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It’s a Mortgage Candidate’s Market, and We’re Just Living in It

Since the onset of the pandemic, the mortgage industry has experienced dramatic change—plummeting interest rates caused a surge in refinances and, in the summer months of 2021, created a booming purchase market. The overall volume of mortgage applications increased, and with it came an increased need for skilled mortgage talent to process them. As a result, many aspects of the mortgage industry talent landscape look very different today than they did pre-pandemic, largely to candidates’ benefit.

So, how exactly has the mortgage-hiring landscape changed over the last few tumultuous years, and what are lenders and financial institutions doing to keep up?

How We Got Here
Today, the mortgage-hiring landscape is incredibly competitive, but this is not solely a byproduct of the COVID-19 pandemic. The mortgage industry was already in a vulnerable position even prior to 2020, as many mortgage companies were continuously understaffed. Fortunately for some of these companies, they were able to keep pace with their existing staff because, at the time they, had a manageable volume of loans in their pipeline.

However, these staffing shortcomings quickly became more apparent when low interest rates created a refinancing rush. Seemingly overnight, pipelines swelled—which would be challenging enough for understaffed companies to manage—but add to the mix remote work mandates and inconsistent adoption of digital loan processing tools across companies, and you have an unprecedented challenge for mortgage industry talent working from home.

What’s more, mortgage talent felt added pressure to process large volumes of loans quickly due to the timely nature of these loans. With many companies furloughing or laying-off staff in the early months of the pandemic, for many homeowners, refinancing their homes wasn’t just an opportunistic move to save some extra spending cash—it was a critical way to shave down expenses to keep their families afloat through a financial rough patch. As a result, mortgage talent was stressed and overworked but also keenly aware of how valuable they were to their existing and prospective employers.

This created unmatched demand for mortgage industry talent throughout 2020. There were simply not enough candidates to fill the number of open roles. The majority of these open roles were loan processors and underwriters. However, companies were also in search of loan closers and loan officers. Demand has fluctuated and is less intense today than it was during its peak in 2020, but by no means has it returned to pre-pandemic levels. The market is still competitive and likely will be for months to come. In particular, demand for underwriters has experienced a slowdown compared to 2020 but will likely pick back up again soon.

For the remainder of the year, demand for new talent will likely be driven by continued growth in new construction. While current purchase demand is limited by tight inventory, construction of new homes will drum up new demand for purchase loans, and thus, more demand for mortgage talent to process these loans.

Candidates Are Running the Show
From the perspective of candidates, the hiring landscape couldn’t be any better. Loan processors, underwriters, and other talent within the industry know their worth, know the lengths lenders and financial institutions will go to lock down skilled talent, and are taking full advantage of the favorable market.

For example, many candidates are no longer entertaining temporary or temp-to-hire roles. Even entry-level candidates know they have no shortage of permanent options available to them. Their LinkedIn inboxes are flooded with messages from recruiters enticing them to explore their options. And candidates are moving quickly on their job offers. Whereas, pre-pandemic, recruiters would check in with prospective candidates twice a week; in today’s market, recruiters are needing to check in twice a day to make sure a candidate is still on the market.

Having so many options has also made candidates more selective in their job search. Talent is more particular about what kind of company they want to work for and what kind of environment matters most to them. Prior to the pandemic, large, well-known lenders had no trouble attracting talent who were drawn to the company’s stature, but today’s candidates are more wary. They’re less inclined to interview with big lenders if they have a reputation for undesirable company cultures or made widely publicized layoffs during the pandemic. Many of these companies operate on a “first-in, first-out” policy, and after a year of unparalleled uncertainty, job security is a top priority for candidates.

What’s more, some mortgage industry talent, along with talent across other verticals, are just not willing to return to the office full time. Whether it be due to concerns over the COVID-19 Delta variant or simply that their quality of life has improved without a commute, many candidates are looking for a new job because their current employer has asked them to return to the office full time.

Research from Fannie Mae found that while 79% of lenders surveyed prefer a hybrid working model, there still are some roles, such as senior executive loan officers and closers, that should return to the office for better collaboration, access to physical documents, and in order to provide facetime with customers who prefer to meet in person. However, many savvy lenders and financial institutions are more than happy to offer permanently remote roles to appeal to those unwilling to return to the office at all.

How Companies Are Responding
One obvious way that companies are vying to beat out their competitors for top talent is by upping compensation and offering other attractive benefits. It’s not unheard of within the industry to see salaries being offered $30k–$40k above the typical asking salary. Many companies are also offering unlimited paid time off and permanent remote status to appeal to candidates. While many employers have realized the benefits of remote workforces, from being able to widen their candidate talent pool and reduced overhead costs related to office space, the opportunity for fully remote work is being used as a bargaining chip to attract and retain talent. Additionally, for companies that offer them, signing bonuses are on the rise, with some even reaching as high as $50k, depending on the role, for a one-year minimum contract.

However, offering and accepting impressive benefits, like generous bonuses, is proving to be a slippery slope for candidates and employers alike. Some candidates are being enticed to leave their current roles with larger-than-life promises about career progression and company culture, only to realize less than a year later that the reality is far from what they were promised. Many of today’s job hunters are slingshot candidates who took on a new role in 2020 but didn’t get the benefits they were promised, and now are back on the market. No one wins in this situation—companies who overpromised to candidates now have another empty role to fill, and candidates once again must start the interviewing process. Plus, candidates who do make the decision to leave less than a year into their role typically must pay back their impressive sign-on bonuses.

Although lenders and financial institutions across the board are feeling this pinch for fresh talent, larger and smaller companies are experiencing it slightly differently.

While bigger, more established companies may have to contend with a potentially negative perception of their culture or company because of publicized layoffs, they also have more internal resources that make their need for talent slightly less urgent. Larger companies, such as big banks, typically have the luxury of internal training programs and professional development opportunities that allow them to bring in more junior talent, or talent that don’t precisely meet every job qualification, and shape them into the ideal candidate.

In the process, they’re able to bring in candidates at a lower salary point, invest in employee loyalty, and reduce the pressure to get a brand-new candidate up to speed immediately.

On the other hand, smaller companies are moving faster through the hiring process and are more often in dire need of a perfect fit candidate who can hit the ground running. They don’t have the resources nor the time to spend getting a new hire up to speed, so they’re unable to be flexible about candidate background. For example, these hiring managers are less likely to interview candidates with tangential experience, such as title processing, for their roles. Their hires need to be ready to dive in after two weeks of onboarding. As such, these are the companies more inclined to offer competitive salaries and excellent benefits to the best fit candidate.

In the bustle of a vibrant hiring market, it can be easy to overlook the human aspect of talent recruitment. At the end of the day, the money or perks aren’t the only things guiding candidates’ decision making. Mortgage industry veterans especially can easily accept or decline a lucrative job offer at an esteemed bank in favor of a smaller company based only on a gut instinct. It remains a buyer’s market for job-seeking mortgage industry talent and those looking for career growth opportunities.

About Author: Madeline White

Madeline White is an Executive Search Consultant with Parker + Lynch, part of the world’s leading talent advisory and solutions company, Adecco Group. White was instrumental in the launch of Parker + Lynch’s nationwide Financial Services division, where she specializes in aligning top talent in mortgage, banking, and financial services with premier organizations across the country. She is based in Phoenix, Arizona.
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