As companies like MetLife exit the business, creating new office and personnel recruitment opportunities for mortgage lenders, a survey from Hammerhouse LLC of originators found that 42% are looking for corporate culture and leadership from a possible new employer.
Products was the response from 24%, while better compensation was the choice of 23%, according to the Mission Viejo, Calif.-based recruiting company's second annual Survey of Originator Opinions.
“The people who are in the industry today, who are looking to better the business for all, are looking for different things now,” said Drew Waterhouse, managing director of Hammerhouse. It is a shift from the selfish to an attitude of what is best for the business and best for the customer is best for me.
Since the late 1990s, when the branching movement gained momentum, the selling points to recruits had been product and compensation in either order of importance. This survey shows that those are no longer as important as they once were to originators.
But when asked why would they stay with their current employer, there was no one overriding item. Financial strength and stability was the response for 28%, while competitive programs and pricing were cited by 25% and competitive compensation was the reason for 23%. There were 19% that cited internal service.
“What this is telling me around operations is that the unit value of every loan and the corresponding lifetime value of that loan is so critical today that you cannot have operational failure,” said Waterhouse.
Financial strength is being measured on a company's compare ratios, whether it has multiple investment channels and whether or not they have a strong capital position, he said. Some of the companies recruiting new branches right now say they are touting these attributes.
Over half of the mortgage originators said the No. 1 issue facing them in 2012 is further oversight or regulation for the industry. Fewer than three in 10 said the biggest challenge would be working with a committed and financially stable mortgage lender, while just 12% said it was product flexibility and 8% cited rising rates.
When asked “What size of organization would be the best fit for you?” regional mortgage banker topped the list at 47%, followed by large national mortgage banker at 24%, regional bank at 15%, mortgage broker at 7%, large national bank at 6% and credit union at 1%.
But when asked what company would best support an originator who gets his or her own referrals from business partners and past customers, 56% said correspondent mortgage banker, 28% said a commercial bank and 14% said a mortgage broker.
Waterhouse said that for those who have build up a portable book of business with their own brand, they felt a correspondent mortgage banker would give them the best opportunity to maintain that.
He explained that type of structure many originators felt provided clear and concise structure and leadership.
This is a change in attitude from three years ago, he noted, when a lot of originators sought out jobs at depositories as the industry began to stumble.
“They have found those depositories in many ways aren't investing in the things they are looking for,” Waterhouse said. That includes investing in the originator to help them build that referral business.
Another telling stat about where originators are seeking new opportunities—over three-quarters said it is important their firm invest in sales presentation tools, business coaching, industry indicators or other value added tools or resources.
Surprisingly, inspiration scored lowest among the desired characteristic these sales people want from their company's leaderships. It was cited by only 3%.
Indeed, integrity was the most cited attribute, by 35%, followed by communication at 29%. Waterhouse feels that many mortgage company leadership teams have been silent about issues such as regulatory interpretations.
“One of the things I think that this tell us is that when you have clear communication and you have high integrity, you are going to get the truth. Not only are you going to get the truth, you are going to get this when it happens,” Waterhouse said. And given what has happened to the business, loan officers feel this will give them an advantage over those whose management just pats them on the back and tells them to get more loans.
Past culture in the mortgage industry was how much business I can do and make the most money. More than half of the respondents said the new compensation rule has not impacted their competitive standing. But 37% felt it decreased their competitive standing while 12% believed the rule increased it.
Just less than one-quarter of the respondents said they were not licensed, with 14% of those stating they had no interest in getting licensed.
Waterhouse commented, “the survey results indicate those on the front-lines, working directly with consumers, desire to improve themselves and work for the best lending organization possible—even if that means making a change.”
