The lending world is undoubtedly one of the most complex and ever-changing environments within the financial hub.
As loan originators, we are required to not only stay abreast of market changes but to also understand them enough to convey this information to our clients and referral partners alike.
For many companies, the uncertainty of the market has caused internal lending guidelines to tighten up and may be a point of contention amongst originators. So how do we handle the complexities? How do we have those conversations with our referral partners and even those sometimes-difficult conversations with clients in our pipelines?
Further, do we revert to a fight or flight mentality?
In order to be efficient in advising clients and partners on the daily changes, it is important to be armed with not only the current market but also what the future forecast may look like. This will allow for originators to be able to have fluid educated conversations with clients and partners on when is the best time to move forward with their home purchases and/or refinances and when is a good time to lock their rates. This will help provide the tools for clients to make the necessary decisions regarding their personal situations.
What about those guideline changes that some lenders experienced internally? It is important to always get in front of your referral partners and help provide clarity around the reasons for the changes and how long they may be in place for.
One thing I have learned is that transparency is the best policy in this business, as it helps to build trust and solidify a relationship. Communicating changes early and explaining the “why” behind those changes allows for brainstorming on ways to move forward during the time of change.
The other layer to those potential changes is those clients already in process that may be affected unwillingly. Those are the tough conversations that many shy away from and can really affect the relationship from both a short-term and long-term standpoint.
Many times, clients do not understand the risk appetite a company may have, nor do they understand the complexity of the securities backed industry or how compensating factors determine a loan’s salability. It is up to us to provide clients with a level of communication that not only explains the unsettling changes but also gives them comfort in knowing that we have taken the time to give them resources and information.
Lastly, the knee-jerk reactors will immediately start to explore options outside of their current companies. Let’s be honest, the recruiters have been calling us just as much as our partners and clients, and they are armed with an arsenal of reasons we should be ready to make a change during this shaky time.
It is easy to want to throw in the towel when times are tough, but what defines us is how we react to those times. I’ll admit, sometimes an internal guideline change can really rattle me personally, but I must step back and have an understanding of the entire picture before making any rash decisions.
Most of the changes we are experiencing within our lending markets are temporary, and while we may never return to a full sense of “normal” following this pandemic, I do believe the market may level out to something a little more manageable again. Be careful not to immediately jump ship in times of turmoil.
The only constant in this industry is change, so you either evolve both personally and professionally or you falter and become another victim of the financial monster. Now is a great time to sharpen your lending skillsets, explore new avenues to generate business and become an expert within your field. Share your successes and keep your head up.