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The Telephone Doctor: Emotional leakage

Jun 10, 2007

Back to basics: The importance of quality management and recruitmentHunt Gersinwell rounded, qualified personnel working hard, sharp, acute and active in moving the business forward A well oiled machine operates best when it is running on all cylinders. The same theory holds true for businesses. If you think in terms of a common pyramid diagram, the organizations that are built from the ground up with well rounded, qualified personnel working hard at the base supporting their superiors all the way up to the top have the best-laid plans for success. Someone who is sharp, acute and active in moving the business forward must represent the tip of the pyramid. When applying this rather basic, yet important, model to the mortgage industry, the same theory holds true, but with extra layers in between. For a mortgage leader who oversees an entire branch network, each branch should be viewed as acting independently as smaller pyramids, but lying in the shadow of the grand pyramid. Each branch should enjoy the entrepreneurial spirit as if it was working as a sole tiny entity, yet pleased to have the far-reaching technological and industry support of the corporate level of the lending organization. This is not rocket science, so why even bring it up? You have everyone in your organization in every branch working toward the same goal, and your company will likely be rewarded with success. Fine. We get it. What's your point? My point is that, albeit a rather simplistic business model, I never stop being amazed on how so many mortgage companies do not operate in such a manner with the most elementary of principals. We are a couple of years removed from the height of the negative backlash associated with net branches, but for many borrowers, the stigma still remains. So, how does a lender become successful in this world and prove to future homeowners that your company is a reputable one as well as one that is worth their business? The answer you go back to basics. Forget, for a moment, the high volume of loans. Throw out the notion of increased revenue. Just for a second, erase the idea of the bottom line. Remember what it was like when you started out in the lending industry. Now look inside your organization and see if you have created the same atmosphere for your work force. People generally want another reason to get out of bed in the morning besides a paycheck. A good mortgage company should have a system of incentives formally in place to reward branch managers and branch operators who continuously reach pre-established goals. Originators should be rewarded for not only a high monthly volume of loans, but also for successfully dispersing high quality loan products properly tailored to individual borrowers needs. Rewards can vary from anything such as cash bonuses to extra paid vacation days, to plaques or trophies given at special company ceremonies. A system of incentives is just a small piece of the puzzle in the grand scope of creating a work environment where employees are genuinely happy at working toward a common goal. But there needs to be even far greater pieces in place. A good mortgage company should provide the best technologically advanced loan origination systems for its branch network whether that is Calyx Point, DataTrak, BYTE.com, Fidelity Information Services Empower, Encompass or any other comparable loan origination system on the market. A good infrastructure goes a long way in maintaining quality output. Perhaps the most important part of the puzzle is the people themselves. Does your mortgage company have highly educated, well trained, hard-working personnel throughout its branch network? One way to achieve this is by making sure your organization has strict recruiting standards across the board. A standard recruiting platform may consist of an initial screening process followed by a more formal written application and a credit and background check. Again, it is not rocket science. But when dealing with individual branch applicants, it is important to be extremely thorough. If an applicant's personal finances are not in order, how will that reflect on the type of business they conduct? A model employee should exemplify the highest of standards in all aspects of their life. To steer away from the issues of yesteryear in terms of net branches, strict guidelines need to be adhered to. Besides now being illegal in many states, no respectable lender should consider applicants who are literally working out of the basement of their home. Proof of an office lease is a good way to counter this problem. An ideal branch should have an established office with a team of working professionals. In terms of branch leadership, it is recommended that the branch manager be someone with an extensive knowledge of the mortgage industry with at least five years of valuable experience and a proven track record. Staffing your net branches from the corporate level often assures greater control and opportunity for success. This includes originators and branch managers. Many mortgage companies allow hiring to be done at each branch level. Unless each appointment is confirmed with the corporate level, you may find over time that not all your branches are still sharing the true company goals and visions as set forth in the mission statement. There is no doubt that branches must maintain a feeling of operating in an entrepreneurial atmosphere. That is part of the idea of having a net branch system where the origination process is localized in communities across the nation. But in order for a high level of quality to be maintained throughout the organization, all employees must be accountable to the company guidelines and principals. Having a direct say in the hiring process is a good way to ensure that this feat gets accomplished. Thinking long term, I cannot stress enough the importance of promoting from within as often as possible. No matter what line of business you are in, as a company employee, you need to be able to see the light at the end of the tunnel or the next step. In addition to the incentives previously mentioned, an employee likes to know there is greater reward around the bend if he continues to exceed the expectations of the stated job responsibilities. If a branch manager position opens up, and you have an originator bringing in monthly loan volumes consistently 25 percent or greater over established goals, you'd better consider that individual for the position. I can't count the number of times I have seen morale drop when a well deserved employee is passed over in favor of someone from outside of the organization. Perhaps that employee's experience is not yet up to par, but that is why it is important to have specific guidelines from the beginning such as a five-year minimum for branch managers. To sum up, quality personnel and quality managers, along with a wide array of loan products and advanced technology, equals a quality mortgage business model the best built pyramid and, in other words, success. Yes, it's a simplistic model, but it's this return to basics that needs to be on the minds of all mortgage companies. We are in an environment today where a lot of people are on their way out of the mortgage business. Mortgage companies are looking for proven producers, particularly at the management level. With a commitment to quality recruiting and hiring practices, the best employees come forward. Without it, the wheels come off. Strong branch management is key, but in order for the mortgage company to continue on a path of success, the quality components must be in place from top to bottom. It is only this way that your company will operate like a well oiled machine running on all cylinders. Hunt Gersin is president and CEO of Interactive Financial Corporation based in Troy, Mich.
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