Motley, Apryl, Independent Banker
How to prepare your mortgage lenders for what promises to be a busy homebuying and selling season
Forecasts for the U.S. housing market are improving every day. There is no better time to reassemble your team and hone your game plan for growing your residential mortgage business.
According to Ron Haynie, president and CEO of service provider ICBA Mortgage, community banks have a real opportunity to expand and leverage their networks if they communicate well with borrowers and set the appropriate tone for their mortgage transactions. "The biggest problems occur when you don't set expectations for borrowers," he says. "Good communication with borrowers is essential in the current housing market."
Haynie acknowledges that everyone involved in the mortgage underwriting process- lenders, builders, buyers, sellers and real estate agents-wants to close deals quickly, but he cautions that the process must be managed even more carefully now to make borrowers feel comfortable and to maintain their confidence.
Effective internal promotion helps ensure that community banks present the best possible image to borrowers. "Many borrowers have probably heard horror stories around people trying to get loans," Haynie says. "Community banks need to stress to them, 'That's not how things get done here. We operate differently.' " In-house, start with these basics:
* Make sure your lenders "really understand the approval process and what's required to get a loan underwritten," Haynie says. You need to make sure that they understand the guidelines and requirements of borrowers as well."
* Establish clear communication from the start to minimize the need for going back and forth with customers. "Repeated requests for information create a bad image of the bank by making it seem like you don't know what you're doing, which leads to borrower frustration," he says. "Loan officers need to be well trained so that borrowers feel confident that their loans will go through."
* Educate staff in all areas of the institution about your mortgage products. "Spend time in your branches making sure managers know what the bank is offering," Haynie recommends. "Let them know you are closing loans in 30 days. Tellers and others on the front line should be cultivated to deliver leads."
* Have different departments work together to increase their mortgage business, Haynie adds: For example, "your bank's commercial clients have employees. Be sure they are aware that you're making mortgage loans."
* Externally, advertise in local home guides. "It's usually a good investment," Haynie says. "Show your loan officers' photos and contact information so people get to know who they are."
Likely there would be fewer consumer horror stories if the different professionals involved in the mortgage process communicated more frequently and coordinated resources. Bankers, real estate agents and builders all have key roles to play in the housing market's recovery.
According to the most recent consumer survey conducted by the National Association of Realtors (NAR), 21 percent of homebuyers rely on real estate agents for information about mortgage lenders.
"Even though homebuyers get much of their information about loans online, including prequalification, many still ask real estate agents for their advice about lenders," says Walter Molony, NAR senior public affairs specialist. One of the best tools that community banks have is face-to-face contact with agents, he notes, so "community banks need to talk with local Realtors about the lending options available in their communities." How?
* "Most local Realtor boards have quarterly or monthly meetings. Ask to attend," Molony suggests.
* Have each loan officer develop a targeted list of agents to call on to discuss your mortgage products and services, Haynie adds. …