How Do You Handle Loan Declines?
Designed for Brokers, made by Brokers.
April 20. 2022
This podcast is our chance to give back to the mortgage broking industry and talk about real issues that are affecting most brokers and loan writers right now. Learning, Validation and Respect = the very foundations of all relationships.
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WE DISCUSS IN THIS EPISODE:
How to deal with loan declines. Loan decline is something that every mortgage broker wants to avoid because getting a loan decline for a client is pretty upsetting (not only for them, but also you sharing such news is also something that you want to avoid).
So, how can brokers handle loan declines better?
Key points include:
- Communication is Key!
- As a mortgage broker, you can educate your client about the possibility that declines can happen. Be upfront about the lender’s expectations, do your research and prepare the loan offer in such a way that it’s methodical and you’ve checked off all the subtleties of the loan procedure in depth (for that lender).
- Then go one step further and explain the process of what happens when a loan is rejected. Have a Plan B and share it with your client upfront. So that if a decline happens both you and the client are aware of the next steps.
- Do your forensic research upfront.
- Do the investigations into what could be rejected by the credit assessor, get the appropriate credit reports of the respective client, collect bank statements and review them appropriately.
- Think ‘what could come up’ and deal with it. This will ensure that there are more chances of a loan being approved if all the documents meet the creditor’s and lenders criteria and hence the chances of loan decline will be much less.
- When A Decline Happens: Deal with it.
- When a loan is declined, don’t complain about it and don’t stick your head in the sand. Find out why it got declined and get a solution so that you and the client is prepared for the next attempt.
- Learn from your mistakes and take action to get the right decision in the next attempt. If you don’t “learn from your mistakes” you will repeat those errors.
- Control the relationship with the client whether the loan is approved or declined. The way you handle a decline can give you big credit towards how the client views the relationship. Share all information you have with the client, tell them what went wrong with the loan, and what can be done better.
- These things go a long way in winning the trust of the client and it can also ensure the client stays with the broker for life.
- Transparency, honesty, professionalism – it matters a lot in a decline situation.
Key Quotes
“If you treat every deal as a decline, there is a better opportunity of one being approved.” – Ruan
“If you get a decline – deal with it. Fix it. Don’t complain about it. It happens to us all.” – Ruan
“Own that moment. It’s up to you to ensure the client gets that experience that they signed up for”. – Ruan
“Look at every deal and review everything forensically as to what could the credit assessor find? Do that forensic assessment upfront and you will reduce the number of declines you have.” – Marissa.
“A decline is a learning opportunity and a chance to change your internal systems so that it doesn’t happen again”. – Marissa
THANK YOU TO OUR PRESENTERS: RUAN BURGER AND MARISSA SCHULZE
