The Building Blocks of Success

Technology has taken over an ever-larger portion of the mortgage business, from prospecting to marketing to FICO scores to applications—all the way through closing. That being said, the lending officer staff is still the engine that makes a mortgage company go. Whether that mortgage company performs like a finely tuned race engine, one that’s in need of a tune-up, or one that is sputtering on its way to dying depends largely on a mortgage company’s hiring and retention strategies.

For this month’s cover story, MReport speaks with representatives of Churchill Mortgage, Embrace Home Loans, Homespire Mortgage, Inlanta Mortgage, and more about best practices for finding, recruiting, and retaining the talent that will keep any mortgage company running at peak performance.

Balancing Productivity Against Culture
Before hiring a new loan officer or other mortgage-related workers, a company needs to decide what skills and characteristics it wants in its new personnel. For loan officers, mortgage firms say, beyond loan production, they look for a combination of people skills, a collaborative nature, and the ability to communicate.

Loan production figures are relatively easy to find, said Steve Adamo, President of National Retail Production for Embrace Home Loans. “We do a lot of analysis on existing loan officers, using different tools to determine what they are doing in their markets related to purchase activity and total volume.”

However, it’s “people skills,” said Lawson Hardwick, VP of Onboarding and Expansion for Churchill Mortgage, that can make all the difference as to whether a loan officer hire proves to be successful. A loan officer must be able to build relationships, and since the advent of the COVID-19 pandemic, they must be able to build those relationships remotely as well as in person.

Any new hire must be a fit within the Churchill Mortgage environment, Hardwick noted, echoing a familiar refrain from those interviewed. Meshing well with the existing team can sometimes be just as critical as loan production itself.

“Some people have a ton of volume, but when you bring them in, they become toxic to the organization,” Hardwick said. “They wreck your operations staff, [and it turns out that] they’re not worth what you had to go through to get them in the first place.”

Hardwick and others agreed that mortgage companies need to dig into both a candidate’s loan production numbers and their personal characteristics before making an employment offer.

“The numbers can be flashy and exciting, and some companies can be quick to hire; we are not,” Hardwick said. “We have turned down people in the past who have on paper looked like fantastic hires that would help us on the sales side of the organization.”

For key leadership hires, Hardwick also meets with the candidate’s spouse, if there is one. “You’re not just hiring that person; you’re hiring the whole family. You can learn a whole lot by seeing people interact with their spouses. We try to make ourselves available to people in the family so that they can see that we are doing our due diligence, that we care about the people that we hire.”

“For all employees, culture fit matters,” said John Russo, Regional General Manager for Georgia and Florida for Homespire Mortgage. “I gauge that differently today in the post-COVID-19 world than in the past. Now we’re relying more on technology and Zoom meetings. For a producing loan officer, the primary skill set that we are looking for is the ability to create, sustain, and build on relationships.”

“Our culture is centered on the core values of community, empowerment, achievement, innovation, and courage,” Adamo said. “We have a lot of individuals spend time with individual loan officers before they join the team.”

Homespire needs loan officers to generate their own business, Russo added. “We’re not a company that provides leads. There is nothing wrong with those scenarios, but it’s just not our world. We eat what we kill. So, one of the things that I look for when I’m speaking to a potential candidate is, do they have a demonstrated ability or a track record of generating business on their own?”

A strong personal drive is essential for any loan officer that Inlanta Mortgage hires, said Paul Buege, President and COO. “You look at people’s actions, performances, and results to determine if individuals are self-motivated with a strong degree of wanting to be successful. You look for someone with the mindset of ‘no one is coming to help, so I need to go out there and do it on my own.’ You look at the roles that they have had to see if they are constantly building and growing.”

Russo also follows up with deeper questioning to learn how a loan officer candidate sources leads and how he or she handles different loan challenges.

“I don’t want to create a scenario where we’ve hired someone and they think they have been misled,” Russo added. “The last thing I would ever want to do is have someone make a career change and then find out that we are not the right fit for them.”

Russo and Buege said that a loan officer who was very successful at a traditional bank may not fit with an independent mortgage company because a bank will offer a natural funnel of work from customers who have other products, something an independent mortgage company doesn’t have.

“That’s a layup environment,” Buege said of banks. “We have a self-sourced business.”

Similarly, WiPro Opus wants someone who is experienced working with a variety of mortgage products, said Greer Allgood, the company’s Managing Director over Operations. “I need to make sure they understand the rudimentary elements of different mortgage products, even though they might have to learn about some specialty products that we offer.”

Like Russo, during the interview process, Allgood will ask prospective loan officers about how they’ve handled various loan challenges, such as how they’ve handled a confrontational customer or a frustrated customer. She will also do some roleplaying during an interview to learn how the prospective hire will react. “I want them to tell me about one of our more complex products. How does the product work? What are some of the things that the borrower will experience? What is the best fit for a borrower for a certain situation? I want to see how much depth they have with the different products that they are selling.”

Buege added that, while being self-driven is essential, a potential hire can’t be overbearing. “They have to be approachable and professional. They also have to have the desire to earn the programs, the products, and the services that we are selling.”

Where to Find Talent
Like many others, Russo relies on the connections he’s built in the industry to find new loan officers. Maintaining relationships helps put Russo and Homespire at top of mind when a veteran loan officer thinks it’s time to change employers. Referrals from current employees and managers provide another source for potential new hires.

Churchill Mortgage looks for different types of loan officers, depending on which side of the business needs them, Hardwick said. “We try to partner with people. Most of the people that we’re getting today are people we already know in the industry, people that are at other companies that we’re friends with and that are interested in us.”

By using its tools to identify the best producers, Embrace Home Loans attempts to identify a narrow pool of potential hires at the outset, Adamo said. “We believe that we have something unique here. We have good processes—good underwriting, good closing, good marketing, good technology, great digital apps, etc.”

The technology, culture, and what Adamo calls the “community of Embrace,” form a three-legged stool to attract loan officers. “We’ve had good growth and we’re excited about it,” Adamo said. “But it is very specific growth around the table stakes of originating loans, the core values, the culture of our company, and the community which we embrace.”

Internal referrals are the initial source of potential hires, Allgood said. “They’re not going to refer someone unless they are happy with the organization themselves, which is definitely a compliment to the employer.”

However, internal references may not always produce a large enough pool of potential hires, so Allgood and many others also rely on LinkedIn. “It is the kind of source that can help you get additional referrals,” Allgood noted.

Allgood posts an opening on her own LinkedIn page and asks her contacts to make referrals. “The posting is something you need to spend a little time on. A lot of organizations put postings out there that are generic; they just list roles and responsibilities. You should be very clear about what expectations are for the role. The postings should also share the history of the company and its services.” This will help distinguish the posting from similar employment offers.

“I’m not the most avid social media user, but LinkedIn is one [social media platform] I’ve found to be a necessity in our business,” Russo said. “It helps you shoot out quick messages or stay in touch with people who many not be answering the phone for whatever reason.”

A strong climate for loan officers makes it hard for recruiters to hire someone away, because commission from loans in the pipeline are at risk, Russo said. “It is difficult for them to pick up and leave, despite how unhappy they might be in their current situation. Throughout my 20 years in the business, I’ve never seen anything like this.”

How to Retain Good Employees
No matter how good the hiring process, how good the corporate environment, how good the company, people will still change jobs. Some who leave may not have been great long-term fits; others may receive offers that don’t make financial sense to try to match. However, there will be some who either receive or are likely to receive offers from competitors but whom it makes sense to try to retain.

In some ways, the ability to retain officers starts before they ever join a company. Several experts cited the need for good technology and other support as essential.

The best loan officers generate a large amount of volume, and a mortgage company needs to be able to support that volume, Buege said. Beyond that, a company must continue to invest in its best people.

“We have a tight community, but that doesn’t mean the community will stand on its own,” Adamo said. “We have to give them the best products; we have to give them state-of-the-art technology, digital processes, reasonable market pricing, and reasonable compensation. We have to be aggressive in search of products available in the market and desired in the market.”

Adamo also cited good communication, an open-door policy, and the availability of personal coaching.

Allgood agreed that communication is essential in retaining talent and added that this element was put to the test as the pandemic resulted in an increased use of remote work.

“You need to build relationships with your top talent,” Allgood said. “They have to feel appreciated. They need to make sure they are being challenged. You need to talk to them about their overall career path. If they have an ability to grow within the organization, they are less likely to move elsewhere. If you’re the manager, you need to make sure you’re staying in touch with them and have candid career discussions with them on a regular basis.”

Sometimes, loan officers will get a large offer or signing bonus from another lender, but typically, the additional compensation is used to cover up a difference in pricing or lack of support in some other area, Hardwick says.

Churchill has one attraction for employees that other firms don’t have, Hardwick said—it’s a fully employee-owned company, so the lenders are invested in the company’s success in multiple ways. The deferred compensation available from the ESOP plan provides a financial incentive to stay with Churchill even if another company offers more money, Hardwick explained. “People build up a lot of stock value and deferred compensation over time. The company has done well over time, and that stock compensation has grown significantly.

Hardwick added, “The mortgage industry is a special thing. Regardless of your role on the sales side and the operations side, there’s a real opportunity to make a great living in this industry.”

Hiring for Operations
While loan officers might be top-of-mind when it comes to mortgage company employees, for the business to be successful, it also needs good underwriters, compliance people, and others who support the mortgage operations.

“In the last three to five years we’ve seen rapid market swings up and down, putting lenders in a position where they are not only struggling to acquire, but also to retain underwriters, which is probably the most significant role in the whole process,” said Eric Torigian, Chief Human Resource Officer for SitusAMC. The company also handles other post-application fulfillment work.

While the skills for each of those jobs are different, there are some commonalities among characteristics of what makes for good employees in those areas.

Technical acumen is essential, said Hardwick, adding that the company has trained the right people on occasion to fill certain support roles.

Inlanta’s Buege said he wants his operations staff to be good with not just the routine work, but also with the “Ripley’s Believe It or Not” exceptions that will occur from time to time.

“The most important attribute is a customer service orientation,” Russo said. “You can hear it in someone’s voice, you can see it in a Zoom meeting … Some have said while we are in this remote environment, it’s more difficult to gauge that. I don’t think so. I can tell in the first five minutes if I’m talking to someone my customers would want to talk to. If I’m not talking to someone our customers would want to talk to, then we’re not a fit for each other.”

Though some employees, like underwriters, don’t talk to customers, they do interact with others in the organization, so the need for a customer service orientation still exists, Russo said. “They have to have a solid relationship with the people whose needs they’re serving.”

Hardwick agreed, “You can have a rock star underwriter, but if they’re poor when interacting with your sales teams or other parts of your processes, then that’s going to be destructive and create speed bumps for everybody.”

The relationship building is a two-way street, Buege added. “You have to create an environment so that they don’t feel like a bunch of ‘peg pounders.’ They have to feel as valued and respected as the sales professional on the front end of the business.”

“With the back-office component of mortgage, it’s uber-important that they can communicate and articulate challenges that they need help with,” Allgood added.

Martina Schubert, CTO for LenderClose, concurred, citing collaboration as the chief characteristic she looks for among new hires. An entrepreneurial spirit is also essential.

“We really like employees who challenge the status quo,” Schubert said. “That means challenging everything. All of our team members have free rein to challenge anything that we’re working on and what we are trying to accomplish for what we put in place.”

Schubert relies on LinkedIn as well as the company’s industry connections to find new hires.

“Seventy-five to 80% of our recruiting is driven from LinkedIn,” Schubert said. “If you’re trying to manage your career and you’re not managing LinkedIn, you’re missing a gigantic opportunity. Schubert sees the LenderClose’s West Des Moines, Iowa, location as a draw.

“It’s the Silicon Valley of the Prairie,” Schubert said. “One of the things that we can offer is a better cost of living than other areas.”

Schubert also cited an excellent education system, “Midwestern values” and opportunity for growth.

“The benefits of being part of this organization are fantastic,” said Schubert, adding that she took a pay cut to join LenderClose because she thought that the benefits outweighed the reduction in pay.

Though the pandemic forced employees to be remote for an extended period, since the headquarters reopened, Schubert and other LenderClose executives prefer to have workers in the office. The company follows guidelines to ensure the safety of all the employees.

“As a growing, small, start-up initiative, we build the best products because we talk to each other every day and we’re face-to-face,” Schubert explained. The dynamic could change with a change to remote work—a development Schubert saw when the office was closed—though a hybrid work situation is being discussed.

“People being around people is important,” Schubert added. “Our environment here is fun; our employees want to come into the office because it’s a rejuvenating experience just to be around others.”

Jon Gerretsen, Situs AMC’s Managing Director of Residential New Originations and Fulfillment Services, added that his company looks for new hires who have long-term career objectives. That and thousands of potential jobs within the organization helps the company be able to shift employees from one type of job to another if the worker’s career objectives change.

Automation will continue to play a growing part for mortgage businesses, but the hiring and retention of the best employees will help ensure that these companies get the most out of their investment in technological and human resources.