Loan Officer Sales Training Series 4/17/24: How to Manage Client's Expectations

Welcome to "How to Manage Clients' Expectations," a crucial installment in our Loan Officer Sales Training series. In the world of lending, understanding and effectively managing clients' expectations can make or break a deal. Join us as we dive deep into the strategies, techniques, and insights necessary to navigate this critical aspect of client interaction.

In each episode, we'll explore real-world scenarios, common pitfalls, and proven approaches for setting, managing, and exceeding client expectations throughout the loan process. From initial consultations to closing, we'll equip you with the tools and knowledge to foster trust, transparency, and satisfaction among your clients.

Hosted by Kyle Hiersche, this podcast offers actionable advice, best practices, and invaluable lessons learned from the field. Whether you're a seasoned loan officer or just starting in the industry, "How to Manage Clients' Expectations" is your go-to resource for mastering this essential skill set.

Tune in to learn how to anticipate, communicate, and deliver on your clients' needs and expectations, ensuring smoother transactions, happier clients, and a thriving loan officer career. Don't miss out on the insights that can elevate your client interactions and set you apart in the competitive world of lending.


For more episodes visit:
https://themortgagecalculator.com/Page/Loan-Officer-Sales-Training-Podcast

About The Mortgage Calculator:

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! 

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages, P&L Mortgages, Asset Bas

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as
officer sales training that wedo every weekday at 12 pm.
m.
Eastern, where we go over thefront end and the sales end of
the mortgage business.
Today, we're going to be talkingabout how to manage
expectations.
Now this is on a sales training,because in order to get the sale
done, We need to manageexpectations, right?

(00:21):
Very important in this processhere.
So that's why it's on a salestraining.
So let me I'm going to take thechat off the screen, but keep
dropping comments there, dropany questions you have.
But let's go ahead and get intoit here.

(00:41):
All right.
So educating client on the loanprocess, right?
So this is one of the biggestparts of doing mortgages just
period all throughout theprocess, managing expectations,
the sales part of it,everything.
Is based on educating the clienton the process, right?

(01:02):
So when we're in the beginningstages, we talk about this on a
lot of trainings of how we'regoing to quote them on multiple
things, we're going, you know,multiple programs, walk them
through those multiple programsto kind of make it their
decision of what they want tostart going with, right?
Educating them on that process,but then all the way through the

(01:22):
process, right?
I can't tell you how many loanofficers will just send out
disclosures without tellingtheir client what it, what it
is, what it means that they havesomething they need to sign.
I mean, you got to really walkpeople through this also.
Signing disclosures, you know,through Ellie May and stuff
isn't is usually not the easiestthing, right?

(01:44):
There's tons of issues that comeup with that a lot.
So it's very important toeducate them.
This is what's happening.
This is what I'm sending you.
This is why I'm sending youthis.
This is what it means.
More importantly, this is whatit doesn't mean.
Right.
When you're disclosing a file atfirst, right?
It doesn't mean that it's alocked file you know, with a
locked rate, right?
So it's important to let themknow what these things mean,

(02:06):
what they don't mean and what toexpect.
So not just, Hey, I'm sendingyou something to sign.
You know, this is what it is,but also what happens after
that.
Every time we talk to theclient, we should be
reiterating, okay, now we gotthrough that process.
Now, remember the next couple ofprocesses are this, this, this,
and this, right?
Remember, this is probably, youknow, not probably a lot of the

(02:29):
times the first transaction,excuse me, of this size they've
ever done.
A lot of the times it's thefirst, you know, home
transaction they've done.
And even if it's not, peopledon't remember the process from
four years ago when they boughtthe house or six years ago when
they last refinanced orwhatever.
Right.
We are the licensee.
It's us.
It's our process.

(02:50):
We are there to, you know, walkthe borrower through it.
Right.
So it's, it's a mistake.
I see a lot of loan officersmake is just kind of, you know,
Just thinking the client knowswhat's going on and just sending
them stuff and expecting them toknow what it is and what to do
and why they're doing it and allthis kind of stuff.
Right?

(03:10):
And then when we're in thatbeginning process, like when
we're sending quotes andeverything or just talking to
him, it's important to setrealistic expectations and
really more.
So I'm talking about right nowas far as time goes.
Right.
Because of course, that's onething.
A lot of people want to know howfast, how fast, when, how fast
can you close?
When's it going to be done?

(03:32):
You know, all this type ofstuff, but we got to set
realistic expectations, right?
And that comes from us being.
You know, a loan consultant andlooking at the whole picture and
knowing what's going on.
And it also has to do with wherewe choose to send the loan to,
right?
Remember we're non delegating,meaning we don't underwrite in
house.
So whatever investor that'sgoing to be purchasing the loan

(03:54):
are, is going to be doing acourtesy underwrite for us.
And so while you have someinvestors that may have the best
pricing in the world, they mighthave longer term times.
Or you might have somebody likeUWM who has really high pricing,
but the fastest term times inthe history of mortgages.
Right.
And so it's going to also dependon where you take it.

(04:17):
And then that's going to helpyou, you know, set realistic
expectations for your borrower.
Right.
So the worst thing that I seefor like new loan officers,
especially as I'm tellingpeople, you We can close this
within 30 days.
Well, a lot of times that'sbecause they're newer, right?
All the more experienced peopleon here know that anything that
can go wrong will go wrong inthe loan process.

(04:39):
Right.
And at the end of the day, youknow, there's a lot of things
that you don't control,including.
Getting the borrower'sconditions back.
So that's part of settingrealistic expectation with your
borrower, especially anytimethat your borrower asks, how
long is this going to take?
What are, you know, the, theturn times essentially.

(04:59):
And that's when we have to say,well, it depends on a lot.
And it depends on when theappraisal comes back, that's out
of our control.
And also it, you know, that'salways a great time to have the
conversation with the client of,well, a lot of, it's going to
depend on you getting me what Ineed when I request it.
Right.
So when I need documents fromyou and things like that, and

(05:19):
throughout the process, I mayhave to come back to you and ask
for more documents.
For example, I may have to askfor updated bank statements or
updated pay stubs.
So when I, throughout theprocess, when I ask you for
these things, it's veryimportant that you get me back
to them quickly, because thewhole process is going to be
waiting on that.
So let them know that they're apart of this.

(05:41):
They're a part of this processand what they do makes a
difference, right?
In the turn time.
So, you know, things like theappraisal, things like them
getting you back conditions thatare needed you know, these
things are out of your control,but we're going to try to do
everything we can to help them.
But again, As far as the clientgoes, part of it is is on them
and going to be depending onthem.

(06:02):
And we want to let them knowthat, right?
We want to let them know, hey,this is a process that you're
going to have to be involved in.
I'm going to need some thingsfrom you.
And as long as you're getting meeverything very quickly, when I
asked for it, there's going tobe.
No delays, but if, you know, youdon't get it to me within a
couple of days, the wholeprocess will be delayed.
However many days it takes youto get that to me.

(06:23):
Right.
Now here is a big one.
Let's talk about the potentialsetbacks.
So you know, our sales manager,Jose is like very big on this.
Practices it very much with hisclients and also preaches it to
our team here.
One of the reasons why we alsosend multiple quotes in the

(06:45):
beginning of this process oftalking to the borrower is so
that we have different routes togo.
And that we know the pros andcons of each route and that we
have a backup plan, right?
So these two here go together,talk about the potential
setbacks, discuss the backupplans, right?
So when we talked about a youknow, bank statement loan, we

(07:11):
talked about how the fact thatif they find more than, you
know, two NSFs, then we're goingto have a problem.
Or if there's Uh, deposits thatwe can't large deposits that we
can't source that's going to bea problem.
So let's discuss that.
Now.
Let's talk about what thesolution would be, which would

(07:31):
be moving probably to a P and Lloan right now.
What would be the setbacks?
It's going to be more expensive.
Now we're also going to need toinvolve an accountant or tax
preparer you know, things likethis, right?
So we need to map this all outbecause then when the issues
happen, then we already have allof the backup plans, right?

(07:54):
And we already, moreimportantly, we already
discussed it.
With the client, especiallybecause if you're so focused on
one thing, and that's all you'retalking to your client about
when that one thing can't happenfor one of a billion different
reasons in this business, thenthey're going to be upset like
you were trying to sell themsomething that they can't ever
get.
Right?
But if you said, Hey, these arethe amazing programs we have, I

(08:16):
quoted you on a few years ago.
Which one, you know, do youthink is the best walking them
through it?
Maybe they ask you which one andyou tell them, hey you know, I,
I think the bank statement isthe best.
And that's probably what theywould choose anyways, right?
They would say, oh, the bankstatement, it's a lot better
price, right?
It's lower rate.
And that's what you wouldprobably say in this example
scenario, there's a million waysto.
Right.
I'm just using a bank statementin a P and L as a example for a

(08:41):
self employed borrower to whereyou know, they would probably
say the same thing.
The bank statement lookscheaper.
And you would say, okay, great.
Let's go with that.
That's easy.
All we need is all your bankstatements, but the issues that
could come up or X, Y, Z.
Now, if those issues come up,Our backup plan can be that P
and L quote that I sent younotice.
It's a little bit more expensiveand keep in mind, we'll have to

(09:03):
get an accountant letterinvolved and stuff, but that
would be our backup plan.
If anything happens.
And so now it's, it's all just apart of the process.
Oh yeah.
Look, there was issues with thedeposits.
We couldn't source them.
The, they wouldn't give us anexception on that.
So now we need to move on to thebackup plan.
Okay.
Everybody knows what's going on.
They've already seen quotes withthe general pricing of it.

(09:26):
Obviously, you have to re quoteit again, but you know, you get
the point here.
That's very important.
Again, in the upfront process ofmanaging their expectations
about.
What can happen with the loanprograms and with how many loan
programs we have here.
There's multiple loan programsfor every borrower, right?
That will fit in general.
You're not going to know if anyof them actually fit the exact

(09:48):
guidelines until you go throughtrying to do the loan.
But that's why it's importantthat before we even go down that
journey, let's have a plethoraof choices.
Let's have walk them throughthese.
Let's have a backup plan that wediscussed with them so that
they're on board.
Right.
That's a very important and nowpiggybacking off of that here.

(10:11):
We need to react to any problemsimmediately.
So another huge mistake here,especially for loan officers.
Excuse me.
New loan officers is actuallyexperienced loan officers too.
All the time.
They don't want to answer thephone when things go wrong,
right?
They don't call people and beproactive when the realtors are
calling them and clients, whenthere's bad news, they don't

(10:33):
want to pick up the phone.
Who wants to pick up the phonewhen all you have is bad news to
tell people.
Right.
But I'm telling you, it'sextremely important because it's
just going to get worse andworse as the problems happen.
So like Jose says.
As soon as you find any type ofissue, you should be on the
phone, calling everyoneinvolved, making sure everyone

(10:53):
is aware of this issue becauseit's just going to be more and
more of a problem, right?
Keep in mind too, we have a hugeobligation to our borrowers.
And in situations like apurchase, for example, we
essentially have their depositin our hands because there's a
financing contingency date thatwe need to be aware of.

(11:14):
And we need to make sure thatwe're communicating with
everyone if we're going to hitthat financing contingency date
or not so that the client andthe realtor can cancel the
contract.
If, if they have to, right.
If we have to figure out how tocancel it, because if not, then
the kind of financingcontingency expires and they
lose their deposit.
Right.
Which is a big deal talkingfive, 10, 20, a hundred thousand

(11:36):
dollars.
You don't know how much thedeposit was.
Right.
So very important there to be ontop of it.
Now, when your phone is blowingup because something's going
wrong.
So guess what?
If you had already had theconversations with your
borrower, with the the, therealtor about these different

(11:56):
options about the backup plans,if XYZ happens, then answering
that phone call is not aproblem.
The client calls you or you haveto now call the client.
Let's say it's even just youhaving to pick up the phone and
call the client.
A lot of people don't want to dothat, especially when it's bad
news, but guess what?
It's not even bad news becausewe've already addressed this,
right?
It's nothing to pick up thephone and say, Hey, remember

(12:18):
what we talked about?
Looks like that's what happened.
So let's go ahead and go withthe backup route.
Remember how we talked about howthat was going to work here?
Let's walk through how we'regoing to.
Proceed down that road.
That's not a problem, right?
It's only a problem if you neverspoke to them about any
possibility of this.
And then it just comes up andthey go, what the heck?
We're halfway through my loan.
You said we could do a bankstatement loan.

(12:39):
I don't know what a PNL loan is.
What are you talking about now?
It's way higher price.
You're trying to bait and switchme.
Right?
So two totally differentconversations.
One is you're an amazing loanconsultant getting out in front
of problems before they happenconsulting your client through
all the different options andfinding solutions for your
client and making your clientfeel safe and secure that even

(13:02):
when one thing happened, we'removing right on to the next.
And we knew it was possible.
So we go from that, which is allpositive.
To an extremely negative,probably going to give you a bad
review and never work with youagain and tell everybody that if
they talk to you aboutmortgages, they're definitely
not going to tell them to workwith you.
They're going to tell them thatyou gave them a bait and switch.
Now, what is the differencebetween what happened in those

(13:25):
scenarios?
It wasn't what happened with theloan.
It wasn't what underwriting did.
It wasn't anything to do withanything besides the loan
officer properly consulting withtheir borrower.
That's it.
The same exact problem happened,right?
The same exact problem with theunderwriter or whoever denied

(13:45):
the loan, why we have to go thisother route or do this other
stuff, same exact scenario, sameexact thing happened that was
out of our control.
But what is in our control washow the loan officer handled
this.
Especially up front.
So now you see how importantthat is.
We have two scenarios here.
One goes amazing and you're themost amazing loan consultant and

(14:05):
your borrower is happy andrelieved and never gets panicked
and trusts you, right?
As opposed to the other way,where not only are they not
going to do the loan at thatpoint, they're not going to
recommend you.
They may end up giving very badreviews because people feel hate
feeling like they got a bait andswitch.
And even though that's not whatyou did.
That's, you know, that's notwhat it looks like to the other

(14:29):
person.
Right?
So very important.
Managing expectations aboutmarket trends and conditions.
So now we're going into, youknow, the rate lock management
side of things.
And so we don't have to be afinancial expert, and we don't
have to try to make our clientsa financial expert, but we
should have a general knowledgeof what's going on and be able

(14:51):
to speak to them about that alittle bit while at the same
time where none of us arepsychic, right?
No, no one knows what's going tohappen with the interest rates,
especially lately, but at theend of the day, something you
should be talking to yourclients about.
Now we talked about this on thetraining last week.
I think the loan officertraining, the one we do in the
evenings.

(15:12):
About the fact that you know, itdoesn't matter whether rates are
going up or down, you know,that's always something to talk
to your client about.
Right.
So right now, like last week,you know, people were waiting on
the rates to go down.
They thought they were going togo down.
And then this week they shot up.
So anybody that was sittingthere waiting to lock their rate
last week saying, oh, we'lljust, let's, you know, the more

(15:34):
we wait, the, Closer we are togetting the rates to drop.
Well, guess what?
They just kind of got screwed,right?
Because now rates are way higherthis week than they were just
last week.
Right?
So you know, it's, it'simportant to just be discussing
these things with your client.
And it's important to understandas.

(15:56):
You know, the, the moreexperienced loan officers do,
and hopefully the newer loanofficers out there will you
know, start to you know, figureit out that it's not just about
the rate, right?
One thing we talked about wasthe fact that it's also the
guidelines.
So when it comes to locking yourloan, you're not only not
locking the rate that day,you're locking the guidelines

(16:17):
that day, and with all thevolatility in this market.
Guidelines are going to bechanging.
Well, first of all, non QM, theychange every day anyway, but
they're going to be changingeven more often.
You know, things like tighteningup the LTV or restricting
seasoning on, you know, things,right.
These are the types of thingsthat they do to try to keep the

(16:37):
prices down.
When rates are going up, they'regoing to tighten up the
guidelines.
And so that same loan that youhad yesterday, that was all
good.
And you were just waiting tolock it.
Cause you thought the rate wasgoing to go down.
Well, guess what prices go up,then they try to restrict the
guidelines to bring the pricesdown.
And so the next day, all of asudden you don't have a loan

(16:59):
because they changed theseasoning requirements from six
months to a year, right?
And so you were trying to save atiny bit of money on interest
rate and you lost the entireloan from one day to the next.
Because you didn't lock it.
So remember, right?
Lock is not just about lockingin a rate.
It's about locking in theguidelines for that day.

(17:20):
And if you don't do it, thenyou're out of luck when they
change the guidelines, whichthey do.
Typically once a month and thenin environments like this, maybe
once a week, even day to daywhen it's non QM loans like
this, there's no rules they canchange at any time they can
change the guidelines, they canchange the rate sheets

(17:41):
throughout the day, intradayrate sheet changes intraday.
Guideline changes.
I mean, it's just, it's, it's,it's ever changing and it's a
landscape.
You need to know how tonavigate.
So, for those of you more fromthe conventional world, you
know, this is totally different,right?
You're not locking guidelinewhen you're doing conventional
loans.
All you're worrying about islocking the rate because the

(18:02):
guidelines are the same forevery single loan that's ever
happened.
For a conventional loan istotally different than non QM.
And then of course, just generalguidance with your client.
Remember you're theirconsultant, right?
You're the licensee.
We are the ones that knowswhat's going on.
And we should also be able toexplain it in somewhat layman's

(18:23):
terms to our clients.
The good loan officers, theexperienced ones are really good
at that, right?
They're good at knowing howeverything works in a
complicated way for them to knowit.
But being able to explain enoughto their client in a very simple
way to where their client can beguided through the process.

(18:43):
And then last slide here, justmanage everyone's expectations.
So, so far we've been prettymuch talking about the borrower,
but the buyer's agent, seller'sagent title, I mean, everybody
should know what's going on.
So that goes back to if there'sproblems that come up, if
there's issues that come up.
You know, these are, these arethings that need to be

(19:04):
communicated to everyone as soonas possible.
And just remember, you're notthe only one in the transaction.
The borrower is not the only onein the transaction there's, you
know, well, assuming this is apurchase, there's the buyer's
agent, seller's agent, theactual seller themselves,
there's title, there's all kindsof people who have a lot going
on.
Right.
And a lot of, you know, a lot ofit could kill the deal too.

(19:28):
And with no you know, nothing todo with us without us doing
anything wrong.
Right.
So very important that wecommunicate with everyone and
communicate quickly and clearly.
That's the biggest, I think,takeaway from today for
everybody, as far as.
Managing expectations.
I guess the 2 biggest takeawaysthere that make sure to not

(19:49):
avoid people as soon assomething happens, pick up the
phone, communicate quickly andclearly with everyone in the
process that needs to knowwhat's going on.
And then the other really big 1here.
is talking about the pros andcons of the multiple options
that we're going to give themwhen we're quoting them and

(20:11):
discussing the route of whichones would we want to go with
first, which ones would be thebackup plans and how we would go
about that.
You know, for example, it mightbe a situation where we say,
okay, 85 percent DSCR.
Let's say their, their creditthere, you know, it could get
the 85 percent if they're at theseven 20 or whatever the

(20:33):
threshold is, but we end up notbeing able to get their credit
there.
And then we know, Hey, rememberthe backup plan was just that
we're only going to get 80percent LTV.
So we already knew this goinginto it.
We were going to try to get the85%, but we knew we might not
get it.
And so that's a lot differentthan this person planning the
entire time to only put 15percent down.
And then all of a sudden now atthe last minute or.

(20:56):
Further into the process, you'resaying that they're going to
have to put 20 percent down,right?
We want to get them in the rightmind state so that they can also
plan personally, right?
They need to know thispersonally, who knows what their
money situation is.
They need to be knowing in theirhead, like, okay, I'm going to
put 15 percent down, but there'sa chance I might need 20.
So I need to make sure that 20percent is set aside.

(21:17):
I've already spoken to, youknow, whatever ex loan officer
about it.
They explained that this couldhappen.
I know what's coming.
I know what's going on.
And I know that the downside ofus not being able to make that
happen is a 5 percent LTVreduction.
I already know exactly what'sgoing on.
Right, so very important tomanage expectations and it all

(21:38):
starts on that 1st interviewwith the client when you're
talking to them to get all theinformation you need to send a
quote and then sending multiplequote options and then calling
the client to discuss them andgo over them and walk through
them and then find a plan ofaction.
And make sure that that plan ofaction also includes backup
plans for when somethinghappened.

(22:02):
All right.
And that is it for today.
I don't see any questions.
So we'll go ahead and wrap it uphere.
Again, huge difference.
Remember that scenario.
Keep that in mind.
Huge difference between Managingexpectations properly and having
a happy client, smooth closing,then that same scenario
happening and us not managingtheir expectations up front and

(22:24):
end up getting a no client, nodeal, bad reviews, bad mouthing
us to people, right?
That's that's a huge differenceof us just doing a.
Good job as a loan officerconsultant up front and not
letting it all explode on theback end.
So thank you everybody fortuning in.
Remember, we do this 12 p.

(22:45):
m.
Eastern every weekday where wego through the front end of
mortgages.
So we'll be back tomorrow, 12 p.
m.
Eastern for the next episode ofthe loan officer sales training
with the mortgage calculator.