You have all heard that companies are either growing or they are dying. That’s probably overstating it a bit since we contracted with the market during the downturn and have been thriving. But, it is true that more companies—and leading loan originators—are looking for opportunities to grow. For companies like ours that maintain national networks of mortgage banking branches, that means growing out your branch network.
For many, growing has proven a challenge in an environment where much of the top talent has fled to greener pastures. We are all competing for fewer top loan officers. The good news is that those who are left are more particular about the companies they work for because they are the good ones, the ones good enough to survive in the lean times.
When firms like ours go out in search of new talent, it’s easy to become focused on a person’s price. We have found that to be a mistake. For most real professionals, the initial offer isn’t as important as the potential for future income and it’s not nearly as important as some other elements of the deal.
Most professionals we deal with are looking for a branch relationship that is a true partnership. They want to see real leadership within the company and feel that the people they are going to be working with on a day-to-day basis who will be underwriting their loans will be there to support them. They ask questions about corporate culture and support structures. They ask about how the company gets loan transactions done.
We’ve done a lot of work over the past few months, honing our compensation system to make it work within the new loan originator (LO) compensation rules and still be attractive to the people we want to partner with. That’s important to the people we’re recruiting to build out our branch network, but not as important as the relationship that will enable them to earn more in the future.
The other serious challenge our industry faces today relates to compliance. We’re living and working in an age of unprecedented regulatory oversight and lenders cannot afford to make a mistake. That means everyone in the organization has to be well-trained, properly licensed or certified and routinely checked for compliance.
Any business owner interested in growing a branch network must bear in mind that the liability for non-compliance rests with them. Any mistake made by any team member will ultimately come back to them. That makes compliance a top concern and can stand in the way of growing a network. But it shouldn’t.
In today’s environment, growing the network goes hand-in-hand with a complete dedication to training and supporting your branch managers and their teams, especially as they come on board.
Often, that means working very closely with state regulators to bring on a new branch in another state that has an existing pipeline. There are many steps that must be taken in the right order to make the transition smooth and legal. It requires a lot of cooperation, both internally and with external partners and regulators. It’s a great first test of a new branch partnership.
One of the things we have noticed is that we rarely recruit new branch managers alone. They almost always come with teams of good people they have attracted previously and who have, together with them, built a foundation of mutual success. In many ways, this makes it easier to build out the network, but in terms of meeting the expectations of a new team, it can make things more challenging.
That’s why it’s so important during the early days of assimilating a new branch and installing a newly recruited team that your home office team realizes that it’s a critical time, a time for all hands to be on deck and doing what they can to smooth the transition. It’s important that the existing partners, loan referral sources and other important contacts of the new team realize at once that their partner’s decision to join your firm was a good one. If they question that, it will negatively impact their pipeline and future business potential.
In the end, it’s all about the many relationships that make up the growing company. If those are valued and managed well, all of the other obstacles can be overcome and a company can grow, even during the most challenging of times.
Stewart Hunter is core values officer and Jim McMahan is president of Dallas-based Benchmark Mortgage. You can find them both online at www.iambenchmark.info.