Hammerhouse LLC, a national recruiting and strategic growth firm for the financial services industry with mortgage sales and leadership placement at its core, has released its outlook on key hiring trends in the mortgage industry in 2011, as presented by Hammerhouse Managing Director Drew Waterhouse.
2011 mortgage industry hiring trends
►“Full -Doc Hiring” will be the new standard and will increase demand and competition to attract high quality leaders, individual producers and production teams: 2011 will be all about credentials and track record. Top producers and leaders will be more highly sought after by lenders looking to strategically expand their markets. Licensing will be in full effect in 2011, and will impose new rules, regulations and requirements on originators. In addition, it will increase the barrier of entry for individuals wanting to enter the mortgage business. There is no doubt that these requirements will reduce the number of qualified originators. For example in Florida, recent press reports state that the Office of Financial Regulation has approved approximately 1,100 mortgage loan originators licenses in the entire State, with only about 14,000 originators applying for the Nationwide Mortgage Licensing System (NMLS) by the Dec. 31, 2010 deadline. These numbers are down significantly from the total licensed originators last year, and over 300,000 at the peak. A proven documentable track record will be key in a lender's hiring process and decision moving forward (Full-Doc Hiring). This documentation will also be instrumental in providing a realistic picture of individual compensation for the loan originator in varying models in line with the implementation of the recent Fed Ruling on industry compensation.
►Model-matching will continue to be the key deliverable in hiring and retaining high-quality production staff: Lenders will need to focus on clearly defining and aligning their objectives with loan officer candidates to positively impact retention and ultimately the goals of growth and profitability for both the lender and a candidate. Model-matching will continue to be increasingly important in the hiring process in order to match the type and source of business as well as personal and professional goals of potential candidates with a lender’s overall value proposition. The goal is to minimize risk for both the hiring lender and candidate in order to establish a long-term, mutually beneficial working relationship.
►The value related to purchase production capabilities will accelerate throughout 2011: As home prices stabilize and mortgage rates stay flat or trend higher, refinance volumes will begin to decline and home purchase activity may begin to pick-up. Mortgage originators that focus on purchase business and have developed transferable relationships from referral partners and past customers will be in higher demand compared simply to high loan volume producers heavily weighted on refinances. The successful originator in 2011 will be technically proficient, possessing strong communication skills and a focus on high service standards to better position and set expectations to their borrowers considering the longer, more detailed process associated with providing a home purchase mortgage.
►The mortgage business will continue to be heavily regulated: In 2011 and beyond there will be an emphasis on loan quality, as well as the performance of an individual producer’s loans. This will create a significant opportunity for high quality producers and well-respected leaders to be heavily recruited. In this environment, we believe traditional recruiting will play an even larger role as lenders continue to look to add quality loan originators to increase market share and stand out in a very competitive market.
►Further consolidation in the market: A smaller overall market opportunity in 2011 will create an environment where there is more competition for less total business. This could increase the cost of doing business due to an increase in market compression. We are projecting M&A activity to increase for smaller to mid-sized lenders and for some to just shut down their mortgage operations due to the increased capital requirements, regulatory pressures and increased costs. Therefore, being aligned with an experienced leadership team that has a well-developed platform and value proposition will need to be thoroughly addressed by production professionals.
Through its unique model matching process, Hammerhouse helps both mortgage bankers and depositories expand top line revenue by adding experienced mortgage professionals. Since inception in late 2008, when the company was founded by a core group of search professional with over 30 years of combined experience of developing strategic partnerships with mortgage bankers and the financial services sector, Hammerhouse has helped its clients bring on board what equates to approximately $6.5 billion in annualized production volume.
For more information, visit www.teamhammerhouse.com.