Last week I delivered a presentation to a mortgage lender group in Nashville, Tenn. As I scanned the audience I noticed something I have seen in nearly every group of mortgage professionals I have addressed lately; people are stressed, they are tired—and they aren't getting any younger.
I wage my 55th birthday this month and along with that celebrate my 28th year in the mortgage business. It is overly apparent I have a lot of company in my age and experience group. The chaotic and challenging mortgage market has taken its toll on many people, and it's no secret our ranks are fewer and aging rapidly. Fact: The industry you work in is smaller and older than it used to be. Why is this happening?
1. For years, many large banks and mortgage companies operated university-type formats for entering the business. They would hire anywhere from 100 to 500 “rookies” a year, put them through a two-week or three-week school, and set them loose to make their start as loan originators at their companies. These 20-some-year-old college graduates and young go-getter-type salespeople injected the industry with fresh faces and fresh ideas month after month. Today, to my knowledge, every single one of those universities is now closed.
2. The mortgage business is no longer a “get rich quick” scheme it was for so many years. Times were when a young, energetic man or woman could enter the industry with no prior knowledge or related background and with a respectable effort earn a six-figure income in his or her first or second year. That kind of easy money attracted thousands of entrepreneur types and “young bucks” to the arena of mortgage lending. Today, an inexperienced new loan originator is lucky to make $25,000 in their first year. Not many bright, young, talented people are drawn to that kind of money.
3. The point of entry is much harder these days. New brokers have to be screened, tested and licensed. Large banks are no longer interested in training or internally promoting their own, opting to hire only established, experienced originators from other banks with a track record of proven production and success.
4. There's less business out there now than in the past, and therefore, we don't need that many loan originators. In 2005, 7.1 million residential units sold. This year the projection is for 4.7 million units. From a business perspective, if the market demand for new loans is a full 33% less—and expected to decline even further in the coming months and years—why would you hire new loan officers? When there is barely enough business to go around for those veterans already originating, do we really need more people?
5. Most of those in the business today have nowhere else to go in our tight economy and shrinking job market or have no desire at this point to make a move. If you are 45 years old and have been originating for 20 or more years, what else are you qualified to do at this point? I see a lot of folks “stuck” in the business today; they aren't making a lot of money and they are burned out, but they are at a life stage where change just isn't an option for them. So they stay.
Yes, our industry is growing older. But on the upside, there are still a number of originators at every age level doing well, pushing forward, and making great money. What does it take to continue to succeed as you mature in this profession?
Earlier this year I facilitated a leadership workshop with sales managers from a large mortgage company. In one exercise, we looked to “profile” a top producer. What habits, practices and skills separate high-volume loan originators from the rest?
As you can imagine, the group built an impressive list of characteristics, such as the word “intensity.” Several managers cited how intensity is demonstrated by their top producers day-in and day-out and how that intensity translates directly into more contacts, more relationships, stellar customer service, high loan application volume, more closings and more income. At the conclusion of the workshop, I asked the group to rank the 15 characteristics we listed from most critical to success to least. Over half the group rated “intensity” as No. 1.
It should be no surprise to anyone that as we age our intensity level goes down. Think about it; if you are 40 or 50 years old, do you have the same intensity and zest for business and life that you did when you were 25? Although you'd like your intensity to remain constant, it probably has not.
Intensity is the by-product of two factors: energy and a positive forward focus.
Many loan originators in our aging industry simply do not possess the high energy levels they did a decade or two ago. They are getting older, tired, have been beat up repeatedly with a sagging housing market, an unending stream of new rules and regulations and are (for the most part) making less money than they once did.
On top of that, their years of experience are not propping them up, but wearing them down. (If this week you wrote your 935th loan application of your career, it's probably all getting quite mind-numbingly bland about now.) As your energy goes down, your intensity follows in kind.
When it comes to positive forward focus, most loan originators today in their late 40s, 50s and early 60s are looking to wind down their careers, not ramp them up. It's hard to get excited and passionate about what you do for a living when you are watching your 401(k) more than your loan pipeline. Many originators I talk with today seem to be spending more time talking about the good old days behind them, instead of the opportunities and years in front of them.
One originator I am coaching right now is 51 years old and has made a fair amount of money over the years. This person told me he is “spent.” “Just help get me through another five or six years, Doug,” he told me, “and then I'm out of here for good.”
This person is a great guy and smart loan originator. But his interest in learning new products, approaching new markets and implementing new business strategies has long since evaporated, and his once powerful intensity for success along with it. As he confessed in a recent conversation: “This business just isn't any fun for me anymore.”
Can we as an industry revive the intensity we need to work in through these challenging times? I'm not sure any of us has the answer to that. I think the better question is: Can you create and sustain the energy, forward focus and intensity you need to drive yourself forward in the next several years?
Intensity is not a skill that can be taught or learned. No book, CD or seminar can change your intensity. Intensity is an attribute, a personal characteristic that comes from within. You create it, you control it. Those loan originators who can grow and sustain that intensity will quickly surpass everyone else. They will bring positive energy to work every day, employ new ideas, technology and marketing plans, work through their day with focus, speed and enthusiasm, study new ideas and learn new selling skills and set the bar high to “better their best” production results year after year.
It's no longer the loan originators with the most experience who are the top performers, but those with the most intensity. In the end, they will not only be the survivors, but the clear winners in this business.
Doug Smith is a nationally known industry speaker, author and sales trainer. For more information, please visit
