In the lyrics of the popular 1950s song “Que Sera Sera,” we are told that “Whatever will be will be, the future’s not ours to see.” However, that sentiment does not work in today’s mortgage banking industry—especially in regard to identifying and shaping the next generation of originators.
“We have an industry that is aging, and we need to do more to attract younger people who want to get into real estate finance,” said Jeff Schummer, vice president of education for the Mortgage Bankers Association (MBA).
“If we really want a next wave of people working in the industry, we need to be able to train them upfront, rather than by osmosis,” said Andrew Peters, chief executive officer of First Guaranty Mortgage Corporation, headquartered in Tysons Corner, Va.
Increasingly, mortgage banking companies are relying on proactive recruitment of new graduates and internal mentoring programs to help create the next generation of lenders. Although there are a number of different strategies involved here, their core goal is the same.
“We play such a critical and noble role in the U.S. economy, and it is really easy to sell a career in this very exciting industry,” said Debra Still, chief executive officer of Denver-based Pulte Mortgage and former chairwoman of the MBA.
Pulte Mortgage has been among the leaders in proactively recruiting new since the mid-1990s, and Still noted that her company is on the lookout for “college graduates with that right attitude and the right aptitude that will go through Pulte’s 90-day training program.” During her tenure at the helm of the MBA, Still advocated for recruiting efforts to ensure diversity and inclusion as part of the industry’s outreach.
“Not only do we have to attract and engage new talent, but we need to make sure that our industry is a reflection of the new consumers,” Still said.
What’s a lien?
But this raises a thorny question: Do today’s college graduates know anything about how this corner of the economy operates?
“Some college graduates came in and knew nothing about mortgage industry,” said Jessica Hammon, vice president of talent acquisition at Troy, Mich.-based United Wholesale Mortgage (UWM). “One kid came up to me and asked, ‘How do I become an account executive? That is what I really want to be.’”
The MBA offers educational courses, but only a small number of colleges have curriculum that focus exclusively on mortgage banking. One of a handful of schools that provides a degree in this subject is Irving, Texas-based North Lake College, which offers an associate degree program. Many of the enrolled students at North Lake are already veterans of the mortgage world.
“Half of the students at North Lake worked 10 to 15 years in the industry, but they were not promoted because they did not go to college,” said Keith Baker, program coordinator at North Lake College. “More and more companies require some sort of college education to get promoted. And very few companies hire underwriters with no experience.”
Baker said that the recent problems that plagued mortgage banking did not help pique many students’ curiosity in exploring this field.
“We had a hard time in 2009 through 2011, when we were down to 100 people in program,” said Baker. “Now we’re up to 350, and we also have online courses.”
But on the whole, very few college students leave school with any educational training in the basic tenets of mortgage banking.
“I’m a good example of someone who landed in the business by circumstance,” said Peters, whose company recently launched the online FGMC University, a program that includes Webinars, training modules and testing. “We have been to local community colleges, but they don’t have mortgage banking training. Our online program is good for new entrants and even for current staff trying to get up to speed on the CFPB and compliance issues.”
Making the grade
There are numerous variations on how mortgage companies bring talent into their fold. For example, at Pittsburgh-based PNC Mortgage, a combination of academic excellence and personal initiative is viewed positively.
“When we send managers from PNC Mortgage to the colleges to do first round of interviews, where we look at GPA averages and whether the students held leadership positions on the college campuses and outside,” said Catherine Grover, PNC Mortgage’s senior vice president and director of strategic initiatives.
At Hallmark Home Mortgage in Fort Wayne Ind., recruitment efforts do not focus on newly-minted graduates.
“I prefer not to see them fresh out of college,” said Deborah Sturges, president and chief executive officer at Hallmark. “I think it’s important for an individual to have some experiences out of college. I tend to identify people with a job or two—they’re more serious minded in starting a career. Oftentimes, when people graduate from college, their expectations are not developed and they are not sure where their strengths lie.”
Danvers, Mass.-based Mortgage Network works with local universities to identify potential talent, but the company also places a strong emphasis on referrals and recommendations for new recruits.
“We want someone to recommend a potential hire,” said Brian Koss, executive vice president of Mortgage Network. “We don’t take out big ads. We take recommendations from all of those we work with—vendor partners, real estate agents, even borrowers.”
Perhaps the most unusual recruitment effort came via a conversation that Mike Hardwick, president of Brentwood, Tenn.-based Churchill Mortgage, had with his son 18 months ago. Hardwick’s son had just graduated from college, but was complaining about the tight job market and the lack of opportunities for newcomers to the work force. As a result, Hardwick created a mortgage training program at his company, with his son and four other recent graduates as the first wave of recruits.
“We’ve been encouraged by progress they are making,” said Hardwick. “Unemployment is still high and underemployment dramatically too high. There is a lot of young talent out there for a business like ours.”
How things work
Most programs offer new recruits the chance to work in various departments within the company, in order to determine which aspect of mortgage banking would best fit their skills and personalities.
“We start them off in the processing area of company for seven months,” said Hardwick. “From there, they move to underwriting, then secondary marketing. After three to six months training in each department, they receive an overall broad-based knowledge of the mortgage industry. After two to three years, we sit with them and the department heads to see where they will be best-suited in the company.”
But many new recruits are caught off-guard by both the complexity of their newly chosen profession, and frequently, by the corporate cultures they enter.
“Even if one comes in with mortgage knowledge, they are not always successful navigating a matrix organization and dealing with a client base,” said Teresa Blake, practice director at Wipro Gallagher Solutions, based in Franklin, Tenn. “This is another way to help people to help themselves.”
Blake’s company responds to this challenge by pairing new recruits with a “buddy,” who is nominated from a specific part of the company to aid the recruit in learning the ropes. “This helps them ramp up faster,” added Blake.
Yet, as UWM’s Hammon points out, the company’s needs also need to be part of the balance within this process.
“We need to step back and evaluate the situation,” said Hammon. “We are looking to develop strategies for the future. We are in it for the long haul—and for the individual out of school, we hope they’re looking to stay.”
“You need to think through how to bring new talent on board,” said Kristi Kovalak, director of marketing at St. Louis-based Lenders One. “For example, you need to have the right tools in place to make sure they succeed. The new college graduates are used to working online and by mobile devices—they are not the pen and paper people.”
Kovalak added that the lengthy training process needs to be supported with a compensation package that will ensure new recruits will want to stay with company.
“Many college grads are not willing to make minimum wage for six to nine months,” she said.
But Eddy Perez, president of Atlanta-based Equity Loans, points out that even if a company wanted to rush a new recruit into origination, government oversight would not allow it.
“Due to regulatory and licensing requirements, new recruits cannot start straight on sales,” said Perez, noting that the lengthy training process is both a financial and time investment by companies. “It takes a year or two before they can see a return.”
A more experienced worker
However, an emphasis on youth, combined with continued tightness in the job market, has created something of a backlash for older individuals that are eager to get work in the mortgage field.
“Age discrimination is a problem,” said North Lake College’s Baker. “Older people who get training here have trouble getting placed within their expectations.”
And not every firm is eager for untested youth. One company that favors more experienced professionals instead of college graduates is Fay Servicing, which actively recruits former loan originators. Patrick Norton, senior vice president of servicing at the Chicago-based Fay Servicing, believes that originators can use their sales experience to focus on the solutions-driven work required in servicing.
“We don’t have to teach people about loan-to-value or debt-to-income ratio,” he said.
Norton added that Fay Servicing fields its older employees via referrals and active outreach to mortgage companies that are initiating layoffs.
Lenders One’s Kovalak acknowledges that hiring experienced workers also takes a corporate focus away from the learning curve and puts it on the bottom line.
“People with no experience fresh out of college are not the same as a seasoned professional with a portfolio full of business,” she said.
Still, the mortgage industry—indeed as is all industries—inevitably need a transfusion of new blood in order to stay vibrant and competitive. Churchill Mortgage’s Hardwick recognizes that the current older guard can only stay in place for a finite amount of time.
“There seems to be graying in our industry,” said Hardwick. “We need to find young talent and skills.”
Phil Hall is senior editor of National Mortgage Professional Magazine. He may be reached by e-mail at [email protected]