Building Trust: Effective Communication Strategies for Mortgage Loan Officers

Hey, everyone out there in podcast land. Thanks for joining us today on the next exciting episode of lending leadership with the mortgage pros. Robert Fillyaw here joined by Tom Mills, David Holland. Hey, fellas. Welcome in for the next episode. How are y'all?

Yeah. Doing great. How are you doing, Robert?

Good, man. Good. Happy New Year to y'all.

Doing good. What what is somebody asked that question yesterday. What's the what's the point where it's acceptable that you can continue to say happy New Year to people? Or or when's it like it's too late? It's way past New Year's.

I I think it's probably too late. Like, we're probably way past it, but, you know,

January is a great

1st time we

do January. I think

I think it's a great topic. I think a lot of LOs get hung up on this, probably 2 or 3 podcasts. But, you know, number 1, I think be honest. Always be honest. Honesty first. It's never it's never the cover. It's never the crime. It's the cover up, number 1.

Number 2, set clear expectations.

I love that.

We talk about this on our sales meetings all the time. Like, in we we have seen this recently in our shop where someone took a 3 week non qm transaction where it was destined to fail. So setting clear expectations, saying no is also okay. Everyone everyone wants every transaction. But if you're in a very hard transaction, you do not set clear expectations. Every waking minute of your day, working day and otherwise, you're gonna be thinking about it, and it's gonna consume you. It's not And

it's not miserable.

Yeah. It's not worth it. And we all coach our LOs. We get it. But it's setting clear expectations, and that is so important.

I think, you know, the the the most interesting thing I think about communication is it's like, why wouldn't you want to communicate well? Because, you know, number 1, when you look at, you know, what if if a customer complains, if a realtor has a complaint about originator, it's usually 9 times out of 10 about communication. So when you know that someone is most likely to complain about communication, if you communicate really well, you solve the most likely complaint that can potentially come your way. But in doing so, you also you create opportunity because you know that realtors complain about communication. You know that customers expect good communication, want good communication. So when you do it, you you have that ability to to separate yourself from the the rest. You know? And you're an originator that communicates really well, and then an agent does business with a loan officer that doesn't communicate really well. They absolutely feel the difference between the two processes, whether whether they go smooth or not. You know, I think when when someone has to call and ask you a question of what's going on, you kinda failed them.

You know, as we talked about this being the you know, first episode 20 25, I I I urge everybody that if you don't have, you know, a way that you communicate and everything that you do and a system for your communication to really start to put one in place, and maybe we can help you do so in this call today.

Yeah. I love I love that. I mean, I think you touched on a couple of key things, guys. The the you know, to me, it's so important to set that level of a communication, set clear expectations because as you do that and then you fulfill it, it just builds trust and reinforces yourself as the consummate professional. Right? And really, at the end of the day, that's what our clients and our referral partners are looking for. They're looking to know that that my transaction, the biggest purchase that I've ever made in my entire life that I'm super stressed out about and that I don't do every day is in good hands. And the way that you give them that sense of reassuring and that that feeling that, hey. I've got this is by setting the right expectations through communication and then fulfilling it through communication.

When you build that, that's where you get the really strong referral relationships. That's where you get the clients that love you forever and send you everybody that they know. So it's really I love your point, Tom, that you're gonna eliminate the complaints. It gives a really high level of customer service. But also, guys, it's a it's a really important tool to build your business.

It's sales tool.

Yeah. It's it's a sales tool. It's self serving. But if you nail this piece, if you get this piece right, it'll put you in the top 10% of originators in the country, and I guarantee you, your business will grow. Communicate early, often, set the right expectations, be honest as Dave's talking about, and then come through with it. Yeah. Under calling and

so forth. How you'll communicate.

It and it's not generally, it's not hard. Depending on your pipeline, it can be done in 3 or 4 hours in the entire week, and it can be done well. In what I what I spoke about earlier, it's it's never the crime. It's the cover up. When something goes wrong, do not bury your head in the sand and hope it'll magically disappear or you're gonna work it out. I mean, certain things happen in the mortgage transaction. Right? Some are out of our control, like title work and appraisal. Right? Others, we might have made a mistake.

Others, things come up midstream that we didn't anticipate. But when you have something that goes sideways, communicate that immediately to the customer, both realtors, if there's realtors on the transaction and be honest about it. I mean, maybe take a half a day or day to have a solve or be honest, like, hey, I'm not sure how we're gonna work this out. I'm working on it with my underwriter, you know, my manager, whatever the case may be, but communicate it.

Whatever you communicate and expectation that you set, like, if you're not sure, hey. I'm not sure yet. I'm working on a solution. I'll be back in touch with you by the end of the day. Hey. Guess what? You gotta call them by by the end of the day and give them an

update. Right?

Answer or not.

The silence is deafening. Like, you know deadly. You know, when that's when deals go transactions go sideways, the biggest complaint is they don't have people don't have answers or don't know what's going on. I've had a lot of deals that have gone sideways in my career. I let people know. I set the proper expectations. If I don't know how I'm gonna solve it, I'm honest about that. Those are not fun calls to make sometimes.

Sometimes you get reamed out. Right? But if you're honest about it, the realtors and the customer will generally respect you. If you make a mistake, own up to it and own up to quickly. Never ever blame your underwriter. Never ever blame your processor because as an LO, it's always your fault at the end of the day. That that that's how I've always it's always been my philosophy. And it's funny, a lot of the transactions that have gone bad where it has been my fault in my career, and I've owned up to it. I've actually you know, I work with some of those agents to this day because I was honest about it, and we solved the problem.

I think it's important to know that, you know, our clients and our referral partners, they don't expect perfection. No no one out there is perfect. Right? They expect open and honest communication and for you to fulfill whatever expectations you're setting. If you do that, you know, you're you're gonna be ahead. We we I've said for a long time, Dave, you know, to your point, eat the frog. There's nothing worse than, you know, something sideways and you don't get ahead of it and you don't make that phone call. And it it's just building, guys. You're not doing yourself any favor.

Eat the frog. Get that call out of the way. You'll feel a 100 times better, and then, you know, you'll you'll find that usually when you do that, what I found in my career anyway, is when you do that, it goes way better than if you bury your hand in in the sand and let it compound. Then the fallout is exponentially worse. And if you get It gets worse. Every

day. Yeah.

And if you get ahead of it, now you've gotten yourself more time because the closing date's always looming. Right? The sooner you communicate it to the agent and the client, the more time they have to react and maybe come help you come up with a solution, find a way forward, bury in your head just just waste time for everybody.

Yeah. And a lot of it is not setting the expectations upfront. If you get a painfully hard transaction, you know, John Tice customer, has he's self employed, has 5 businesses, owns 25 rental properties, has some other complexities on his file. You take it in, and it's a 2 and a half week closing. You're you're setting yourself up to fail. And by the way, John isn't good at technology, so he's gotta stop by your office and and give you everything. Right? That that is a recipe for disaster. There is no way anyone's gonna walk away from that transaction happy.

So So talking talking about, you know, why we communicate and making sure you get ahead of it and the reasons for it, some of the foundation, I think is all all great. We've we've talked a lot about the hand you know, these these kinda difficult conversations. Right? And let's be honest, guys. They're no fun. They suck. I've gotten chewed up and spit out by agents, by clients when I've dropped the ball before. What are some best practices that you guys have for for delivering bad news? Doing it professionally, how do you approach these tough conversations? How do you try to keep your clients and referral sources calm and kinda walk them through it while still maintaining trust and rapport? Like, what do you guys do? What do y'all see that works?

I think, again, being honest in falling on the sword, in coming with a solution, and if it's a mistake that we made, just being honest about it. I mean, we're we're we're not perfect. Something that is slightly the coward's way out, but I'll put it out there for our listeners because I have found it somewhat effective.

I think I'm not gonna say.

Well, especially with people who who have tempers. Right? Sometimes when they get the news, they are able to calm down and process it than getting them. And I'm not suggesting email. I'm suggesting using slide dial.

Right. Do the same thing. I was gonna say cookie

at. Slide dial, leaving leaving a message. Right? And then that way, they can process it. Right? And, again, it's it is slightly coward's way out, but sometimes it gives people 15, 20 minutes an hour to think about it and calm down than than getting the news cold on the phone and then feeling they have to react negatively. So

Is that for them or for you, Dave? Let's be honest here. Who who are we trying to tell you?

Both. Little bit of both. And listen, for those for those who are listening out there who who maybe don't know what slide dial is, you can look it up. It it gives you the ability to call someone on their cell phone and it does not ring. It goes directly to their voice mail. You can leave a detailed voice mail that they get. And then maybe by the time they've called you back, they've had a little time to breathe and calm down. This is a great way not only to deliver news like this, but also if you're trying trying to deliver, you know, maybe some updates and you have that bar that is gonna hold you on the phone for an hour telling you about their their cats activities over the last week.

I true story, I had a bar that literally would keep me on the phone telling me about

our cats. Activities, Yeah.

Yeah. What the cats did the last week. Right? So, like, this is something where you can use that to deliver the information in the news that you need and maybe not get tied up as much of a time suck. So great tool if you're not using it. It's something I've used for a long time. Tom, what what do you do? What what what have you seen that's worked?

You know, I think it it's not about what you do in the moment of having to make the bad communication or the tough, like, call. It's really about what you've done that led up to that moment that makes that call more difficult or not. Like, you mentioned, you know, communication builds trust. I know we always say trust is built from what?

Small promise is kept. Promise.

Small promises kept is what we believe in

somebody. You have

you know, when you're working with somebody, the average customer you're working with, I mean, today, sometimes that's 4, 5, whatever months. You know? It's not the 30 day cycle like it once was, so you have a longer time to establish trust. You know? You do it by letting them know what you're gonna do, and then you do that, and you have your standard streams of communication. Along the way, you happen to build relationship oftentimes with the customer. And then when you have to confront that tough one, it's not as hard because they trust you. They believe you're coming from a good place. They know you've been on top of things. It's hard to think somebody hasn't been on top of things and and putting your best interest at their forefront when they're when they're not when they're communicating like that, when they're doing exactly everything they told you they've gone they were gonna do and plus, you know, and going above and beyond there.

The conversations are tough, but then you just you just peel the Band Aid and you make it happen because you've established a relationship, a rapport with that customer. They know you're coming from a good place and everything that you do with them. And I think it's really it really just starts in the in the very beginning, from the very first call to when you're gonna call them back, to what's gonna happen, to how long this is going to take. You know, whatever the case may be, it it it all starts there, and it's built with every every touch and every conversation that happens. And then sometimes the tough ones have to come in the mix of that.

You know, it's interesting, Tom. You you know, we we were talking about kind of the basis of communication, and then we got off on this side street of difficult communication and how to handle some of those conversations. And you just circled kinda back around to the the beginnings of the conversation and building the trust and the rapport. And I wanna take just a few minutes and talk about what you guys have seen and, you know, what's worked, what hasn't even is probably just as important in your careers, on techniques for clear communication, making sure that we have empathy. And we're really, you know, trying to put ourself in the customer's shoes as we're doing this transaction. You know, the reality for us in this profession is there's a lot of jargon. There's a lot of stuff that we do day in and day out that I think we take for granted that are outside of the scope of our clients. Right? How how many I mean, a simple example of how many times have you asked the client for a bank statement to be told, oh, I don't get bank statements or a pay stub.

I don't get pay stubs. Well, you you like, just the the explanation of that, that's all communication, and it's all part of being a really good loan officer is walking them through that, not getting annoyed with it, you know, explaining it. So what what do you guys see that works really well kinda in that in that vein of communication, and what doesn't maybe? Like, what what doesn't work?

Well, what doesn't? You you kinda went into it jargon. Right? By using terms that people aren't gonna know, not being patient. And I think number 1, you you need to be a student at the mortgage game, and you need to understand mortgages as a loan officer. That that's a given. That's a whole another episode. It's a whole

another episode. Yeah.

When people start questioning you, like, when when they send you only the odd pages, 13, and 5 of the bank statement. Right? You need to communicate effectively why you need all the pages, why you need page 5 that says this page is left intentionally blank. You need to explain that. You need to be firm. You need to have empathy and say, hey. I understand. Well, I guess if if we in this case, we probably give this person automatic VOD, but that's another story. You need to be firm.

You need to explain it. I don't make these rules. These are rules coded by Fannie Mae, Freddie Mac, FHA, whatever the case may be, and you need to explain it. And the worst thing you can do is let your client run rough shed over you and then kick it to your processor or be afraid to ask. We see that with Elos here. They don't wanna ask for the hard stuff, the additional items, and then they get into trouble 2, 3, 4, 5 weeks down the line, and then the customer's frustrated.

I love that line that you just said. Right? Like, I don't make the rules. What I I used to say to the point to my clients is, hey. Listen. Unfortunately, I don't make these rules. I know sometimes they don't make a lot of sense. The good news is this is nothing personal. It's the same for everyone.

I'm not asking you to do something that we wouldn't ask anyone else to do. It's a even playing field. Everyone has to play by the same rules. We're going to need this to proceed. And then I I would take it a little bit step further sometimes. You know? If I had someone that's really pushing back and really being difficult, right, pick an example, that bank statement. You don't need that. You know what? That's great.

I don't need that. Don't worry about it. Don't send it to me. Oh, really? Yeah. I'm I'm gonna let your agent know you're gonna be paying cash today. I don't have enough cash. I guess you might wanna send me that bank statement then. It's a little extreme.

But it you are you guys are the professionals out there. Right? I think Dave's point is is pretty valid. If you let them run rough rough shed over you, you're gonna that's part of clear and effective communication and setting expectations. You're potentially setting yourself up for just more trouble and challenges down the road.

Well, and and Tom brought up a good point that not, you know, little bit of firmness comes from the very first conversation. Right? I agree. When when I get, like, a know it all customer from the beginning, I I try to set kinda clear expectations like, hey. It's gonna be the same everywhere else. Here's why. Explain it. This is ridiculous. I've never been asked for this before.

You've asked me for the same thing 4 times. Every loan officer on this call has heard these things. Why do I need this? My uncle Billy said we don't need this when he bought a house 27 years ago one time. Right? So you you you gotta kinda, like, set expectations, lay the groundwork, and not let them bully you. And that's not every customer. Right?

But

it's certainly some.

Well, every customer is different. Right? You know, I think you have to ask questions. You have to understand who your customer is, where there are concerns, you know, how do you seek to solve, not to sell. When you, you know, and communication kind of goes both ways too. I mean, the customer, you have to set that expectation like, hey, you gotta be honest with me about everything. I'm I'm your guy. I'm in your corner. If you, you know, is there anything that concerns you about you obtaining this financing, anything about your income or your assets or your employment that you would think I should know? You know? I think that's a really important question because sometimes people have these things in the back of mind.

There's this fear. Like, why not tell me what that fear is? I can find it out today and solve it today. I may I may not see that, and it comes up, you know, 5 days before closing. And now

We're gonna find out anyways. We're gonna find out anyways.

It's a two way street. So I think it starts with, like, that communication. It's like, hey. Here's how we're going to work best together, you know, and and and you do the same and you'd be forthcoming with them and they'd be forthcoming with you. Trust Bill along the way, and you get there in the end. You know? That's really what it comes down to.

I like that. You know, one thing is we're talking about a lot of this. I'm I'm thinking about kinda setting the stage out of the gate. Right? That's what we're talking about and and having just some proactive communication. You know, one thing that I've always tried to do, and this is more as we were getting ready to submit files to underwriting, but it goes back to how you communicate with your client is if if I'm got an underwriter going through my file and there's a question that comes up as they're going through it, I want the next thing to look at to be the answer to that question so they don't start digging. Right? That's always worked really well for me. I've done a lot of government loans and, you know, some of them were like a sweater. There is a thread that started pulling, got getting pulled on.

We're not we're not gonna we're not gonna check anything. You know? Trust but verify. Right? So something that I'm gonna bring in my best practices is when we get the online app, because sometimes we take them over the phone, you know, one out of a 1,000, we may be taking person, but we're getting too complacent looking on the online online app and not dig in and taking things at face value. So number 1, when you review, when you review the 1,003, right? It builds rapport. When you spend 30, 45 minutes, it builds a little stickiness too, right? And then you find stuff out. This example, if a full conversation would have been had with the customer, it would have we we would have avoided so much heartache and pain.

What was it, Dave? We got a few minutes. What what was it specifically?

There was a gap, in 8 months in employment. The LO took it at face value, assumed the dates were correct, didn't question it. So that's something we see. Something we see is on the declarations that they're not the first time that they're a first time home buyer. Everyone on this call probably realizes if you're under a certain certain income limit and you're a first time home buyer, you have no LLPA adjustments, which could be massive on the rate. Massive. No one likes finding out a week before closing that your interest rate's a half point higher. Not not good.

I love the the the fact that you wanna incorporate this in your daily process, Dave. I think it's so powerful. And, guys, like, when Dave talks about stickiness of it, that's a really powerful thing. I think I think one of the biggest challenges we face in our market is the the commoditization. I don't did I say that right?

You did.

You got it. We have to make sure we don't become a commodity. Right? And where the push button get mortgage

Mhmm.

Or missing junior or 3rd or they leave their middle initial off or they have Dave instead of David. You know, there there's a million different things. And then getting the information upfront as well too and and and looking at the w twos and pay stubs, but I'm digressing to another topic.

Yes. So so many topics interwoven in this topic that we could go off on. Guys, we're coming right at the 25 minute mark. We wanna kinda keep it there. I wanna close it with one last question. I know what mine is. I'm interested to hear what yours is. We've been in this business a long time.

We've managed a lot of people high level. What is your one pet peeve bad habit that you see originators doing in regards to communication that if you could just pick them up and shake them and, you know, or maybe magic wand that you wave and they never did that bad habit again, it would be fixed, what would it be?

I wanna go first because I know when I wanna take mine. Setting clear expectations. K. In in saying no if it's if it's not possible or it's gonna be a fire drill and everyone's gonna lose their mind. Setting expectations.

David, then and that's the true story. I actually have a a background made for when Dave's talking about him setting expectations that comes up and says if every yellow was Dave Holland. Right? Because the pro the problem with setting expectations for a lot of you out there is, you know, you're not closing as much business as Dave is. It's easy for Dave Brunello who's doing, you know, 60, 70, 80,000,000 to to be a little bit more firmer on those expectations. If you're doing 6 or 7,000,000, you want every deal that you can get. We totally understand that. Just think about every yes comes with a reaction. Every no comes with a reaction.

Right? There's some follow on that comes because to everything you say yes or no to. Just take that into consideration, but I like that, Dave. That's a great one. And you you practice that one a lot, so good job. What's yours, Tom?

You you actually touched on it earlier. It's blaming others. Whether, somebody else made the mistake or not, like, you are the person that they elected to do business with, and that is your team behind you. And you're to that customer, you're the face of that team. And it's okay to say things like we made a mistake or we done this, but you know, single a person out in the process. You don't point a finger at your company. You don't point a finger at the underwriter. You don't blame your assistant.

You take the ownership. They feel that too. People appreciate when people just take ownership for something. Even when they think it wasn't maybe that person's fault, they actually appreciate it even more. You're missing an opportunity, and you're really just a bad teammate when you do that. A bad teammate.

And it's gonna bite you in the butt long term. Right? Because then when you do need something and you're you're asking your ops team to go above and beyond for you, they're not gonna be as willing to do it. That's Yeah. I love that you brought that up. That's actually my number 2, Tom. So Mhmm. Yeah. I nothing

That's a good one then. Your number 1 must be must be really annoying.

It it it annoys the mess out of me. Right? Listen. If you're out there and you're in this business and you're in sales, answer your damn phone. Answer the phone. That phone Robert.

What's the stat?

I'm gonna mess it up. It's either 82% or 87%, but 82 or 87% of clients close their loan with the first person they speak to. Answer your damn phone. It's They're trying

to give you money.

They're trying to give you money. Answer it. Answer the phone.

I was doing a panel at a conference, and someone asked me what my favorite piece of technology was. And I pulled my phone out of my pocket and said my phone is my favorite piece of technology.

100%. 100%.

If you

took all the other stuff off of it, it'd probably be even better and less distraction if it was just Right.

Well, also

also taped to my, office door is a picture of a phone and around it says, use me. I make you money. Mhmm.

Yeah. No doubt. Guys, great, great subject. Great topic. Really good insights. I I appreciate the time and everything that we've shared today. Guys, if, if you found value in this out there in podcast land, go ahead and smash that like, and subscribe button, leave us a 5 star review. And, thanks for joining us here on lending leadership with the mortgage pros, for, for Dave Holland, Tom mills.

This is Robert Fillyaw. Thanks everybody.

Thanks everybody.