There was a time when most lenders didn't feel the need to keep their loan officers on a tight leash. They were commission-based employees or contractors who were expected to be self-starters, working on their own initiative and generating leads from real estate brokerage firms and any other sources they could muster up. When the company provided leads to them, lenders felt little need to monitor how those leads were pursued or managed. Originators had plenty of incentive to turn leads into business, and how they went about that work was of little concern to the mortgage company.
But a new mortgage regulatory environment has put lenders under more pressure to monitor and manage how originators interact with potential customers. And an expanding array of technology and electronic commerce has broadened access to consumer leads, and made lead and contact lists more transient than ever. That has raised questions about who owns leads or contacts, and what happens to them when a loan officer leaves a lender.
In today's increasingly mobile workplace, lenders worry that departing originators will take business with them. And moreover, lenders could find themselves in the crosshairs of consumer protection agencies if current — or former — loan officers utilize those leads in ways that stray from the new compliance standards.
Meanwhile, loan officers are often resistant to using technology that could diminish their control over their book of business and expose their client list to other originators.
In this new world, lenders are struggling to find the right balance between centralized management of leads and empowering loan officers to turn leads into business.
The Lender's Dilemma
Brian Koss, executive vice president of Mortgage Network Inc., a privately held, Danvers, Mass.-based mortgage banking firm active in 21 Eastern states, says that though technology can be employed to protect sensitive consumer data, it's hard to prevent loan originators from exporting leads and contacts in a business that relies so heavily on easy access to this data — meaning that it's almost impossible to stop someone internal from taking leads or contacts out of a lender's internal systems, even if it's against company policy.
"We are very good at creating the firewalls and keeping people away from the data. But when you have people internally who do things that are unwise, that's the hard part," he says. In a Web-based business environment, Mortgage Network distributes laptops to its loan officers that can be locked down and encrypted to control the customer contact information available on those devices, which can also be wiped clean if a loan officer leaves the company.
Mortgage Network embraces the use of social media and other online technology that could put contact information at risk, believing that it is impossible to prohibit loan originators from using those tools, Koss says.
"If you are going to post or share information, we are going to teach you how to do it and then monitor it, rather than let people do it secretly and pretend it isn't there."
The company holds routine classes to help its loan officers understand how they should use online services such as Facebook and LinkedIn the right way, without putting their customers' data at risk or running afoul of various compliance regulations.
Koss says monitoring and restricting the transfer of borrower leads and contact information is sometimes tricky. The company wants to restrict where information is going and how it gets there, but it doesn't want to impede electronic commerce. Efforts to discourage inappropriate transfers of leads and contacts include limiting the size of emails and creating firewalls or what he calls, "a little friction" in large data transfers.
"We try to create little barriers where we can, but don't slow it down enough so it's bad for business," he says.
And much of the company's focus is on protecting private consumer data like social security numbers, which have come under greater regulatory scrutiny. "Our data is our data. We recognize that loan officers take the public data that's out there. Anything that is private data that you can't find in the public domain, that data is ours," Koss says.
Lenders are often required to stop ex-loan officers from going after their customers. Servicing agreements prohibit a lender and its representatives from going after existing customers with refinancing offers, for instance.
"If you leave us, you are supposed to behave the way you were supposed to behave when you were here," Koss says.
The biggest concern, Koss says, is that departing loan originators will violate consumers' privacy. Customers are not happy when they get a call from an originator at a different company "who seems to know an awful lot about me," Koss says. Mortgage Network also tightly controls loan officer's own websites. "All of their websites must be licensed to us, so we control all content on the site."
If originators believe the company is watching their Web activities, they are likely to behave, he says. That monitoring may get easier in the near future. Koss says Mortgage Network is implementing software that will comb loan originator websites all the time. The software pings the lender if it finds originators misusing their online presence and will be rolled out in the next 60 days. "That monitoring…is going to be invaluable," Koss says.
And the company provides guidance to loan officers about how they should use personal websites and social media profiles to protect both the lender and employees.
"Most people are clueless about it, so we help them with that. We catch people doing silly things and we educate them," he adds. And since loan originator websites are licensed to the company, Mortgage Network can take them down when an employee leaves the company.