The process of acquiring a home loan has many variables throughout that can determine not only when a loan will close, but also if it will close. At the top of this list and one of the biggest sources of frustration for loan originators, is document gathering.
The reason is obvious. There is very little control for the LO during that phase. They ask for the documents they need and have to trust that their clients will dutifully handle the rest.
But whether it’s a client who drags their feet or submits incomplete/inaccurate docs, there always seems to be something that delays a LOs ability to get a quality file submitted for approval – and sucks up time that could be used moving other files forward, or building relationships.
Fortunately, there are some simple techniques that originators can use to gain some control by creating an environment that is conducive to speedy document gathering.
Stoke the Fires of Urgency
When it comes to creating an emotional response in your clients that urges them to get their documents to you ASAP, there are really two different components that help with generating that sense of urgency.
First, you have to be clear when setting initial expectations with a client that there is a critical need for them to get you their documentation. The process of them getting a loan will come to a grinding halt otherwise, and if they take their time with it some docs they submit could become outdated and require even more work on their part.
The second part comes from creating artificial pressure. People, in general, have a bad habit of waiting to complete a task until they absolutely can’t wait for any longer, adrenaline kicks in, and they launch themselves into action.
Take advantage of this psychological phenomenon by setting a deadline for the document collecting portion of each loan file and then intermittently reinforcing it by leveraging simple reminders.
Not only will the borrower develop a sense of urgency, but also accountability to their responsibilities within this process.
How easy do you make it for your clients to get you their docs?
The fact is that email, fax, and paper hardcopy all have associated roadblocks for any client whether it’s security, having to print, or physically driving to the office.
And while some will still want to use these methods, as they’ve always done it that way, the expected timeline for when your clients will fulfill document requests get lengthened considerably.
The advent of digital mortgage point-of-sale software has provided the industry with the simplest, and fastest, way to complete this task. Modern mortgage POS systems are more than just a file uploader, they ensure that the borrower knows exactly what documents have been requested, what they’ve already submitted, and what they still owe.
These systems have demonstrated the ability to cut document gathering times in half.
Cater to the Lowest Common Denominator
Borrowers come to the table with varying levels of knowledge about the process of acquiring a home loan. While some will be well prepared, with their documents already in tow, there will be others that truly have no idea what to expect or do.
By simplifying the process to meet the needs of first-time homebuyers or those who require more guidance, you ensure that every client gets the same level of help when they need it as well.
As the saying goes, “you don’t know what you don’t know” and that couldn’t be truer for people that have little to no experience going through these complicated transactions. How would a client know that you DO need that last, blank page of their bank statement unless they’ve been told?
Prepare them with explicit instructions, detailed examples and descriptions of what they need to source, guidance for where to find documents, and fill-in-the-blank templates for items such as LOEs.
Boiled down: simplify the process for your borrowers, provide them with resources, give them a nudge toward action, and make it incredibly easy for them to do what you need them to do.
Create that environment for your clients, and you’ll be rewarded with less stress and faster turn times.