PD is a lingo which every housing finance professional knows. What is so great about it? My colleagues tell me do we really reject a case because of PD? Maybe not. May be yes, one in 25 or 50 or even 75; isn't it a good start. Are we not custodians of the public money? Don't we ask that basic question to even our friends or family members when they ask for money? There is a difference between donation and lending? Now, it is becoming even more important in the affordable housing segment when you are giving credit to first time borrowers in the informal segment based on assessed income.
This requires an art of communication to understand the borrower, family, business and property to get a 360-degree view. The problem is that when the conversation becomes a transactional in nature, one may not be able to offer a right product structure. The customer may not default but in the long run, you would have pushed him into financial mess and you as a mortgage professional is equally responsible for it. Saying ''No" can always be good for the customer.
There are two aspects to the communication. One is listening to what prospect is saying and other is what he is not saying but getting conveyed in the zone of silence. This requires the housing finance professionals to be a good coach to ask right questions which can take the customer in his/ her inner journey to answer not only for the purpose of recording for underwriting but also in thinking and introspection mode for the customer to take a right borrowing decision. This is a big move to expect from a young professional at the age of 24 or 27 years to lead the prospect at the age of 40 or 50 plus in the key underwriting process.
The key to ask right question is to be calm, poised and be present. The zone of awareness of self in the conversation can be a clincher in the PD. Why am I talking more on the individual rather than focusing on the templated discussion? The simple reason is that the behavioural zone of knowing self is important. This would be the first step to learn the art of successful PD. If I say you should meditate, my friends in banking sector may find it difficult to digest. What is your opinion? Share it?