Are you ready for some awesome news? I am excited to inform you that there is no such thing as an unqualified borrower! That means that you should never refer to even the unemployed recent college graduate sporting a 540 credit score as unqualified. You see, the successful mortgage loan originator understands that there are only two types of borrowers: those who are qualified and those who are not currently qualified.
Think back, if you will please, to a time when you wanted something but might not have been quite ready. Maybe you hadn’t saved up enough for it yet. Maybe you weren’t old enough to buy it but you went to where it was being sold to get some information. Do you recall how you were treated by the sales staff as soon as they realized that you weren’t going to buy what it was about which you were inquiring right then and there?
I will never forget an experience shortly after having turned sixteen. There was a car that I passionately wanted to own and, even though I hadn’t even come close to saving up the money needed to buy it, I nonetheless went to a dealership to look at it and learn what I needed to know so that I was prepared when the time to buy finally arrived. Moments after being introduced to the salesperson, when he realized that I was unable and not going to buy that day, he checked out and acted completely disinterested in answering any of my questions. When I asked him if I could take the car for a test drive, he reluctantly agreed but told me that I would need to affix the dealer license plate on the car myself and warned me to be back to the dealership within fifteen minutes. Without even the slightest doubt, I am thoroughly convinced that, had he believed that I was ready and able to buy that car without delay, he would have put that plate on for me and accompanied me on the test drive. Oh I ended up buying that car about a year later. But from a completely different dealership.
You see, the car salesperson that I just described defined me as and treated me like an unqualified customer. And, as such, he lost a sale. Sure, maybe he would have had to wait for me to be ready. But, had he treated me more appropriately, he would have ultimately reaped the rewards of treating me the way that I deserved to be treated.
As a mortgage loan originator you will regularly encounter customers who are not currently qualified. In fact, you can expect that quite frequently. But it is how you treat those individuals, and how you respond in those circumstances, that will define your reputation and success.
The successful mortgage loan originator sees all customers as future customers. At the very least, he or she sees them as potential referral sources.
The “not-currently-qualified” customer is often someone who requires education pertaining to what it will take for him or her to become qualified. And, most importantly, he or she needs and deserves to be treated with respect. Imagine if that customer was your mother, father, husband or wife. Wouldn’t you want a mortgage loan originator to treat him or her with respect and dignity? Even if he or she did not currently qualify? Of course you would!
I must preface what I’m about to say by making something perfectly clear. As a mortgage loan originator, you are never permitted to discourage anyone from applying for a loan. In fact, the only time when you can refuse to take an application from someone is when they’re under the age of 18, if they’re committing fraud, or if they’re mentally incompetent. Even simply implying to a potential customer that they would not be approved for financing could land you in hot water for violating their rights protected through the Equal Credit Opportunity Act (ECOA). You may certainly discuss underwriting parameters and qualificational guidelines but, outside of the aforementioned three automatic disqualifiers, be certain to always offer the inquirer the opportunity to apply.
Having said that, when the future customer decides not to apply at that time based on the financing’s qualificational parameters in relation to his or her current circumstances, the successful mortgage loan originator continues by offering the individual specific and custom-tailored tips and strategies to help him or her improve his or her future chances for loan approval.
Review their credit profile with them and help them to understand how to improve it if necessary. Discuss savings and debt-elimination strategies. Provide a realistic timeframe for them so that, when they follow your advice, they’ll be certain to qualify by a particular time. And then follow up.
Not everyone who you counsel will choose to and/or be able to follow your advice. That’s why, after your initial consultation, it’s wise to calendar a check-in a month later. And if, when you check in with them, they’ve abandoned your guidance or hadn’t started following it yet, wish them well, remind them to call you if they have any questions, and move on. If, however, you discover that they’ve been following your advice, the periodic check-ins should continue monthly until they’re finally ready to apply.
By doing this, not only are you encouraging their situational improvement, you’re also creating top-of-the-mind awareness so that they will remember you when the time to apply finally arrives. And when that time comes, not only will they be excited to move to the next step with you, but they will also naturally want to refer friends and family to you because of how you treated them with respect, dignity, and as a human being instead of just a potential sale.
I understand that this process may take some time before these individuals are finally ready. I also understand that you need to earn income now. But not every customer who you encounter will be unqualified and, when you think about it, if you’re constantly working with currently-unqualified future borrowers while simultaneously working with currently-qualified borrowers, eventually your efforts will come full circle and you’ll have a constant supply of formerly-unqualified customers who are finally qualified and ready to act.
Mortgage loan origination success is all about relationships. The successful mortgage loan originator knows the importance of seeing people for who they are, perceiving them as much more than just an income source, and helping them to eventually participate in the American dream of homeownership.