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Actually, I have been talking about this trend for quite some time. Many would point to technology or compliance or even immigration, but this trend is even bigger. It is … The aging of the mortgage industry
I have heard different numbers bantered about, but it appears that the average age of our sales force in this industry is in the 50s. This means that during the next several years, we will lose a large portion of our sales force. What does this mean for the industry?
►For one, competition for experienced loan officers is about to get even more fierce. And it is pretty fierce today.
►We will have to bring new blood into the industry.
Why has this aging occurred?
There are several reasons. The financial crisis made sure that this was not a profession of choice of many and the reaction of adding licensing made it even harder to enter the industry. But the biggest issue has been the reticence of Millennials to purchase a home. Good loan officers are experienced homeowners and many enter our industry after purchasing a home–some because they were either inspired by their real estate agent and/or loan officer and some because they felt that they could do are job better than we did.
As Millennials delayed life decisions, including owning a home, a giant entry point to our industry closed. As Millennials get older, they will purchase homes, but many of them will have found the career of their choice by that point in life because they are older than when we purchased homes. Some will enter our industry, but not in the same numbers as previous generations.
Regardless of what caused the issue and the entry point, we will need to bring new blood into the industry and that means we need to change the way we go about training. Because our sales managers tend to be top producers, it does not give them much time for training. In the past, our training programs have consisted of “follow me around and learn.” With the addition of layers of technology and compliance, we need more training than ever. Add the fact that one of the largest trends we will face in the future is the growth of minority segments of the population. This trend will change our training needs as well, both because our targets will change and so will the composition of our sales force.
What will our training need to look like in the future?
►Licensing and continuing education: Even though all loan officers are not required to be licensed, certainly every company should be participating in the equivalent of what is required for licensing. Licensing is not success-based, it’s compliance-based. And this is essential.
►Orientation: Orientation would be part of the on-boarding process and would introduce the loan officer to the organization, procedures and technology. The more technology the industry adopts, the more important this training will become.
►Classroom: Today, classroom training may be face-to-face, online or via Webinar. Certainly, the need for training of novices is absolutely obvious and essential. But our industry as also lacked in its delivery of advanced technical training and sales and marketing success training for its experienced loan officers as well.
►Field training: Just a bit ago, I made light of the “follow-me around” aspect of training. However, the truth is, a loan officer can’t learn the job from a course. They need to observe and practice. This would include everything from sitting in on closings to role playing exercises. And we are not just talking about “following someone around.” We are talking about formal mentorship programs.
Again, let’s move back to our point that our sales managers do not have time for all of this. Thus we must understand two things:
►The ability to find synergy in training is very important. How can our training help us to our own jobs better? That is a topic for another day.
►The field training must be formalized and it does not have to be conducted by the sales managers. What we need to do in this industry is formally training mentors. Certainly, we have plenty of experienced producers who will want to help others as they wind up their careers.
Going through a training class and then coming back to a company without a trained mentor is a recipe for disaster. In future columns, we will be elaborating on what comprises a mentorship program, as well as the components of orientation and other types of training.
Dave Hershman is a top author in the mortgage industry with seven books published. He is also the founder of the OriginationPro Marketing System, and currently the director of branch support for McLean Mortgage. He may be reached by e-mail at Dave@HershmanGroup.com or visit OriginationPro.com.
This article originally appeared in the May 2016 print edition of National Mortgage Professional Magazine.