The Truth in Lending: Communication

by 08 Mar 2013

Although there is some debate as to the origin of the word “mortgage,” the general consensus is that mortgage is a French law term meaning "death contract," meaning that the pledge ends (dies) when either the obligation is fulfilled or the property is taken through foreclosure.  Now generally speaking, no one lives or dies based on the mortgage they receive; however there are certainly a few loan officers who would argue that point.  When dealing with “death contracts” it would be safe to assume that keeping your word might play an integral role in success or failure to sell such instruments.  My personal opinion is that keeping your word, regardless of the business you are in, is paramount to everyone’s success.  When there comes a time where we cannot keep our commitments, communication becomes our savior.

People generally remember two types of individuals: the ones they can trust, and the ones they can’t. When I look back on some of the most challenging events of my life and how I was able to overcome them, I find one common theme.  Whether there was good news, bad news, or no news at all, I’ve always delivered the news.  When I look to my most frustrating times in my business career, my uneasiness was usually tied to the uncertainty of the situation. Regardless of the event, if I had not heard from a client, customer, or business associate, the “not knowing” was worse than the actual result.  Anyone that has touched a mortgage in the last few years lives and breathes this uneasiness.

In 2007 when the mortgage world collapsed, my company was paralyzed by a state of not knowing what the end result would be.  How long will this housing market be in a perpetual free fall?  How long will the credit markets be frozen?  My job title changed from business owner to firefighter. Every day a new problem presented itself. Warehouse lenders froze credit lines. Mortgage insurance companies refused to pay claims. Massive class-action lawsuits were levied across multiple business channels, and I was left to decipher how to remedy the situation and keep my company alive.

This was a very dark time in my life, but I made a personal decision to face the problem head on.  We could hide out and wait for the business world to make the decision for us, or we could go straight to the source, see where we stood, and make an educated decision on the future state of the company.  I personally called each of our warehouse banks, their attorneys, and in many instances, individual borrowers and let them know we’re here to stay, and ready to work through this challenging time.  Regardless of the outcome, I wanted to eliminate the uncertainty.  I made a promise that I would fight for my company. I needed to keep my word.  The result was unbelievably rewarding.  Collectively, all parties were ready and willing to work with us. They were relieved that they didn’t have to come chase us down.  We created a plan of action and moved on.  It allowed us ALL to plan for the future.

The daily life of a loan officer is filled with many of the same type of challenges. This career choice is one of the hardest but most rewarding I can think of. A loan officer provides the ability for people to participate in one of the largest financial transactions of their lives. They help them to purchase their first home, possibly pay for their child’s college education, and ultimately provide shelter for their families.  It is a completely emotional experience filled with uneasiness.  Dreams and aspirations depend on our communicating with them and telling them what they need to know… the truth.  Many times we have to say “No.” That’s the hardest part of the job. But when we provide direct communication to our customers and we provide the news (good or bad), it allows people to plan for their future. When we communicate with our customers, they take notice.  When the time comes that they are able to buy a house or refinance, they will always remember the loan officer who was upfront and honest.

The same goes for our referral partners.  When a loan is having issues getting through, we should let our partners know.  Anyone in the real estate business knows that loans are hard – in some cases, darn near impossible.  “Cookie Cutter” and “Slam Dunk” are no longer words that we can use.  Communicate with your partners.  Let them know when there are potential issues.  Don’t be afraid to say “No.”  Remember that all business is not necessarily good business.  Your partners will appreciate your directness. We worry about making our referral sources unhappy – but they will be more unhappy if they are led to believe in something that is unachievable.

Our borrowers, our partners, and our colleagues hinge on our every word.  One misstatement through lack of focus, and everyone from the borrower to your employer will hold you to that word. Remember that there will certainly be those times when we cannot keep our promises. There will be times when our best efforts come up short.  It is during these times that we need to communicate. Good, bad, or indifferent, people will remember, and they will trust your word.

And… when you need them, they will be there for you.

FOOTNOTE:

My company recently had the honor of having Captain Charlie Plumb speak at our sales conference. Captain Charlie Plumb graduated from the Naval Academy at Annapolis and went on to fly the F-4 Phantom jet on 74 successful combat missions over Vietnam. On his 75th mission, with only five days before he was to return home, Plumb was shot down, captured, tortured, and imprisoned in an 8 foot x 8 foot cell. He spent the next 2,103 days as a Prisoner Of War in communist war prisons. It was one of the most moving and inspirational sessions I’ve been a part of. One of the things that resonated with me during his speech was what he thought after he ejected from his plane and parachuted down to the ground.  He explained that he was trying to figure out his next course of action. How do I survive this?”  But the enemy continued to fire upon him from the ground. Captain Plumb provided a blunt assessment of the ability to plan his next move: “It’s awfully hard to plan for your future, when you are busy dodging bullets.”  

Warmest regards,

 

Glenn B. StearnsFounder and Chairman, Stearns Lending, Inc. www.stearns.com. Follow Glenn at https://twitter.com/glennstearns

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