WE’RE HEARING that last week I wrote a column in honor of Thanksgiving by giving thanks to the hunters among us who help drive the industry’s production. Those hunters, the loan originators, are key drivers of volume and have been for a long time.
Now, I often comment on LOs and get a lot of comments back—some of them attacking me for implying that perhaps some LOs may be overpaid for the service they provide, or perhaps commenting that customer satisfaction or other quality metrics ought to be part of pay.
Well, last week I said good things, and expected a ground swell of support from the originator ranks. After all, there are still about 100,000 LOs out there and I figured some of them had to read the column over a holiday weekend. Wrong!
Nobody read the column over the holiday weekend, so I encourage you to go back now and read it. I actually liked it very much and thanked the hunter brand of originator for doing a great job and being a critical part of what makes a mortgage company successful. So, at least some of the 100,000 need to say something nice about me, don’t you think?
Now, it’s time to talk about gatherers. After all, it will take both to survive in the mortgage marketplace of the future. Not much good has been said about those loan officers that scoop up the business that falls into the company’s lap, but that will change in the future. It will change because production won’t just fall through the doors anymore; lenders will have to market for it, using traditional and advanced marketing tools.
We are working with companies that are doing a great job leveraging data to find customers, and even using social media as an outreach tool. When a loan comes in the door, the company will already have a stake in it because every lead will cost more money than it has in the past. The gatherers are the ones who will close those loans.
In the good old days, these loan officers would have been called order takers and the hunters in your organization would have looked upon them with disdain. I remember running call centers where we literally didn’t have enough people on the phones to capture all of the business. We were constantly looking for good gatherers, LOs who could interface with the customer, answer their questions efficiently and get that application signed and the process started. Once we got the application, chances were good we would close the business and it was just a matter of finding a loan program in which the borrower would qualify.
Even back then, good gatherers weren’t growing on trees. You couldn’t take a fast food worker and turn them into a good gatherer. There was still a sales process that had to be worked through, and a critical need for technology to help those gatherers do their jobs.
Now that federal regulators are making it easier for consumers to shop for a loan (and complain about lenders who don’t handle the loan the right way), lenders may find it tougher to get qualified borrowers to call them. Social media is already having a major impact on the way the new generation of American consumers buys things—with some younger buyers refusing to buy any product that doesn’t show social proof of acceptability on their website.
No, gatherers in the future are going to have to sell not only the loan product, but the lender as well, if they hope to be successful.
Meanwhile, lenders are going to have to get much more sophisticated about how they prospect for new business. They’re going to have to pay attention to online ad spending and follow the leads they buy or attract through their process so they can determine their cost per lead, cost per closed loan and profitability per loan officer. This will turn every mortgage lender into a gatherer of data. It won’t make any sense to spend a ton of money on leads if your gatherers can’t get them closed. So expect to see accountants and other executives pouring through the data and working in peer groups to get a handle on these important numbers.
And don’t forget about the other kind of gatherer that’s present in every mortgage company, the loan processors. They’re going to be working harder than ever to gather up the documents that verify the borrower’s qualifications and provide that all-important audit trail for compliance purposes. That is something that I will discuss more in a future column.
Yes, gatherers are going to be very important in the mortgage company of the very near future. And that should add a bunch more professionals to the list of 100,000 loan officers who should say something nice about me.
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience, from Fortune 500 companies to startups, including management of two of the most successful mortgage e-commerce platforms. He was formerly with Chase Manhattan Mortgage and ABN Amro, where he was a senior executive during the sale of its mortgage group to Citigroup.