You close the email and sink back in your chair. Your underwriter pointed out that you calculated the income incorrectly for your self-employed borrower, leaving the DTI at an interesting 57%. Of course, the loan referral is from a new RE Agent that you’ve been trying to make progress with… and she is NOT going to be happy. The borrower is a CIO for a new manufacturing company in your area, and now the loan you told him was a “slam dunk” is now actually DEAD. Gulp indeed.
These are the moments where Loan Officer’s reputations are made, for better or for worse. Every Top Producing Loan Officer has multiple stories just like this that they can recall with great clarity; they can tell you the borrower name, Agent name, the Loan Amount, the problem, and likely what shoes they were wearing that day. These types of errors are burnt into our memories.
That said, if you ask virtually any top producer, there are usually (at least) two huge take-aways which are common for these types of loan file catastrophes.
1) They fought the urge to hide from the Agent and borrower. Instead of dodging phone calls and emails, they proactively sought people out, apologized, took ownership for the mistake, and offered some semblance of a ‘back-up plan.’
2) They learned from the mistake they made – and likely never made that exact same mistake again.
Look – no one enjoys making mistakes. Perhaps even less palatable is ADMITTING a mistake. It can be frustrating, embarrassing and unnerving — especially in the Real Estate and Mortgage industries, where building a solid reputation among referral partners is so critical.
It’s funny, though; often the mistakes that Loan Officers make — and the subsequent challenges they go through — end up propelling them forward in their careers. They end up leveraging the error and negative consequences for GOOD.
When we are able to learn from and grow through our missteps, we’ve reached a level of success that few find.
The Truth About Mistakes And Your Customers
Before you can fully embrace and then leverage your mistakes, there is a fundamental truth that we must fully grasp: Loan Officers are human. All humans are finite, and don’t know everything, and are subject to making errors. Importantly, no one (reasonable) expects a person to know everything and to operate mistake free.
Mistakes are going to happen, that is a given for every single Loan Officer and Real Estate Agent. However, once a mistake is made, this is where there is a divergence of reactions: some Loan Officers won’t admit a mistake, and consequently the usually won’t learn from it. However, other Loan Officers will tackle the problem head-on, accepting all blame and responsibility.
Loan Officers who shirk responsibility will be seen by others as incompetent at best, or more likely as an incompetent scoundrel.
Loan Officers who politely, humbly, and confidently own a mistake are seen by others as principled, trustworthy, and a person of character. Owning an error actually builds trust with others, and will often allow you to salvage the deal, and even grow the long-term referral relationship.
Fear of Mistakes Prevents Growth Through Adversity
I’ve always believed that while challenges are difficult to navigate, that adversity truly is the best teacher. We desire for our circumstances to go smoothly, but it’s the bumps in the road that help us learn the skills, habits, and character traits that provide a huge payoff down the road. Most parents know this intuitively about their kids; you’ve got to let them fall (often) and pick themselves back up to prepare themselves for the inevitable problems they will face later in life.
According to psychiatrist Shimi Kang, M.D., “Mistakes allow children an opportunity to stop and assess what they’re doing, and to consider what they can change to succeed next time”
We know this is true for kids, but many adults don’t apply this same concept to themselves; they don’t fully buy into the notion that mistakes provide the fertile ground for experiencing substantial growth.
We perform at our very best when we are free from worrying about other people’s expectations and judgements. When you possess the boldness to fail now and again, you are empowered to try new innovative marketing tactics, reach out to potential referral partners with confidence, or perhaps finally hire that LOA whom you’ve needed for so long.
Some of the most successful people in the world have failed i business ventures more often than most people have ever tried. Legendary entrepreneur Richard Branson has pursued hundreds of business ideas over his decades-long career, with many notable failures — including the now-famous Virgin Cola launch. He went up against Coca-Cola and failed miserably, but leveraged that (and other) failures into other immensely successful ventures.
Mistakes That Lead Loan Officers to Success
Not all mistakes are created equal. For example, engaging in a heated, expletive-laced argument with a well-connected, highly respected Real Estate agent isn’t a good idea, obviously. However, some mistakes that Loan Officers are bound to make are a natural progression along a path to success.
Next week you might blow it and misquote a rate. Next month you might take an Agent to coffee and stumble through the entire conversation. However, these types of mistakes do not need to derail you and your reputation. As we’ve seen, the opposite is true. The next time you, (or perhaps your LOA or Processor), steps in it – remember the following:
- Proactively deliver the news: pick up the phone and make the calls. (DON’T HIDE!)
- Own it 100%. Explain what happened, and take full responsibility.
- Sincerely express your empathy.
- Provide Alternatives. Have a plan that can either fix the mistake, or at least give the person their best possible options.
When a loan file implodes, your referral partners will remember how you handled the situation much longer than they will remember the mistake itself. Use the error to earn their trust, and watch the relationship (and the referrals) grow.