As I have spoken with CEOs around the country, I’ve found that one of the most challenging problems leaders are facing in the industry today is uncertainty about what to do with underperforming loan officers. These are the LOs who are not generating significant business or contributing to the greater success of the company. Managers need to quickly develop these underperformers into successful originators, but many are not sure where to begin.

Here’s the good news: underperformers are not a lost cause. They are simply in need of someone who will invest in them and help facilitate their development. In fact, by implementing the steps outlined here, managers can empower their loan officers to experience significant growth and become strong producers.

DETERMINE THE REASON FOR UNDERPERFORMANCE

Underperformers fall into two categories: they either lack the will or the skill to succeed. Those who lack the will are simply unwilling to do what it takes to increase their production. However, other loan officers lack the skill, meaning they want to improve but do not know how. These are the people who have not been trained, pushed, or held accountable.

The industry assumes that if someone has been working for five years, they should have the experience they need to be successful. However, five years of bad practices are not going to improve anyone’s business. Instead, they have just built bad habits that keep them from reaching their full potential. If a manager is going to grow their team’s production, they need to identify the people who are eager to improve but have not been given the proper tools to do so.

When leaders talk with their underperformers, they can start with a question: “Are you pleased with where you are?” If loan officers say they are not, the leader can pivot the conversation to their future, finding out what kind of business they would like to be doing.

If their reply is something along the lines of, “I’m currently at two units and would like to be doing four,” managers should learn why this goal is important. LOs need to identify their “why,” determining the reason that improvement is necessary for them both professionally and personally. When they are open to this conversation and can say, “I’m not at my best, I need to get better, and this is the reason why,” leaders can assume that this is a person who lacks the skill, not the will. They are ready and willing to change. Now, the manager can begin the process of developing them into the producer they aspire to be.

 

PLAN FOR SUCCESS

In my 30+ years of mortgage industry experience, I have found that almost nothing is more vital to a loan officer’s success than having a defined business plan. When I am talking to an underperformer and say, “Let me see your plan,” most do not have one. Nobody has taught them the importance of mapping out how they will reach their business goals. LOs have to know where they want to go, but they also have to know how to get there.

Managers can work with their underperformers to make sure they are implementing a plan that is strategically detailed. If they want to go after referral sources to build their business, which ones are they specifically targeting? Are they looking at real estate agents, builders, financial partners, CPAs, stock brokers or insurance agents?

How will they go after these potential partners? How often will they contact them? What time of day? When will they call or email and when will they go see them in person? What value proposition can they present? When a loan officer has answers to these questions, they are prepared to grow.

HOLD THEM ACCOUNTABLE

Once leaders have helped their loan officers put a plan together, what is their plan for involvement as the manager? Are they checking in daily? Do they encourage their team members when they fail and celebrate alongside them when they win? Good leaders understand that they have ownership for their team’s performance.

By ensuring their underperformers have a strategy in place and holding them accountable for following this strategy, they are truly setting them up to elevate their business.

When people are held accountable to take action on the strategies and daily disciplines they’ve outlined in their business plan, their chance of success skyrockets. There are three options for how to implement this accountability: self-accountability, manager accountability or third-party accountability.

Self-accountability works for loan officers who are motivated enough to hold themselves to a high standard and put the disciplines into practice they need to succeed.

However, many LOs are much more likely to get distracted when someone else is not helping to keep them responsible.

Most mortgage professionals need someone else to check in daily or weekly and make sure they are spending their time on the right priorities. Managers can fill this role, though this can also be a challenge when they are still producing their own business.

The third option is outsourcing accountability to a third party who will hold LOs accountable while training them in best practices to grow production. No matter how it is delivered, accountability is vital for underperformers to reach the next level of success.

When leaders make an investment in the development of their loan officers, incredible things can happen. Originators who know that their manager cares about them enough to set expectations for performance and empower them to reach those expectations are going to be much more motivated than those who are made to feel like a failure.

By determining the reason their LOs are not living up to their full potential, helping them map out that plan, and keeping them accountable to that plan, managers can transform someone who is ready to leave the industry into a powerful mortgage professional.

Underperformers are not hopeless. With the right person investing in them, there is no limit on what a loan officer’s future can hold.

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