Ch. 70 – Taking The Mortgage Application – Who?

Be the Better Broker Voume 3

An excerpt from Volume 3 of Be the Better Broker.

Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, “What’s in it for me?” – Brian Tracy

You, as an independent Broker, can claim to be available seven days a week, all hours of the day and night. A traditional banker cannot be. For the representative at the bank, this is just a job. For you and me, this is more than a job or even a career, it is a calling. We are passionate about helping clients through what can (and likely will) be a stressful experience as smoothly and calmly as possible. We love what we do, and it does not feel at all like work.

In fact, I often point out that not only is it my job to get on the roller coaster that is the mortgage approval process, but it is also my job to take a client through the process without their even knowing there was a roller coaster at all.

“I do not take days off during your subject ∕ condition removal period. I communicate daily from the date the offer is written until the financing conditions are met, and then weekly until the comple- tion date. I am always on, always available.”

Who Is Your Client?

When taking a client’s application, keep it as conversational as possible. Pre-fill as much in advance as you possibly can. If a client has sent an email in advance of the phone call and their email signature contains a job title and employer name, Google the address and pre-fill those details into the system.

You may even look the client up on LinkedIn to confirm their employment history. Our application requires at least three years’ employment history, and often LinkedIn provides this data for you…which I still verify verbally with no reference to my checking out LinkedIn.

Do be careful with the extent of the online research you are doing, as clients can be easily made uncomfortable when they realize just how public their lives are, and how snoopy you are being.

Trust but verify.

Sometimes you will notice (if you are paying attention) inconsistencies in a client’s credit report that may tell a story. For instance, the client is 53 years old, yet the report shows all trade lines with a maximum six years’ history. It’s unlikely this client waited until age 47 to open their first credit card.

This is a tip-off that that client possibly went through a pre- vious bankruptcy. The way to phrase the question with tact is, “Your credit report seems to go back no further than six years, which suggests you are either new to Canada or new to credit. Lenders will be asking about this. Is there an explanation you can help me prepare in advance?”

In theory, bankruptcies and other credit missteps are sup- posed to fall off the report and not affect the client moving forward, but that’s not the world we live in. Credit mistakes, as with many mistakes in life, leave behind a trail of clues that those in the know can piece together. Get out ahead of such situations, and don’t be caught without the answers by the underwriter. It creates delays in the process that could have been avoided up front.

You’ve got to ask the hard questions. What is the story? What happened? The main reason is that if you send a client’s file to a lender that was hurt in a previous bankruptcy, the lender will decline it, even though their automated pre-approval system gave you no sign of a problem initially—a dangerous situation if rates have moved around between pre-approval and a live offer being written.

If you have held a rate for the client with that lender through their automated system, and rates have risen with every other lender in the meantime, a decline with that initial lender can put you in a very tricky position. You might blame the client (bad move, refer to Chapter 55), but blaming anyone but your- self is pointless as you are the expert in this equation. This can cost you not only the file but also the client and possi- bly the referral source to boot. The most painful thing about these situations is that you cannot even begin to explain to the referral source why it is all blowing up, not without the client’s permission. Permission you are unlikely to get when the story links to a personal bankruptcy.

I have had this experience. I have lost a key referral source over a $110,000 file that had many client-induced wrinkles in it—wrinkles that I was bound by confidentiality not to reveal. It was quite a few years ago, yet to this day, it frustrates me to no end that I was left looking like an amateur.

Who Are You?

Many clients are running their own business. Have you run your own business? If so, then you can relate to many of your clients’ past and current challenges. It’s no surprise when a client running their own business (bfs) has a history of struggle. After all, 96% of businesses fail in the first 10 years. Running your own company is not an easy path.

If you have run your own business in the past and are speaking with a client running theirs, then make a point of connecting on the common touch points. Tell your client a bit of your own story, and ask them to tell you theirs.

The lender is going to ask for the client’s story. You need to be armed with maximum information; you do not want to waste this client’s time chasing an A-lender refinance approval when it will be a small miracle to get a B-lender approval.

If we are talking about a purchase, you don’t want the Realtor wasting their time, or the client’s time, showing properties and writing offers that have no hope of funding.

Know your client’s story.

This can be where the job becomes larger than arranging mortgages. As you sit listening and learning, peeling back the layers of people’s lives, you can become part therapist, part life coach, part business coach. Inevitably, there will be cases where you are drawn deeper into clients’ lives than you might like, and you will be asked for advice. Be very careful just what sort of advice you are offering, and be aware of what sort of advice you are licenced, or not licenced, to be giving.

  • Investment advice
  • Accounting advice

Legal adviceThese are not areas you should be speaking to in any depth. You can qualify your comments as opinion, or make them part of a story about your own similar situation, but in the end, youshould always be referring the clients to an expert.You are all about clients seeking expert qualified mortgage advice. So, too, you should be all about clients seeking expert qualified legal, tax and investment advice. Have referral part- ners at the ready that you trust in these areas.

Know your limit and work within it.

When I suggest telling your own story, I am talking about a story with an ending, preferably a happy ending. If you are immersed in an ongoing battle with cra yourself, this is per- haps not the most intelligent or confidence-inducing thing to share with a client. Think carefully before you tell past stories of failure as well. There is a time and place for those, know the when and the where.

Don’t talk about your current problems; after all, you don’t have any. Everything is awesome. You are the one with the life all dialled in; you are the Rock of Gibraltar, the Steady Eddy.

You want to share stories of having been there, done that, and pulled through via X solution or Y solution.

Even if your troubles were not as severe, no one’s life is unblemished. Find a way to connect and to empathize when the timing is right. Few among us have lived lives of detailed perfection. Most of us have had our own struggles and chal- lenges. Just don’t turn it into commiseration. Misery loves company, which is not what you are trying to provide.

As the Saturday Night Live character played by Billy Crystal says, “Baby, you look marvelous, and it’s always better to look marvelous than to feel marvelous.” I love that line. It says an awful lot about the world we are expected to fit into. We all want to appear to be feeling marvelous. We all want to look like everything is marvelous. In reality, very rarely is every- thing marvelous. It’s pretty rare that every single part of your life is working perfectly at once. Enjoy those brief moments when they do occur; revel in them. Usually, some parts of our lives are working wonderfully and others are not quite there. This is far more real.

Be real. Be a real person.

Few people buy or sell real estate based on logic. It is unlikely that clients realize this. Inevitably they are buying or sell- ing based on something that’s happening in their life with little connection to current market values or current interest rates. Something good: they’re getting married, they’re having another baby, life is on the upswing, everything is wonderful. Or something bad: they’re going through a difficult divorce, a faltering business or illness ∕ injury. Emotions drive real estate transactions more than any other single thing.

You are dealing with an emotional person in the middle of an emotional transaction and they are making a series of decisions almost all of which are based on emotion. Try to inject a bit of emotion into the equation yourself, and identify with them. If you and your client have both been through a divorce, you’re going to be able to offer some words of com- fort, some insight. The same goes for business failures and success. Relate on a positive level when the opportunity to do so presents itself.

Whatever the case, letting that person know that they are not alone and that they are dealing with somebody who’s also been-there-done-that can go a long way.

chapter tip: Know when to tell your own story and when to let it be all about the clients. This comes with experi- ence. When in doubt, just shut up and let the clients talk.

chapter tip: You have every opportunity to make a second impression, and a third, and a fourth. If you put your foot in your mouth, pull it out and keep on walking and talking. For the tale of a foot deep in mouth re-read Chapter 43