Loan Officer Sales Training Series 4/17/24: How to Manage Client's Expectations

Welcome to "How to Manage Clients' Expectations," a crucial installment in our Loan Officer Sales Training series. In the world of lending, understanding and effectively managing clients' expectations can make or break a deal. Join us as we dive deep into the strategies, techniques, and insights necessary to navigate this critical aspect of client interaction.

In each episode, we'll explore real-world scenarios, common pitfalls, and proven approaches for setting, managing, and exceeding client expectations throughout the loan process. From initial consultations to closing, we'll equip you with the tools and knowledge to foster trust, transparency, and satisfaction among your clients.

Hosted by Kyle Hiersche, this podcast offers actionable advice, best practices, and invaluable lessons learned from the field. Whether you're a seasoned loan officer or just starting in the industry, "How to Manage Clients' Expectations" is your go-to resource for mastering this essential skill set.

Tune in to learn how to anticipate, communicate, and deliver on your clients' needs and expectations, ensuring smoother transactions, happier clients, and a thriving loan officer career. Don't miss out on the insights that can elevate your client interactions and set you apart in the competitive world of lending.


For more episodes visit:
https://themortgagecalculator.com/Page/Loan-Officer-Sales-Training-Podcast

About The Mortgage Calculator:

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! 

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages, P&L Mortgages, Asset Bas

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages...

Transcript

0:00

Well, welcome everyone. My name is Kyle Hiersche. I'm the COO of the Mortgage Calculator, and this is our loan officer sales training that we do every weekday at 12 pm. m. Eastern, where we go over the front end and the sales end of the mortgage business. Today, we're going to be talking about how to manage expectations. Now this is on a sales training, because in order to get the sale done, We need to manage expectations, right? Very important in this process here. So that's why it's on a sales training. So let me I'm going to take the chat off the screen, but keep dropping comments there, drop any questions you have. But let's go ahead and get into it here. All right. So educating client on the loan process, right? So this is one of the biggest parts of doing mortgages just period all throughout the process, managing expectations, the sales part of it, everything. Is based on educating the client on the process, right? So when we're in the beginning stages, we talk about this on a lot of trainings of how we're going to quote them on multiple things, we're going, you know, multiple programs, walk them through those multiple programs to kind of make it their decision of what they want to start going with, right? Educating them on that process, but then all the way through the process, right? I can't tell you how many loan officers will just send out disclosures without telling their client what it, what it is, what it means that they have something they need to sign. I mean, you got to really walk people through this also. Signing disclosures, you know, through Ellie May and stuff isn't is usually not the easiest thing, right? There's tons of issues that come up with that a lot. So it's very important to educate them. This is what's happening. This is what I'm sending you. This is why I'm sending you this. This is what it means. More importantly, this is what it doesn't mean. Right. When you're disclosing a file at first, right? It doesn't mean that it's a locked file you know, with a locked rate, right? So it's important to let them know what these things mean, what they don't mean and what to expect. So not just, Hey, I'm sending you something to sign. You know, this is what it is, but also what happens after that. Every time we talk to the client, we should be reiterating, okay, now we got through that process. Now, remember the next couple of processes are this, this, this, and this, right? Remember, this is probably, you know, not probably a lot of the times the first transaction, excuse me, of this size they've ever done. A lot of the times it's the first, you know, home transaction they've done. And even if it's not, people don't remember the process from four years ago when they bought the house or six years ago when they last refinanced or whatever. Right. We are the licensee. It's us. It's our process. We are there to, you know, walk the borrower through it. Right. So it's, it's a mistake. I see a lot of loan officers make is just kind of, you know, Just thinking the client knows what's going on and just sending them stuff and expecting them to know what it is and what to do and why they're doing it and all this kind of stuff. Right? And then when we're in that beginning process, like when we're sending quotes and everything or just talking to him, it's important to set realistic expectations and really more. So I'm talking about right now as far as time goes. Right. Because of course, that's one thing. A lot of people want to know how fast, how fast, when, how fast can you close? When's it going to be done? You know, all this type of stuff, but we got to set realistic expectations, right? And that comes from us being. You know, a loan consultant and looking at the whole picture and knowing what's going on. And it also has to do with where we choose to send the loan to, right? Remember we're non delegating, meaning we don't underwrite in house. So whatever investor that's going to be purchasing the loan are, is going to be doing a courtesy underwrite for us. And so while you have some investors that may have the best pricing in the world, they might have longer term times. Or you might have somebody like UWM who has really high pricing, but the fastest term times in the history of mortgages. Right. And so it's going to also depend on where you take it. And then that's going to help you, you know, set realistic expectations for your borrower. Right. So the worst thing that I see for like new loan officers, especially as I'm telling people, you We can close this within 30 days. Well, a lot of times that's because they're newer, right? All the more experienced people on here know that anything that can go wrong will go wrong in the loan process. Right. And at the end of the day, you know, there's a lot of things that you don't control, including. Getting the borrower's conditions back. So that's part of setting realistic expectation with your borrower, especially anytime that your borrower asks, how long is this going to take? What are, you know, the, the turn times essentially. And that's when we have to say, well, it depends on a lot. And it depends on when the appraisal comes back, that's out of our control. And also it, you know, that's always a great time to have the conversation with the client of, well, a lot of, it's going to depend on you getting me what I need when I request it. Right. So when I need documents from you and things like that, and throughout the process, I may have to come back to you and ask for more documents. For example, I may have to ask for updated bank statements or updated pay stubs. So when I, throughout the process, when I ask you for these things, it's very important that you get me back to them quickly, because the whole process is going to be waiting on that. So let them know that they're a part of this. They're a part of this process and what they do makes a difference, right? In the turn time. So, you know, things like the appraisal, things like them getting you back conditions that are needed you know, these things are out of your control, but we're going to try to do everything we can to help them. But again, As far as the client goes, part of it is is on them and going to be depending on them. And we want to let them know that, right? We want to let them know, hey, this is a process that you're going to have to be involved in. I'm going to need some things from you. And as long as you're getting me everything very quickly, when I asked for it, there's going to be. No delays, but if, you know, you don't get it to me within a couple of days, the whole process will be delayed. However many days it takes you to get that to me. Right. Now here is a big one. Let's talk about the potential setbacks. So you know, our sales manager, Jose is like very big on this. Practices it very much with his clients and also preaches it to our team here. One of the reasons why we also send multiple quotes in the beginning of this process of talking to the borrower is so that we have different routes to go. And that we know the pros and cons of each route and that we have a backup plan, right? So these two here go together, talk about the potential setbacks, discuss the backup plans, right? So when we talked about a you know, bank statement loan, we talked about how the fact that if they find more than, you know, two NSFs, then we're going to have a problem. Or if there's Uh, deposits that we can't large deposits that we can't source that's going to be a problem. So let's discuss that. Now. Let's talk about what the solution would be, which would be moving probably to a P and L loan right now. What would be the setbacks? It's going to be more expensive. Now we're also going to need to involve an accountant or tax preparer you know, things like this, right? So we need to map this all out because then when the issues happen, then we already have all of the backup plans, right? And we already, more importantly, we already discussed it. With the client, especially because if you're so focused on one thing, and that's all you're talking to your client about when that one thing can't happen for one of a billion different reasons in this business, then they're going to be upset like you were trying to sell them something that they can't ever get. Right? But if you said, Hey, these are the amazing programs we have, I quoted you on a few years ago. Which one, you know, do you think is the best walking them through it? Maybe they ask you which one and you tell them, hey you know, I, I think the bank statement is the best. And that's probably what they would choose anyways, right? They would say, oh, the bank statement, it's a lot better price, right? It's lower rate. And that's what you would probably say in this example scenario, there's a million ways to. Right. I'm just using a bank statement in a P and L as a example for a self employed borrower to where you know, they would probably say the same thing. The bank statement looks cheaper. And you would say, okay, great. Let's go with that. That's easy. All we need is all your bank statements, but the issues that could come up or X, Y, Z. Now, if those issues come up, Our backup plan can be that P and L quote that I sent you notice. It's a little bit more expensive and keep in mind, we'll have to get an accountant letter involved and stuff, but that would be our backup plan. If anything happens. And so now it's, it's all just a part of the process. Oh yeah. Look, there was issues with the deposits. We couldn't source them. The, they wouldn't give us an exception on that. So now we need to move on to the backup plan. Okay. Everybody knows what's going on. They've already seen quotes with the general pricing of it. Obviously, you have to re quote it again, but you know, you get the point here. That's very important. Again, in the upfront process of managing their expectations about. What can happen with the loan programs and with how many loan programs we have here. There's multiple loan programs for every borrower, right? That will fit in general. You're not going to know if any of them actually fit the exact guidelines until you go through trying to do the loan. But that's why it's important that before we even go down that journey, let's have a plethora of choices. Let's have walk them through these. Let's have a backup plan that we discussed with them so that they're on board. Right. That's a very important and now piggybacking off of that here. We need to react to any problems immediately. So another huge mistake here, especially for loan officers. Excuse me. New loan officers is actually experienced loan officers too. All the time. They don't want to answer the phone when things go wrong, right? They don't call people and be proactive when the realtors are calling them and clients, when there's bad news, they don't want to pick up the phone. Who wants to pick up the phone when all you have is bad news to tell people. Right. But I'm telling you, it's extremely important because it's just going to get worse and worse as the problems happen. So like Jose says. As soon as you find any type of issue, you should be on the phone, calling everyone involved, making sure everyone is aware of this issue because it's just going to be more and more of a problem, right? Keep in mind too, we have a huge obligation to our borrowers. And in situations like a purchase, for example, we essentially have their deposit in our hands because there's a financing contingency date that we need to be aware of. And we need to make sure that we're communicating with everyone if we're going to hit that financing contingency date or not so that the client and the realtor can cancel the contract. If, if they have to, right. If we have to figure out how to cancel it, because if not, then the kind of financing contingency expires and they lose their deposit. Right. Which is a big deal talking five, 10, 20, a hundred thousand dollars. You don't know how much the deposit was. Right. So very important there to be on top of it. Now, when your phone is blowing up because something's going wrong. So guess what? If you had already had the conversations with your borrower, with the the, the realtor about these different options about the backup plans, if XYZ happens, then answering that phone call is not a problem. The client calls you or you have to now call the client. Let's say it's even just you having to pick up the phone and call the client. A lot of people don't want to do that, especially when it's bad news, but guess what? It's not even bad news because we've already addressed this, right? It's nothing to pick up the phone and say, Hey, remember what we talked about? Looks like that's what happened. So let's go ahead and go with the backup route. Remember how we talked about how that was going to work here? Let's walk through how we're going to. Proceed down that road. That's not a problem, right? It's only a problem if you never spoke to them about any possibility of this. And then it just comes up and they go, what the heck? We're halfway through my loan. You said we could do a bank statement loan. I don't know what a PNL loan is. What are you talking about now? It's way higher price. You're trying to bait and switch me. Right? So two totally different conversations. One is you're an amazing loan consultant getting out in front of problems before they happen consulting your client through all the different options and finding solutions for your client and making your client feel safe and secure that even when one thing happened, we're moving right on to the next. And we knew it was possible. So we go from that, which is all positive. To an extremely negative, probably going to give you a bad review and never work with you again and tell everybody that if they talk to you about mortgages, they're definitely not going to tell them to work with you. They're going to tell them that you gave them a bait and switch. Now, what is the difference between what happened in those scenarios? It wasn't what happened with the loan. It wasn't what underwriting did. It wasn't anything to do with anything besides the loan officer properly consulting with their borrower. That's it. The same exact problem happened, right? The same exact problem with the underwriter or whoever denied the loan, why we have to go this other route or do this other stuff, same exact scenario, same exact thing happened that was out of our control. But what is in our control was how the loan officer handled this. Especially up front. So now you see how important that is. We have two scenarios here. One goes amazing and you're the most amazing loan consultant and your borrower is happy and relieved and never gets panicked and trusts you, right? As opposed to the other way, where not only are they not going to do the loan at that point, they're not going to recommend you. They may end up giving very bad reviews because people feel hate feeling like they got a bait and switch. And even though that's not what you did. That's, you know, that's not what it looks like to the other person. Right? So very important. Managing expectations about market trends and conditions. So now we're going into, you know, the rate lock management side of things. And so we don't have to be a financial expert, and we don't have to try to make our clients a financial expert, but we should have a general knowledge of what's going on and be able to speak to them about that a little bit while at the same time where none of us are psychic, right? No, no one knows what's going to happen with the interest rates, especially lately, but at the end of the day, something you should be talking to your clients about. Now we talked about this on the training last week. I think the loan officer training, the one we do in the evenings. About the fact that you know, it doesn't matter whether rates are going up or down, you know, that's always something to talk to your client about. Right. So right now, like last week, you know, people were waiting on the rates to go down. They thought they were going to go down. And then this week they shot up. So anybody that was sitting there waiting to lock their rate last week saying, oh, we'll just, let's, you know, the more we wait, the, Closer we are to getting the rates to drop. Well, guess what? They just kind of got screwed, right? Because now rates are way higher this week than they were just last week. Right? So you know, it's, it's important to just be discussing these things with your client. And it's important to understand as. You know, the, the more experienced loan officers do, and hopefully the newer loan officers out there will you know, start to you know, figure it out that it's not just about the rate, right? One thing we talked about was the fact that it's also the guidelines. So when it comes to locking your loan, you're not only not locking the rate that day, you're locking the guidelines that day, and with all the volatility in this market. Guidelines are going to be changing. Well, first of all, non QM, they change every day anyway, but they're going to be changing even more often. You know, things like tightening up the LTV or restricting seasoning on, you know, things, right. These are the types of things that they do to try to keep the prices down. When rates are going up, they're going to tighten up the guidelines. And so that same loan that you had yesterday, that was all good. And you were just waiting to lock it. Cause you thought the rate was going to go down. Well, guess what prices go up, then they try to restrict the guidelines to bring the prices down. And so the next day, all of a sudden you don't have a loan because they changed the seasoning requirements from six months to a year, right? And so you were trying to save a tiny bit of money on interest rate and you lost the entire loan from one day to the next. Because you didn't lock it. So remember, right? Lock is not just about locking in a rate. It's about locking in the guidelines for that day. And if you don't do it, then you're out of luck when they change the guidelines, which they do. Typically once a month and then in environments like this, maybe once a week, even day to day when it's non QM loans like this, there's no rules they can change at any time they can change the guidelines, they can change the rate sheets throughout the day, intraday rate sheet changes intraday. Guideline changes. I mean, it's just, it's, it's, it's ever changing and it's a landscape. You need to know how to navigate. So, for those of you more from the conventional world, you know, this is totally different, right? You're not locking guideline when you're doing conventional loans. All you're worrying about is locking the rate because the guidelines are the same for every single loan that's ever happened. For a conventional loan is totally different than non QM. And then of course, just general guidance with your client. Remember you're their consultant, right? You're the licensee. We are the ones that knows what's going on. And we should also be able to explain it in somewhat layman's terms to our clients. The good loan officers, the experienced ones are really good at that, right? They're good at knowing how everything works in a complicated way for them to know it. But being able to explain enough to their client in a very simple way to where their client can be guided through the process. And then last slide here, just manage everyone's expectations. So, so far we've been pretty much talking about the borrower, but the buyer's agent, seller's agent title, I mean, everybody should know what's going on. So that goes back to if there's problems that come up, if there's issues that come up. You know, these are, these are things that need to be communicated to everyone as soon as possible. And just remember, you're not the only one in the transaction. The borrower is not the only one in the transaction there's, you know, well, assuming this is a purchase, there's the buyer's agent, seller's agent, the actual seller themselves, there's title, there's all kinds of people who have a lot going on. Right. And a lot of, you know, a lot of it could kill the deal too. And with no you know, nothing to do with us without us doing anything wrong. Right. So very important that we communicate with everyone and communicate quickly and clearly. That's the biggest, I think, takeaway from today for everybody, as far as. Managing expectations. I guess the 2 biggest takeaways there that make sure to not avoid people as soon as something happens, pick up the phone, communicate quickly and clearly with everyone in the process that needs to know what's going on. And then the other really big 1 here. is talking about the pros and cons of the multiple options that we're going to give them when we're quoting them and discussing the route of which ones would we want to go with first, which ones would be the backup plans and how we would go about that. You know, for example, it might be a situation where we say, okay, 85 percent DSCR. Let's say their, their credit there, you know, it could get the 85 percent if they're at the seven 20 or whatever the threshold is, but we end up not being able to get their credit there. And then we know, Hey, remember the backup plan was just that we're only going to get 80 percent LTV. So we already knew this going into it. We were going to try to get the 85%, but we knew we might not get it. And so that's a lot different than this person planning the entire time to only put 15 percent down. And then all of a sudden now at the last minute or. Further into the process, you're saying that they're going to have to put 20 percent down, right? We want to get them in the right mind state so that they can also plan personally, right? They need to know this personally, who knows what their money situation is. They need to be knowing in their head, like, okay, I'm going to put 15 percent down, but there's a chance I might need 20. So I need to make sure that 20 percent is set aside. I've already spoken to, you know, whatever ex loan officer about it. They explained that this could happen. I know what's coming. I know what's going on. And I know that the downside of us not being able to make that happen is a 5 percent LTV reduction. I already know exactly what's going on. Right, so very important to manage expectations and it all starts on that 1st interview with the client when you're talking to them to get all the information you need to send a quote and then sending multiple quote options and then calling the client to discuss them and go over them and walk through them and then find a plan of action. And make sure that that plan of action also includes backup plans for when something happened. All right. And that is it for today. I don't see any questions. So we'll go ahead and wrap it up here. Again, huge difference. Remember that scenario. Keep that in mind. Huge difference between Managing expectations properly and having a happy client, smooth closing, then that same scenario happening and us not managing their expectations up front and end up getting a no client, no deal, bad reviews, bad mouthing us to people, right? That's that's a huge difference of us just doing a. Good job as a loan officer consultant up front and not letting it all explode on the back end. So thank you everybody for tuning in. Remember, we do this 12 p. m. Eastern every weekday where we go through the front end of mortgages. So we'll be back tomorrow, 12 p. m. Eastern for the next episode of the loan officer sales training with the mortgage calculator.