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Beware of Loyalty Myth in Mortgage Business World

Mortgage business world has changed drastically. In old days, once you closed a mortgage loan with any customer, you almost "earned" that customer's loyalty for life. It was because customers did not really shop around looking for the best mortgage rates or lowest borrowing fees. In most cases, they just asked family members or friends who they used for financing assistance and then used them as well. For this reason, mortgage loan officers were basically guaranteed to get all the future business from that customer, and such relationship could usually last forever or at least for a very long period of time.

This kind of loyalty myth, however, does not exist in mortgage business world today. Customers are now more financially intelligent then ever before, mainly because of the use of the internet and advanced technology. Transparency is also must higher, and there is simply no mystery of the whole mortgage financing process. In addition, more and more individual clients are doing their own mortgage research long before meeting with lending professionals.

While today's customer are now so well-informed, they do not need to rely too much on professional knowledge of mortgage loan officers. This situation surely reduce their loyalty to lending professionals.
On top of that, your clients can ow easily hop online and find many other mortgage loan officers in a matter of minutes.

How can a professional mortgage loan officer survive in this market environment?

First of all, as a successful lending business professional, you have to go beyond just adding customers into your database. Do not laugh. We have seen too many mortgage business professionals do not have any formal database of their previous clients at all. Even the others may have built a database, they simply never make use of such database to contact their clients. It appears they ignore an important fact that customer database is a goose that lays golden eggs in any professional business.

We trust the reason why most mortgage loan officers are not contacting their database enough is that they mistakenly believe that when their customers need financing or know someone who does, then customers will automatically call them. However, in real business world, most clients just will not do so.

How can we know this? Statistics of a key U.S. mortgage firm indicate that good percentage of its mortgage business each month comes from telemarketing (cold-calls). A key telemarketing phrase used by this company and has been proved effective is: "We will not take much of your valuable time. We just intended to know if your mortgage loan officer has informed you that interest rates are now at over 25-year low, but that the window to refinance and take advantage of these record-bottom interest rates is quickly closing. Has your lending professional really informed you of this?"

In fact, for those customers who had not refinanced yet, we would estimate that approximately 60% of them could not even recall who their mortgage loan officer was without having to go digging through the documents of their last closing. Most of them now become clients of the above mortgage business telemarketing firm because it was simply easier to get the information there than searching through boxes to find out who their lending professional was. This truly reflects that now there is no customer loyalty in mortgage business world at all.

How can a professional mortgage loan officer actually do to overcome this problem? Here we list down 3 effective ways to make your mortgage business a success:

(i) Become friend of your customers. How loyal are you to your own friends? We know that you may prefer to portray an image of professionalism, but for keeping your customers loyal (ie. earn more commissions on repeat loan transactions or referrals), you have to become a true friend in their eyes.

(ii) Contact your past clients more frequently. If you do want to be the first person your clients think about when anyone mentions the term "mortgage loan" then you should touch base with them more than once a year or even quarterly. We recommend a simple follow-up system that contacts your past clients on a monthly basis at the minimum so as to maintain good customer relationship.

(iii) Do not end any mortgage sales process with the closing. Proactively contact that client the day after closing, a week later, a month later, etc. Make yourself unforgettable and also make sure that your customers are fully satisfied after leaving the closing table. This can also be a good business opportunity to ask for their referrals.

While business loyalty is becoming a rare commodity these days, this is still not impossible to happen. Never continue to believe that loyalty is guaranteed just because you closed a mortgage loan. The good news is that if you follow our professional suggestions and actually do form a strong bond with your clients, you will truly have earned these customers for life.


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