Seven ways loan officers can ensure more client referrals

by Kasi Johnston01 Apr 2020

Even after a year of record volumes in the mortgage industry, many loan originators are frustrated and confused by the lack of referrals. This stems from one of the biggest misconceptions that loan officers have: if the borrower likes you, they will refer business to you.

“Many loan officers say they’ve reached the end of their deal, it was a good close, everyone was smiling, and then they waited on referrals that never came,” said Michael Seminari, director of Stratmor’s borrower feedback analysis program, MortgageSAT. 

Instead, referrals and repeat business are driven by creating a delightful experience for the borrower throughout the entire experience. With feedback from 130,000 borrowers, mortgage advisory group Stratmor put together a list of seven “commandments” to help guide originators in getting more referrals. This list focuses on the most impactful aspects of the loan process, and the things that might be enough to sour the entire experience for the borrower, Seminari said.

#1 Provide a checklist upfront
Giving the borrower an upfront checklist of information they will need to provide is one of the most important things a loan officer can do, according to Seminari. While many lenders and brokers have automated checklists, he still recommends an email or phone call to the borrower to not only make sure they received the check list, but also that they understand it.

“Sometimes a customer might have missed the email, plus adding that personal touch is extremely important,” he said.

#2 Review final numbers with borrower before closing
The second commandment is contacting the borrower before the close to review final numbers. Taking the time to discuss closing numbers and expectations is something that surveyed borrowers appreciated greatly and had a great impact on whether that borrower was someone who would refer their loan officer in the future or not.

#3 Avoid asking for the same document more than once
This mistake is the most common out of them all, said Seminari. Assembling documents can be stressful, so ensuring the borrower is not asked for the same thing twice can really make or break the loan experience.

“It happens in 1 in 3 loans, which is really surprising because it seems like such an easy fix.”

Having a system like Stratmor’s MortgageSAT that monitors and identifies problems has been key to solving a lot of these issues, Seminari added.

#4 Keeping the borrower informed
Whether it’s by phone, email or text, Stratmor found that borrowers want their lender to take the lead in keeping them informed about the status of their loan. As soon as the borrower needs to pick up the phone themselves for an update, the satisfaction level goes way down.

#5 Close loans in the promised time
“Closing a loan in the time frame expected results in highly satisfied borrowers who are very likely to recommend their lender,” the report stated. Missing the close date drops that likelihood significantly.

#6 Make every effort to solve issues
One in six loans will experience a problem in the course of origination, whether it’s an issue with the appraisal, title or a change in circumstance. Stratmor found a phone call post-close showing concern about a borrower’s unhappiness can greatly improve the chance of a referral and saving the customer experience.

#7 Starting the closing on time
If the borrower has to wait around for a closing, it can have a big impact on their feelings toward the whole process.

While all these seem fairly easy to apply, Seminari explains the main message is to increase visibility throughout the entire loan process.

“Loan officers need to understand that their referral may be contingent on what’s happening at different points along the process, like an unexpected fee or a late closing,” he said. Improving communication is one of the first steps to gaining more referrals.