Take Back Valuable Time

“Back in 2006, there weren’t strict guidelines on what an assistant could do and really anybody could quote interest rates, do loan officer duties, process loans, and even handle client calls,” Munar said. “Since the guidelines were so lenient, I was able to take more on my plate and ended up bringing in 80% of the sales at the brokerage that I was assisting at.”

Jay Dacey, president of the Minnesota-based Jay Dacey Mortgage Team, said that hiring an LOA was a large step when he and his small team set up an independent mortgage shop. “I made the decision to seek out an assistant because I needed more time to focus on my own tasks as a loan officer,” Dacey explained. “I have just one LOA on my team now, but it’s allowed me to take back my time and produce more.”

Making Room For An LOA

The apprehension toward hiring an LOA is how to pay them while still being able to profit and make a comfortable return on investment. “Back then, I probably made $13 an hour and maybe an additional $50 cut per file. If I brought my own clients in, back then I got a 50% commission split if I brought that client in,” Munar said. “Nowadays, it’s based on your geography and how much you produce or the volume of the loan officer’s production.”

When Munar first hired an assistant in December 2012, he paid the salary from his own pocket.

“Many [mortgage professionals] are scared to make that jump and hire an LOA,” Munar said. “I made the jump to hire my first assistant when my business started to take off. It changed the whole way my business ran: I was able to talk to more Realtors and clients as the face of the business while I had someone on the back end handling the rest.”

Even though Munar says that conferences he attends continue to recommend hiring an assistant to boost business, many are still reluctant to take the step to hire. “A lot of people fret about how they’re going to make that extra money per month to pay an assistant, but what they’re forgetting is that the extra 40 hours per week that the assistant is working is more time to make more loans per month, which in turn, makes the money to pay an assistant.”

Munar also said that mortgage shops tend to stock up on LOAs during busy markets to crank out loans, but that doesn’t mean that they can’t readjust their staff in a down market when money is tighter.

Dacey, on the other hand, says that he decided to take the leap and splurge on an LOA after hearing repeated advice to do so in the industry and after his business began growing. “I made the decision to hire an assistant because I heard on a webinar that you can’t afford an assistant until you make the jump and hire one,” he said. “They become a part of your regular team. Like my other employees, they receive health insurance and a 3% match IRA plan.”

Munar says that as someone who is on the road a lot, having four LOAs has been instrumental in Co/LAB’s success. “The simple fact is that you can’t do it all. Ronald McDonald doesn’t cook his own french fries,” Munar quipped. “Sales and fulfillment cannot be the same person. It’s a decision that most people wished they had made sooner.”

Toeing The Line

Today, the line between an LOA and a regular mortgage loan officer is more defined than it was in the early 2000s, thanks to the Dodd Frank Wall Street reform that established regulatory requirements for each role. LOAs can work licensed or unlicensed, which gives them specific job constraints. Michael Barone, a managing partner of Abrams, Garfinkel, Margolis & Bergson Law’s mortgage compliance practice, specializes in mortgage regulatory practices. He says that the best way to avoid confusion between licensed and unlicensed LOAs is simple: Companies should disclose what duties each LOA is allowed and not allowed to perform.

“The key difference is that unlicensed LOAs are not allowed to quote interest rates or really make recommendations to clients,” Barone said. “A processor, LOA — licensed or unlicensed — all have limitations on what they can do.” Munar provided a similar perspective and said, “An unlicensed LOA can really just do paperwork. They can’t talk about the rates or solicit business.”

Barone also said that what licensed versus unlicensed LOAs can do is also scenario-based and some gray areas exist. “I think it’s very easy to script what an LOA should say or do, but it’s hard to guess what the consumer’s response or questions will be,” he explained. “That’s why LOAs should get training on how to respond to certain situations that they may not be sure they’re permitted to answer.”

Sometimes, Barone says that LOAs may have industry background ahead of time, which is one complication that he sees in many practices. “While these LOAs [with experience] may be able to answer questions through their own knowledge that the customer or Realtor is asking, those answers may be outside of their job duties, especially if they’re unlicensed,” he said.

Barone said that an ideal LOA may have no industry experience or knowledge at all. “They’re less bound to step outside of what they can and can’t say if they don’t have an answer to give a customer,” he said. “Even though their industry knowledge may not be as keen as others, they’re the least likely to get you in trouble with a regulator.”

Knowing Your Role

So, what can a licensed LOA do? For starters, understanding the specific duties of an LOA is imperative so as to not confuse their duties with a processor. Munar, who has three LOAs and one processor at Co/LAB, says that the duties are vastly different. “The loan officer assistant is really an assistant to the sales part of a loan officer’s job, so they’re making sure that the customer service experience is seamless and building up relationships,” he said. “The LOA can take client and Realtor calls, do cost sheets, take sensitive information like social security numbers, and really be the extra support that the loan officer needs.”

Munar says that his experience with processors has been that they’re the more analytical side of industry help. “A processor is more like the back end of home contracts. They make sure that the file goes smoothly, and oftentimes don’t necessarily have to have as much human interaction as an LOA,” he explained “They’re making sure all the boxes get checked and working with the underwriter, title company, and closing department.”

Barone says that the two different positions have some overlap, but the number of LOAs needed depends on how much the market is allowing the loan officer to produce in volume. “Loan officers have the ability to essentially throw some of their loans at an LOA, whereas a processor won’t do that,” Barone said. “The processor, rather, will go to the LOA instead of bothering the loan officer if they have questions about the conditions of a loan.”

For Dacey, he says that his shop prefers to only hire licensed LOAs. “By having my whole team be licensed, there are minimum discrepancies,” he said. “A client who calls up my shop can speak to any team member about current rates since they’re all licensed. If I had an unlicensed LOA, there might be risks that arise, especially over-the-phone confusion with customers.”