“Circle the Wagons! The Lenders are Coming!”
March 8th, 2007 by Rich JacobsonSparky Sounds Off
Okay, Buckwheat! Why is it that whenever the market starts to slowdown to any great degree, mortgage lenders literally start crawling out of the woodwork? Seriously, when the market is good and moving briskly, you never see one. They don’t return your phone calls. They have ‘enough’ business, thank you very much. But as soon as the market takes a turn for the worse, Realtors® are suddenly inundated with solicitations, and you’re everyone’s ‘best’ buddy! What gives?
Buckwheat Responds
The short answer? Desperation and Enthusiasm!
When the market is brisk, Loan Officers, much like Realtors® can be found on every street corner. Kitsap County in particular has seen a huge increase in the number of both Loan Officers and Realtors these last five years. Rising property values and aggressive loan programs have made Loan Officers with little experience, overnight heros. In addition, it’s pretty common for new Loan Officers to be told they need to prospect Realtors® if they want to have long term success. You can probably expect to see a resurgance of the old “Dougnuts & Rate Sheets” type visits from Loan Officers.
Right now as you probably know, sub-prime lenders are disappearing at an alarming rate. The pool of Lenders is shrinking while the pool of buyers is increasing. The pool of buyers is increasing because fewer of them qualify for mortgage loans. When home prices rise, fewer buyers can qualify to buy them. Fewer loan closings equal desperation in Loan Officers.
The enthusiasm comes from a situation Lender Account Executives create. Often, Account Execs visit Loan Officers and tell them all about the newest and greatest Loan Program that is available. Younger Loan Officers, believing the hype, get excited about helping buyers into homes. And they want to tell everyone about it. They want to share their excitement. Here’s and example for you. Last week I heard this pitch in the office next to mine: “Your borrower’s credit score is too low to qualify? Don’t worry about it! We have a program that allows you to use the spouse’s credit score instead! Even if the spouse doesn’t work.” Needless to say, that Loan Officer was brimming with enthusiasm and grabbed for the phone as soon as the Account Exec left the office.
Let me ask you a similar question. Why is it that Realtors® treat Loan Officers like the mold on the cheese (something to be pared away when nobody is looking, so you can get to the useful stuff in the middle) when times are easy, and like the Loan Officer’s best friend when times are tough? I’ve had more lunch offers in the last 6 months than I received in the previous 3 years combined. At each lunch, I was eventually presented with a difficult loan scenario and asked if I could help. Realtors® know that some loans are very difficult and others are very easy. Do they really think that offering the promise of a string of tough loans is going to excite a Loan Officer? “Hey Mark, you can’t have any of my clean files because those go to my regular Loan Officer, but how about I send you all of my hard ones from now on?” Don’t they understand that their ‘regular’ Loan Officer isn’t getting the job done? Their ‘regular’ Loan Officer is just cherry picking!
By the way, do you want to be my buddy?
Sparky Fires Back
Boy! Can we just elect to take the ‘short‘ answer please? Sheesh, talk about being a little ‘chatty!’ How many pots of coffee did you drink this morning?
First off, I personally don’t consider any Loan Officer to be ‘mold’ on the cheese (although a few have acutally smelled that way). However, I do place a tremendous value in my lending partners. Like us Realtors®, a good, knowledgeable, ethical, hard-working Loan Officer is worth their weight in gold. Whenever I recommend a Loan Officer, I want someone to whom I can fully entrust the care and service of my clients. I want someone who does business like I do – someone who embraces, with the same fervency, the relentless pursuit of their client’s best interests, and possesses high ethics and integrity in the marketplace. Great rates and creative programs are secondary. Be honest, straight-foward, communicate well, treat people fairly and ethically, and you’ll never be ‘moldy’ cheese in my book. (Boy, how’s that for being ‘chatty?’)
Back on topic: I guess my point is, where were all these Loan Officers when things were going so good? Was my business and support not important or wanted or necessary for them then? Why all of sudden have I become their ‘Best’ buddy? Why do I find piles of notepads, pens, and cute little greeting cards littering my inbox? Why are they calling me like some long lost relative who they just can’t wait to see again? At least you’re getting a free lunch!
(I will concede, however slightly, that there are times when Realtors® are faced with a challenging transaction, and desperately need a ‘miracle maker’ to save the deal. Loan Officers who eventually accomplish the impossible and ’make’ it happen should be rewarded with future opportunities, not just the tough loans.)
Define ‘Buddy’
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So true. I guess if it works to get agents to Broker’s Opens during tour, it’ll work to coerce agents into using Loan Officer Candy Jar.
In the end, It always comes down to food. Lately, we’ve been getting jars with candy. The game plan is for the mortgage officers to return to fill the candy jars on a regular basis. Thus, you can judge how busy said mortgage officers are. Empty candy jars equals busy mortgage officers. Who needs to read the wall street journal?