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Are Your Loan Officers CEOs?

Dave Hershman
Apr 22, 2013

Yes, this is a management column. But, as we have pointed out time and time again, you cannot be a great manager unless you hire the right people. Or, to put it another way … if you hire the wrong people, you will never become a great manager. We all know what to look for in a loan officer hire—a hard worker who is an ethical, team player, and is professional, etc. Today, I would like to add a critical one that many managers overlook. Why do they overlook this issue? Because they see loan officers as salespeople. Actually, I see them as CEOs. When we counsel managers, we counsel them to hire candidates that understand that they are not applying for a position but to start a business. The manager must make these candidates understand what investment must be made for each individual. In effect, instead of advertising in the help wanted section of the newspaper, perhaps they should be advertising in the “Business Opportunities” section. I brought up this topic with Nathan Burch, president of McLean Mortgage Corporation in Virginia, and Nathan agreed with this view. “We invest a lot in each loan officer we hire, from technology to licensing to training and marketing support,” said Nathan. “Yet our most successful loan officers, by far, are those who add to that investment significantly. There almost seems to be a multiplication effect.” Before you hire a loan officer, ask them about how they have invested in their business. And remember that investments do not include only money. They include time, money and energy. Ask them to read the segment below and then relate how it describes them. Do you view yourself as a salesperson? Or, do you view yourself as the CEO of your own business? If you really want to lead the industry, you must view your business as your company. That also means you must invest significant amounts of your money, time and energy in your business. And you must make this investment up front, not some time in the future. For example, we cannot ell you how many originators say, “I know I need this , but I need to close a few transactions first.” Then they go months or years without whatever they need. They are running businesses that are always going to struggle. And most of them will eventually fail because companies that are underfunded do not do well. If you have worked for such a company, you know what we mean in this regard. Those who are on "pay as you go" status never seem to reach the top. So here is the basic question: Are you investing what you need to in your business? Imagine if you were opening a retail store or restaurant. You would invest many thousands of dollars and hours before you rang up the first sale. This would include hundreds of hours of research and setting up the location. You would purchase equipment and inventory. You may pay a multi-thousand dollar franchise fee. And when it was opened, the hours needed to run the business would increase substantially. In the end, you would still be in a situation that poses a major risk because start-up businesses tend to have a high rate of failure in the first few years. Sales personnel do not necessarily have to invest as many hours or as many dollars as one might starting a restaurant. But the concept is much the same. What do you need to invest in? Marketing, education, technology and more. Perhaps it is a laptop. Or it is the time to learn how to use a software program you have purchased for your laptop. Have you ever purchased a software program and not learned how to use it? In this case you have invested the money but not the time. You must make an investment of all available resources. Imagine running a store without the technology you need. Imagine running a doctor’s office without the knowledge you need! The investment needed would vary for each person and each company. For example, an insurance veteran of eight years moving into the mortgage industry would not need to learn about available insurance coverage. On the other hand, someone moving from government should spend the time to learn this aspect of the industry. After all, if you are serving homeowners and prospective homeowners, you will need to become an expert in all aspects of the real estate and financing processes so that you can deliver maximum value to your clientele. Some will need a home office. Others will need a marketing or processing assistant. It is this needs analysis that is an all-important research step. For example, within the education category some may need to learn how to better utilize a computer. Others may need help learning how to communicate verbally or in writing. Still others may need public speaking training. Those who wait for their employers to give them all the resources to be successful will typically have a long wait—forever. Success comes from within. And the key to this success is finding the right elements of investment that are needed for each individual. These elements include time, money and energy. You cannot make it with just two out of three. Our question is … have you made the investment that is necessary to sustain and grow your business as the reigning CEO? There certainly is a big difference between an employee and a CEO! 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 Dave@HershmanGroup.com or visit OriginationPro.com.
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