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Sometime in the not-so-distant future, in a galaxy far, far away, there will come an end to the refinance boom. In this strange world, loan officers will not leave the industry to find greener pastures at the end of the boom. They will be retiring because the average age of experienced loan officers in the industry will have reached close to 60 years of age.
In this world, wholesalers who faced a financial crisis in the distant past some years ago, will again find themselves facing another type of crisis. The past financial crisis not only was beset by a drop in available business. It was also subject to a severe contraction of the mortgage brokerage industry–the prime target of the “broker-wholesale” sector. This new crisis will be different. There will be industry consolidations, but the overall shift will not necessarily be towards larger institutions. Instead, the shift will be towards a younger Millennial generation of loan officers.
Within every crisis, there is an opportunity
With a new generation of loan officers coming on board in the not so distant future, there will be a need for learning. Despite this need, the structure of the management of this industry will not change. Sales managers will generally be top producers who will have little time or skills to provide the educational foundation for new loan officers. Even if they had the time, they will not be trained to teach—or to mentor, for that matter.
The wholesale company(s) that recognizes this need will be in a position to:
►Deliver value which is already a pressing need of their clients. In this regard, the not so distant future has already begun to arrive.
►Develop relationships and loyalty with a completely new generation of clients.
How can a wholesale company do this?
First of all, they must recognize that training focuses only on their products is not the value their clients need and will not differentiate these companies from the competition. Training on wholesale products is necessary and what is expected of them, but it does not represent added value.
The next question which follows is: What represents added training value? In this case, the world is the industry’s oyster, as there are few levels of training which are not needed. In addition to product training, here is a partial list of needed topics:
►Sales and marketing: Both for in-house loan officers and street loan officers.
►Application and customer service training: Of course, this training will increase the quality of the wholesaler’s business as well.
►Understanding mortgage types and comparing mortgage products so that loan officers can become expert mortgage advisors and better serve their clients.
►Qualification of borrowers, including the self-employed and additional scenarios.
►Understanding rates and the secondary markets, including the complexity of rate sheet.
►Training specific to refinances and purchases.
►The economics and social aspects of home ownership, including tax benefits.
Loan officers get plenty of ethics and compliance training through licensing. But beyond that, licensing preparation does not show a loan officer how to succeed or even how to do a good job. This is a travesty in an industry which deals with such an important transaction. Purchasing a home is typically the most important financial and social decision a family makes
Again, their supervisor is not in position to deliver the training. Larger mortgage companies may have the resources to develop a complete university. But not the smaller companies that most broker wholesale companies service. For those companies, even developing one or two value-added topics will be a great value to their clients. If every wholesale company did their part—we would have a more professional industry.
For the broker wholesale company who wants to lead the way in this regard without dedicating a ton of resources towards this endeavor, we will reserve the answer to this question for a future column. Imagine being the leader in educating your clients and the loyalty which will follow. For those wholesalers who want the answer before we publish the follow-up to this article sometime in the future, feel free to contact me at [email protected].
Dave Hershman is a top author in this industry with seven books published, as well as the founder of the OriginationPro Marketing System and the OriginationPro’s online comprehensive mortgage school. Dave is also director of Branch Support for McLean Mortgage. He may be reached by e-mail at [email protected] or visit OriginationPro.com.
This article originally appeared in the September 2016 print edition of National Mortgage Professional Magazine.