The language of loans

Shakespeare wasn’t talking about diversification when he wrote about turning a winter of discontent into a glorious summer.  That said, channelling Shakespeare seems a good place to start on the topic of language. And, isn’t diversification simply subtle changes made to brighten your future?  

I have noticed that brokers fit generally into one of two camps when it comes to non-conforming loans:  There are those who can sell it, and there are those who can’t.  I did a quick survey of our top brokers asking them if there is any particular language, phrases or clichés which help win or sell non-conforming loans.   In doing so I discovered the following consistent patterns:

No buts

It sounds simple enough, but a seed of doubt in the borrower’s mind is all it takes to put the brakes on a transaction big time.  You’re the professional.  You know the products and you know your stuff, so convey this to the borrower.  There is no room for “These loans are difficult, but…”, or “Sure it’s expensive, but…”   Confident, positive language is the key.  Always lead with a positive such as “I have found the best possible loan for you”.

Outcome over process

If you’re a broker, the applicant has sought your assistance solely to reach an outcome they themselves cannot.  They know where they want to be, but can’t negotiate the path alone.  “I can help you get this solved”, is much better than “There’s one or two options but gee, it’s gonna be tough”.   “The process of this loan can take some time, but I’m working with you all the way through”, is much better than, “These loans are hard.  Nobody likes non-conforming loans”.

Clichés work

Politicians don’t say “mid-to-low socio-economic family units”.  They say “working families”.  Why?  Because idioms and platitudes give a succinct illustration of a more complex reality:  They’re reassuring in nature.  For instance, some brokers refer to MKM as a ‘washing machine’ for bad-credit applicants.  It gives an immediate and clear picture of what we do.  Find one that works for you.

Be like Barry

Obama didn’t get elected by spruiking fear.  He spoke the facts but he sold hope.  Non-conforming loans of all persuasions are more expensive than bank loans and require more due diligence than a vanilla alternative.  But, if you’re transparent on fees and conditions while keeping a “Yes we can” attitude, you’re half way there.

Diversification discussions always make their way towards non-conforming lending.  At approximately 5 per cent of the overall mortgage market it’s an under-utilised segment that has maintained market share throughout the good times and the bad.  

I’ve never met a broker who hasn’t come across a non-conforming applicant.  So why do some brokers make non-conforming loans their specialty, while others struggle?

By minding their language.

Michael Watson is perations and marketing manager at MKM Capital