Why Haven’t Loan Officers Been Told These Facts?

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1. According to RESPA, the definition of a business day is a day on which the offices of the business entity are open to the public for carrying on substantially all of the entity’s business functions. Generally, this definition equates to the following days:

A) Monday through Saturday except for federal holidays

B) Monday through Sunday except for legal public holidays

C) Monday through Friday except for legal public holidays

D) Monday through Friday except for federal holidays


2. In meeting the disclosure timing requirements, which of the following disclosures are not dependent on the RESPA definition of a business day?

A) The Loan Estimate

B) The Closing Disclosure

C) The Servicing Disclosure

D) Your Home Loan Toolkit, A step-by-step guide


Behind the Scenes

The Taper Tantrum
Watch Those Refinances, No On and Off Switch for Rate Changes

To Explore Strange New Worlds, to Seek Out New Life and New Civilizations, to Boldly go Where no Person has Gone Before 🙂

Last week, the Journal emphasized the importance of solidifying your value proposition with current referral sources. One way to better define and articulate specific values is to prepare a value stream map. Value stream maps are associated most frequently with process improvement. You are going to use the map similarly. Using real estate agents for the exercise, consider what specific actions or deliverables you generally provide.

For example, Chris, Sam, Jackie are real estate agents from whom we currently receive referrals. Jot down what you think you currently offer to them. How do you distinguish yourself from competitors? For example, here are a few deliverables:

  • Preapproval letters
  • Marketing materials
  • Prequalification
  • Co-branded advertising
  • Other sponsorships (e.g., Marketing Services Agreement)
  • Tools
  • Public speaking opportunities
  • On-time closing
  • Referrals to prospective buyers and sellers
  • Excellent communications
  • First-time homebuyer programs
  • Specialized loan solutions (e.g., non-QM, forward commitments, relock options)

Transfer these things discretely onto index cards, one deliverable for each index card. These are your value propositions.

Next, set up a time to get together with Chris, Sam, and Jackie for a brainstorming session. Ideally, get at least three or more customers of a similar feather. Pass around the index cards and ask each person to rank the deliverables from one to five anonymously: one of little value and five of the most significant value. Facilitation tip: Limit the participants to awarding no more than one or two “fives.” This comparative analysis might help deepen the deliberation.

In the initial stage of brainstorming, there is no judgment, cross-talk, or discussion. Collect the cards and announce the tallies. Write the rankings on a whiteboard. Next, present the ranked deliverables to the group for discussion. Preserving the scoring anonymity of the participants may help the participants to feel less argumentative or defensive regarding the ranking. Here, be open to the concept of synergy – that the whole is greater than the sum of the parts. The exercise is to open possibilities by gaining different perspectives on everyday things. Ask open-ended group questions. Start with the top-ranked values, for example:

  • How do the deliverables help you achieve your goals?
  • How might the deliverable be of even greater value?

After the discussion, circulate the cards for round two of ranking. Explore whether or not the discussion changed the tallies.

After the group has warmed up, open the discussion for suggestions, complaints, and thoughts. Give the group a chance to express what values are missing from the cards. When people talk, share, and have some fun, they feel safer than when they do not. Hopefully, anonymity is no longer needed. So, what values, services, or deliverables might help them meet their goals? Some leading questions to ask are:

  • How could the list be expanded? What value or deliverable is missing?
  • If you had unlimited resources, what one thing would you do to change your business?
  • What three things do you dislike most about your business?
  • This time next year, what do you hope will be different about your business?

This gathering is an opportunity to suggest a few business initiatives. Might the agents have an interest in serving underbanked communities, low-moderate income households, and first-time homebuyers? Determine if there is any interest in going after the underbanked communities. Offer to sponsor advertising for homebuying seminars or speak about financing solutions for entry-level homeownership. Be part of the solution.

The value of this exchange is twofold. First, your customers can better articulate their needs and success criteria to you. Second, you are more equipped to improve your value proposition. Brainstorming can be hard work. But it can also be fun and rewarding. Your role is to facilitate the discussion and note what you can do to accelerate your customer’s success. Make sure you capture something that you can implement within the week.

So make it fun, brainstorm over lunch, beers, or a ballgame. Bring your processor, assistant, or manager along. Generally, brainstorming improves with differing perspectives. Generally, people will positively view any effort you make that values their opinion!

You may feel ill-equipped to facilitate a brainstorming session. Draft your boss, a senior executive, a title rep, or someone with the skills to do the job. What is worse – do a half-baked job of facilitating the meeting or do no meeting at all? Leave your perfectionism at home and get busy. Take a chance. Take action. Plan something for next week you are not doing this week.

Do your customers refer you to their attorney, accountant, or financial planner? Why or why not? Do you ask your customers if they know any first responders or educators? What do you have to lose?

Next week the Journal looks at expanding the customer base with prospective customers you might have overlooked.

Tip of the Week

Project Management Skills for Loan Origination – Communication

Last week, the Journal argued the importance of analyzing stakeholder communication preferences to ensure you get it right. Because people have different communication styles, sensitivity to communication needs demonstrates care and respect for people. In addition, it is most helpful for the message sender to avoid unnecessary assumptions and stereotypes.

For starters, a tool for communication style analysis might be helpful. The tool is not to assess the appropriate communication mode or medium. The tool is to focus on how you can influence the message recipient through relatability. The tool is a window to the stakeholder’s communication style and how you can influence the stakeholder to unpack your messages more favorably.

When talking to people, do you find that you click with some people more than others? What is ubiquitously labeled “chemistry” may be just that, a neurochemical response taking place in the brain. Good chemistry with people is the same feeling you get from ah-ha moments when learning something new. It feels good.

You know the feeling. Increased energy, a brighter disposition, more optimism are a few of the signs that you’ve experienced a positive neurochemical experience. The person you’re communicating with may exhibit excitement, often smiling or laughing. If the person you are communicating with was down, they might get more animated, and you can almost see the clouds parting and the sun shining through their previously gloomy disposition. The interaction usually occurs between people with similar communication styles—picture two computer nerds braying over a gaming console (watch the stereotypes :)), or people excitedly finishing each other’s sentences.

Good communication feels good. That’s why some interactions energize us, and others are draining. And you better believe it, emotions are infectious. But how do you prime the emotive pump and get those positive feelings flowing? Again, take a look back at the buying process series in the Journal for a few tips.

If your conversations and interactive communications leave the recipients feeling drained, you might be failing to appropriately adapt your communication style to theirs.

The way to prime the positive emotions and energize the message receiver is by speaking the stakeholder’s language. But how do you identify the appropriate language?

This week, we start with the first of our four communication styles, the Dewrecktator.

I’ll tell you a personal story. A story about the Journals editor. A bit about my native communication style.

Firstly, I’m overly direct and too intense for most folks. The proverbial bull in a china shop pretty well sums up my native language. Unless I consciously adjust my communication style to that of the message recipient, people might view my native communications like I’m a professional wrestler or a character from the Sopranos.

Communication style has nothing to do with timing, although timing can be significant. Sensitivity to the message recipient and their environment requires just a little situational awareness.

I have an aversion to chit-chat when busy – which in my mind, is all the time. When I was onsite, vendors and co-workers would wander into my office, pull up a chair, and begin asking about my kids or what I did that weekend or was planning to do this weekend.

Or just as bad was getting bushwhacked in the parking lot or cafeteria. At least if we were walking while they were talking, my blood pressure was pretty even. I’d bite my tongue and endure it as long as I could. I’m sure I was unable to hide my feelings. Regrettably, I’m sure the message sender would often take my wincing and grimaces as a personal rejection or a negative response to their message.

Once I grew so tired of chit-chat (almost anything I did not want to discuss was chit-chat), I removed the chairs from in front of my desk. Unfortunately (or fortunately, because adaptation was not optional), that hardly slowed the worst offenders. They would just roll a chair into the office and sit down. “Dude, you should get some chairs for your office.” No lie. Me, I was thinking of getting a lead pipe instead. No kidding. My dermatitis went ape for a week.

If anyone barged in for too long, my assistant or some other sympathetic soul would come in with an “urgent” call or task teed-up, so I could say, “gee, I’m sorry I’ve got to handle this right now, please close the door behind you.” I admit it – that was inappropriate, and I’ve spent much of my life trying to be a better human being.

Yes, part dictator and overly direct. You can see the signs; I make a lot of eye contact. I speak with passion. I want to get to the marrow quickly and be forceful when making a point. Likewise, I express my opinions without invitation and overvalue my perspective.

But for those who knew me and were willing to adapt, they did not wander into my office for chit-chat. Instead, they’d send an invite to a meeting with several alternate times or days. When we sat down, they had handouts. They’d give me what I need to decide in a timely fashion – right upfront. Whatever they were presenting – spreadsheets, histograms, or reports, the numbers lined up. They provided clear problem statements, quantified impacts, and appropriately granular requests or imperatives. I seemingly could always make time for those interactions. I liked talking to those folks and wanted more interactions with them.

I’ve heard it said the first step in getting better is admitting you have a problem. I admit that expecting that people communicate with me the way I want is selfish and unprofitable. However, when dealing with people like me or those who know how to communicate with me, I can relax and just let it fly.

I am also aware of the polar opposite of my communication style. I have adapted. I still like the spreadsheets, accurate numbers, and bottom-line on top memos. However, I’ve learned to speak gently and chit-chat too. I now keep pictures of my favorite people and spots on my phone to share them with those who need to connect on a personal level. When I ask someone about their weekend, usually, I mean it. If someone needs time to make a decision, I can accept that too.

I did learn to adapt to others’ communication styles. But sure enough, when stressed – it’s the reversion to type—my communication style, the Directator or (Dewrecktator), comes flying out at the worst times like a bat out of hell. No worries, just be better, not perfect.

How do you deal with someone like that, a Dewrecktator? Get to the point. Stay focused on the topics at hand—bottom line on top. Provide clear options and trade-offs. Make sure the analysis and conclusions hold water. Back up any assertions with accurate data. Stay focused on reason and facts, not on feelings.

Does this sound like anyone you know? Then, next time you talk to them, be prepared.

A simple tool to help identify the key stakeholder’s communication style is helpful. There are endless tools and variables one could consider—no need to get too fancy. The Journal shall consider four primary influence styles for better communication. First, identify the communication style types and signatures. Then adapt your delivery so they can hear your message.

Keep in mind; you won’t reinvent your communication skills overnight. Start with a few key stakeholders. Building better communication skills will be gradual, with incremental improvements. Better communication with just one key stakeholder could be the difference between success and failure.

Keep in mind. Many small steps add up to great distances. Start with the key stakeholders you know best. For example, pick a coworker or customer you know well. Identify their communication style and determine how to better communicate with them using their language.

Part of the benefit of attempting to identify the communication style of key stakeholders is the deliberate focus necessary when contemplating effective communications. That deliberation and analysis are better than nothing – which is the default for most.

Watch for the Directators. They are hard to miss :). Next week the Journal will unpack the second of the four communication styles.


2021 CE – Sneak Preview

Is now a good time to go long or short on the stock market? Is the residential real estate market overbought? Time to sell? Are you confused about where to invest your hard-earned money? Stop messing around and make the best investment you will ever make – invest in yourself. Yes, that means professional development. Be the best version of yourself that you can be. Expand your horizons. Why not get on one or more of the developing market waves?

Are you interested in Low-Moderate-Household-Income lending? Do you wonder about getting started with loan manufacture requiring alternative credit (nontraditional credit)? Have you heard all the horror stories about collaborations with Housing Finance agencies? Grab the bull by the horns and take some chances. Join us for a primer on getting started with these types of loan programs.

CE should be an opportunity for professional development. That you might expect – but we promise that you will have fun at the same time. So how can you enjoy hours and hours of law, ethics, and regulation? Well, swing on by the LoanOfficerSchool.com 2021 continuing education classes and find out!