You’ve been engaged in the mortgage industry for many years. You’ve achieved some notable successes, but your business development has stalled. You may feel overwhelmed by rapid changes in the industry, new regulatory requirements and just the competition inherent in today’s economy.
The question then becomes, “How can you, as a mortgage branch manager, take your retail operation from good to great?” This article will show how an analysis of some fundamental business processes and structures will help you achieve resounding success, both in the industry as a whole and in your local environment. Consider the following six actions to affect positive change.
1. Analyze your business model
Are you a purchase shop or refinance shop? It is difficult to excel at both. You are better off specializing in one, branding your branch accordingly and recruiting your staff with this focus in mind. Too much time and energy is spent trying to teach loan officers to call on realtors for purchase referrals when their past experience was sitting at a desk waiting for phone calls from a refinance mailer. Become a specialist!
Creating a unique niche and differentiation from your competition will reap rewards in areas beyond customers and staff. As you become an expert in both the industry and in your chosen specialty, you will find opportunities for publicity in trade magazines, business events and speaking engagements, and you can maintain your competitive edge through continual learning.
2. Analyze your staffing model
Do you spend most of your time helping the low producers get their loans through the system and putting out their fires? Does your part-time staff complain more than they produce? Is your turnover rate rising? Many managers make the mistake of hanging on to low producers to fund a loan or two every other month. If they amass enough of these employees, the funding will create enough revenue to pay the bills … so they think. This short-sighted viewpoint impedes creation of a successful branch by retaining ineffective staff.
You should continually measure “loans per originator” (LPO) and hold your staff accountable to a minimum standard per quarter. Use LPO as a benchmark to gauge the efficiency of your operation. A high LPO compared to similar branch models signifies a well-run, professional organization.
Set S.M.A.R.T goals for each of your employees (Specific, Measurable, Attainable, Relevant, Time-Sensitive). They will produce more and achieve greater job satisfaction as a result. Conduct annual employment reviews with each employee. Make them thoughtful, timely and honest. Consider terminating your lowest producing LO at least annually to establish your branch as a production-oriented shop and push all employees to become more successful.
“Thinning out the herd,” a time-proven sales strategy, works because mortgage customers prefer professional, successful LOs, and successful LOs want to work at a branch with other successful loan officers. Pruning your staff helps to build branding and reputation. If you want a best-in-class branch, you must hire and retain best-in-class staff. You must select quality processors as well. It will become more difficult to recruit and retain the best LOs if you settle for a mediocre processor.
3. Analyze your commission, bonus and rate sheet pricing
Stay in the middle in your market so you are seen as competitive. Quality processors and LOs are looking for a complete employment package in addition to high income. Can their loans be approved and closed in your branch? Can they get them closed on time? Do they feel supported by the branch manager? Do they enjoy coming to work? These considerations affect recruiting and retaining quality people. Just paying the highest splits or bonuses is an unsustainable business practice and often leads to failure.
On the other hand, your staff will also recognize the imperative of the bottom line, both for your organization as a whole and in their individual situations. The working environment plays a pivotal role, but, in the end, your commissions and bonuses must stay competitive with the rest of the industry.
4. Create and follow a consistent recognition plan
Sales people, notorious for being motivated by money, are also influenced by recognition. Post production numbers at least weekly, both in the office on a white board and via e-mail to every employee. Stack rank them to stimulate competition. Create a simple monthly prize, such as a gift certificate to a local restaurant, so winners can share their success. Recognition provides effective and cost-efficient motivation.
Recognizing valuable employees, of course, goes beyond contests. Reinforcing positive actions and discouraging negative ones should become a daily element of the environment. Also, different people respond to different approaches. While some may require a firmer hand, others react better to encouragement and are dissuaded by a forceful attitude.
5. Embrace online publicity for your branch, yourself and your staff
Use Facebook and Twitter for starters. People do business with those they know, like and trust. Telling people about your team and mortgage business will increase production. Social media sites also provide great venues for “asking” for business. Building your business through your online sphere of influence represents another proven strategy.
Go beyond social media after you’ve set up the basics. Consider an e-mail marketing campaign using Constant Contact or MailChimp to create an attractive newsletter template. Starting a blog, especially one hosted on your own Web site, can improve search engine optimization (SEO) by creating links and attracting visitors to your site.
6. Determine if you are using the right lending platform
As a broker, should you align yourself with a mortgage banker or a bank? If you are already allied with one, can you and your team become more successful by joining another company? Do you delegate to corporate to focus your energy on origination? Often, mortgage brokers become consumed by the compliance and licensing requirements necessary to stay in business and end up failing as a result.
Brokers are being squeezed out of competitive circles as the big banks are less likely to interact with lower volume, third-party originators. Becoming a branch of a mortgage banker or bank can increase product and guideline flexibility. Many allow both in-house mortgages and brokering leaving very little business on the table.
LOs find it easier to sell the Good Faith Estimate (GFE) to their customers if they are with a mortgage banker or bank providing an in-house loan. These factors play a large role in recruiting and retaining best-in-class staff for your branch. If you do make a shift to another company, do your homework to ensure the right cultural fit.
A successful branch manager must analyze fundamental issues to drive their organization from good to great. Your business model, staff analysis, payment structure, recognition, online publicity and lending platform should all be specifically addressed in a thoughtful and continual process. You should enjoy learning more about the industry and implementing the results of your study. Branch managers should look forward to each day’s challenges instead of complaining about the obstacles in their way.
Good branches can be found anywhere. To excel, you must commit to a thorough analysis of your organization’s strengths and weaknesses. Then, identifying and implementing customized changes can transform your branch to achieve greatness!
John Cate is director of branch support for Guaranteed Home Mortgage Company. Founded in 1992, Guaranteed is a licensed mortgage investment and banking firm comprised of more than 300 mortgage professionals lending in 27 states. He may be reached by phone at (813) 444-1035 or e-mail [email protected]