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Ellie Mae launches Encompass processing network

National Mortgage Professional
Sep 26, 2006

Finding keepersPaul DonohueTop mortgage originators This article originally appeared in The EDGE newsletter published by Argent Mortgage Company. It has been reprinted here with the permission of The EDGE newsletter. Your company's success hinges on hiring and keeping the best loan originators. Yet for many business owners and managers charged with finding new hires, predicting a person's capacity to perform remains a great mystery. Hiring is largely a guessing game in which interviewers make assumptions based on how candidates conduct themselves during the interview process, and when yet another new employee fails to live up to expectations—which may or may not be specifically spelled out—turnover can affect a company's reputation, office morale and ultimately, the bottom line. In the mortgage industry—in fact, in most industries—customers make use of a company's services because they value their interaction with the human beings who make up that company's staff. But how do you discover the real human being during the hiring process, especially when candidates can be good interviews and interviewers (even the best of us) can be swayed by sparkling personalities? It's all about the right skills Making great hiring decisions comes from accurately assessing a candidate's talents and understanding that some skills have more importance than others. Specifically, the talents of an employee can be grouped into three sets of skills: 1. Job skills: Knowledge of lending laws/practices and understanding of loan products and qualification standards. 2. Sales skills: Ability to ask questions and discover a customer's needs. 3. Personal skills: Innate talents and capacities, including personal values, resiliency, self-starting capacity, accountability and results orientation. In a typical hiring interview, we gather clear information about job skills and sales skills with questions about job experience (where they've worked, for how long and in what capacity) and success rates (how much they brought in for the company). But it's the last one—personal skills—that ultimately becomes the indicator of whether or not that person will thrive as part of your team. Job skills and sales skills are teachable, whereas personal skills are less so—it's hard to change an employee's personality. It's also hard to uncover a candidate's personal skills in an interview. Yet not understanding those personal skills is the biggest mistake you can make, because personal skills have a multiplier effect on performance. The sales performance quotient (see Figure One) highlights the relationship between those capacities that are found above the surface (job skills and sales skills) and those that lie below (personal skills). Figure One: Sales Performance Quotient (Job Skills + Sales Skills) x Personal Skills = Performance Rate each of your candidates on a scale of 1-10 for each skill set. Then use this formula to predict performance. You'll see that the personal skills score has the greatest impact on performance. You can employ someone with little or no mortgage industry experience and a minor amount of sales experience, and if that person has highly developed personal skills, he can become a champion originator with or without formal training. On the other hand, you may hire a person with experience in the mortgage field who knows the business and has good selling skills (and whose résumé looks perfect), but if this person has poorly developed personal skills, no amount of training will catapult them to high levels of performance. Once again, personal skills are the multipliers of performance. Well-honed personal skills are built on a solid set of ethics, interpersonal finesse and good judgment. Unfortunately, these are attributes that can be effectively hidden during the interview process, especially when a job seeker is a good interview. During typical interviews, candidates will not tell you what you need to learn about them; they only tell you what they want you to know. Reveal the champions Determining who will turn out to be a champion and who will fail does not have to be a guessing game. There is an easily learned art to this process, and with a little practice, you can increase your success rate and consistently uncover the hidden qualities of candidates well before they sign on the dotted line. The key to your success will be to look past the exterior of a person and accurately capture the essence of his capacity to perform. Reveal the personal skills that are the correct fit for your team using the four-step hiring process outlined below. Step One—Describe the job Well before the interview—even before you advertise the position to be filled—clearly define the position. Answer the following questions (and make up some of your own): • What tasks will the employee perform on a day-to-day basis? • How many hours will the employee spend on the job? • What will the employee do when no customers are seeking his services (downtime)? • How will the employee work with a client who is having trouble getting a loan? • What personal skills have resulted in winning outcomes in your business? • How will the employee interact with other members of the staff? (This is key and will lead into Step Two.) With these questions answered, write a specific and measurable job description. If you choose to advertise, use this as your guide. Step Two—Define the talent gap In this step, you will identify the talents of the people you already have on your team. Ask yourself what you are lacking and what would complement the existing team; then, create a list of the attributes that would create a well-rounded staff. For example, perhaps you have a particularly nurturing loan officer who takes considerable time with each customer, but who may lack prospecting skills. In this case, you may want to seek a new hire who demonstrates a talent for finding customers in undeveloped markets. Perhaps you'd just like to clone an especially good employee to give your company the capacity to service more customers. Using a top performer as a guide, document the talents that make this person thrive on the job. In either case, be specific about what talents you seek in a new hire, keeping in mind these attributes that are key to the mortgage industry. (See the mortgage industry talents sidebar for attributes that are key to success in the mortgage industry.) Step Three—Conduct an evidence-based interview You're now prepared to conduct an evidence-based interview in which you can gain a clearer view of the candidate's personal skills. 1. Keeping the specific job description in mind, offer the candidate three or four typical situations, one at a time, that he is likely to encounter (from Step One above). Use the Evidence Action Result model (or EAR, to remind the interviewer to listen carefully): • Evidence: Describe the situation. • Action: Ask what action he would likely take in that situation. • Result: Ask the candidate to describe the ideal outcome of the actions taken. 2. Now, ask the candidate to describe, using the EAR model, one or more customer-satisfaction situations from his work experience. Be aware that the experience may be from another industry entirely (customer satisfaction is universal). 3. Listen carefully to the candidate's answers and document examples that demonstrate the personal skills that you listed in Step Two. After the interview is over, compare the attributes you revealed in the candidate to those already present in members of your staff. Seek to create balance among your team members. Step Four—Ask the five most important questions Finally, considering everything you learned about the candidate, ask yourself the five most important questions, the answers to which will lead you toward a final decision. 1. Why would this person be interested in mortgage loan origination as a career (motives)? 2. Will this person actually perform (attributes)? 3. How will this person perform (behaviors)? 4. Can this person perform (skills)? 5. How effectively will this person deliver in this position (job match)? A worthwhile investment Once you've made a decision and found a person who displays the qualities you seek, set the stage for retention. Ensure that the candidate is in agreement about what the job actually entails. Give a copy of the job description to the new hire to clarify your expectations and set standards against which you can measure performance. Identify areas in which the employee needs additional training, then provide that training and measure progress over time. Most importantly, when the job is performed above your expectations, recognize the accomplishments with appropriate awards. Hiring people who are best suited for a specific job and then rewarding them for superior performance are the secrets to moving your organization to new levels of success. Gone are the days of the easy loan. Only the most effective sales organizations will survive today. The successful broker can't afford to waste time, money and resources on loan originators who will not perform. Invest in a hiring process, like the one outlined previously, that is objective and evidence-based. The key is to match the person to the job. When you hire the very best people who bring the right talents to the job, you have the potential to create a true sales culture. Once in place, invest in your people. Give them the best training and the best managers. One of the rewards of managing people well is the satisfaction of helping them achieve their potential, and by building an organization of champion originators, you help raise the level of performance and professionalism for the entire industry. Over time, a solid hiring process pays big dividends in turnover reduction, helping you build a strong team that sells itself through referrals from satisfied customers. For each champion you can retain, you avoid the cost of the replacement hire and the savings goes directly to your bottom line. Paul Donohue, CRMS is a trainer, speaker and consultant to the lending industry. Core concepts and ideas for this article have been contributed by his strategic partner, Bill Brooks, as well as adapted from his seminar, "Hiring, Managing & Retaining Champion Loan Officers," and book, "The New Science of Selling and Persuasion—How Smart Companies and Great Salespeople Sell." Paul may be contacted at (800) 753-7767 or e-mail paul@pauldonohuepresents.com.
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