sure about the wait time as "there was no bed available."
Without a bed, apparently, and despite the fact that she was in pain, nobody was able to just scurry out, diagnose the issue and determine what could be done to alleviate her pain. I'm not joking when I say that I am thankful it wasn’t life-threatening, as we could have had a situation that would have been TV ready. Maybe they thought it wasn’t that serious. After all, they have years of experience doing what they do. But we were in the dark, and they provided no light at the end of that tunnel.
Ultimately, I think we're guilty of doing this in the mortgage industry, too. Our established process is to meet with someone, take their application and then tell them to wait. And too often, we jam a period on the end of the sentence. Wait, period. We don't say wait for a certain period of time. We usually don't even say, "Wait and if you have not been called in X number of minutes, I will come to you and give you a status update."
They didn't do that at the hospital and, very frequently, mortgage lenders don’t do that with the consumers they serve. In some cases, if you can't give the consumer what they expect, giving them this information upfront alleviates much of the dissatisfaction they might otherwise experience. If they had told us that it was going to take a certain period of time, we'd have likely been much less frustrated than we were by sitting there without knowing, uncertain of how long it ultimately was going to take.
The second source of frustration presented itself to us when she finally did get to see a professional, who immediately said, "We didn’t have beds. So, sorry you had to wait." They then immediately figured out that my wife needed a painkiller. No kidding. However, we then proceeded to wait another 30 minutes, and I had to escalate that to a manager to finally get her attended to (sound familiar?).
In fact, perhaps mortgage bankers should take the same approach. A prescription painkiller would certainly provide some relief from the pain caused by the new compliance and underwriting rules. "Take this painkiller once a day until approval" might be just what the mortgage doctor orders.
In my next column, I'll tell you about the eventual outcome of all of this (my wife is thankfully fine after a three-day stay in the hospital) and show you how our industry's future success depends, in part, upon avoiding the same mistakes I've described above. And I'll give you some ideas on how we can do that.
I should mention that I have not even received the bill, so perhaps I will need to double down on those painkillers when I see how much I have to pay for this poor service. Of course, any mention of prescription medicine needs to be accompanied by a long litany of potential side effects, so the FDA requires that I inform you that "taking painkillers in conjunction with a mortgage application may occasionally create unintended side effects such as inappropriate outbursts, hysterical complaining, reduction in ability to locate critical paperwork, and inability to read disclosure forms. And always remember to consult a physician for any mortgage wait time lasting longer than four hours "
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience.