The secret to a smooth reverse mortgage transaction and consistent referrals is to ensure you don’t meet your client’s expectations. You must exceed them. Your client can’t just like you, they must love you.
Actually, they do. Studies show that reverse mortgages generated an amazing 80 percent approval rating from senior borrowers. But loan officers, always seeking to improve their own performance, can fall into the trap of thinking that everything is going wrong.
The senior borrower expects the loan to close. So as a loan officer you must go above and beyond the simple process of closing the loan in order to stand out and generate goodwill and referrals. But how can you tell if your customer really loves you? And if they love you enough to say yes when you ask for a referral?
Like anything else, you can’t manage it unless you can measure it. So I have developed a reverse mortgage “Love-O-Meter” to help loan officers learn how to manage expectations and overcome the reluctance to ask for referrals.
The first chart below depicts the typical loan officer’s perception of a reverse mortgage transaction. The bottom axis is the number of days from application to closing. The vertical axis is your “Love-O-Meter” scale, from Love to Hate. On Day 1, the borrower loves you, otherwise they wouldn’t move forward with the process. Unfortunately, as the process goes on, the loan officer begins to feel that the borrower is getting frustrated or concerned about their loan. Their affection drifts downward on the “Love-O-Meter” scale. Add a title or an appraisal issue and the next thing you know, their feelings drop from Love to Hate. But, after 60-plus days, the loan finally closes and the borrower’s emotions have a slight upward bounce.
The first challenge is that many loan officers don’t ask for referrals from the borrower at all! They simply hope that by doing a good job the senior will automatically become an advocate after the loan closes. But you should start asking for referrals on Day 1, when the customer loves you! You can’t risk waiting until the loan closes.
The second chart highlights when you should be asking for referrals. Don’t wait until the loan closes or you’ll be behind the curve.
Now comes the tricky part. The first chart depicting the downward slide to Hate is rarely the borrower’s perception of the transaction, but rather the loan officer’s.
A classic example is when a loan officer promises to call the borrower with an update and forgets to do so. A few days go by and the loan officer remembers and then assumes the borrower is upset that they didn’t receive the update. The next thing you know the loan officer is avoiding calls and dumps everything on the processor when the fact of the matter is the borrower still loves you.
It’s only when time goes by without a response or update that the borrower’s attitude drops to meet our perception. Chart Three shows the loan officer’s perception relative to the borrower’s perception. If the loan officer begins to assume the borrower is not happy, sooner or later that assumption will become true.
The key is to make sure both the borrower’s and loan officer’s perceptions match and fall in the Love zone.
How can you raise the Love-Hate line to all Love, all the time? Start by doing a better job explaining the details of the loan transaction; highlighting the different players involved, from the appraiser to the closing attorney or settlement agent; and staying in touch throughout the transaction.
The fourth chart highlights the objective of the borrower loving you from beginning to end, which makes for more opportunities to ask for and receive referrals and introductions to new referral sources. This can be accomplished by weekly phone updates, handwritten notes, stopping by with a small token of your appreciation (a box of chocolates always goes a long way), and emailing timely information.
But if you want to truly excel in the reverse mortgage business the goal should not be getting the borrower to love you evenly throughout the process. Chart Five shows you must work to get the borrower to love you more and more as the process goes on. If you set that as the goal and miss it by a bit, you’ll still be winning! When this happens you’re building tremendous goodwill and creating advocates who will go out of their way to refer you.
Besides the obvious necessities of explaining the process better and keeping the senior informed, I actually describe the “Love-O-Meter” to my borrower at time of application. I explain where we are on the chart and that my goal is that they will learn to love me even more. It may sound silly, and you can imagine the teasing I get.
During the loan process I ask the borrower how I’m doing and let them know it’s OK to let me know if I’m slipping toward Hate. This gives me a chance to correct any issues and get back on track.
We all know that we must do better than just closing the loan. We must exceed the senior’s expectations. Test your own “Love-O-Meter” to help ensure that you “feel the love” from your borrowers and generate goodwill and referrals.