Mortgage bankers are once again enjoying the salad days: interest rates are the lowest they've been since the early 1950s, and their phones are ringing with frantic calls from consumers who want to refinance. The industry has seen this picture before: applications are flooding in at a pace not seen in several quarters, which means they need to staff up, but by how much?
The fear is that they will over-hire and wind up cutting permanent staff six months down the road when volumes begin to subside.
Several lenders interviewed over the past week said they are hiring, but cautiously and with an eye toward what the industry will look like when the latest refi boomlet is over. "We're being careful," said Bill Dallas, CEO of Skyline Financial, Calabasas, Calif.
Dallas, who has witnessed several industry booms and busts before, has tried to shape Skyline into a firm that specializes in purchase money loans, but keeps getting side-tracked by refinancing flare-ups. "Right now we're hiring mostly support staff," he said. "I need to hire productive employees. I can't afford to hire nonproductive employees."
Skyline's application volume doubled in June and the firm is on track to fund $150 million in September. The lender forecasts total production of about $1.1 billion this year, 10% ahead of last year. In total, Skyline employs 250 full-timers and expects to grow that number by 10% over the next year.
"We're actually looking for growth of about 20%, but 10% gets weeded out and that leaves us with 10%," he explained.
Alan Pott, senior vice president of wholesale lending at Carrington Mortgage Services, Irvine, Calif., also is in the hunt for new employees. A retail/wholesale lender, Carrington currently employs about 29 account executives, double what it had two months ago. "We're looking for more people," said Pott, who joined Carrington two months ago when the firm bought his company. "But we only want the best and brightest. We're looking for area managers and AEs."
Pott declined to give any volume figures or estimates but said the privately held Carrington has "big growth plans." The firm sees a major opportunity in wholesale, a channel abandoned by many megabanks over the past three years including Bank of America.
Then again, just because companies say they are hiring that doesn't mean they will find the right workers. John Lovallo, a spokesman for Total Mortgage Services, Milford, Conn., said the lender announced that it would hire 50 LOs back in July but, to date, has added just three.
"We're still committed to hiring them," he explained, but noted that several candidates TMS was eyeing said they cannot leave their present employers because "their pipelines are too full."
Lovallo added that the lender's goal is not to just hire—but "to hire the right people."
But not every busy mortgage banker is frantically looking to add staff.
Chris George, CEO and part owner of CMG Mortgage, San Ramon, Calif., said volumes are strong at his shop, too, but he's paying overtime to current employees instead of staffing up. "Right now it's cheaper to pay overtime," he said. "And I have some employees who really appreciate the extra money. I just don't know how long this refi wave will last."
