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
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
Hunt Gersin is president and CEO of Interactive Financial
Corporation based in Troy, Mich.