How To Build a Sticky Referral Network as a Loan Officer

Michael Vandi: Hey everybody. Welcome back to the loan officer playbook podcast, a podcast where we talk to actual experts in loan origination. We talk about real insights, real conversation and real strategies about lending today, we're talking to Eric Rotner. Eric is a branch manager at cornerstone first mortgage.

And I'm super excited to have a conversation with Eric today. Eric, welcome to the pod.

Eric Rotner: So

Michael Vandi: Eric, let's dive right into it. I have been doing a lot of work, preparing for this podcast and, a lot of work because it's reading your reviews and people seem to really love you, the people that you work with, borrowers, what's, what's your secret sauce?

Eric Rotner: I'd love to say that I have some form of secret, but really it's just a matter of, I like to get really hands on on the loan and get to know the clients and they can tell that I'm kind of there working with them from start to finish and heavily involved in the process. And as a result, they like to think that they feel confident, you know, that In the service that I'm giving them and the guidance that I'm giving them and that I'm looking out for their best interest.

And so, you know, being involved in every stage of the process, I get to know the clients, you know, pretty thoroughly and develop a relationship with them and. You know, the really focus on making sure that they're getting the full experience with throughout the loan process, you know, the, you know, customer service, you know, attention to detail, answering all their questions and just making sure they're confident the whole time.

Michael Vandi: Right. And, have you always been this type of person or did you morph into being like more attention to detail once you got into lending?

Eric Rotner: no, I'm pretty type a, so it's. It's actually been a process to let go of certain elements of the loan process. when I started in the industry a long time ago, it was a pretty small company.

We didn't have a lot of staff. And so the downside of that is you didn't have a lot of help. But the upside is that you learn every single aspect of the process. And so, I became very familiar with things that are covered typically by other people in different departments. And so As I kind of grew in the business, it got busier, higher volume and needed to bring in staff.

It was actually kind of tough for me to let go of all of the different things that I had taken care of throughout the process. And so thankfully I've had the staff who's been with me for quite some time and, you know, as I got more comfortable with their skillset, I was able to let go of things so that I could, you know, be more client focused and also focus on growing the business because there is only so many hours in the day, but.

That's just kind of the nature of my personality, that having, you know, being relatively type A being, you know, I mean, it means that I'm going to be kind of have my hands in everything really.

Michael Vandi: Yeah. And so you're doing operations, you're doing client work, you're doing loans. how do you find the time to manage all of that?

Eric Rotner: It's a battle, you know, when it comes to, you know, As I get super busy, my number one role is still, is still originating loans. I am involved in operations for the company. I also manage the branch that I, you know, that I run. and I'm there, you need to be there for the loan officers that I work for.

and. Really just kind of becomes a matter of really becoming efficient with my time. So start the day off, typically getting my critical origination tasks out of the way, making sure that transactions that need to fund are going to fund, making sure that any critical items that were left undone from the day before done.

And then from there, I'll typically have a game plan for the day with respect to how much time I'm going to allocate to certain tasks I need to get done from an operations perspective and. You know, there still needs to be some degree of flexibility there. If one of my loan officers has an urgent need, then I need to go ahead and take care of that.

Or if I have a transaction where. Something comes up and needs my involvement, then things have to get shuffled around. So while I have a game plan for the day, that game plan rarely goes according to form and really is just a matter of making sure that I'm being as efficient with each of my tasks as possible so that I can, you know, I, I can't pivot.

Michael Vandi: And I imagine you didn't plan this all to happen this way. I want you to take us back to the beginning when you first started to think, maybe thinking of going into the industry, what were your steps? Like, what did you do? What prompted you to go into lending?

Eric Rotner: So to be honest, I had no idea that this job even existed when I was in college.

And so I finished college, or towards the end of my time in college. I was doing some work with, CPA who owned a lot of real estate. he had done, had done a lot of real estate investing and he asked me as I came out of college, you know, what I wanted to do and told him I love real estate.

I love numbers. I'm great with numbers. I don't want to sell houses. so I wasn't really sure what my options look like. And so he hooked me up with the owner of the mortgage company that he had done all his loans with over the years. And. Kind of stumbled into it. And then my first boss, she ran a pretty decent sized shop.

that was sort of kind of reducing in size, just given due to the market at the time, this was back in 2001 and she taught me a decent amount, but also just kind of threw me into the fire and let me, you know, kind of figure it out on the fly. I've made a ton of mistakes, had the jitters that you always have when you're first starting your first job.

Kind of sounding incoherent on the phone at times, but you know, it's, it's one of those things you kind of, it's like any job, you know, you learn, you learn on the fly, you learn from your mistakes. I made a ton of those, leaned on the people who were around me. there's a couple. You know, loan originators who had been there for quite some time that were very generous with their time.

So I was very appreciative of that. And then we did a lot of work for builders, which at the time was quite, quite the grind, but the nice thing was I got exposure to a lot of different scenarios, a lot of different transactions quicker than most people do. and so that I've, I feel that kind of accelerated my development as far as in the industry, just It's one of those things that you can only learn from doing.

And so I was able to get a lot more doing earlier on in the, you know, in my time of work.

Michael Vandi: I think the autonomy that was put on you is a situation where most people would break, like coming into the industry and then having so much autonomy as an early, early career person. And then you just arrived in that environment.

Like, do you think for loan officers, it would be better to like put them in a really high autonomy environment?

Eric Rotner: I think it's more of a function of every person's different. I've always done well having tasks put on me and figuring out how to do them. so that's, that's an environment that I've done well in.

Other people that may not be as easy for them to function in and they might do really well once they, once they've got that, you know, sort of hand, handheld instruction and in a more structured environment, which then eventually they can go on to do it in a more, you know, autonomous nature. it really just kind of comes down to, in my opinion at the time, it was kind of like, you got to have confidence in what you're doing.

It's. I figured if I was ever going to take a risk going into a job that could be lucrative, but also has a salary of zero that I could afford to do a coming out of college when I was already broke. So it's not like I was really losing anything since I didn't have anything to my name anyway. and so, you know, I, I still have buddies to these, to this day who think I'm crazy.

I've never had a salary in my life. it's, you know, you kind of, it's a commissioned only business. You eat what you kill. And if you're confident in what you're doing and you're fortunate enough to be able to build that book of business, it takes care of itself. But it is something that definitely has some stressful elements to it.

I, I bought my first house when my wife was in medical school, got in there and then I hit like an all time cold streak. we, we, we got into the house. I'm sitting there paying medical school tuition. I now have a mortgage. And I went on this epic, like 90 day stretch where I closed like a two small, like home equity lines of credit.

And that was it. And, you know, you go three months without making any income while you've got expenses flowing out and you feel that one pretty fast. And so I was all of like 26 years old and wondering, maybe I'm going to have to go do something different. and then, you know, the tides turned and, you know, worked out, but it's definitely a situation where, you know, you have to.

You got it. You got to be confident that you're going to be, you're going to be able to figure it out, because there's no real backstop in place. At least there wasn't.

Michael Vandi: You had, you had a small dry spell there.

Eric Rotner: It was humbling to say the least.

Michael Vandi: Yeah. That's the beauty of the market, right? It's like, it's very cyclical, but things don't last long in a particular environment.

So the things it's always changing, you know, rates go up, rates come down. Refinance boom, purchase boom, things like that. And, like you, you have like so many different skills as a loan officer to manage each one of these scenarios. Like what would you say are the top three skills? That a loan officer should have today

Eric Rotner: dependent.

And one thing is not is to really learn purchase business and focus on purchase business. if you are a refi only loan officer, there is a long stretch where things were worked out great for you, but you also are highly dependent on interest rates, which is something you can't control. so one of the lessons that I learned from that, my first boss was, She always said, focus on purchase.

Refi's are icing on the cake. Sometimes there's a ton of icing, but other times there's not going to be. So, you know, even when you're in a refi boom, if purchase business is coming through, you have to focus on that. You have to make sure you're taking care of your referral partners, whether that's realtors, fast clients, builders, you have to make sure that purchase is what you know, and purchase is what you prioritize, from a skillset perspective, it really is different.

Depends on what everyone's business model is. I, I definitely, even though over time I've let go of certain elements of the process, I definitely would encourage anybody getting into the business to learn what's going on at each stage of the process, because even if you're not going to be handling these various aspects, it gives you an understanding of the process.

You can speak much more clearly and confidently about each element of the process. And also you can intervene when there is an emergency and something needs to get done. You're not reliant on someone downstream handling your task in the order that it gets assigned to them. Instead, you're able to hop in and handle something.

So if you know how to, even these menial tasks that, you know, ordering an appraisal, obtaining insurance, dealing with title issues. processing the loan, like these are all things that there's typically departments or various individuals to take care of, but just cause you're not doing them on a regular basis, it's critical to have an understanding about what is being done at each stage.

it makes you able, it enables you to be way more flexible and efficient at handling the loan process. to that right, another skill set is also learning how to let go. you can't do everything. And that's probably been the hardest lesson that I've had to learn. And, you know, you get so used to doing everything, you feel like you're in control of everything, but you're also becoming really inefficient doing things that can be handled by other, other people in the background while you're handling your primary tasks.

It's a matter of making sure that inevitably something's going to go wrong at some stage, but making sure that when that thing goes wrong, you don't overreact to a one off situation and revert to your old practices. you know, as a loan officer, your focus is on business generation and making sure that your Transactions in process are going well, you know, a transaction that goes well is your best opportunity to build, you know, to build your book of business.

You know, the people who are you're working with, who are happy with you, they're going to be your biggest advocates. They're going to be the ones who give your name out, refer you business. Referrals are incredibly sticky relative to, you know, cold calling or buying leads, things of that nature that have a much lower conversion rate.

So, you know, that's definitely something that needs to be focused on. And then the last thing really is becoming an expert in what you do. there's such a wide variety of loan products that are out there, conventional, government, jumbo, non QM. you know, having the biggest breadth of knowledge of all the various loan programs out there enables you to be agile, move quickly when you're, you know, have control of the conversation when you're talking to clients.

They get, they present you with information and you can direct that conversation quickly and confidently and really be the expert that they're looking for. You know, if someone's hopping on the phone with you, they're looking for you to give them the guidance of what is in their best interest and why, and it requires you to become very familiar with guidelines of all these different products and you don't have to know all the guidelines in, you know, in depth, but you have to have a good enough understanding to know how to steer the conversation and also to know.

That here's a tricky situation. I don't know it exactly, but I know what I need to be looking up. And I know, frankly, I know what I don't know. and so that is something that takes both just time having multiple transactions. And also, you know, takes the willingness to dive in and read guidelines and recognize these little niches and things like that.

That's going to allow you to differentiate yourself from others.

Michael Vandi: Yeah. You mentioned something that I think is super important, which is building your book of business and also building that referral network. What would be like your advice to loan officers on how to build a sticky, referral network?

Eric Rotner: So I, first off thing, number one is getting a diversification of where your business comes from. You know, working with real estate agents has always been a big key for me. getting agents that I work with who are, who are very confident in the services that I offer, know, you know, knowing why they are recommending my services to their clients.

You know, they send them to me, they know they're going to get a good price. They know they're going to get clients who are in a position to compete for, you know, for properties. I'm in a market that's highly competitive. and so I allow their clients to differentiate themselves and also. You know, I put them in a spot where if I say the loan's good to go, they know the loan's good to go, they're confident in everything.

So, you know, real estate agents, builders is another great source of business. They can be harder to, to kind of develop as a referral source. So many builders now have their own mortgage companies, but there are plenty that do not. and then, you know, your best, your best, Book of business is going to be your client database.

if you do a good job, you offer good service. you take care of your clients. They will tell people about you. and the other thing is knowing that you're doing a good enough job and being confident enough to ask people for referrals, you know, don't be obnoxious and. You know, but also the same, right?

Bring it up that, you know, people oftentimes don't realize, and then people will ask me like, is it all right if I refer you to my friend? Like, absolutely. That's, that's, that's really what, that's, that's what I'm looking for. and so, you know, people don't, loan officers don't realize that their clients often times don't realize that they can refer you out.

And so making that known. In a non cheesy and non overly salesy type of way is critical and everyone's got their own style my style would not work for somebody else's and vice versa. It's like you have to be authentic um people can tell when you're not and You know i've tried over the years as i've developed my business It was kind of you know, you see you see something that somebody's doing you're like, oh, that's great Let me try that out.

But if it's not who you are, it's it just it seems really fake and it comes off but I've always found that, you know, if you develop, if you do a good job and you develop loyal partners, you're able to build that network of referral base and clientele. And it's a little bit of a slow burn, but you know, it's kind of the whole, the whole tree idea.

You know, one branch becomes two, two branches become four and it grows exponentially. and if you're patient enough and you work that. it will become something that will endure and kind of allow you to continue growing your business, you know, as long as you want to do it.

Michael Vandi: Yeah. I talked to, speaking of sales, salesy tactics, I talked to a lot of LOs and one of the common things I see is a lot of them try to substitute the job of a mortgage loan officer as a salesman.

Which, because you need the skills of a salesman where your job is not like primarily to sell to like grow your business, like if you decide to serve people, someone I talked to had this, hashtag, hashtag, who can we serve today, instead of like, let's say, who can we sell to today. So I'm just like imagining, On the first call, you're being like really salesy, like, well, how many people are in your family?

How many folks can you refer me to just before you actually even get to helping them? That would be, that would be super weird.

Eric Rotner: Some of the most successful, like highest producing loan officers out there, they are purely salespeople. And that works for them. You know, like, like I said, everyone's got their own model.

You know, different things work for different people. If you can just go out there and just blast sell and just have your team doing everything and you're just selling 24 seven, if that works for you, you know, it probably can become a very lucrative business model. And, for me personally, it's, there's a, there's that, there's a balance.

I really enjoy the actual loan process. and so I can't just sell, sell, sell that's, you know, just, it's not something that I would get the pleasure out of doing what I do for a job. And. Originally, you know, if you asked me 20 years ago, what I'd be happy to just sell, sell, sell. And I'm doing a ton of volume.

I probably would have said, sign me up. but you know, as I've been in the business a long time now, there's, it's key that it's kind of critical. You know, I like, I want to make sure I'm enjoying what I'm doing. And I like the, I like solving the problems on loans and I like putting them together. And so.

You know, I have that balance of, of doing the loan, originating, and also selling at the same time.

Michael Vandi: Yeah. So someone mentioned that they gave you a very difficult, scenario and that they had sent it to a couple of people and then they, they give up and then they were in a, in a very difficult situation that you weren't able to find a solution for them.

And, I want to bring this question over to how we're seeing AI impacting the industry right now. Yeah. Because even though AI is great, there are so many different permutations of things that could go wrong in the mortgage industry that you need an expert advisor to overlook, overlook some of the decisions that are being made by AI.

So I'm thinking of, let's say someone comes to you with, a very difficult scenario and then what are some of the tools that you see would, let's say, help you, like, transfer that knowledge? Obviously, not everyone in your team has the knowledge that you have. And it would be great if you can oversee all of the, applications that come in, all of the clients that you have.

What are some of the ways that you think you could transfer that knowledge over to your team? Are you implementing something now, like training videos, things like that? How are you doing some knowledge transfer to your team right

Eric Rotner: now? So from a training perspective, I'm now starting to run and I've been, I'm pretty new to the ops role at my company, but one of the, one of my roles there.

So I'm in sort of like a sales, a bridge between the sales side and the ops side. and so. Part of that role is to start doing training, you know, doing trainings on individual underlying investors and individual loan products. And when I'm doing these trainings, it's not really point. It's not really going through just reiterating guidelines because that's not super effective.

People are going to tune that out. It's more identifying what are the niches for these various products and what are the practical applications for them so that the goal is that if someone comes across this scenario that they heard me describe in one of these trainings. That either they have notes or hopefully they'll remember, Oh, Eric was talking about this.

And so it's kind of, you're going through as you're hearing the situation that the client's presenting you, whether it's complicated financials, you know, difficult to, to paper trail assets, challenging credit, whatever it may be, or whatever layers of those things that may be there. You're kind of going through this mental sort of waterfall of determining what, determining, sort of what the issues are and.

What the potential ways to work around those issues are so, you know, one of the as I've, you know, with a I kind of in its infancy. some of the more interesting things that I've seen so far have been, kind of the A. I guideline, systems essentially where they're combining the guidelines for a variety of different programs and therefore seeing, you know, what's the program that is going to be applicable for certain scenarios.

The versions that I've seen so far have been able to do some fairly straight forward, loan programs. it's the nuance that comes up when you have these different sort of situations, understanding the, you know, understanding the, you know, these unique situations that come up for the client, understanding how that can impact them, you know, from a financial perspective, from a tax perspective, from a, you know, future planning perspective.

And navigating through the different options there. it's, I think as time goes and as the, there's just more and more improvement on the AI developments of, of the ability to sort of kind of mimic the, this decision making tree. I think it'll definitely help people, especially people who don't have a thorough, like as long of a history going through loan products to where AI, you know, guideline checks will allow them to, you know, it'll, it'll either give them suggestions or point them in the right direction as opposed to having them, you know, I, you know, hopefully stumble or guess their way into the proper channel.

Michael Vandi: I see folks worry that AI will replace loan officers and not only loan officers, but a lot of different industries, software engineers. even research scientists. what do you think, what, what are your thoughts on AI in the lending industry? I think

Eric Rotner: I, I do think there's certain roles that AI could replace completely.

The, I think those are more of the clerical roles. there was, I don't even know how long it was at this time, but it was probably 10 to 15 years ago where I, we, I remember that there, there was an article that was out in a magazine that basically said it rated the. Jobs that were most likely to be replaced by computers and loan officer The only reason this sticks out is that my buddy who worked at my company brought it to me and we were number one And so, you know, that was disconcerting to say the least so All this time later, though.

We're still here I see AI being a really good tool for increasing efficiency But I don't think that loan officers are at risk of being replaced by AI at all. I've seen some really impressive computer models come out for the loan process, but, and there are certain types of loans that can be done with almost no human involvement, but those are few and far between.

Most loans are not super vanilla. There's some form of challenge on them. And even those straightforward ones. Still have a human element to them. You know, people want to know, people have questions. This is a huge decision for somebody. They're borrowing money on their home. It's the, probably the biggest investment they have.

It's the most money that they're going to borrow. This can be stressful and there's going to be questions. And there's, and that a computer can't answer, and there's going to be guidance that a computer can't give. And, you know, you do have, you do have some therapist aspect to your, you know, to your job as a, as a loan originator, and that's not going to be replaced by a computer.

but to the same right, you can't fight technology. You need to be able to, you need to use it. And, you know, Technology has increased the efficiency of the process astronomically. you know, ability to sort documents, evaluate documents, you know, really increase the speed of, you know, certain aspects of evaluation.

And as that grows, it's, you know, it's going to make, it's going to make the process a lot more efficient, ideally a lot more cost effective for both companies and ultimately trickling down to the consumer. The mortgage industry is kind of a race to the bottom when it comes to cost. You know, margins get compressed due to competition and costs get cut down.

So how do you eliminate costs? Well, if you become more efficient, those closing costs, they get passed on to the borrower or they get absorbed in the interest rate, those will go down. And, you know, it's a matter of, there's so many aspects of the loan origination process that, you know, Involve people, involve expenses and involve, you know, that slow things down.

If you can integrate technology and AI into your process, it's going to make it better, you know, throughout and without risking you being eliminated, from, you know, from the process itself.

Michael Vandi: And this is always going to be resistance. So people are going to say, well, this 50 years. Like, why do we need to change this?

And unfortunately those people might be the people in. The leadership positions like the CEOs, the CTOs, the, chief lending officers. And folks like that, even some, some LOs as well. And, having to convince those people that, Hey, efficiency is a good thing. And well, they know efficiency is a good thing, but technology breeds efficiency.

Like convincing them would be the hard parts in the industry. And folks like you that are very forward thinking, I think would be, would be the future of the lending industry. Like I saw this chart from the mortgage bankers association about how many. Lenders, what percentage of lenders are investing in AI?

What percentage are like, well, no, I'm not going to invest in AI. And I think it's like 25 percent of lenders. Say openly that I'm investing in AI. I'm going to continue investing in AI. Another 25 percent is like, well, I've already invested, but this is going to be like, I am done investing. And there's like a decent number.

I don't know if like 10 or 15%, it's like, don't plan to not going to do anything at all. Things are going to stay the way they are. And, I just want to get like a, your sentiment, like your general thoughts on, on resistance to change in the industry.

Eric Rotner: There's a, there's a wide variety. you know, it, it really kind of comes down to, it's always going to be like most company decisions, it's always going to trickle down from the top and, you know, what's motivating the people at the top, you know, so if it's, if they, you know, for example, if it's all cost driven, they're going to want to see evidence of the results before putting it in, because, you know, it's going to take a lot of upfront investment and before, and they want to make sure that that upfront investment is likely to pay off for them.

If it's, if it's more, you know, productivity and, you know, just growth driven, that's in, you know, that's a different conversation. Obviously, there's always going to be the financial aspect, you know, they're running a business. but I find company owners who either are still originating to some degree or originated for a long time.

tend to be a little bit more forward thinking with respect to what are they, you know, what, what is their willingness to adopt and introduce technology into the equation? you know, they see the limitations that, you know, if you're, if you're familiar with doing loans, you see the limitations that you run into and you see the challenges and you see the ways that technology can help you overcome those.

And. Sort of avoid or eliminate the things that have been irritants to the process throughout. And so there's not all companies are run or owned by people who have experience in the origination side of the process. You know, there's a lot of people who, you know, are very experienced running businesses, but they don't actually have experience originating loans.

now there's obviously going to be multiple exceptions to that. And some of these people who haven't originated loans. are exceptionally well versed in the, you know, in the loan process itself. But my experience so far has been people who are now running companies that were on the origination side seem to be a lot more willing, at least at this point to, you know, you press that, you know, press those limits and, you know, adopt technologies earlier in the process itself.

Michael Vandi: Yeah. It's because they understand the process end to end. Right. I think that's a brilliant point. Originator run companies. Or more accepting of technology and, efficiency gains and changes. Like it's something I've never really thought of before. so we're coming up on time here, Eric, and, I, I know we have a decent amount of first time homebuyers, Millennials in the, in the audience.

what would be the best way for them to reach out to you?

Eric Rotner: So, you know, I, I personally, most people who reach out to me will either initiate, you know, initiate contact, you know, whether it's by email. Or, text. Very few people seem to call out of the blue . most people, most people reach out by text now, which, you know, I appreciate.

I'm, you know, I'm on the phone all the time and I hate sending people to voicemail and I hate sending that, you know, text response of, I'm on the new line, I'll call you at my first opportunity. 'cause sometimes my first opportunity is insanely long from when I, send that message. but I like being contacted by both email and, and text so that I can, you know.

You know, get back to someone right away, let them know that, you know, let's find a time that works for both of us, you know, get on, you know, get on our schedules. And then, then I like to, you know, start that process out with a conversation because everyone's situation is different. You got to learn about what's, you know, learn about what their situation is, whether, you know, kind of, what do they do for work?

what area, you know, what areas do they want to be in? What is their price point? Maybe they're completely starting with a blank slate, but getting on the phone or meeting with somebody or having a video, you know, meeting with them. allows me to ask a lot of questions really quickly, learn about that client and, you know, answer all their questions as well.

And really kind of turn it into something where I can take this process that has all these different avenues it could go to and really narrow it. And kind of remove some of the complexity from that. And so from there, the, you know, the loan process tends to go a fairly similar, you know, similar steps, application, documentation, pre approval.

But really, you know, people reaching out to me, you know, initially by, you know, you know, phone, email, or text, and just getting back to them and kind of, and then setting up that first call is kind of the whole, it's the, it's the way that really helps me, Get to know my clients and, you know, get that process moving forward.

Michael Vandi: Well, everybody, I'm going to put Eric's information in the description, a link to his profile where you can reach out to him, don't call him in the middle of the night, knowing him, he might pick up. this has been,

Eric Rotner: this

Michael Vandi: has been another episode of the loan officer playbook podcast, and I'll see you in the next one.