Skip to main content

Is The Bottom Line Better As A Boss?

Become a non-producing manager? Grow a team? Or focus on originations?

Dave Hershman headshot
Dave Hershman
A businessman counts money at his desk, thinking deeply.
The decision to halt production is tied to the long-term career goals of a producing manager.

Well over ninety percent of the production managers in this industry are what we call “producing managers or owners.” That is—they carry a personal pipeline of production in addition to managing other producers. Why is this so?

  • Most producers become managers not because of their potential to become great managers, but because of their success at personal production. The personal production makes the producer a target for recruiting and the management slot is a tool for this recruiting.
  • The personal production of a manager helps support the branch economically. It provides a base of income for the branch that the company can leverage towards profitability. If the branch needs six million in monthly production to be profitable and the manager producers three million monthly, the branch is that much closer to profitability.
  • Most companies that hire branch managers provide a compensation plan that encourages personal production. That is, the salary is a lower level and the overrides do not provide major income unless the branch grows very large. Keep in mind that a high producer may be used to earning $100,000 to $500,000 or more annually. A base salary in the $20,000 to $40,000 range is not going to be significant part of their income.

Of course, explaining why we have producing managers dominating the industry does not at all help us make a decision as to whether a manager should halt personal production in favor of growing the branch larger. As a matter of fact, for the most part the industry assumes the manager is producing and attempts to reconcile both goals instead of making it an “either/or” decision.

However, some managers will face this decision within their careers—either as their branch grows larger and/or they move up to manage more than one branch or even become an owner of their own company. One of the motivations for producers to become managers from a monetary perspective is to make their monthly income less variable. What if they become sick for an extended period of time? There is no protection for a loan officer whose sole source of income is based upon how many loans they close next month. Obviously, a manager’s income is subject to cycles—but it is not based upon the success of one person.

On the other hand, so not to assume that giving up one’s production to build a large production organization is always the safe route. Generally, as a manager “moves-up” to higher level positions, the more susceptible they are to loss of job through mergers or acquisitions. When two large companies merge, there may not be a need for every regional manager. When the producing manager gives up their personal production, they lose security in this respect.

The bottom line is that the decision to halt production is tied to the long-term career goals of a producing manager. A manager that garners 80% of their income through their own personal production will always be seen more as a producer, rather than a manger. On the other hand, if one builds their own production team to become a super-large producer, that path may bring the largest potential income to the table. The larger that team, the more management skills will be needed.

Close more loans, be more efficient, stay out of trouble.

Find more at Pro School
This article was originally published in the NMP Magazine February 2021 issue.
Dave Hershman headshot
Dave Hershman

Dave Hershman is an author for the mortgage industry with eight books and several hundred articles to his credit. He is also senior vice president of sales for Weichert Financial Services, head of OriginationPro Mortgage School and a top industry speaker.

Published on
Mar 16, 2021
More from NMP Magazine
The Emotional Components Of Branding

What emotions does your brokerage evoke, and how can you use them in developing your brand?

NMP Magazine
NMP Magazine
Answering The Magic Question

The more you focus on the commission “split,” the more you have turned your job into a commodity.

Dave Hershman


DealDesk: Focus on the Angel Oak Mortgage Solutions Bank Statement Product

Bring your deals, scenarios and questions as National Mortgage Professional Magazine presents a DealDesk featu...

Investor Confidence in Today’s Non-QM And Why Originators Are Paying Attention... A Virtual Town Hall

We host Angel Oak Mortgage Solutions for a special 2021 edition of their virtual town hall series they ran fro...

Apr 08, 2021
How to Help Real Estate Pros in a Post-Refi World

Hear from Melissa Merriman, REALTOR® with The Melissa Merriman Team at Keller Williams, on what real estate pr...

Mar 18, 2021
Fast Sales Increasingly Common This Fall: Redfin

Homebuyer demand outstrips supply as mortgage rates creep up; demand has grown 15 times faster than supply since 2019.

Analysis and Data
BofA Report: Family Support Plays Key Role In First-Gen Homeownership

Bank of America reported that family support often plays a key role in helping first-generation homebuyers purchase their home.

Analysis and Data
Feds Reviewing Appraisal Standards, Qualifications

Appraisal Subcommittee said requirements are being reviewed to determine whether they ensure and promote fairness, equity, objectivity, and diversity, in both appraisals and in the training and credentialing of appraisers.

Regulation and Compliance
Connect with your local mortgage community.

Meet your your colleagues, both national and local, by attending an event in your area.