First, it is clear that if you can find a top producer with plenty of experience who also meets all of your specific criteria you have set out as the perfect loan officer, hire that person! Who would not want an experienced top producer who is also ethical, profitable, a team player and produces a quality product? There does not seem to be much of a decision to make here.
On the other hand, since only approximately 10 percent of originators are top producers and only a portion of these are high quality, the task of finding one is not easy and frankly you are not necessarily likely to be successful unless you are paying bonuses, spending money on marketing dollars or spending a lot of time and energy networking. In reality, many times the choice is between either a high-quality novice or a lower quality experienced producer (typically we say one with bad habits).
In other words, many times the choice will be between someone we have to train, but does not have bad habits and someone we will have to “un-train.” Too many times in the recruitment process the sales manager makes the choice of the latter because they do not have the necessary training resources or the time to attract higher quality experienced producers.
In my mind, the key would be to focus upon quality individuals, experienced or not. Sometimes it is harder to spot lower quality within novices because they have no track record within the industry. They are more likely to seem perfect, but raw when they are new. However, if you take the time to really check their track record, you can separate the wheat from the chafe.
The goal should be a choice between quality with experience and quality without experience. I have to admit a certain propensity to those without experience. Why? For one thing, I have built my career around training and having that ability helped distinguish myself from other managers. In addition, I can remember being a “rookie” and people telling me that I should expect to earn $25,000 in my first year (probably the equivalent of $50,000 now). Well, I earned that in one month on my way to doing almost 600 transactions in my first 18 months. What if someone did not give me a chance because I had no experience? Some of the rookies I trained twenty years ago are nationally-ranked top producers now.
I was lucky that I had experience people to learn from. However, there was no training program. Today, there are plenty of training programs available. And of course, the licensing curriculum is basic as well. In other words, you don’t have to train them yourself. On the other hand, there are not a lot of programs that bridge technical knowledge and what they need to do in order to succeed. There needs to be programs that go beyond the basics and show an originator how to become an expert and market like an expert.
One also needs to remember that experience is a broad term. I had a manager tell me that he would never touch a rookie. I said—what if the candidate had ten years as a real estate agent and personally knew one-hundred other agents? What if they also had five years as a financial planner and ran their own business? Would you hire that person? The answer was, sure! Well, experience in mortgages is not the only qualifying experience. One should also look at sales, real estate, financial and even mortgage operational experience. Some of the best loan officers started out as processors because they know what gets files approved.
Finally you need to determine how you can weed out those who have a quality background but are not committed. For that I prefer challenges. Ask any rookie if they have the motivation to succeed and they will say yes. How many actually will become top performers?
Think about your long-term experience in interviewing. Everyone’s view of him/herself includes the hope that they will succeed in the future, even if they have not in the past. One of the most important attributes of success is the ability to be honest with yourself about your shortcomings. The first step in recovery in the Alcoholics Anonymous program is admitting you are an alcoholic. If you never get through that step, there is no chance of recovery. Well, most of your prospects are still failing step one because they don’t know what they need to fix or are not committed to fixing what they know is a problem. And when you hire someone who is going to fail, you are wasting very, very precious resources.
What are examples of challenges?
► Have them go through the licensing course and take the test and pass BEFORE you hire them–even if you work for a bank.
► Hand them a book (I use the book I have written, The Book of Home Finance) and ask them to call you back when they are finished and ready to take a test on it. If only two in 10 people return—at least you have eliminated eight who tend not to follow-up. Of course the exercise does not measure who might have call reluctance.
► Ask them to put a list together of at least three hundred people they know or are connected to. If they don’t have an extensive sphere, why would you hire them? Being a rookie and having to cold call or purchase leads is a lethal combination for failure.
► Have them get a letter from a Realtor saying they will use them if they get in the business. This will test how well they can leverage their sphere and measure their propensity to overcome call reluctance.
Hire a rookie or hire experience? Instead focus on quality. If you would like advice regarding how to put resources in place to support those who are inexperienced, don’t hesitate to contact me.
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.