Residential Magazine

Time to Shine

The market has changed dramatically and only talented originators will thrive

By Dennis Black

It is apparent that mortgage originators will need to rewire and fine-tune their sales skills in order to finish strong in 2022 and start great in 2023. Without a change in approach, originators will struggle with the new reality of rates that range between 5% to 6% or higher.

Who in the mortgage industry didn’t love the past three years? With interest rates at record lows, originators repeatedly broke sales volume records. The problem is that apathy developed. Originators didn’t need to nurture their sales techniques. Skill was less critical than the ability to have maximum operational support to handle the record volumes provided by the low rates.
This is a fabulous opportunity, however, for sales professionals who are willing to not rest on their past production and wish to improve themselves so they can separate from the pack in the coming months. The loan originator who flourishes in these market conditions is the one who realizes he or she must be better now than in the past three years.
The mortgage industry went through turmoil as rates rose and subsequently declined after the crash of 2008. The one constant is that people still found ways to purchase homes, with unique product offerings being a critical component for survival for many originators. Starting in 2018, rates dropped enough to create a sustained refinance market. Clients called originators and the main issue was to manage turnaround times. How things have changed.
There are two constants in the mortgage industry. One is that change is inevitable. Mortgage originators must embrace this mindset. Two, skill matters. Selling is an art, not a science, and if you hone your craft for the balance of 2022, you will not only succeed but set yourself up for a great start to 2023. Here are some key ways to achieve the necessary change to thrive during these demanding times.

Sticker shock

The primary issue is “sticker shock” for borrowers, due to the combination of rising interest rates and escalating home prices. But there’s some positive news: There is tremendous pent-up demand for many buyers who want to acquire a home. Combine this with sellers who realize that buyer affordability is declining, and this will lead to a busy purchase market for the remainder of 2022. Are you in position to capture this opportunity?
The strong mortgage originator will understand that what matters today is total awareness of the client’s goals and needs, along with a vision of what a mortgage can do for them. The mortgage professional needs to resume more of a financial consultant’s role. They need to sell rather just being an order taker. The average or below-average originator who relied on low rates will probably exit the industry, which is good for the quality originators who remain.
The best originators will stand out to both the borrower and, just as importantly, the Realtor partner. Referral partners need top-flight originators who will help the buyer navigate these turbulent waters and close the sale by providing the right financial offering.
Comprehensive product knowledge is the lifeblood for the originator of 2022 and beyond. The industry is no longer in a 30-year fixed-rate world where price is the preeminent factor for many borrowers when selecting a lender. Originators need to understand the client’s short- and long-term goals for a home purchase.

Creative solutions

Originators need to be able structure a loan that may be nontraditional, such as an adjustable-rate mortgage, a nonqualified mortgage, or a combination of a first- and second-lien loan that utilizes a home equity line of credit product. Develop this trust by conducting a needs analysis. This will separate you from the average originator who just wants to close a single loan rather than develop a long-term client relationship.
Knowing your client leads to the proper product recommendation through quality questions such as:
  • Do you have an idea of how long you’ll be in your home?
  • Is this your last home and do you see yourself retiring in this property?
  • Do you value monthly cash flow as the most critical factor? Or is long-term equity build up more important to you when choosing a loan product?
The answers to those questions drives product recommendations going forward. You can create a strategy for the client based on the needs analysis. This is why many mortgage originators got into finance — to offer creative solutions for the borrower and deliver the service expected by the Realtor.
There are great products to offer clients today — far more than just a boring, 30-year fixed-rate mortgage. One product in particular that is of major value, especially for the self-employed borrower, is the bank-statement loan. This product determines income based on bank data rather than tax returns and employer verification. Learn about the bank-statement product and make sure it is part of the loan options you can deliver for today’s borrower.

Selling excellence

Another of the keys to success in the mortgage business is to have relationships with a minimum of five Realtor partners who will send prospects your way first. Nearly half of borrowers consider a single lender or broker before deciding where to apply, according to the Consumer Financial Protection Bureau.
And 77% of borrowers end up applying with only one lender or broker rather than filling out multiple applications. While this data is several years old, it’s clear that being the second or third choice won’t cut it.
Homebuyers often rely on Realtors to point them in the direction of a mortgage originator. And the prime goal for a real estate agent is to complete the sale. As an originator, if you’ve developed product knowledge to deliver the best options for clients, then you’ve become a valuable asset for the Realtor.
Timing is imperative in this situation. Convince the real estate agent to give you the first chance at delivering the right financing for the client. They may potentially gain a new trusted lending partner.
Now is the time for the mortgage industry’s best salespeople to rise to the top and seize every chance they are presented by being better through product and process education. Product knowledge and the right group of Realtor partners are the keys to survival for the balance of 2022 and early 2023. Sales skills matter more than ever, and even though many originators have allowed their skills to atrophy, they can always rebuild them through training and coaching.
Don’t view this as a challenging time but a great time for the future of the industry. The outcome of the rising-rate environment will hinge more on sales excellence compared to the past three years. Accept this challenge and grow every day through knowledge and experience. Once you get through it, you can truly say you survived tumultuous times. And no one can ever take that away from you. ●


  • Dennis Black

    Dennis Black is the CEO of Dennis Black and Associates, a training organization devoted exclusively to the development of sales and management professionals within the lending industry. Dennis Black and Associates has trained more than 120,000 mortgage professionals throughout the United States, Canada and Australia. Black speaks at conferences sponsored by the Mortgage Bankers Association and NAMB - The Association of Mortgage Professionals about selling strategies and is a frequent speaker at state conferences.

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