RACKING UP REFERRALS

The name of the game for originations is referral business. Determining your sourcing to application ratio is a dangerous proposition for loan officers. How much time you spend sourcing your loans versus how many applications you generate is the bottom line benchmark to your success. The key therefore is to generate business without having to constantly pound the pavement for new loan opportunities. Referrals therefore are THE KEY to your long term success.

The critical factors of an effective referral program are how you make the referral request and the degree of urgency you instill with your request. The simple statement of “please ask your friends to call me with their loan needs” is better than saying nothing but it does not instill much urgency. Nor is there a benefit to your current applicant. Please remember that when you are asking for referral business, the person to whom you make the request is often playing the “WIIFM” game - What is in it for me? If there is a potential benefit to the person generating additional referrals for you, the odds are greater that they will make a definitive effort to meet your request.

You may consider writing your current applicant’s name on the back of five business cards. For each of the five cards that are returned to you by a future applicant, offer to pay 50 to 100 dollars of your current applicant’s closing costs. The key is that the new referral must make application before your current applicant’s loan closes. This will increase the degree of urgency and also provide an incentive for their “WIIFM” game.

Many loan officers believe that when they do a good job for their applicant’s, they will automatically be sent referrals. NOT TRUE. It is therefore important that you specifically request referrals and have a regular program for so doing. If you could increase your total volume by 10-20% simply by employing a referral program on a regular basis, wouldn’t you do it?

Well, what are you waiting for?

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