Referrals are the lifeblood of the mortgage originator. Having real estate agents and other trusted partners sending you mortgage leads is one of the best ways to keep your pipeline full. We’ve spoken with some big producers about how they go about acquiring new referring partners, as well as the steps they take to activate those relationships in order to generate more business for themselves.
Acquiring New Referral Partners
There is a wide variety of tactics that loan officers employ as they seek to make connections with new referral partners. Those tactics can be generally identified as belonging to one of three overarching strategies:
- Brand development — provide great service and leverage word-of-mouth marketing and social circles to build a network
- Active marketing — campaigns targeting real estate agents and other partners to create business relationships
- Niche – provide a specific skill or expertise they can access, or their clients are in need of
“I just built a great name in the market and built upon it over time. I have a pretty big team so I am able to service my agents better than the competition”, said Scott Evans of Cross Country Mortgage.
As Scott mentions above, this approach only works after you’ve put in years of work to develop your brand. A reputation is not earned in a day. With that being said, these relationships tend to be the most productive,long lasting and can be the backbone of your mortgage business.
Linda Rudd of Legacy Mutual Mortgage uses all three strategies, but she had some particularly useful advice in how she goes about guiding the word-of-mouth conversation.
“I think it’s working your client contacts and your agents backward. For example, if we’re working on a transaction and that client’s CPA is who we have to go to for documentation and that client loves that CPA, it’s a matter of working backward like, ‘Hey, if you love your CPA can I call them and introduce myself?’, it’s working it backward from the other angle to their centers-of-influence and who are the people that are important to them”, said Rudd.
If you’ve been successful in the mortgage industry for long enough, you’re very likely already familiar with the referral generating benefits of a strong brand.
This is the approach for the originator that wants to get their name out and try to capture new business. New and seasoned LOs alike know the business building value of referring relationships. A new partner referring just 1 deal a month can add a couple of million dollars to your annual loan volume.
There are levels to the active marketing approach and can start as small as targeted social media interactions. We spoke with one top producer who has hired a full-time marketing person for his branch. “She stays in the field and hands out our business cards and marketing material and tells people who we are. Her primary role is to help spread awareness of who we are and to sponsor open houses and events and lunch-and-learns and help keep our calendar filled with events. Her job is not to get us applications, her job is to get us connections. Realtors, referral sources”, said this LO.
This strong of an approach isn’t for everyone, as it requires additional capital resources to be devoted to hiring and collateral.
“In a good month, we might meet 100+ realtors face-to-face. That really helps a lot, but you have to have somebody out in the field making that happen while the loan officers are managing the files”. Translation: don’t expect to replicate those results by yourself, because it is a full-time job.
Working the phones, attending and engaging with people at network events are great ways to introduce yourself. But those passing introductions need to be reinforced quickly in order to stay top-of-mind.
The key? Avoid, like the plague, coming across as desperate in your interactions. Instead of going for the hard sell, invite them to an event you’re sponsoring to keep building trust. The ultimate trump card is being able to make the first referral in the relationship, though this is entirely too uncommon an opportunity.
Loan originators we spoke with didn’t advocate for acquiring a skill just for the purpose of owning a niche but instead prefer to emphasize and bring attention to something that you already do that is on the specialty side.
For Jen Hernandez of Legacy Mutual Mortgage, she gets about 10% of her loan volume because she is considered the best in her area to work with Spanish-speaking clients.
“Agents know that I’m the bi-lingual loan officer and there’s not a lot of good bi-lingual people out there. I have 2 bi-lingual people on my team both on the front end and the back end because it is important and it’s something I know that we need. We actually just brought on a big realtor account where they’re going to have a lot of Spanish-speaking people. It definitely gives me an edge that is very helpful in this market“, Hernandez said.
Instead of a specific skill, such as a second language, Linda Rudd takes advantage of her past career to give her an edge.
“I also work with a lot of bankers, so banks that don’t have mortgage companies are great for me because I am a former banker. I speak their language and am very comfortable with it. That’s a great opportunity for me to develop those relationships“, said Rudd.
Do you have a skill or a background in a related field? Even developing this market as a small segment of your book-of-business can pay off in a big way.
Activating referral relationships to generate more mortgage leads
Similar to how these successful originators have acquired their referral partners, they also have leaned on multiple approaches to expand the relationship once it’s acquired. Maintaining the trust and value in your referral partnerships will keep the mortgage leads flowing your way.
Provide education and business strategies
Jen Hernandez’s top duty for her team is managing referral partner relationships. She believes that educating her partners and helping them build their own business is the key to a successful relationship, not coffee and bagels.
“I have to manage the relationships and go deeper and go more profoundly with the referral partners to show them that I care about them. I need to educate them, educate their teams, I need to help them with tactics to improve their business. It’s not just about buying them coffee and taking them to a play, that’s all the fluffy stuff. But what am I doing to help them grow their business?” said Hernandez.
Why is this tactic our favorite? Because if you can help your partners to grow their business, they will have more prospects to send your way.
Organized traditional marketing
Linda Rudd breaks down her referral business into lists so that her team can stay on top of the different types of referral sources.
“I break it all down into lists. Agent list and how we’re following up with them. Past clients and what we’re doing for them. Business partners, like financial planners, attorneys, and CPAs, and how we’re staying in front of them. We do monthly mailings, monthly video newsletters, client events twice a year, and phone calls on a consistent basis”, said Rudd.
This level of organization allows you to implement carefully planned strategies with maximum efficiency. With tactics like email marketing, it is important to deliver the messaging that is appropriate to the audience. Builders, Realtors, CPAs and Attorneys each respond to much different content.
Never stop communicating
We have found that this is the best tool in a LOs arsenal to reinforce the trust they’ve worked so hard to establish in their referral relationships, keep the mortgage leads coming.
It is naturally stress and anxiety relieving to have the information available to prevent speculation. Agents rely on loans closing to pay their bills as well and not knowing where a deal stands or how things are going would naturally create uneasiness in the transaction. All of that can be avoided by making a concerted effort to keep partners updated.
Andrew Soss, of Benchmark, steadily increased how often he communicates with his borrowers and partners, and isn’t sure there is a “too much” ceiling.
“I have slowly ramped up the number of email updates that I provide in the transaction and haven’t yet hit a point where someone says that it’s too much. The twice-weekly-plus milestones seem to be a sweet spot. It’s been a huge differentiator with clients and agents. We have seen significant agent retention since we instituted updates in a systematic way”, said Soss.
Another LO we spoke with has built his business upon his speed of service, and the high level of communication he provides.
“I went to a lunch the other day with four members of my team, and there were 25-30 realtors at the lunch and we were the only lenders. I was having a conversation with some of the realtors at our table and 4-5 of those people I’d done business with recently including three of them this month. They were all talking about how we are their favorite lender because we communicate so well“, said the LO.
“A huge part of our business is communication”, he continued.
This strategy can be explained with one statement we were given from Scott Evans:
“All real estate agents want is communication, service, and someone closing the loan on time.”