Talent, Tech, Marketing: Loan Origination Growth Strategies for Retail and Brokers

The mortgage industry is at a crossroads, with an evolving economic landscape and intense competition from tech-first startups. This critical session is designed for the boots-on-the-ground mortgage professionals who are working hard to grow their business. We'll explore paths to growth including growing your team by attracting top-tier loan officers or expanding your business development efforts through powerful partnerships with realtors and builders, as well as leveraging data-driven lead generation. Join us as our expert panelists share actionable insights and discuss the cutting-edge technology that is empowering you to secure more deals.

Transcription: 
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record. 

Tony Blodgett (00:08):
Well, thank you. Yeah, we're excited for this discussion. I know there's a lot of talk today about tech-forward mortgage companies, people entering the mortgage business, or acquisitions that have happened. In our discussion, we want to talk a little bit more to the traditional mortgage banker and the mortgage broker, and really focus around growth strategies that work in today's world—things that we're all doing every day in our day-to-day jobs. I hope this can be somewhat interactive. We're absolutely open to questions from the audience as we go along because we have a number of topics to touch on, but we only have 30 minutes and we want to make sure that we're answering the questions that you guys are most interested in. When I think about growth in general, I tend to break it into two categories: the first one being growth through an acquisition strategy.

(01:04):
We've certainly seen acquisitions and mergers within our industry. The other one is more of an organic growth strategy utilizing regionals, branch managers, and traditional recruiting. Those are the two areas that I want to focus this discussion on as we move forward. But I want to first introduce the panelists that are here with me today. To my left here, I've got Jamie Cavanaugh. She is the CEO of Alpha Mortgage, with lots of industry experience, and she tends to be more on the broker side of the business. I'll let you unpack that. And then of course, I've got Alec Hanson over here, who's the head of revenue and growth at LoanDepot—certainly an organization that has been through the acquisition process, really founded through acquisition. I think he's got some good insights. My name's Tony Blodgett. I'm at New American Funding, but 12 years ago I was at a mortgage company and we went through an acquisition as well.

(02:08):
So I think there's discussion here on both sides of the equation. Does it make sense for the smaller or mid-sized company looking to be acquired? Are there benefits to that, or is it just giving away your dream? I think there are some things to unpack there. And then for companies looking to grow through acquisition, what are some things to look out for that can make that positive but also potentially problematic in some cases? So Jamie, I'll kick it off with you. Maybe just give a quick background on who you are for the audience, and then your thoughts around acquisition and some of the unique strategies you guys are deploying, given your size and the type of model you are.

Jamie Cavanaugh (02:53):
Yeah, so I've been in the industry for far too long. This is year 28 and I've been through all of it—the ups, the downs, the downs, the downs. But really, I've also been part of every channel. My former partner and I built a nationwide retail and wholesale operation way back before the crash. I've been a broker owner for the last 10 years, and about six months ago, a really close friend of mine sold his very small brokerage to a public tech company. They were acquired and I was honored when he asked me to come in and lead the company through this acquisition, taking a team of very traditional, veteran-focused loan officers in a broker model and helping them become part of something much bigger without losing the heart of the "why" in what we do. I'm running this interesting balancing act; you don't know when you're going to be acquired and you don't know when somebody's going to look to you.

(03:52):
A small brokerage with 20 loan officers based out of Texas, but which happened to have a nationwide licensing footprint, got snapped up just like that. The next thing you know, we're part of something really big. Similarly, you've both been through large acquisitions; you don't know when it's going to happen to you. But I would also say it doesn't necessarily have to be a public acquisition. We are seeing a lot of consolidation in our industry just due to the nature of the market and the things we've seen over the last few years. Sometimes it's two broker owners or two IMBs deciding to join forces because sometimes one plus one is greater than two. Sometimes when you combine two powerful things, you become exponentially more powerful. So I'm excited to unpack a lot of that today.

Tony Blodgett (04:36):
Yeah, absolutely. The first thing that comes to mind for me during an acquisition is holding that team together. We've seen very successful acquisitions where there was almost a hundred percent retention, and then others where it literally just fell apart almost immediately. Can you identify one or two things that would be the difference in those two scenarios? What can a company going through an acquisition, or the acquiring company, do to help ensure that what they're acquiring actually exists on the other side of the transaction?

Jamie Cavanaugh (05:15):
It's hard because, looking at mortgage companies, if you're acquiring a model primarily based on independent originations—not a consumer direct model where the company is driving the business—you are buying the loan officers who have the ability to leave at any point.

Alec Hanson (05:32):
Who are not for sale.

Jamie Cavanaugh (05:33):
They are not for sale. I heard somebody say something on a previous panel and I'm going to steal it: "In the absence of communication comes hallucination." It's all about communication. Now, here's the tough part: if you are part of a public company, you can't tell your team every single thing that is in the works or about to happen. But what you can do as a leader is stay in front of them, continue to reinforce that we have not lost sight of our mission, and express your commitment that every change made will be for the betterment of the team, our clients, our consumers, and our business. You promise to be open with them as much as you can, as often as you can be. I think we lost only one loan officer.

Tony Blodgett (06:22):
Alec, I want to get your take on this. It feels like the companies that do well through an acquisition are the ones that had a really strong culture before that, where everyone was on the same page regarding their mission. When you talk about the continuity of that mission moving forward, everyone knows what you're talking about because there is clarity there. Alec, what's your take on this with what you've been through over the years?

Alec Hanson (06:49):
Well, I've been through a terrible acquisition and a really successful one. I think the main differentiator for me was the amount of respect shown to the company that was purchased. When LoanDepot went into retail and purchased iMortgage, and subsequently Mortgage Master, there was a lot of respect for the company being purchased. The will of LoanDepot wasn't shoved down on us. They let us continue to operate with our own culture and way of thinking, and just had a hands-off approach of, "We're here to be helpful." They let that sit for a period of time. Eventually, it became evident that we actually wanted a little help, more collaboration, and for our branding to be changed. In the beginning, it was, "Don't touch us, we're good." But it was that respect that allowed us to stay, listen, and understand the value of their platform and make our own decision. I think that's a big differentiator. When people come in and say, "We're now in charge, here's all our stuff," without showing respect for what was already there, they lose out.

Tony Blodgett (07:57):
I'm wondering if LoanDepot had that foresight because they were already in the mortgage space. I think about tech companies or public companies that may not be in the mortgage space but see it as an opportunity. There's definitely opportunity if you can bring technology and other assets to the mortgage space. We would all agree that we're at a digital mortgage conference; there's a lot of evolution coming to this industry over the next couple of years. I wonder if that insight into the industry helped them be a little bit more careful. What could tech companies do to understand what is important to a retail loan officer to make sure they're not scaring everybody away?

Alec Hanson (08:41):
I'll tell you, we were terrified because Anthony Hsieh's reputation was digital call centers and he had sold previous companies. All of us on the retail side were like, "Does this guy even understand what it's like to get kicked in the face by a realtor at an open house on a weekend?" But the ability of him and other senior leaders to come in and listen, and then let us listen back, made us realize that Anthony actually was a retail loan officer before. None of us knew that he had been in the streets of Cerritos dropping off bagels at open houses. That patience for anyone coming in through an acquisition, especially a tech company, to put themselves into someone else's shoes and understand what they're going through is paramount to the success of this kind of thing.

Tony Blodgett (09:22):
It makes me think about the continuity of leadership. Jamie, it seems that especially if you're not familiar with the mortgage space, that would be one of the most important aspects: making sure that the leadership who drove the culture before is not only there but still empowered. It seems like there'd be a balance there during an acquisition.

Jamie Cavanaugh (09:45):
Yeah, I obviously gave up my own business to come and burn the boats to do this. I was compelled to do so because after I met with the CEO and the leadership team of the public company, it became evident that they were the kind of leaders who knew what they didn't know and wanted to build trust in other leaders who did. Since mortgage wasn't something they had spent decades on, they were willing to listen. To your point, what did we buy? Who are the people on the front lines? What is important to them? Now, nobody buys a company just because they want to feel good; they buy companies to generate revenue. But the leadership team where I am had the foresight to say the revenue's not going to be immediate. What's more important is retaining the foundation of what we have acquired first—not only honoring the culture that exists, but creating a new and better culture that brings forth the best of everything. We have five subsidiaries. We had to look at them and realize one didn't have much of a culture, while another had a very strong one. How can we create cohesiveness and create "one Alpha" moving forward? That was the differentiator for us.

Tony Blodgett (11:14):
Yeah, we heard on an earlier panel about branding—do you change the name right away or leave it the same? Better and Neo were talking about that, and I loved what was said. Alec, what are your thoughts on that? I've seen promises made to keep things the same, which is fine, but when it changes suddenly, people wonder what happened and you see fallout. What are the best practices to message and execute that?

Alec Hanson (11:54):
It's interesting. I'll answer that in two ways. First, from 12–15 years ago when the iMortgage thing was done, we had a lot of pride in that brand. We felt like we had pioneered it. We needed that respect from the LoanDepot side to say that what we built mattered. We bought it because it matters, and no one wants to have a "new dad" show up tomorrow and ask who we are. That level of respect, combined with the investment going into the LoanDepot brand, eventually made us jealous.

(12:30):
Over time, we wanted to be part of the cool stuff happening. We didn't want to feel like the stepchild anymore. That caused us to come to the table. The second way I'd answer is that today, with social media and the proliferation of personal branding, loan officers are becoming the front-and-center brand for consumer-facing interactions, especially self-gen retail LOs. There's another level of respect you have to give to individuals driving business with their own personality across large geographies. I think it's a unique balance between a corporate brand and honoring the individual who is living in the community and breathing your brand into the lives of the people they impact.

Tony Blodgett (13:15):
It almost sounds like you have to earn their trust in your new brand versus forcing it upon them. It sounds like they did a successful job of doing that. My guess is, whether it be Better or others, the focus is: you're going to keep your name until you feel like there's value in joining the brand we've established. If you can do that successfully, good on you. As we move close to the halfway point, I want to transition to a segue question. As we think about growth for mortgage companies, there's an acquisition strategy versus an organic strategy. We're going to talk about organic growth, but first, what are the pros and cons generally of companies looking to grow through acquisitions? What are the wins and the risks?

Jamie Cavanaugh (14:21):
Obviously, the biggest risk is you have to do your diligence and know what you're buying. An often unasked question is: what is the likelihood of attrition from the people producing the business? If that likelihood is low, how can we ensure it remains that way as we go through this process? It's not a quick process. Regarding rebranding and attrition, my neighbor was the original company that was acquired. The acquisition happened 12 months ago and we just rebranded two months ago. It was a process of discussion about how to do it well in a way that honored where we came from and where we were going. With acquisitions, the one common theme in good experiences has been continuity in leadership, communication, and respect—respect for the people, the brand that was built, and the work that went into it.

Alec Hanson (15:24):
Yeah, I think acquisitions right now are very hard because a lot of organizations have over-engineered their platforms. It's something we're struggling with as an industry. We've put so many shiny objects into platforms that are under-leveraged and just add to corporate overhead. One movement in the broker community that I respect was the gut-check against large independent mortgage banks, saying, "You have too much infrastructure. You have too many salaried heads that don't add value. You have too many costs for me where I don't find the value." That pushback is healthy. In acquisitions today, you almost have to let somebody run their own franchise, like a DBA, let them keep their resources and build their tools until you find the right way to blend it together. I think we're going to see a lot more acquisitions and mergers in the next 12 months.

Tony Blodgett (16:20):
At New American Funding, acquisitions haven't really been part of our strategy. We've had one successful acquisition and a few others we considered that were almost 100% geographically based. It gave us a presence in a market we didn't currently have. Identifying those opportunities was easier when we were a smaller organization. Bringing an acquisition into a market where you already have deep penetration brings complexity regarding integration and overlap. You might lose some of the synergies and efficiencies through duplication. Alec, you mentioned technologies. We found that you have to shed technologies, but there are often contracts and massive expenses that can cause financial hardship and change the economics of the deal. Due diligence on technology overlap is a big thing to consider. As I said, we have focused on organic growth, so I want to talk about that. It's my area of expertise, but it's evolved. Let's talk about the elephant in the room: organic growth is not really cheaper than acquisitions.

(18:03):
It is very expensive to grow in today's world. Although loan officers aren't there yet, I expect them to be recruiting NFL agents to represent them in contract negotiations soon, because that's the level we're at with signing bonuses and retention. What's super interesting to me is that the broker channel has grown significantly without many signing bonuses. They've grown their market share drastically.

Jamie Cavanaugh (18:46):
We were hovering around 30% the last time I checked.

Tony Blodgett (18:48):
It was less than 10% before. There's been significant growth there with a completely different strategy than what IMBs and banks have deployed. Let's talk about that aspect of organic growth. Is that here to stay?

Jamie Cavanaugh (19:08):
It's got to be here to stay to a certain degree. I'm a big fan of AB testing everything. I'm doing AI initiatives, advertising to consumers, and organic growth. I think we all have to evolve and do all of that. Within the broker channel, there are at least three to four completely unique models. Larger organizations have a structure, a plan, and a support system. The broker world isn't always that way. There is a flat-fee model where you plug in but get no support, versus a full support model, versus something in between. When you're out there recruiting—and I've spent the last decade doing it—the truth is you have to identify who your target loan officer is.

(20:13):
Everybody leans toward hiring the monster producers. I was one, and the Joe Schmo who would blow up my phone all day, or the VA calling me from overseas, was not going to get my time. Who is your target loan officer? Speak to them and understand that 95% of the loan officers who think they're looking for a new opportunity don't actually know what they're looking for. It's your job to help them figure that out and then decide if you're the fit.

Alec Hanson (20:48):
That's a great point. I don't know if this is controversial, but I think we're in a pretty toxic place when it comes to organic growth. In the retail model, we're doing large sign-on bonuses with multi-year clawbacks. I'm familiar with companies forgiving clawbacks and then putting on another three years just to lock people into agreements. We joke about the "recruiting rate sheet" people are shown, which is packed with the margin they negotiated in their sign-on bonus. It's a toxic place everyone's trying to figure out as the industry repositions after the boom. I'll also call out partners on the broker side who have put together multi-level marketing strategies where every LO becomes a recruiter and gets a "rip" on someone else.

(21:40):
Those things have to find their way out of our industry as we move to a healthier place. Talented mortgage bankers are rising to the top and you can see them coming to the forefront. Those models will get cleaned out. The models that become the most attractive will be those that identify the best people and stay true to recruiting them. Those are the franchises that will have success in this emerging model.

Jamie Cavanaugh (22:11):
We have to stop being a commodity. We have to stop trying to hire everyone that can "fog a mirror"—and we do. We have to start having real conversations with the right people who we can serve as leaders. As leaders, we're failing them if we're not identifying whether we can give them what they need. We're also failing them if we're not helping them discover what it is that they need.

Tony Blodgett (22:36):
A handful of mortgage companies had a ton of success during COVID and built a war chest. As the market shifted, they chose to reinvest those profits into growth so they'd be prepared for the next cycle. I understand the idea of investing in growth. You might say, "I had X amount set aside for acquisitions, but instead, I'll pay signing bonuses to get big producers over." At the same time, originators were susceptible because their income had dropped 50% to 70%. I'm wondering if this naturally works itself out as we move into a more normal market.

Jamie Cavanaugh (23:31):
There are no enemies in the room. There is a fit for everyone across all the different models in the broker and retail spaces. I know hundreds of loan officers who operate in their own silos. They are "plug and play" and don't want to share compensation because they have their own teams and their own systems. They just need a place to hang their hat. But there are far more originators yearning for the training, knowledge, and guidance that our industry has traditionally not done the best job of providing—particularly in the broker space.

(24:11):
I'd rather see the companies with a solid, proven foundation help the incoming generations of LOs. Those people who have been trying to make a go of it for five or ten years but have floundered because they haven't had the help. I'd like to see those people find leaders who will help them realize the level of success they can achieve while helping others. We're helping people.

Alec Hanson (24:42):
I agree. I don't know if we're ever going to find a "new normal." Our industry is wacky and continues to get more wacky every year. We're on the fringe of a new level of wackiness with AI. I'm very passionate about the topic of AI and loan officers. We're going to be on a rollercoaster for a long time. Homeownership is a part of the American dream that stays rooted in our culture. What we do is massively important to the future of the United States, but it is going to be insane as the world changes. As mortgage companies find their place and realize who their customers are, there is a place for everybody. Pure entrepreneurial LOs who want to run their own business have a great space in the broker community. LOs who want more structure and resources thrive in independent mortgage retail spaces.

Tony Blodgett (25:49):
One hundred percent. I'd like to see if there are any questions from the audience before we wrap up. Julian?

Audience (26:01):
I have a question for Tony and Alec. Both of you are prolific on social media with the Market Shares podcast and Modern Lending podcast. Alec, you've done some very creative things. What has that done for growth and visibility regarding good old-fashioned recruiting or potential deal-making?

Tony Blodgett (26:36):
I'll let Alec go first. He was really an inspiration for me to get into social.

Alec Hanson (26:48):
I get made fun of a lot. I have a strong belief that the future for successful loan officers will be based on their ability to have influence in the local and digital ecosystems. Pull your phone out and look at your screen time; it's insane how high it is. Relevancy and connection to humans are required. I did a rant the other day that everyone's going to look at AI first instead of calling you. That's a symptom of relevancy, not competency. I started messing around with digital because I was good at the old-school stuff—building business door-to-door and at open houses—but I didn't know what to do with this digital space. I wanted to figure out what it meant.

(27:36):
I'm still very passionate about it because our great salespeople need to do it. If you're leading sales, your digital footprint matters. If you can bring a little positivity and a solution, you can make an impact. That's why I continue to do it.

Tony Blodgett (28:25):
I was inspired when Alec did his "100 videos in 100 days." At the time, I wasn't on social media in a meaningful way. I committed to doing one thing: a podcast. I committed to being consistent. I do an episode of Market Shares every single Friday. They've gotten better over time, but the key is consistency. I then take that podcast and repurpose it in short form on Instagram, LinkedIn, and everywhere else.

(29:18):
It creates awareness. I wanted to create evergreen content. If I meet someone new and they want to learn about Tony Blodgett, they can Google me and my podcast will come up. They can listen to two minutes or two hours of what I have to say. It helps build relationships. It seems to be working for now.

(30:03):
Doing it every week and staying consistent allows more people to see it. I appreciate the question. We could talk all day. Final thoughts? Alec, real quick.

Alec Hanson (30:40):
Thanks for coming to these events. Collaboration and connectivity are needed in our industry. This is an incredible time.

Jamie Cavanaugh (30:51):
I appreciate the different audience; I'm usually in my broker world. I appreciate the opportunity to share what it's like to be part of something that got acquired while balancing the competition between broker and retail spaces. All three of us are committed to leading our teams well and helping people understand this complex process so it feels a little less scary.

Tony Blodgett (31:26):
Thank you for the time. We had a short amount of time to share a glimpse into our thoughts, but we're all going to be around. Please reach out to talk more if you want to dive into a deeper conversation. Thank you all.