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2012 Outlook on Key Mortgage Industry Hiring Trends

Drew Waterhouse
Jan 10, 2012

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 2012. The transition to a purchase-oriented business model that will last for decades will fundamentally alter the industry and the careers of the people in the business. Leadership in the lender ranks may change, but one thing will remain the same—it will take talented, skilled originators to acquire and close the loans.” Some of the key mortgage industry hiring trends for 2012 include: ►Top producers will continue to be on the move in 2012: There will be an acceleration of movement of top producers toward the best possible model-matched organizations for their business. Specifically, top originators will be most sensitive to: 1) Strong leadership teams; 2) Clear and consistent company value proposition; 3) Strong capital position; 4) Strong loan quality/performance; 5) Leading compare ratios; and 6) Multiple investor channels. ►Competition for producers will lead to enhanced value propositions: Lenders will invest in programs and systems to attract and retain the best producers. There will be a clear distinction between organizations that have a clear and consistent value proposition for the self-sourced originator and those that do not. Originators will focus on gaining efficiency to improve work life balance and to grow their business. Examples of possible lender investments to accomplish this include: 1) Marketing platforms; 2) Presentation tools; 3) Business coaching and life planning; 4) Systems and systems integration; and 5) Proactive product enhancements. ►Management teams will be shaken up: With purchase business as the mandate, lenders will shake up management with selective or whole-team changes. The “era of refinancing” is over in the mortgage industry and management that can effectively respond to that reality will be in high demand. ►Regulation will become (more) normalized: Enforcement actions based on previously new regulations will help to normalize operations as expectations become clearly known. But many new regulations are still to be written and implemented. This will take time and will not be pain free. One likely outcome will be more consistency between depositories and non-depositories such as bank originators going through the state licensing process for each state in which they want to originate. ►Consolidation will continue: The changing mortgage market and regulatory burdens will force some lenders to “strategically exit” geographic markets or origination all together. The characteristics that created a rational case for getting into the mortgage business in the past will now support their getting out. Others will seek to grow market share through purchase or attraction of the best talent impacted by the changes. Still others will seek to leverage the better production platforms of competitors and seek buyouts or mergers. The watchwords for 2012 are “lean and mean.” ►Execution is the word: Most producers are accepting the changes in compensation and extra up front work it takes to do a loan. However, top producers simply will not stand for anything less than outstanding execution from their lenders in all areas of processing and operations. The “unit value” of each application and the corresponding “lifetime value” of each client is simply too high to allow execution failures in related to processing, underwriting, funding, etc. Those firms with a history of superior execution will be in position to attract the best origination talent. ►Responsible and well-capitalized organizations will continue to infill and expand: The year 2012 is going to be another great year for mid-market mortgage organizations. Both established and new organizations entering the market will capitalize on market restructuring opportunities. This will include adding incremental production to existing offices as well as strategic expansion into new markets around “high-quality” teams and individuals. But “high-quality” is a two-way requirement. Top, career originators will only choose to leave existing situations for lenders that can demonstrate a culture of integrity and secure finances. Drew Waterhouse is managing director of Hammerhouse LLC, a national recruiting and strategic growth firm for the financial services industry with mortgage sales and leadership placement at its core. Drew may be reached by e-mail at [email protected]
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