The Management Dilemma
I still remember two events that happened which shaped my career in the mortgage industry some 30 years ago. Event number one involves my entry into the mortgage business, which was as random as it could be. I had worked in government out of college. Six years in the State of North Carolina Attorney General’s Office, during which I also finished my master’s degree and worked on a Ph.D in public policy. My next two years were spent on Capitol Hill managing an office for a congressman. As the two-year term ended, I was looking feverously for opportunities. I happened to mention this fact to a group of people I played racquetball with on a weekly basis. It turns out that one owned a real estate company and another ran that real estate company’s mortgage entity. One was a mortgage insurance representative. I didn’t even know what mortgage insurance was. The owner of the company said to come down and talk with them. When I met with the president of the mortgage company, he “encouraged” me to become a Realtor. Translation: I am not really that interested in having you as a loan officer. When I went to see the owner of the real estate company, he said, “You will become a loan officer.” I went back down to Tim and said, “Al said I should become a loan officer.” Tim said, “I guess you are going to become a loan officer.” I came in the first day and a staff member said, “You are a loan officer, right?” I guess it was a mistake, but I said, yes. She said, there was someone in the waiting room that needed a loan application taken, the loan officer did not show up. Right there I should have questioned something, but it is the first day and you don’t rock the boat on day one. She gave me a bunch of forms and I took them, and as I walked away, she said, “Keep in mind, it is a VA loan.” I thought to myself, no problem. I am, after all, from the state of Virginia. When I was done, I gave the forms to the staff person who turned out to be an underwriter. She looked them over and told me that I was going to be a great loan officer. I asked her how she could know that. She replied, “Because you filled in all the blanks on the forms.” I laughed because I thought she was joking. Little did I know … Event number two came about 18 months later. My boss who hired me was gone and another president of the mortgage company was hired. In that 18-month period, I had originated and closed more than 550 loans. I was far and away the “top” producer. The new president had big plans to expand the mortgage company. He asked me if I wanted to manage. “Sure, no problem,” was my reply. Of course, no one told me what a “manager” of loan officers actually did. So I called the Mortgage Bankers Association (MBA) and asked for their books on management. They said they had books on secondary, underwriting, sales and a host of other topics. No books on mortgage management existed. So not only did I learn to manage in this industry on my own, but in my third year in the industry, I also wrote the MBA’s book on management, Managing a Branch Office. Don’t call the MBA for it because it’s out of print. That is how old I am, I have books that I have written that are now out of print. Now, let’s get back to the management dilemma. Training programs for loan officers in this industry are pretty much non-existent. It is true that the government now asks us to get licensed and requires training, at least for those who don’t work for a federally-chartered bank. But this licensing training has nothing to do with a loan officer being successful at their job. Training for managers is even less prevalent. Keep in mind that these are the most important leaders in our industry. They are supposed to lead the rank and file—those who are on the frontlines. They are supposed to train the loan officers, processors and other operations personnel, and they get no help in doing their jobs. When I held national management conferences across the nation, I had hundreds upon hundreds come to me and thank me profusely because they felt alone and lost. Think about it. How do you become a manager or owner in this industry? Usually like me. 1. You become a loan officer without any training. Usually because you know someone in this industry because most companies don’t want to train rookies. If I had knocked on the door of 10 mortgage companies 30 years ago, none of them would have hired me. 2. You become a top producer. Perhaps you are more competitive, a harder worker or just fall into the right situation. I think for me it was the right situation being “inside” a real estate office. 3. You are then promoted to manager. Or, you start your own company because you get little guidance or support from your present manager. There you are—a good producer. You are probably missing a few fundamentals of production. Now you must teach others to do what you do. And here is the problem—you are still producing. Now you must produce, recruit, hire, train, coach, administer, fight fires and more. If I count all of these, it would be at least five full-time jobs. Think you can do any of them well? Most producing managers make 70 percent of their income from personal production. Therefore, where are you going to spend most of your time? For those not good in math, that leaves 30 percent or less on the other four jobs. And you wonder why I felt that management training was important? And that is why I have teamed with National Mortgage Professional Magazine to deliver a column on leadership for mortgage managers. That is also why I ask that I not set the agenda each month. It has to be what is important to you. E-mail me at [email protected] and let me know what you are would like to see in this column. Dave Hershman is a top author in the mortgage industry with seven books published, as well as hundreds of articles. Dave has delivered hundreds of keynote speeches, seminars and schools for the industry as well. He may be reached by e-mail at [email protected] or visit OriginationPro.com.