Track 2 – Recruiting a Salesforce that Reflects the Borrower of Tomorrow

TRACK SPONSORED BY:  Clever

Growth isn't just about product mix, it's about aligning your salesforce with changing home buyer and owner demographics as well as housing diversity objectives from regulators. How do you add LOs who serve the borrowers of tomorrow? How do you know exactly what kind of business LOs are doing today? And how do you help your existing LOs get more business from realtors already serving these borrowers?  This panel shows how bank and nonbank lenders are getting this done.

Transcription:

Luke Babich (00:07):

Hey, good afternoon everyone. I'm Luke Babich, co-founder and CEO of Clever Pro, and Clever is sponsoring today's track. Now we've got an all-star panel here who I'm very excited to have the privilege to introduce. And today's panel is going to be about recruiting a sales force that reflects the borrower of tomorrow. Obviously, a lot of mortgage growth starts with recruitment, with building the team who brings in the business, who brings in the loans, who bring in growth. And so today we've got on this panel, Spencer Lee, Reporter with National Mortgage News. We've got Jenna Gray Bennett, The Branch Manager, and SVP of Mortgage Lending for Guaranteed Rate. We've got Aaron VanTrojan, CEO of Geneva Financial, and we have Patrick Palmer, Executive Vice President of Cross Country Mortgage. It's a really awesome group and I'm very excited to hush up and let them take it away.

Spencer Lee (01:02):

Thank you, Luke, and this is an awesome group and thank you to Clever Pro for sponsoring this track, this panel. We really appreciate it. And thanks to all of you in the audience for attending Digital Mortgage 2023. We really appreciate it. We have over the next 40 minutes, hopefully a real engaging discussion about what Luke mentioned, recruiting the sales force that reflects the borrower of tomorrow, and that's a real tongue twister by the way too many there. But again, thank you for joining us. I'll let my panelists introduce themselves in just a moment, but first, just to give you a quick rundown of what the next 40 minutes will look like. We'll talk a little bit about who is the future borrower a and what are their needs, and maybe a bit about the expertise of the future loan officer, especially technology-based expertise that they'll need, especially given this conference is a technology focused conference.

(01:55)

But we'll also touch a little bit about the other skills they might want to bring and as time permits, we'll also talk a little bit about the education for the future loan officer, the younger loan officers, and also how affordability, the affordability issues today might play into that. And there will be time for Q and A, so I hope you get your thinking caps on and have a few questions for us toward the end, maybe the last 10 to 15 minutes, we'll have some Q and A, but let's dive in. I'll have each of you, I'd like to ask each of you to introduce yourself maybe first I have Jenna Gray Bennett, Aaron VanTrojan, and Patrick Palmer to my right, ask each of you to introduce yourself. I think everyone knows the companies you work for, they're big national lenders, but maybe tell us a little bit about your background in home wedding. I'll start ladies first.

Jenna Gray Benett (02:43):

Sure. Yeah, So I have been a mortgage loan originator for almost 20 years. I started in 2004. I'm currently a branch manager of the Berkeley, California branch, though I will always be an originator at heart production, topped out a year and a half ago at 205 million in personal production. And so yeah, I'm excited to be here and kind of share some of my perspective on this topic.

Spencer Lee (03:13):

Aaron?

Aaron VanTrojen (03:15):

Yeah. Aaron VanTrojan, CEO of Geneva Financial, born and raised in Seattle, Washington. I've been down in Chandler, Arizona since 98. Got in the mortgage business in 2001 after running health clubs for about eight years. And my wife Telly and I started Geneva Financial in October of 2007 when most people were going out of business. We thought it was a good idea to start a mortgage bank and been doing that ever since. We're now just, we're relatively small compared to the competitors to each side of me, but 48 states licensing footprint.

Spencer Lee (03:53):

Go Seattle, almost a Seattle native. So we have another Northwestern I know at the end.

Patrick Palmer (03:58):

Patrick Palmer. I'm also from the northwest Portland, Oregon, so not too far from the Seattle folks here today, but started in 1995, is my 30th year in the business predominantly as an originator and then as an owner operator. And then the last 15 years or so in executive leadership, I run a group from the Washington area down to Dallas and kind of back around, but all in distributed retail production. Okay.

Spencer Lee (04:23):

Well, let's get started. I mean, the big overarching theme of this panel is the future borrower. Now, if I asked everyone in this room, what does the future borrower look Like? I'd probably get different answer from every person. There's probably different answers from each of you and your respective companies. So what does the future borrower look like and what are their needs? And does anyone want to start? Don't be shy.

Jenna Gray Benett (04:49):

Yeah, That's a broad question and it is specific to the area and demographic. I am Bay Area based, and so a lot of our clientele is their tech very heavy in RSU type of income, variable types of income. The price point is a little bit higher in the Bay Area. They're very tech savvy. And so of course the technology, the theme of the conference here is very important to a lot of the borrowers. They are also quite, there's a lot of information on the internet, and so rates are always super important, just really a general sense of understanding what all the costs are, much more educated or I should say internet educated than the Typical, typical borrower has been historically.

Spencer Lee (05:48):

And they probably think they're smarter than the area.

Jenna Gray Benett (05:50):

Correct. Right.

Spencer Lee (05:52):

Aaron, your thoughts?

Aaron VanTrojen (05:55):

I think that I've been in the business since oh one. I don't think the borrowers really changed that much. Maybe a little bit more tech savvy just because tech is available. I mean, the internet's been around as long as I've been in the business, and so they've always been able to shop online. I don't know if that's really moving the needle anymore. I think that with the industry, I don't necessarily have the answer for this, but I think what the industry does and the decisions the industry makes will mold the borrower into doing what we want them to do. Geneva financials not going to be that company. We don't have the firepower, but just like with the Amazons and the people that are changing the way we do things, the way we shop for products, including mortgages, will be defined by big corporations for the good or bad. And I alluded to this on the brief call we had prior to the panel is I always bring this up with my salespeople is that I go to Whole Foods and I'm forced to self-check out my own groceries. And it's miserable experience, especially if you buy produce and I'm not getting discounts off of anything by doing all the work myself. Yet the big corporations has brainwashed us into thinking that's a good idea. I mean, for people that are a little bit older than me, every time you went to get your car fueled up, somebody would fuel it up, check your oil and wash a windshield. That's gone. The price of gas didn't go down. So corporations is going to mold our borrowers. I don't think the borrower's going to change innately by themselves.

Spencer Lee (07:34):

That's interesting. And by the way, I screw up at the grocery checkout line too all the time. Patrick.

Patrick Palmer (07:42):

Think there's some on demand applications that they do like though I think the borrower of the future will definitely want to communicate a little bit differently. But I think Aaron's right, I don't think they're any different. I think they still want to have guidance and advice, and they want to understand that you know what you're talking about before you structure a deal and place them into something that's as big of a piece of debt as what that is. So I don't know that they're mindset changes. I think how they like to go through the process of funding their loan I think will be different. I watched a slide in the last presentation that 41% of people start shopping online, yet the statistic remains the same, that the first real estate agent that they interview they work with and that they're heavily referred by the first real estate agent that they work with to the loan officer. So it doesn't seem like that metric is changing, but it is once they start the application and they're in the funnel, how much paper they have to push around, are they going to come visit our office? Are things going to be done by video? Those are the things that I think change drastically. And they already had probably more so because of Covid than actually technology. We just leveraged what was existing.

Spencer Lee (08:48):

Now with tech at the Ford. Does that sort of threaten maybe not the job of the loan officer, but it certainly maybe makes some of their tasks obsolete, and how can they remain relevant given these changes that you've all just mentioned?

Jenna Gray Benett (09:07):

I don't consider the loan officer obsolete at all. I think that it's going to continue to be important for the loan officer to be involved in the transaction. We were actually just speaking about this on the previous panel, there's a lot of technology that can take the borrower from start to finish. It's going to text message and email you milestones. It's going to do all the things, but the client doesn't want to feel like they've been thrown into this technological black hole. They really need that personal touch that, Hey, congratulations and here's the next step. And there's a lot more to that than just setting them up for text messages and email updates.

Spencer Lee (09:44):

But do they like the text messages?

Jenna Gray Benett (09:48):

Some do and some don't. Yeah, I've had feedback on both that they do enjoy the personal touch.

Patrick Palmer (09:59):

The obsolete thing is interesting. I think whatever, 80,000 of them have already become obsolete, and I think that you watch it when they turn their license. I don't mean that the wrong way, but the reality is if you're just chasing rate, I can't remember the term you used for on a Friday, but it's a race to the bottom. And I think if you have no advice to give, if you have no value, drive commodity. If you're a commodity based, that's what makes them obsolete. Not necessarily using a piece of tech. I think understanding the borrower and knowing how they want to communicate is your preference tech. Well, if I'm working with somebody at Intel in Portland, they don't ever want me to pick up the phone and call them. They want everything done by text, mobile application, portal, upload. But I'm talking to somebody in one of our tertiary markets and they don't want any of that.

(10:43)

They want me to pick up the phone and they want a completely different approach. So understanding that each borrower is different and how to communicate with them is what keeps the great originator from becoming obsolete.

Aaron VanTrojen (10:55):

Yeah, It's critical how we communicate, that's for sure. Because 20 year old are on Facebook, they're on Instagram, they're on TikTok, and so it's old people that are on Facebook, more so than TikTok. If we're only targeting people through social media on Facebook, we're missing the audience of people that are up and coming home buyers not where they're at, they're not texting, they're Snapchatting. And so you do have to chase those different technologies to make sure that you're staying up to speed with them or you'll lose entire demographic. I agree a hundred percent with what Jenna says is that to differentiate yourself amongst the competition is that the borrowers still need to be educated.

(11:36)

They still need to be handheld. They still, and I think the education is the key component, which your mobile applications is not going to do and has never done and will never do. It'll never provide the customer service that a person can. But also if you talk about the race to the bottom, I would think that if the vast majority of loan officers in our industry were actually delivering that service, it wouldn't be a race to the bottom. And what I mean by that is when loan officers are cutting their competition or cutting their comp, because the only thing that they have to compete on is price. They're not delivering the education, they're not delivering the service because the only thing that they have left is price. And you can argue it however you want to argue it, but the evidence is in 2022 and 2023, and probably in 2024 and maybe 2025, it's a race to the bottom. And I think that's because most originators don't provide the service you're speaking about.

Spencer Lee (12:43):

So it sounds like tech is not going away, and the future originator definitely needs those tech skills, but they need the other, I don't if you want to call them soft skills, but people skills. And that's always been the case, but is it any different? Would you say it's any different than it was say, pre-internet? Maybe you're not old enough to remember.

Jenna Gray Benett (13:04):

No, I remember trans boxing my loans to various lenders and overnighting loan packages and getting wet signatures with return label. No, I mean, it's changed immensely. I mean, the fact that we do hybrid closings now, all of that, but the tech is meant to enhance the experience. It's not meant to replace. And so that's where I've found it really useful in my business and why my business has quadrupled in the last four years because it enhances it. It allows me to do my job more effectively, more efficiently, more communicative with my clients and my team, but I certainly can't be replaced.

Spencer Lee (13:48):

Aaron, Patrick.

Patrick Palmer (13:50):

I'll jump in for a second. I think where tech is going to be really critical in the future, we've already seen it that the top part of the funnel where the lead is originated and it's sitting it, it's there for a lot longer. And so if you're used to in years past getting a lead and converting 25% of them, but now your follow-up skills, your automation, any of the things that you use to stay in contact with that borrower until they purchase, we're seeing sometimes now our leads are sitting in the queue for eight or nine months. And the people that are really good and have great systems and great tech and leverage that part of the funnel, they're the ones that are converting. I know Dave Savage did, he did an interview the other day about being aware of new metrics conversion being one of them. And one of those metrics was how much does it cost for us to take a deal in to the pipeline, get it all the way through underwriting, and then it withdraws or it cancels? What is the cost for that? And we're seeing a lot of that. It's hard on the teams. It's hard to create capacity and scale when that's happening. So I think that you're going to continue to see people leverage tech in that side of the business because it's just too hard to keep constant contact with the lead sources until they actually convert.

Spencer Lee (15:03):

Do you have anything to add, Aaron?

Aaron VanTrojen (15:07):

I drew, Jenna is that tech we like? Our whole principle of our company is we have all the technology everybody else does, and most people have all the same similar technologies. How you implement that technology can make you different than your competition, but there's nothing revolutionary. And when AI is a big talking point, we will all be using AI next year if we're not already, and we will all be using similar AI. So the technology's not going to necessarily be the one thing that's going to separate you from your competition. And for us, it's technology in the background to make you more efficient, to make maybe some things easier on the client. But being human forward, do not lose that. And I warn my loan officers over and over and over again is do not replace yourself with tech, which I think is where the industry's headed.

(15:57)

And I think we're maybe not intentionally for loan officers and branch managers, what have you, but I think the industry's going that direction. And I think realtors have been on that course for 10 years. They've been replacing what they used to do, pick you up, find the houses, drive you around, take you to coffee. They don't do that anymore. They send you a link, tell you to find your own house and they'll meet you there. And so that's going to drive down their value, it's going to drive down their compensation. And I do think that loan officers are slowly going the same direction, which I find unfortunate.

Spencer Lee (16:32):

Technology. I mean hopefully it's obvious, but technology should enhance the loan experience or compliment, maybe that's a better word, complimentary experience. Now, do you have any, apart from just the tech-based knowledge, but talking about the people skills, I mean, are there differences in the borrower today that loan officers need to adapt to their personalities? This might be getting into dangerous territory, but having those people skills and understanding, is there anything different today, and this could be a regional differences.

Jenna Gray Benett (17:11):

Yeah, you're right. And this is a little bit of a touchy subject, but I do think because there is so much information out there, some clients will come to you and they've done their Googling and they've gone on bankrate.com and they've spoken to Bank of America, and so they do come to you with more knowledge. And so sometimes there's a little bit of, I don't want to say reprogramming, but maybe educating them as to why it might not be apples to apples. So yeah, I think some people think they're a little bit smarter than they truly are on the topic. You guys can chime in on that one.

Aaron VanTrojen (18:02):

I was just going to say is the real estate agent that tells you how to do your job, you certainly don't want to let the borrower tell you how to do your job because even the most sophisticated, smartest high Credit score borrower doesn't probably know much about mortgages even though they think they do. And you know that probably better than anybody because of your market.

Jenna Gray Benett (18:25):

Yes.

Patrick Palmer (18:29):

Yeah. Their access to information is incredible, but you have to tactfully unwind some of it because what they're getting isn't necessarily truth and it's not necessarily good for them, and it's not necessarily good in how they go about structuring a deal or buying a home.

Spencer Lee (18:42):

That's true. The internet made everyone an expert. You can trust everything you see on the internet.

Patrick Palmer (18:47):

That's true.

Jenna Gray Benett (18:48):

You have to be very comprehensive also with the borrower of today, at least in my market. So I have all spreadsheets and I screen share and I'll run my pricing engine in front of everyone, and it's like this whole 40 minute comprehensive, very transparent spreadsheet driven conversation when somebody gets pre-approved with me. I didn't have to do that five years ago. I didn't have to do that three years ago. So that has certainly evolved where people really want to see the cost, the breakeven point, if they pay points, they want to see all that. That's changed.

Spencer Lee (19:26):

Now I want to pivot a little and bring up some data that was brought up earlier in one of the demo sessions about the average age of the current loan officer, and this might need to be fact-check, but one of the judges said it was 55, which is kind of I think on the high end.

Jenna Gray Benett (19:43):

That feels high.

Spencer Lee (19:45):

But it's young, right? That is young. I'm surprised how young they are. It's both. It's both. But how can you bring new loan officers in the mix and how can you gauge the potential of new loan officers to produce in the future? Who wants to tackle that?

Patrick Palmer (20:12):

This is a tough one because the cost of it and you bring it in, you just laugh it at me because taking this on, you almost have to partner them up or have them come in as an apprentice. But it's really hard. I don't think anybody's really figured out the trick otherwise you would see all sorts of platforms that are doing it well, and I also don't think that it's a big secret that the Salesforce has been aging for some time. I mean really, we took a pretty good black eye in 2007, 2008, and a lot of people stopped coming into the industry at that time. I don't think that's going to be the case in the future though. So really it's how do we get them up and going and they don't starve. Particularly in a market like this. It's one thing to bring them in 2021 when there's a lot of opportunity, but how do you bring them in now and help them have some sense of success early?

Jenna Gray Benett (20:57):

I agree with that. They almost have to start. We call at our company, but they almost have to start working with a higher producing originator. That's how I learned. I started with a brokerage and worked with the broker and just absorbed and watched and listened and kind of worked my way up different brokerages. That was back when you had to have your real estate license to do loans. And so I don't really see another way in unless someone just gets in and kind of jumps in the deep end and works and hopes for the best. It's tough though. I mean when you're brand new in the business, not a lot of people want to work with you.

Aaron VanTrojen (21:39):

Yeah, we all have similar, our models of companies similar in the sense that we have branch managers and loan officers and what have you. It is extremely expensive if you abide by the laws to bring in new people and train them up because in most areas you have to pay minimum wage. A lot of companies don't, but you should and you're supposed to. And it can take, especially in this kind of a market environment, I mean it can take months and months and months before they ever hope to close their first transaction. And so a lot of people aren't willing. I mean, you and I, we just go after everybody else's loan officers, so we don't have to train 'em up. The whole industry is doing that and there's a reason why we're doing it because the cost, even though sometimes the cost of recruiting can be just as high as training that person up, that would be a good study. We might all change the way we do things because I'd much rather bring somebody that's brand new and teach 'em how to do it right. Then unwind bad habits from somebody that's already been in the business.

(22:45)

I don't know if that pencils very well, but it would certainly be great if we could do that. And the other problem with our industry, and I'm sure both of you would agree with this, is that a lot of the branch managers in this industry have never been taught how to manage. They're loan officers that became branch managers entitled, but were never taught how to manage. So you can't expect them how to mentor and train and educate and coach these people up because they don't know how. They've never been taught to, I know this all clearly because I deal with the same problems. All my loan officers came from somewhere else. So it is a tough condition of our industry and I don't know if anybody's trying to fix it. I think we all would love it to be fixed, but I don't know if anybody's trying. It's hard.

Spencer Lee (23:37):

Now I'm just talking about the recruitment of loan officers. I think in past conversations we mentioned just who was the great. Producer of two or three years ago, the market's changed so much. I mean, how can you adapt for that? It's a heavy refi market, 20 20, 20 21, and now it's anything but a refi market. So how do you figure that in the equation? When you look at recruitment?

Jenna Gray Benett (24:02):

We all have technology. We can look up production and we talked about this kind of on our Zoom the other day. You look at 2021 Scotsman guide, and if someone was working for Rocket or better and they were 100% refi business and 0% purchase business, it's probably not going to be a great recruit or if they have a lot of out of state, but it's very clearly company fed that they don't have their own self sourced business, probably not going to be a great recruit. So the technology tells us where the red flags may be.

Spencer Lee (24:44):

Yeah, I think that was a key point. Those who are hand fed versus self sourced. Correct. How do you find the self-starters since it's technology? Just technology?

Jenna Gray Benett (24:53):

Yep. Technology. Yeah. There are ways to kind of determine that. Yeah,

Spencer Lee (24:59):

Gentlemen?

Aaron VanTrojen (25:00):

You also know, I mean, if you're recruiting on a regular basis, what companies are self sourced or not. So most companies that we're going to target are all self sourced, so I'm not worried about that. That can be an issue certainly, but it's not. We know the target. We do have technologies to look up their numbers, which is really, really important. It's a little bit trailing sometimes not totally accurate. The biggest problem in 2022 and 2023 is using that technology to target your loan officers is that volume doesn't mean profitability. So what I've found in 2022 and 2023 is that the highest producers are the least profitable. And what I mean least profitable is they might be doing loans that are lost to their company. I don't want that. Right? So not only do you can get on the phone, that could be your first phone calls talking to somebody that's doing five, 10, whatever, how many deals a month, but is it profitable?

(25:59)

Are they selling rates 300 basis points under markets? And that's all they know how to sell. So that's not going to help me. And that's the bigger challenge in this type of environment is just finding the people that can bring the value, can bring earnings, can actually be profitable because numbers, volume doesn't matter if it's not profitable. Yeah, well said. I think some of the key things that I'm looking for when I'm recruiting are can you present, I think the days of having individual coffee meetings with real estate agents or CPAs, I think they're long gone because even they don't have enough production to give. Can you get 30 agents into a Zoom meeting? Can you get 30 agents into a room? Can you get 30 into a room? One of our top producers has figured out the social landscape enough to get 20 and 30 buyers in a room at one time over specific products. And so the phone of our day is now video or video presenting of today utilizing YouTube and creating content from a marketing standpoint. But also once you're there, do you have the, I guess what would be now a newer version of call reluctance. We had people in our industry that they didn't want to pick up the phone. They didn't want to call real estate agents, they didn't want to set meetings. Now we have people who are reluctant to do video, and so I'm trying to find this next generation of folks. They're going to be one to many. They're going to have to if they want to make a living, and in the absence of that, I think they're going to struggle because you're going to end up with just a stomach ache from 30 coffee meetings with 30 agents and get one deal. So those are some of the key things that I'm looking for in recruits right now. Are you coachable or are you teachable? Are you willing to do some of these things that are more one to many leveraging technology to get more people in the room at one time?

Spencer Lee (27:47):

Going back to what we talked about at the beginning of this conversation, how using technology to compliment their skills, but they still need those people skills and they still need the willingness to try new technology, whether it be social media, which isn't that new, but things like TikTok and who knows what else is coming. Chat, GPT. Maybe next. Now I want to pivot a little before we get to Q and A, talk a little bit about affordability. I know this sort of varies by market, especially the Bay area is I don't think anyone would call that affordable, but regulators, the government, GSE's, have all made equitable housing one of the pillars of their mission. And is there a way, I mean maybe there isn't, but is there a way of getting that new home buyer maybe a little bit at the lower end of the market? Is there any hope for that and loan officers, can the loan officer do a better job or sort of help facilitate that? Does anyone want to tackle that?

Jenna Gray Benett (28:54):

If I am understanding the question correctly, you're asking about just affordability and how we communicate a message of affordability?

Spencer Lee (29:04):

And can there be affordability?

Jenna Gray Benett (29:08):

Yes, the answer is yes. Every home buyer can afford something, Whether it's changing their mindset about what they can afford. So you've come from a market where rates were 2%, 3% and they were offering half a million in my market, a million over the list price, and for whatever reason, psychologically they were okay with that. Now rates are in the sixes, the sevens, and it's unheard of and people are pulling back. But in this market, there's more opportunity. We were seeing 40, 50, 70 offers per property in that era and now maybe like you see one to six offers. So there's more opportunity for home buyers to negotiate, get better pricing on properties, even though prices haven't come down that much because of the lack of inventory, but it's a more equitable transaction in this type of a climate. And I always preach to my client, it doesn't really matter if the rate's 18%, right? It was in the early eighties. Can you afford the monthly payment on what this particular property right now? And you can't really promise the refinance in the future. It's likely right, but you can't promise that. So you help them with what can you afford right now in this moment and do you need to buy? Yeah, that's it.

Aaron VanTrojen (30:40):

Yeah. You're in a different market.

Jenna Gray Benett (30:42):

Very.

Aaron VanTrojen (30:43):

Did you say sixes, your sixes?

Jenna Gray Benett (30:45):

We do have some sixes. Yeah, yeah, no, we actually are with sixes.

Aaron VanTrojen (30:51):

You're dealing with the different issue. It is an issue. I don't recruit in San Diego or San Francisco for those very issues. It is a challenging, challenging market for completely different reasons than it is for most of the country. But the affordability issue, and that's one of the problems it's good and bad sword, is because the people that really, really, really want to buy right now that aren't distressed because of a divorce or something of that sort are usually the lower income that aren't in the situation of getting into bidding wars. And that's mostly subsided through most of the country. So what few properties they have, they might have a chance of getting the problem is they're distressed borrowers, right? Or they would've been playing the game two years ago when things were hot. They weren't able to play that game because they couldn't bid 50,000 over the price.

(31:43)

Now they don't have to bid 50,000 over the price. In some markets they can come in a hundred thousand under the price, but they're coming with distressed credits, they're coming with multiple jobs, they're coming with DPA. And so the time to originate that loan through your underwriting process, which we just discussed earlier this morning, the time it takes to underwrite those loans is longer. So it's more cost intensive, plus the likelihood of those loans defaulting if the market changes and the possible fraud that's involved in loans. So I think that addressing the affordability issue for the people that are buying and are in a more distressed situation, yes, there's more of them now available than there maybe were two years ago. But it leads to another problem that you have to manage. It's true, it's true.

Patrick Palmer (32:34):

Affordability mathematically is the cost of money. If the cost of money is not 2%, it's 7%, it makes it less affordable. If houses are up 20, 30, 40% from a couple of years ago, that makes it less affordable. As an operator, I have to look back and say, what are the things that I can control as it pertains to the originator? We control how we can teach the borrower about managing down the risk, right? Do they understand reserves? Do they understand product types? Do they understand having some sort of liquidity backed up? Do they understand how the asset performs? And if we're not teaching them those things, we're doing them a huge disservice because maybe it's not affordable right this second, right? The third equation to that affordability is how much is our income's going up? Well, it's trailing the other two by a pretty significant margin, and I think showing them how to do it safely or even being able to tell them right now is probably not the time for you. Not putting them in a situation that's going to create risk, not only for us as a company, but for them as a borrower. Those are the conversations that we can control. And if they're done really well, maybe they don't lead to that transaction right now, but they can.

Spencer Lee (33:43):

And you'll be top of mind later. Yeah. I think I've heard the term use, sustainable home ownership, Educating them about what is sustainable homeownership. Now we have only a few minutes left, but I'd love to open it up for some q and a. Hopefully we can get a couple questions in if anyone has any. I'm sure there must be someone, and I think someone see a hand right there. A couple of hands actually.

Audience Member 1 (34:08):

Is that on? Okay. So going back to the personnel and looking for originators, nobody graduates from college coming into the mortgage banking industry, right? I mean, I would say most of us in here who are in the mortgage industry fell into it either by accident, maybe on purpose. So it seems like, and I kind of curious if you all have been a part of this, it seems like we need to look to our state mortgage banker associations and maybe go after some colleges or Get out there in front and try to recruit from that. I don't know. Have you attempted to do that?

Aaron VanTrojen (34:57):

I'll speak real briefly on that. Actually, I can't remember what association It was, but it dialed me up with some of the biggest colleges in the United States about recruiting. This was a couple years ago. The problem is, again, it goes back to, I don't think there's any problem getting people interested in what you do. I mean, if you can tell people in a good market what an originator can make, we got originators that are working from home in our underwear, making seven figures. That gets eyes on you, that gets attention. But for me to be able to train that guy or woman to that place could cost me hundreds of thousands of, and the likelihood of that actually happening is low, is exceptionally low. So I think that yes, it can happen, but I don't think any of the companies that we're working for is going to risk the capital to do it. It's hard. It is exceptionally hard thing to do.

Patrick Palmer (35:57):

The three people who are new to the industry that have been somewhat successful over the last two years have worked on teams like we talked about earlier, but they came from other, what I would call very high pressure sales jobs. So they're used to the cycle of calling, building relationships, and they already have built those habits and they probably have some sort of a reserve fund where they can make it through that initial period of attrition. The other thing about a lot of kids come out of college right now is that they've got a lot of debt. They don't have a lot of time to be like, I can wait to get paid 3, 4, 5 years down the road. Maybe like some of us, when we got in the business, we had a little bit of space to breathe. Most of them really don't. And then when you put 'em on a team, where does that money come from? Are you taking it from the other team? Because they're feeding their families and the market looks a lot different. So the problems are numerous, and I think we'll probably struggle to continue to figure it out over the years.

Spencer Lee (36:51):

It's interesting. Any thoughts, Jenna?

Jenna Gray Benett (36:53):

Yeah, I mean, this might not be a popular statement, but to be a top producing loan officer, it takes a certain personality type and you either have it or you don't. I think there's something about that personality type that cannot be taught. You can teach the skill, you can teach someone how to calculate income. You can teach someone how to cold call. You can teach all that, but there's that extra level of grit that it takes to be a top producing loan officer. And I think that that's something that's, I mean, sadly it's, I think it's an eight, so it's challenging.

Spencer Lee (37:34):

I think we're just about up on time. Apologies, the conversation was really interesting. So went a little bit longer than I thought it would, but this has been a great panel and I want to thank our three panelists. Please give a hand to Jenna Gray Bennett, Aaron VanTrojan and Patrick Palmer.