Expert says it is a matching game that is not just based on the LO’s volume.
The mortgage sales business will be challenged in 2011 as originators compete to attract the higher-quality loan officers, an executive with recruiting firm Hammerhouse LLC commented.
Besides its consulting and coaching business, Hammerhouse looks to fill sales positions in the financial and mortgage industry, said Drew Waterhouse, managing director of the Orange County, Calif.-based firm. It also looks to fill leadership positions on the sales side as well.
Among the factors that will impact the job market for loan officers this year, he said, are licensing, compensation, conditions in the home purchase market and strong capitalization of origination businesses. Also job seekers are looking for companies that support the right business model for today’s business.
There are reports that many experienced loan officers are having problems passing the new state and federal tests. This creates a void in the market, Waterhouse said, but those who aren’t able to pass the test can work for a state or federally chartered bank.
“With the states still needing to make their decision around licensing and what they are going to accept or not accept in terms of their interpretation of the federal rule has caused a lot of concern and it is definitely not going to be resolved until probably April when we really know what is going to happen,” he explained.
But the licensing issue creates a “compelling opportunity for us,” Waterhouse continued. “Our ability to do the due diligence, to identify the people who are attracted to our clients, our job of model matching and finding the quality (person) for our clients, makes us more attractive because it does take more time, it does take more energy, it does take more efficiency in finding those people.”
Some people, Waterhouse said, are not concerned about getting their license; rather they feel that dealing with what is needed to get licensed is something they want to avoid. This issue alone is causing Hammerhouse’s phone to ring and have it communicate with LOs about matching up with the right origination entity.
Among the other things that will affect loan officers in 2011 is the compensation rule that goes in affect in April and general market conditions.
The latter is probably a bigger fear out there right now for mortgage sales people. They want to know what Hammerhouse’s lender clients are going to do for them to support growing their business in a purchase environment. This includes marketing support as well as technology and fulfillment.
With many experts predicting the first sub-$1 trillion origination volume market in quite some time, the overall need for loan sales staff might be smaller, but Waterhouse said this does increase demand for those who are considered to be high quality producers.
Companies, he said, are looking “to find the educated originator, the licensed originator, the originators who understands how to attract purchase origination business.” This has become especially true after the rise in rates. They want those “who are tenured in the business, who understand what it means to provide great customer service, who are technically adapted to what today’s market offers and have a track record of producing great quality loans.”
That’s what Hammerhouse’s clients are asking the company for, “to better model match for them all of these areas within someone’s business,” he said.
Model matching is one of the keys. Even if the person is a top-producing loan officer, is the business the right model for that loan officer to be successful in? “We can bring a high-quantity LO to a mortgage company, but that doesn’t mean that that person’s business isn’t going to be better supported by another client. That is where our challenge of the industry has come.”
A common mistake, he said, lenders make is they have blinders on when it comes to looking at how much volume a person brings in.
Waterhouse, noting that the lending business has become “full doc” in the wake of the crisis, continued that he looks at the loan officer recruiting and hiring process as “full doc” as well. “You have to vet out all these different aspects of someone’s business. It is not just do they do business; that is not good enough anymore. It is all these other factors that impact them.”
In matching an originator with a client lender, Waterhouse said that leadership is one of the “unique selling propositions” that it considers. Leadership is what drives the culture of an organization and therefore that makes it the most important consideration.
Much of it is about communication. There are so many changes going on in the industry and not every person is able to read every publication in order to keep up.
So, they are looking to the company’s leadership, he said, to provide them with the knowledge and information to drive their personal business forward.
For example, regarding the new compensation rule expected to go into effect in April, “a lot of originators are having blind faith in the company they are with, based on a track record of culture and leadership that the right decisions are going to be made to benefit the consumer and provide them with an ability to continue to make a living doing this work,” Waterhouse said.
Compensation is the lesser of the factors for loan officers to move, although he added it is one of the factors in them assessing the company they work for now is the best place they want to be.
Other factors, he reiterated, are what is being done from a marketing perspective, a technology perspective, a fulfillment/operations perspective, and even what are they doing to support the loan officers regarding the continuing education requirements brought in as part of the licensing standards.
When Hammerhouse talks with perspective clients, leadership is a key factor. Waterhouse said his firm needs to believe in the company’s leadership before it can sell the job opportunity to sales staff. If the leadership is not accountable for what Hammerhouse is selling for them, the value propositions of being affiliated with that lender, then his company is putting itself at risk.
So in looking at the leadership, it wants to know if they are delivering on all of the pillars they say they support, he said.
