Loan writers: The broker's apprentice

The world of mortgages can be incredibly daunting for loan writers new to the industry. So if you'd like 'productivity' and 'success' to be added to your loan writers' list, you need to take the right approach. AB's Agnes Gajewska investigates how best to equip your apprentices with the right stuff

It's very difficult to find a good loan writer, yet the experts agree - once you have one it isn't too difficult to turn them into a desirable asset.

Persistence with a capital P

According to principal finance manager for LJ Hooker Financial Services, Tracie Palmer, the first step to getting the most out of your loan writer is to ensure they are in fact the right type of 'apprentice'.

The mortgage industry has plenty of challenges, especially at the beginning, and an ultimately successful loan writer has to be able to live up to these. So before you invest your time and money, Palmer advises that you ensure that the loan writer you hired has the right character, drive and attitude.

"They have to have the characteristic of someone who works hard, someone who's proactive. You want them to be the kind of person who will go out there and build relationships with people in the community," she explains.

"I've always used the words 'persistence, persistence, persistence.' They just have to have the persistence to keep going back."

Further Palmer states that the potential within a loan writer rests very much in their approach and natural qualities.

"You can teach someone to be a broker," she explains, "but you can't teach somebody to have good qualities. You can't teach somebody to care about their customers and unconditionally go the extra mile. You can teach them about a loan product."

Rocky Warren, MD of The Sydney Home Loan Centre, mirrors this sentiment, likening a new loan writer to a blank canvas.

"If they have all the other prerequisites - professionalism, punctuality and ethics - and we think they're going to be good enough, we would take them under our banner as a loan writer," he says.

"Then, we basically have a blank canvas to paint. We can mould them in our way."

Knowledge is power

When you're certain you have a quality loan writer in your team, the first point to focus on is providing the right type of training and support.

"A broker needs to ensure that their loan writer is well versed in what the lender actually requires," says FBAA president Peter White,

"They need to spend time with lenders - they need to go in there or have lenders come out and see them. They need to have a training environment with the lender to ensure that their knowledge base is what the lender needs it to be."

Palmer agrees, "I'm really big on training. Every month we have a group training session where we invite lenders along to update us on their products and services."

According to her, learning all of the products, services and systems that lenders have in place - and which vary between institutions - are a major challenge for new entrants to the industry.

"For example, our aggregator has over 30 lenders on its panel and every one is different," she explains, "loan writers need to know [each one's] products, systems and what they like and don't like."

She says this task is difficult and mistakes are easy to make and often come at a high price. "It might be a case of putting a borrower through one bank, which a broker would [normally] know will not do a particular loan where another bank would.

"[An experienced broker] won't waste time doing a loan with the first bank, but it takes a good while to get to the point where you can say 'I know where I should send my client'," Palmer says.

White also adds that building a relationship with lenders while learning about their processes is key to future efficiency.

"Loan writers need to know who the people whom they are dealing with are. A bit of relationship building is a very good thing, because if you get along well with people, when things get under the pump you'll get much further," he says.

Support line

The initial starting period is often a time of high stress and vulnerability. New loan writers are being encountered with incredible volumes of information and often need time before they begin to regularly generate leads and take a firm hold of their role. In view of this, it is imperative for brokers to provide encouragement and support.

"It can be a lonely world," Palmer says "and just being there and supporting them through the hard times when they're not getting leads, for example, is important."

Former CEO of the National Brokers Group, Graham Bennett, believes that good, empathetic communication is the key to avoiding future problems.

"Strong communication is critical," he says, "whether in the field or in the office writing loan applications, the communication between the broker and the loan writer has to be clear."

"We have to have empathy for all of our workers, including our loan writers, to try and help them achieve their goals and dreams. If we can help them to do that, then certainly we will benefit along the way," he says.

Palmer adds that personally she finds one-on-one sessions particularly effective to this end.

"In our one-on-ones we talk about what they have been doing, where they have been, whether that was successful, and I can tell them to 'keep doing this or stop doing that," she explains.

It takes time

An important thing to remember is that, regardless of how proactive or talented a particular loan writer is, it takes time for them to settle in and begin making a perceptible difference.

"It took the last two loan writers that I put on a good 3 to 4 months to get through all of the lenders, all of the training, all of the accreditation," Palmer says, and this is just the beginning.

"Once they do all their initial accreditations - their MFAA or FBAA certificates - they've got to go out and try to get business, and it takes time to build relationships with people," she explains.

According to Palmer, brokers need to expect a minimum of a six month settling-in period. She also adds that only after about three years will brokers and loan writers begin to see a substantial amount of referrals and a perceptible difference in the business they were writing.

Managing director Scope lending, Will Davies, agrees that timing is a highly variable element.

"It's really different for different people," he says, "We've had mortgage brokers who have started, and within two months have been writing two million dollars a month in applications, and we've had others who have taken ten months to get going but then have actually hit their straps towards the end of the year.

"It's really bizarre; it's different for different people. It depends on each person's learning cycle and how much similar type of work they've done before. For example if you have someone who's been in the real estate industry they're familiar with the whole prospecting thing."

On the issue of what to expect your loan writer to achieve within a certain time frame, Davis states that rather than having a set criteria it's better to concentrate on behaviour and individual performance targets.

"In our experience, some people just do take longer than others so set criteria probably doesn't work. All of our brokers have targets for each week - how many appointments, how many loan applications and how many leads they should be getting a week. We also have a coaching model where they set goals every week about what they're trying to do and then have a meeting in the following week to check that they've met their goals."

The logic test

While you are helping your loan writers to achieve the best results, you also need to be aware if they are not working to their full potential.

Given the long-set 'settling-in' period this can be hard to measure, figures can be misleading. However according to Peter White, it is not a difficult process - the best way to gage whether a loan writer is pulling their weight is to simply apply "a logic test."

"For example if a loan writer gets a whole lot of loans approved and nothing seems to settle, then you need to ask are they following things up. If someone's always sitting around, chatting, looking on the internet you know you've got a problem there - they're not working," he says.

Palmer agrees adding that the attitude that loan writers display is probably the most powerful mechanism to gage whether they are an asset and likely to succeed or whether they are complacent and not working to their full potential.

"If a loan writer is in your office and they're just sitting there all day long, in my eyes they're not going to be successful," she says, "They've got to be out there walking the pavement, knocking on doors, meeting people, building relationships and going to as many things as they possibly can. If they're doing those things they're trying. If they just sit there, they're wasting your time and they're wasting their own time."

2007 MFAA loan writer* statistics:

• 62% of the participants worked with a lender panel that exceeded 21 lenders.
• 57% of those surveyed worked in excess of 41 hours a week
• 43% of those surveyed had been a mortgage broker for three years or less.

The top five challenges as identified by the loan writers were:

• attracting new customers;
• managing paperwork and office procedures;
• processing loans;
• managing business growth and
• time management.

* Loan writer is defined as anyone holding either an Accredited Mortgage Consultant (AMC) or a Certified Mortgage Consultant (CMC) status.

Top loan writer hiring tips:

According to the experts any broker who is interviewing potential loan writers should think about the following things:

• Does the candidate hold sales experience? Can they demonstrate a good past sales record?
• Does the candidate have clear and concise goals (with a touch of ambition thrown in)?
• Is the candidate proactive? Can he/she show marketing material they have produced in the past or give examples of action they've taken?
• Is the candidate well presented? Do they conduct themselves in a professional manner? Are they well spoken? Are they punctual?
• Do they possess good knowledge of your business style and needs?
• Will the candidate's character work well within your business environment?
• Does the candidate hold the same business ethical standards?
• Have you been diligent in gaining reference checks on the candidate?

Tools of the trade:

LJ Hooker uses a tool it calls the 'Online Diary' in order to allow for communication and competitive motivation between its loan writers and brokers. The application allows for everyone in the office to view their peers' online diaries to see how they're progressing in terms of appointments, processes and so forth.

"It's been a good tool. If someone's been quiet and see that someone else has all these appointments, it spurs them on to get out and get more appointments booked into their diary," says Tracie Palmer.

"I've also found it very valuable because not only can they see what everybody is doing, but I can see what they're doing and what they're not doing," Palmer says, "so it's been useful for me for training them and seeing that they are busy and they are doing proactive things."

There's more than one way to train a loan writer

According to managing director of Scope lending, Will Davies, finding ways to train and encourage loan writers in various ways can yield impressive results.

"For a number of our brokers we have a special program that we call Mega broking success. This involves actually holding them accountable for contacting a certain number of people every week - whether that be people on their database that they've already seen, or new people," he explains.

"A lot of the newer guys have to contact a hundred people a week. If they don't do that there's a penalty and if they do it, there's a reward. It's not something that's funded by our business; I'm just holding them accountable. So they might say 'OK if I do this for three months every week I go on a really nice holiday' and if they don't we might get them to give a $100 donation to some political party that they don't like as a disincentive.

That really helps with the prospecting side of things, which for a lot of people is the harders part of being a broker. And if they can get out of the chair and get prospecting and make a hundred calls a week then it's very hard for them not to be successful."