Pretty much everyone in the mortgage business knows by now that the industry is bracing for a sharp drop off in refinances starting sometime this year, with purchase mortgage activity expected to increase and pick up at least some of the slack.
But expecting the same employees who have been doing refis the past two years to start doing purchase mortgages well may be unrealistic. That's why many in the industry are saying that the mortgage business going forward will be looking for a new type of employee to handle these new challenges.
"Everybody is looking for someone who is purchase oriented, who has relationships in the real estate community or with other types of referral partners," says Steve Rennie, managing partner at Hammerhouse LLC, a mortgage sales recruiting firm in Mission Viejo, Calif. But there's more to it than that.
"The loan officer these days is more like a project manager," he says. "You're not just an order taker anymore. You're managing different stakeholders, from the borrower to the internal stakeholders. The right loan officer has to be solution-oriented. The loan business is one of problems; there is a long list of problems that has to be solved before a loan gets closed. So the loan officer who best takes the approach of solving those problems and communicating what needs to be done along the way tends to be more efficient."
Rick Glass, head of R.T. Glass & Associates, a mortgage industry headhunter in Carmichael, Calif., says mortgage companies are "not looking for the same old player doing the same thing that everybody else is doing. They're looking for somebody who can really make a difference, who can roll up their sleeves and get involved. They're looking for impact players who look at things a little different and have a significant amount of drive and energy and really believe they can make a difference. They have that drive and accountability and understand work-flow dynamics and can implement change to impact performance."
Indeed, he says, one of the most important attributes mortgage employees in both sales and non-sales jobs will need isn't one that can be taught.
"The biggest risk to any organization is people who are not self-motivated," he says. "They need to get up and do the job without being told what to do. But a fair amount of people lack the internal motivation or self-discipline to go out and do it. Some people will be challenged to remain relevant in this business going forward if they can't figure that piece out."
Unfortunately, Glass says, there are not a lot of those kinds of people in the mortgage business right now. "There seems to be a shortage of that type of player today," he says. "Our industry hasn't been mining that up-and-comer and bringing in fresh new talent. The sophisticated MBA graduate has been going to Silicon Valley and not into mortgage banking. But the companies that are able to bring in that talent organically and grow and nurture it are really going to have a leg up on the competition."
One company that is taking the "build your own" approach is Residential Finance in Columbus, Ohio.
Since last July, the firm has nearly doubled its number of employees, from a little over 400 to more than 800. Most of them have been retail loan officers as the company gears up to build out its branch network and meet the expected demand for more purchase loans.
While many of the new hires are experienced loan officers, the company also has an active "rookie" program, which involves recruiting people with sales experience from outside the mortgage industry as well as recent college graduates.
"Most of the growth industry executives see is in sales, and most of the human capital will come from rookie programs that they institute," says Carmen Scalise, the company's director of talent acquisition. "The industry has changed dramatically since 2008. You can't grow fast enough if you're going to sit there and hope you're going to have experienced loan officers who want to come back into the industry. So instead we got a little smarter and started to grow our own."
The company has held career fairs at local colleges near its Columbus and Tampa lending centers, where it's made some hires. "We give them a career opportunity to learn the business the way we do business," Scalise says. "A lot of these people are hungry, they're motivated, they want to make money. Those are the types of characteristics we look for."
Sales skills will be in demand not just in originations but in servicing too, says Tucker McDermott, executive vice president and co-founder of Fay Servicing in Chicago, which services distressed residential mortgage loans.
"We view servicing distressed loans as a sales job," he says. "You need a very different approach. You need to create a bond with that borrower and make a meaningful impact on that first call."
Fay recently opened its second office and is hiring servicing account managers with origination backgrounds and experience, particularly those who have worked for consumer finance or subprime companies and have experience dealing with people with imperfect credit. "Those are the perfect people for this role," he says.
George Yacik has been covering the residential mortgage business for more than 20 years and writes frequently for industry publications. He can be reached at firstname.lastname@example.org.