LOS Journal – Volume 5 Issue 23

Why Haven’t Loan Officers Been Told These
Facts? Better Communication Equals Better Relationships and More Business

Many factors contribute to achieving consistent operational excellence at both the organizational and individual levels. A crucial element in this important pursuit is effective communication. Consequently, Mortgage Loan Originators (MLOs) must intentionally prioritize thoughtful and well-planned communication for every transaction. However, well-planned communication does not mean that MLOs need to start from scratch with every new transaction or stakeholder. Instead, templates or models can serve as helpful starting points for good communication. The MLO can then customize the model to meet the specific needs of the transaction or stakeholder.

Effective communication awareness is crucial because communication is such a dynamic process. During the early stages of the manufacturing lifecycle, there is typically more uncertainty surrounding stakeholder expectations. This uncertainty requires increased communication and care. Therefore, it is essential to maintain frequent contact during the early stages to ensure a good start and effective communication throughout the loan manufacturing lifecycle.

MLOs must closely monitor communications to ensure they achieve their intended communication goals, which, in turn, enhances engagement and stakeholder relationships.

In the past, the LOSJ has discussed the differences between effective and efficient communication, concepts that are easily confused. Although they are related, they are distinct from each other.

When evaluating the effectiveness of communication, it’s crucial to assess its impact, specifically, how well information or messages are understood. Efficiency, however, pertains more to the economical use of resources. For instance, if you have 100 stakeholders, face-to-face communication is the most effective way to convey your messages (though there can be exceptions). However, if these stakeholders need daily updates, relying solely on face-to-face communication becomes inefficient.

The way a sender structures and delivers messages is also crucial for effective communication. Communication methods encompass more than just text; they also include visual, verbal, spatial, auditory, and gestural elements. Most people recognize that body language can significantly impact how a message is received. It’s not just what you say, but how you say it. Effective communication often employs multi-modal messages, such as a narrated slideshow with textual pop-outs.

The terms “communication channel” or “media” refer to the systems or formats used for communication. Good communication involves careful planning of both modalities (e.g., visual and textual) and media (e.g., teleconference, videoconference, email)

Visual, verbal, and aural (sound) communication are straightforward concepts, but what do we mean by gestural and spatial communication? Gestural communication refers to body language, which conveys feelings and intentions through gestures and movements. Spatial communication, particularly in web design, is closely tied to user experience design (UX). It focuses on how intuitive the website’s layout is. A well-designed site is thoughtfully arranged, guiding users on where and when to click to find what they need, often without requiring other communication modes.

Is Video Conferencing as Good as Face-to-Face Communications?

Video conferencing has its pros and cons. If the sender or recipient feels the need to shave or put on makeup for a 10-minute call, it can make video conferencing unnecessarily inconvenient or intrusive. However, when the MLO is reviewing the Loan Estimate with an applicant, video conferencing can be highly effective and efficient. There is an ongoing debate about whether video conferencing can fully replace in-person interactions as a means of communication. Ultimately, the most important factor in successful communication is being sensitive to the needs of your key stakeholders.

Communications encompass more than words or tone of voice used to convey a message. The structure, frequency, and mode can either support or undermine the message.

Communication Tips

Using interactive methods increases the chances that the receiver will understand your message as you intended. Additionally, using two or more communication modes simultaneously can enhance comprehension. Interactive communication encompasses various formats, including face-to-face conversations, telephone calls, and videoconferencing.

SMS messaging may seem interactive, but it is not always effective in this regard. In fact, text messaging and similar forms of communication can often be counterproductive, as people frequently underestimate the inherent communication gaps in texting and emailing.

A communication gap occurs when there is a disconnect between the sender’s message and the receiver’s interpretation of the message, resulting in the receiver misunderstanding part or all of the message. Email and text messaging are generally ineffective for bridging these communication gaps; however, they are often the main channels we rely on for communicating with many stakeholders. Therefore, it is crucial to closely monitor these types of communication with key stakeholders. As a general rule, the more critical the communication, the more interactive the communication media should be.

Identify and Satisfy Key Stakeholders

Key stakeholders are individuals or groups that play a crucial role in the success of your project. This may include those involved in processing and underwriting, as well as builders and borrowers who assess whether your efforts meet their expectations. Additionally, it encompasses individuals who may not have a direct stake in the transaction but still significantly impact your success. For MLOs, management serves as a key stakeholder. They assess your overall performance and determine the level of support available to you.

Pointers for Written Communications

1) Clearly state the bottom line at the beginning of the message. This is especially important for Type A personalities. The subject or opening line should provide the key action item, request, status, or demand. If the relevance of your message is not immediately apparent to the reader, that lack of clarity is part of the message itself, making it less relevant or important. The “bottom line on top” approach exists primarily to address the most pressing question from the reader: “Why are you sending me this email?” If that is unclear in the first line, your message may fail to get the desired attention.

2) Keep it concise. In general, it’s more effective to maintain a single focus in your written communication. However, if you need to convey multiple messages to the recipient, you might consider using a different approach, such as video or phone conferencing. Alternatively, you can send separate emails for each topic—the more complex the messages, the better to engage in telephone or face-to-face meetings.

Critical Communication

The more important the communication is to the key stakeholders’ objectives, the “closer” and more interactive you should aim to be with the message recipient. To consistently and successfully bridge the communication gap, it is essential to focus on the most significant recipients of communication—the key stakeholders. This is why proper identification, assessment, and classification of stakeholders is crucial to communication success. Your ability to effectively communicate is limited; make it count.

You have limited time for the most effective multi-modal communications, such as face-to-face interactions, video calls, and telephone conversations. MLOs must ensure they communicate the right messages to the appropriate stakeholders at the right time and in the right context. There are known situations that can create communication gaps. It is crucial to closely monitor single-mode communications with key stakeholders, particularly when utilizing mail, email, or dashboards.

How can you determine when communication is not effective? You can ask message recipients for their thoughts, clarification, and feedback.

Indicators of ineffective communication include stakeholder frustration, irritation, impatience, a dead fish on your desk, a termination notice, or a loss of rapport.

Another indicator of communication gaps is the dreaded, “Why am I learning about this today?” type of questioning. When a gap is suspected, get more interactive. Face-to-face interactions are the best, but they are not always practical or possible. Although video conferencing may not fully replicate in-person interactions, it is undoubtedly more effective than telephone use in many cases. There is no single solution or perfect approach.

Urgency and The Power of Specificity

When encrypting your message, urgency and criticality are closely linked. To give your message appropriate emphasis, be specific and quantitative. If the message lacks urgency and specificity, it lacks importance.

Example of a Self-Inflicted Communication Gap

**MLO** Mr. Applicant, I need the items indicated on the checklist as soon as possible.
Applicant: You got it.

The applicant then went on a 10-day cruise to Chile. When the closing was delayed due to delayed processing, the applicant yelled at the MLO for not clearly conveying the urgency of obtaining the checklist items.

Example of Closing the Communication Gap

**MLO** Mr. Applicant, today is the 10th. Please ensure that the items on your checklist are in my office by noon on Friday, the 12th. If I receive them after that time, it could jeopardize your financing goals, including loan approval and a timely closing.

**Applicant** Yes, ma’am. I’ll make sure to have everything to you by Friday morning.

Numbers speak volumes.

Tailor Communication with Key Stakeholders

It’s important to note that some stakeholders prefer older technologies. For certain key stakeholders, calling them is often more effective than sending a Zoom invitation, as it may also invite other problems.

Implementation

Focus on making small, incremental improvements to your communications planning, execution, and monitoring, rather than attempting large-scale changes simultaneously. This way, success will be more immediate and measurable. Make a communications checklist that covers mode, media, frequency, and quality control. Keep it simple. Quality control can be as simple as periodically asking, “So what can we do better to communicate with you, Mr. Applicant?”

 

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BEHIND THE SCENES – Representative Maxine Waters Throwing Shade At FHFA Director Pulte

A few months ago, Bill Pulte was sworn in as the fifth director of the Federal Housing Finance Agency (FHFA). Representative Maxine Waters took it upon herself to send Director Pulte a congressional welcome letter. After the initial salutations, Representative Waters included a list of 17 questions that require answers within seven days of the letter’s delivery. Here are some excerpts from the letter. Welcome to Washington, Director Pulte!

Among the Salutations

“During your first month at FHFA, you have broken the law by illegally appointing yourself as Chairman of the Boards of each of the Enterprises, along with naming your General Counsel as a Board member for each Enterprise.” “Appointing yourself as Chairman of the Boards not only departs from the custom set by your predecessors but also directly violates federal law.” Section 1101 of the Housing and Economic Recovery Act of 2008, which established the FHFA as regulator of both Enterprises along with the position of Director, specifically prohibits the FHFA Director from “hold[ing] any office, position, or employment in any regulatory entity or entity-affiliated party.”

“You have also launched attacks on fair lending—despite your legal obligations under the Fair Housing Act and the Equal Credit Opportunity Act to prevent lending disparities and discrimination—by tweeting on March 25th that you were terminating Special Purpose Credit Programs (SPCPs) supported by the Enterprises.”

“On your second full day as FHFA Director, it was disclosed in public filings with the U.S. Securities and Exchange Commission (SEC) that 14 members were removed from the Enterprises’ Boards of Directors, including one individual who received a Nobel Prize in Economics. These qualified Board members were instead replaced with eight new Board members, including yourself as Chairman of the Board of both Enterprises as well as Clinton Jones, FHFA’s current General Counsel, as a Board Member of each Enterprise.”

“Equally troubling are the glaring conflicts of interest within the Trump Administration, among them,
your decision to name Christoper Stanley as a Fannie Mae Board Member. Mr. Stanley is not only closely aligned with Elon Musk’s Space X but is also part of Musk’s so-called Department of Government Efficiency (“DOGE”). In fact, it has been reported that there are now two DOGE individuals acting as liaisons within FHFA. What’s more, Mr. Stanley’s Board appointment appears to lack any merit whatsoever given that he has no prior experience in housing finance or familiarity with the Enterprises. It begs the question whether a Musk insider who lacks housing finance-related merit has the adequate or independent judgement needed to serve on Fannie’s Board. Following concerns with conflicts of interest and just one day after his appointment, Mr.Stanley resigned from the Board.”
[Some things take care of themselves, Representative Waters! – LOSJ Editor]

Waters Letter to Pulte

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