Looking for loan officersDon Frommeyerhuman relations, recruitment, employee retention Ah! April and May bring the springtime, and they also bring in business. As we begin to get busier and busier in our everyday lives, we also get a little busier in our workplaces. And in getting busier, you need to hire more loan officers. So, you start asking around and trying to find out if anyone out there is maybe looking for a new job. You advertise on the Internet at Monster.com and maybe put an ad in the Sunday newspaper. Then on Monday morning, you start receiving faxes and e-mails with resumes. You set up some interviews and start the process. How many of you have done this in your life? Well let me tell you, it is harder than heck to do your job, follow-up with customers, finalize your loans for closing, work with your processors, train your loan officers, prospect for new business and then interview prospective loan officers. As I talk to these men and women, as we discuss everything they've done and are currently doing to get leads and work their real estate agents, I hear two things that startle me. The first is that they tell me they cannot produce any results unless I can guarantee them 20-30 leads a week. The other is that they want to be paid 70 percent commissions and be paid on a 1099, because that is how they are currently being paid. Now, I'm all for helping my loan officers generate income, be it by leads, advertising, introducing them to real estate agents, helping to get them into networking groups or whatever. But 20-30 leads a week? Whatever happened to networking and soliciting real estate agents, attorneys, financial planners and attending open houses to get to know the real estate agents, etc.? I explain to these people that we pay good commissions, with an additional volume bonus, but not 70 percent. We have FHA, VA, conventional and sub-prime lending. We have printed books and mailings personalized for each loan officer. We have an excellent reputation in the workforce and on the street. If you say you work for Amtrust Mortgage Funding, it opens doors because our reputation precedes you. Everyone knows that we look for the best out there and that our loan officers know the business. We have each one join the Indiana Association of Mortgage Brokers, our National Association of Mortgage Brokers state affiliate, and get involved. We have each one train and attend roundtables where we discuss how to get loans closed. We know that if you do it right the first time, the loan closes quicker. So, now that I've explained to them why I only supply a few leads a week, but I also help them get additional business, the perspective loan officer looks at me and says, "Okay, but I still need 70 percent because that is what I get paid now and I don't want to go backwards, and it needs to be on a 1099." "Alrighty then, you get paid 70 percent commissions. Do you get all of this commission on everything? How is it broken down?" I ask. "Well sir, I make all of the origination and yield spread, and my boss takes a $795 processing fee on each deal and I get 70 percent of that." So I say, "If the fees are $2,900 and you subtract the $795 fee, you get paid $2,105 and 70 percent of that is $1,473.50. In my book that equates to 50.8 percent of the fees collected, and according to the math, you pay the full Social Security tax and you boss pays nothing of that. That amounts to another seven-plus percent you have to pay (which is the portion that the employer pays). Plus, you are not an employee of the company but an independent contractor and almost all of the agreements that your boss signs to get approved by the lenders state that they do not buy third-party paper, and that you have to be an employee." (What a freakin' mess!) "With all of the problems that can come from this, now is the time for you to come to work for me. I will pay you a good commission, with some perks for being an employee, and you will be taxed and receive a W-2 at the end of the year. You can still write off some of your own expenses (please consult an accountant for this, as I am not one) and start being an outstanding loan officer, not one trying the angles or thinking you are making all of this money at 70 percent." In retrospect, this loan officer finally realized I was telling him the truth; he was amazed that he really wasn't making 70 percent. He ended up coming to work for us. How many of you are currently in this kind of business relationship? Please, do yourself a favor and start working for a company that does it right. Get with a company that pays you, takes out taxes and pays their fair share of your Social Security, unemployment and workers' compensation. Don Frommeyer is senior vice president with Amtrust Mortgage Funding Inc. and president of the Indiana Association of Mortgage Brokers. He may be reached at (317) 575-4355 or e-mail [email protected].