The Roller-Coaster Effect is when a Loan Officer’s production swings wildly from month to month and their income soars and then dips. Their emotions follow suit. They go from feeling invincible when their pipeline is big and they fund everything out and they get a big check – to desperate, angry and depressed when they realize their pipeline is dry. They lose faith in their ability to earn a steady income and become less effective as their attitude deteriorates. They are constantly stressed out and irritated and feel like their career is out of control. They become skeptical that the system works, and may even question why they got into commission based sales in the first place.
Take heart young friend! Although the symptoms vary in severity, all Loan Officers experience this to some degree during their careers. It typically affects first year Loan Officers most severely because they have not yet established a routine which insures success and because they think short term. It also occasionally (and dramatically) affects even seasoned veterans when they burn out, go through some emotional crisis, cut back on their hours or just get lazy.
Any seasoned Loan Officer will tell you his own tale of woe. Most Loan Officers who have suffered through this experience prefer to chalk it up as a slump, pin it on bad luck, on a changing market or blame the system. In my observation it is almost never these reasons! It is almost always due to the Loan Officer not working logically and not thinking long term.
A Fable for Our Time
The Set Up
The typical Loan Officer starts here with an empty pipeline, eager to get on the phone and prove himself. He loads up on calls, puts in long hours and enthusiastically works any lead given to him. He is constantly in a Sales Managers office seeking advice and guidance. He lives on the phone, convincing and cajoling his current and potential clients to move forward, and comforting them when they feel down. He fights his way through processing, aggressively reviewing files and chasing down conditions. He is on fire!
Then the pipeline is full. And in comes another deal. And another. And another. He wouldn’t dream of making another lead call! He lets the lukewarm leads die. He ignores a couple of smaller deals and they die. He ignores his clients who are not screaming at him because now his pipeline is on fire! Everything is going wrong! One disaster after another, but he manages miracle after miracle and saves the day! (With a little help from freaked out Sales Managers, processors and by giving significant discounts.)
Does he take a lead call yet? No way! He has funding disasters to contend with!
And then the dust settles. The checks trickle- and then pour in! He cuts back his hours, after all, he deserves a break! How about a lead call? No way! He is burned out. And then finally pay-day arrives! He receives his giant check! The applause and amazement of an adoring and jealous hoard of other Loan Officers, who exclaim “Amazing! and “Wow!”, “He is the man!”
He goes home with his huge check and his wife/girlfriend makes elaborate plans to spend it. He spends the next week online looking at expensive sports cars for sale and planning a trip to Maui. He sleeps late, takes a long lunch and goes home early. After all, he is the man, and now that he has been crowned the undisputed king of loans, there is no reason to work as hard as the mere mortals that work around him. He assumes that the deals will magically fill his pipe and manage themselves. Actually he is not thinking, because he still makes no lead calls.
The Wake-Up Call
He snaps out of his daze one day. Maybe he overheard one of the low producers bitching about how it sucks that he works a grueling 25 hours per week, made two calls the previous pay period, doesn’t do any follow up- and his pipe is empty! Then he thinks “Holy crap! My pipeline is empty too! It is halfway through the quarter! I better take some calls!!!” He boldly proclaims; “I will make 200 calls per day until my pipe is full!” But he is distracted by personal emails and used to doing busy work instead of originating so he only makes a few and doesn’t get an app. Now he is mad! “This place sucks! These leads are no damn good!” And the next day the same thing happens. And the next. And the next. And now he is getting desperate and angry. He pushes too hard on the phone and scares away potential clients. He starts scheming of ways to get business; “Maybe I’ll go hit up some Realtors, or maybe I’ll call old pipelines, or maybe I’ll print up fliers and pass them out on 5th…” He gets jealous of the guys and gals doing well. He suspects that there is a conspiracy designed to hold him down. He starts thinking about going to work for that place behind the gas station that offers 103% splits, free leads from the Yellow Pages and unlimited coffee refills. Or maybe he thinks, “I’ll show those bastards that I mean business! I’m going to start my own brokerage! How hard can it be? I’ve been a LO for 6 months! I’m one of the top producing Loan Officers in the country! I’ll buy an RV and have the only mobile brokerage in San Diego!”
The Beginning of The End
But then he catches a break and gets a few apps in and kind of forgets why he was so mad. Those few apps and talking about loans at happy hour makes him feel busy. He refuses to make more calls because he doesn’t want to work late and he is going to Vegas on Friday. Before his trip he checks his bank account and realizes he is a destined for the nickel slots, not the high rollers lounge. He gets mad when he thinks about what his split is. His buddy gets 90% working for a company that does illegal advertising targeting old crippled people- and he got two neg-ams last month!
He figures that since he has worked at three different brokers in the last 6 months and it’s always the same, that it is a good idea to leave. But he doesn’t want to give up his three loan pipeline and he doesn’t want to go through the hassle of interviewing so he just kind of works part time and makes a few calls here and there and scrapes by on $4,000 bucks a month while he steals as many leads as he can from his broker.
A few months later he concludes that the reason he is broke is because the system is flawed and he can do much better elsewhere. He gets ready to quit but we fire him first because of poor attitude and production. For the next two years he bounces shop to shop at a string of failing brokers, tries retail for a while, and finally calls it quits because the mortgage business obviously sucks and the only way to make money is to be in a refi-boom. He was right, he predicted that it would suck and it did! Nobody can ever be successful in the mortgage business. All of those stories of millionaire LOs he heard about are just a pack of filthy lies!
Hindsight is 20/20
A few years later he experiences an enlightening series of events. While working as an Assistant Manager at Jack-In-The Box he sees one of his former coworkers drive by in a new Ferrari. The guy is lighting a Cuban cigar while racing another former coworker in his Porsche! Then on his 15 minute lunch break he is reading the newspaper and on the front page of the Business section the headline screams “ANOTHER REFI BOOM!” And finally, later that night he is watching Wheel Of Fortune in his one bedroom apartment in El Cajon and the winning phrase is “SELF-FUFILLING PROPHESY”. He doesn’t understand the phrase so he grabs a dictionary, opens it up and there is a big picture of him- staring back at him!
So What? I’m Different!
OK, so maybe you won’t end up like most LOs. But if you continue to work erratically you will never be a success. Let me help you! The secrets to success as a Loan Officer are not so secret;
- Work 10-8 every day and one Saturday a month.
- Make 100+ calls every day.
- Call your follow up leads every night between 5-6.
- Call your past clients every night 6-7.
- Review your files every day.
- Never stop originating.
CONSISTENCY IS THE KEY TO SUCCESS!