My first advice to a young loan officer just starting out with my company would be to immediately go out and buy a brand new house, a new car and to charge up all of their credit cards. This way, they would be heavily in debt and be forced to do lots of loans. I say this jokingly, but truth be told, money is one of the best motivators for people. It becomes addictive. The more you make, the more you want to make.
But this is only true up to a point. All of us have a figure in mind, may it be $100,000 a year, $330,000 a year or a $1 million a year when we say to ourselves, “If I could only make that much, then I would be rich.” What I noticed was when the person DID make that much, then their leisure time became more important to them than making any extra money. If someone dreamt of making $100,000 per year and made it, then they would try to figure out how to make the same money by working only three days a week and spend the rest of their time on their new boat.
So, here I had a bunch of people I was helping make tons of money, and I had to motivate them to make more money against their will. Such problems a mortgage company owner has!
So I started something called “The Winners List.” We took the top monthly income earned in the month and broadcast it to the rest of the company. Once people have all the money they need, then they want fame. The top 20 “Winners” got a royal blue “Carteret Mortgage” baseball jacket. It was just about the ugliest thing you ever saw in your life, but the competition was fierce. When you went to a Carteret bowling party, you knew the person wearing the jacket was a top producer. Respect was earned.
But doing more loans is not the only thing a manager has to motivate a loan officer to do. Think of all the rules and procedures you lay out that they have to follow. If you have kids, you know, it is not always easy to get them to do what you say. You cannot threaten to fire employees after every little offense. It loses its power when you both know it is a hollow threat. That is why I always used a “carrot and stick” approach to my procedures. If you do it like this, good things happen, if you don’t slightly bad things happen to you. If you get the file in on time and correct, you get paid that week. If not, well, it could take up to two weeks to get you your money.
Another good motivator is “opportunity.” I have never met a loan officer who ever told me, “All I want to be is a loan officer for the rest of my life.” No one plans on being 70-years-old and still bringing doughnuts to real estate agents at an open house. Everyone has a dream. That is why, as a manager, you have to offer the opportunity for upward potential. If you do this and this and that, then one day …”
With us, it was the opportunity to be a “Recruiter.” This meant you had the authority to bring in other loan officers where you would get a “piece of their action.” Enough of these and you could retire just on the extra override, which many of my people did, reinforcing the idea that “one day this could be you.”
It is not enough to promise things to motivate. The employee has to see it is real by it happening to someone else. It has to be a thing of value, whether tangible like money or intangible like the esteem of his colleagues or the opportunity to get ahead.
This reminds me of a story. Since I am Jewish, it is a rabbinical tale, but feel free to substitute your own religious personages as you wish.
There was once a poor farmer. All he had was this one cow, but with the milk, he could sell, he was able to feed his family, barely. He was a deeply religious man, so he was happy with his portion in life. He was pious, never said a bad word and helped his neighbors when he could.
One day, a famous Rabbi comes to town and honors him with a visit. He tells the Rabbi he doesn’t have much, but he will provide whatever the Rabbi wants. The great Rabbi says all he wants is for him and his disciples to share a dinner with the man in his family, but the plates must be made out of gold, the finest wine served and only most expensive table linens used.
The pious man is shaken, but he agrees. How could he deny such an honored and respected sage? He goes to town, sells his only cow and buys what the Rabbi requests. The next day, the Rabbi has his meal, thanks the man and promptly leaves.
Now the pious man doesn’t know what to do. He only had the one cow and now he doesn’t even have that. He decides to go into the woods and just kill himself.
While in the woods, the pious man meets an old man who is dying. The pious man makes him comfortable, gives him water and they talk. The old man says that he is wealthy, but his kids only love him for the money they will get after he dies. He says he will fool them as he has buried his fortune in the forest. They will never get it. But, since the pious man was so nice, here is a map to where it is buried. The old man eventually dies and the pious man goes and digs up the treasure. He becomes a very wealthy man, donating to the Synagogue and helping the poor.
One day, the pious man is riding through town in his golden couch and the people are cheering. The Rabbi just happens to be there and waves to the man. One of the Rabbi’s disciples turns to the great sage and says, “Rabbi, I really do not understand. You are a very modest man. You never eat from golden plates or even desire the finest things. Why did you do that to this good man?”
The Rabbi replies, “The Lord spoke to me and told me of this man. The man was destining for greatness and to help many people. But he was never going to do any of it until he sold that damn cow.”
This is the REAL problem in motivating people; “Good is the Enemy of Great”
As long as things are good and you are happy with them, then they will never be great.
Like I joked earlier, have your new loan officers buy that new house and car, then they will be forced to be a great loan officer.
Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 505-8692 or e-mail [email protected]
This article originally appeared in the May 2014 edition of National Mortgage Professional Magazine.