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The Next Generation of Mortgage Loan Originator

Casey Cunningham
Dec 29, 2011

The number of mortgage loan originations has shrunk in both number of units and overall dollar volume since its peak in 2003. Without saying, this decline spilled over and sharply depleted the number of loan originators (LOs) able to withstand the storm that has enveloped the industry. Yet the average age of an LO is higher than even five years ago. As the general population of LOs continues to age, the next challenge facing mortgage lenders will be to replenish the ranks. In the past, the practice has been to recruit the traditional LO from competitors; however, the impending shortage of LOs will force the industry to find alternative methods of supplying the next generation. Lenders who focus effectively on recruiting and developing sales teams from outside the mortgage industry will have a marked advantage in the marketplace. To be successful in this endeavor, they must have a clear understanding of their company’s value proposition and how they will leverage key managers within their organization. They must have a plan to replace their existing sales force. There are countless lenders who have attempted to hire and train their own with little or no success. Organically growing a new segment of your sales force requires effective implementation via a tactical model that blends mortgage strategies and best practices. The new sales professional model need not be an all or none proposition. Each company must determine the desired ratio of experienced LOs to the new generation LOs balancing the need for a strong stable sales team to generate immediate growth and a team properly positioned and poised for long term sustainable growth. While there are many factors to consider, there are some simple steps to follow to ensure a successful new sales force. Consider these 10 Steps for Building the Sales Force of Tomorrow. 1. Corporate hiring goal A company should begin by determining the allocation headcount of new LOs it plans to recruit, hire and train. As part of this initial step, it is important as well to identify the first and second year annual production goals for these new hires. Remember, these new hires are not “exposed” to the traditional knowledge of your current LOs. It is highly recommended you set higher expectations for these new sales professionals as they will work to achieve your minimums with little knowledge of the industry norms. 2. Job description and benchmarks/metrics Once your corporate hiring goals are set, it is time to identify the job description of the new LO. Upon hiring, will they fulfill the traditional model of an LO or will they be an assistant or junior LO for a specified period of time or permanent assistant to a top LO? As you establish benchmarks/metrics for the new position, remember that your corporate hiring goal is impacted. These metrics/benchmarks should be given serious consideration as these are your success indicators in your new LO program. Items to include in the job description: Number of units and dollars in production, number of sales calls or increase in referral sources/production for top LO, etc. These benchmarks should be determined with expectations for the first three months, increasing from the third to the sixth month, sixth month through the 12th month and again after year one. 3. Compensation Once the job description is complete, it is time to create a compelling compensation plan to support the acquisition of new talent. An effective recruiting campaign will position you to compete for the same talent as other Fortune 500 companies. Your compensation plan is obviously a huge component of the overall strategy. Create a compensation plan that meets the financial needs of your company and make sure that it has incentives to attract the highly-qualified talent you seek. 4. Ideal new candidate profile Upon completion of the compensation plan and job description, your knowledge of what is “ideal” in a new recruit is imperative to the success of your initiative. There are known key indicators of future success for new LO candidates. A careful examination of previous work history and a well-prepared interview guide will assist in uncovering desirable patterns of behavior, as well as obstacles or warning signs that would impede success. Consider the following traits and determine the “must haves” you will require in developing the next generation of your team: ►Direct sales experience with a track record of success to include a demonstrable and stable work history, direct sales experience, and excellent verbal communication skills ►An ability to build long-term relationships with referral sources, including but not limited to, realtors, builders, financial planners, CPAs and attorneys ►Candidate should possess a need for achievement in highly-competitive environments ►The ability to connect with customers for repeat business ►The ability to creatively market themselves and prior employers ►Be self-disciplined with fairly strong organizational skills ►Be a team player (many high producing LOs have participated in competitive sports) ►Demonstrate an ability to thrive when dealing with adversity and high stress situations ►Possess an existing referral database—a quality “sphere of influence” with people in their community 5. Training and assimilation plan Outside of the corporate culture and requisite on-boarding of new hires, internal training teams must be prepared to deliver immediate comprehensive mortgage industry essentials and advanced mortgage skills or determine the outsource provider of such training. Mortgage 101 and beyond should be implemented jointly with an effective assimilation plan encompassing, in-field mentoring, daily business practices, prospecting activities, weekly accountability meetings, business planning and other responsibilities within the scope of the job description. The training plan and assimilation plan should include a thorough training of the managers/mentors as well. 6. Manager/mentor qualifications The manager/mentor of each new hire is an integral part of the overall success of the new LO. Select company “champions” who strongly support the company mission/vision and are role models for your new LOs. The manager/mentor selected to fulfill this role must possess outstanding technical skills, industry knowledge and proper utilization and efficiencies of the company’s technology. They must have demonstrated the ability to motivate and inspire their current team or fellow loan officers via excellent coaching skills and/or previous success with rookies. The qualified manager/mentor does not need to possess the manager title, but must be an exceptional mentor. 7. Recruiting plan The key to locating qualified exceptional candidates is to take advantage of and optimize the numerous sourcing options available to you. From your existing database to current LOs (ask your team) branch out to other professions, including stock brokers, financial planners, insurance agents, finance managers or sales professionals representing the auto industry, restaurant management and real estate agents. Recruiting from these various sources will allow for a large, highly talented candidate pool. Remember, the best candidates will want to hear a clearly defined value proposition. The effective recruiter will be able to communicate compelling reasons to work for your company, what you offer and the company vision. 8. Initiate recruiting plan It is imperative that all components are in place before you initiate your plan and it is also important that you have established benchmarks by which you will measure the success of your recruiting. How many recruits yielded one quality hire? What marketing was most effective? Did one professional sector provide the most viable candidates? Was the set aside capital requirements sufficient? 9. Hire and train As the new hires arrive, the on-boarding and training program should clearly explain the expectations for professionalism, ethics and execution. The communication to the leadership team on the overall measures of the program is an integral part for the future planning process of new hires as well. 10. Assimilation process Conducted in tandem with the established training schedule, a great start for a LO begins by shadowing sales calls with the assigned manager/mentor for a period of 60 to 90 days. A probationary period follows where the new hire will, in turn, lead the sales call accompanied by the manager/mentor. Depending on the job description and responsibilities, the LO assistant or junior LO receives a separate but equally defined skill set they are honing. Providing immediate feedback through effective one-on-one meetings is crucial to avoid sales pitfalls and to acknowledge and reinforce positive sales and/or other skills. The more success a new hire experiences immediately, the higher probability of long-term success. The time to start is now It’s time to consider this strategy for the overall growth and health of our industry. All of the other financial industries (financial planners, stock brokers, insurance agents, CPAs, etc.) have attracted great talent and require comprehensive training and knowledge to have the privilege of reaching, serving and retaining clients. For so long, we have recruited and committed to hiring only those with previous mortgage experience and success believing it will transfer with the LO into a new corporate environment. The truth is, hiring is risky and experience, knowledge or pipelines do not guarantee success. We have clearly overlooked the benefits of “growing” our own. Our industry is ready and needs the next generation of LOs as they bring with them the following wonderful traits: Enthusiasm, new energy, an open mindset, motivation, loyalty and most importantly, unlimited production. We will no longer be beholden to the limited recruiting pool currently available. Recruit and train new LOs and you have opened your company up for ultimate success in the long-term. Casey Cunningham is president of Atlanta based XINNIX, a provider of interactive online training for mortgage sales and leadership development programs. She may be reached by phone at (678) 325-3501 or e-mail [email protected]
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Dec 29, 2011
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