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Top Five Tips for Building Your Loan Origination Team

Leif Boyd
Jun 07, 2012

Over the last few months, I have written a series of articles that I hope loan originators (LOs) are enjoying and learning from. This month, I continue the series with five tips that will help when you want to start building a successful team. Although every business is different, these are strategies that I have used and have seen others use. Implementing these tips has helped to make my business and others successful. 1. Know your business model inside out Building a successful team starts with knowing what you do. Simply put, if you don’t know what you do, it’s nearly impossible to hire the right people with the right skills to help. LOs should start by carefully documenting each step in their processes, from business development and meeting with clients to starting the loan process, closing and follow-up. It may take a few days or even a few weeks to clearly layout every step. Once processes have been clearly defined, an LO can go through and review each process asking themself, “If I personally do not do this, will it cost me money?” If it will cost the LO money, then that process cannot be delegated, if it will not negatively impact the bottom line, then an individual can be hired for those tasks. It is important to note that every step in the process is important. Attention to detail is essential for a loan to close on time. That said, the difference lies in what tasks help increase the bottom line and which tasks just take time. For all of the time-consuming tasks that do not help generate revenue, find an individual who can fill that need. Hiring for these processes will help give the LO time to focus on profit generating activities. 2. Determine what you can give up Similar to step one, this step involves a little bit of journaling. Spend one or two weeks documenting each unique action you take. Are you making outreach calls? Following up on referrals? Asking for referrals? Attending networking events? Filing loan documents? Meeting with clients? Talking with a real estate agent? Making copies? Write it all down and don’t forget anything. No task is too big or too small to include on the list. When every task has been written down, the LO can then go through and review the list using a specific labeling system to categorize each task. For example, I use a three-tiered approach: ►A: High Value, High Touch ►B: Low Value, High Touch ►C: Low Value, Low Touch First, notice I did not include “High Value, Low Touch.” Although it is a valid category, most tasks are better situated in the categories listed above. Once all of the tasks have been ranked by the LO, separate tasks labeled “B” and “C.” Tasks labeled “B” and “C” can be delegated to another team member or to a new hire. An LO can even write a job description based off the tasks with these labels. Tasks with an “A” label should be done by the LO. 3. Understand that it takes money to make money It is an age-old phrase, but many LOs and other business leaders often feel that it does not apply to them for some reason. There is a good reason why Fortune 500 companies do not have a staff of one. They have boards, vice presidents, managers, analysts and staff. These companies have realized that their jobs cannot be done alone and they are better, more efficient and more productive as a team. There are many fantastic LOs out there that need help, but some cannot fathom giving up income or reducing their income to obtain help. No matter how hard an LO works, there are still 24 hours in a day and seven days in a week. The only way to reach out to more clients and get more work done is to hire additional staff members to help with some of the tasks. I often tell LOs that hiring additional staff is not a cost, but an investment in their business. A busy LO cannot thrive or achieve their full potential without assistance. LOs need to focus their time on networking and prospecting for new business. This is one of the most important aspects of their job. If they are too busy closing loans, they do not have the time necessary to effectively grow their business. They can choose to hit a plateau and stay there for the rest of their career or they can choose to grow their business by hiring additional staff. 4. Have a plan, don’t wait until it’s too late Every house starts out with a blueprint, then a foundation is laid, walls are erected and eventually it takes shape and becomes a home. Why should an LO not follow the same basic principles? Start with a plan, build a firm foundation and eventually a thriving business will take shape. Sometimes, I see that LOs are so busy with their day-to-day workload that they have neglected to plan or build a solid foundation before erecting walls and putting on a roof. These business models often fail, the walls (support) were not put in the right spot, the foundation crumbled and the roof had nothing holding it up. How does an LO know when to start building a team? In a perfect world, an LO would start his or her business with a plan in mind of what level they would need to get to in their business before hiring. Once they hit the predetermined level, they would already know what tasks that person would help with and immediately hire that person, knowing their job description and knowing what skill set they were looking for. Unfortunately, we do not live in a perfect world and most LOs do not start their businesses with hiring help at the top of their mind. My recommendation is that when an LO notices that they have very little time to prospect on a daily or weekly basis, it’s time to hire immediately. Waiting two or three months is far too long. Prospecting is the most important part of an LO’s job, and stopping it for even a week or two could result in a significant loss of potential income. 5. Figure out how much money you are leaving on the table A good LO is almost always a good prospector. Take a look back at the last few months of prospecting. How many people and events did you go to before getting a new referral source? Let’s say that a successful LO needs to attend four events per week, meeting ten new people at each event for each new referral source. If the LO ends up missing one event a week because they are in their office doing paperwork, they have cost themselves one new referral source per month. Now, the LO must ask themselves what is one referral source worth? What could the LO do with 12 more referral sources over a year? My guess is that 12 new referral sources and the revenue they helped to create would far surpass the investment of hiring staff to handle some of the tasks that take an LO away from prospecting. 6. Commit to working on your business, not just in your business This is a bonus tip and goes directly back to the focus of my April 2012 article for National Mortgage Professional Magazine, “The Top Five Things to Improve Your Existing Business.” In order to grow a business and make it successful, you need to take a step back, see what worked and what did not work and put a plan in place to grow the business. This can be done with careful reflection or with a business coach, but it must be done and must be done honestly. Also, once an LO hires staff, they need to train them. Training helps establish what an individual’s role will be, who they should go to with questions and will help them do their jobs correctly the first time. Mistakes will be made, but each mistake offers a new learning experience for both the LO and their staff members. Utilizing these six strategies can help many LOs take their business to the next level. Hiring the right staff for the right tasks can lead to increased profit and even a better work/life balance. When done correctly, it can also reduce stress on the LO, giving them the ability to perform the tasks they love and excel at, while giving some of the other necessary tasks to a staff member. Finally, remember this: being successful takes a team of talented individuals working together to achieve a common goal. Leif Boyd is senior vice president of production for American Pacific Mortgage. Since joining American Pacific Mortgage, Leif has taken an active role in overseeing all aspects of mortgage origination, including the oversight of the production department and 114-plus branches. He may be reached by phone at (916) 960-1325 or e-mail [email protected]  
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