Cultivating Talent Within Mortgage Loan Officer Channels

Since maintaining compliance has been, and will continue to be, a moving target, mortgage loan officers have a lot to consider in regards to their careers and futures.

Kevin Gillen, General Manager, Mortgage at TD Bank sat down with MReport to discuss the state of talent and competition in the industry and what it’s doing to cultivate top-tier talent within its mortgage loan officer channel.

MReport: What is the state of mortgage loan officer talent and competition in the mortgage industry right now?

Gillen: I would say the mortgage industry has gone through a tremendous amount of change from the boom years of refinancing to where that has changed dramatically so the percent of refinancing is nowhere near where it was a number of years ago. The average age of mortgage loan officers is in the mid-50s. With unemployment low and home prices remaining solid, a lot of the banks and nonbanks have really started to step onto the field so we have fewer people in higher demand. What's interesting among the nonbank providers and fintechs is there's a couple of platforms out there where their pitch is "high-tech, low touch" or "high-tech, no touch." This could possibly mean cutting the Realtor, service providers, banks, and mortgage loan officers out of the process.

The important factor here is based on what the generation needs are and the comfort levels. All the research that we have read about and have been told about the millennials is that they are obviously much more tech-savvy and have the ability to do reasearch, but it is a daunting task and by far the most complex transaction that most people will got through in their lives and then add to that the emotion of somebody's home. So that trusted advisor is mission-critical.

There are a couple of banks—us included—that have started to go down the path very similar to the one traveled years ago within the commercial banking business to introduce a form of commercial credit training program. We have had wonderful success not only hiring top talent from the outside, but also from the inside. It's important to hire people with a strong acumen for credit and business development. Growth in the retail channel will come as the traditional act of hiring terrific talent into the marketplace, focus on underserved communities, and hiring minorities. In addition, financial institute should be looking at people right out of business school with a robust training program.

MReport: What role does regulation and compliance play among mortgage loan officers in the industry?

Gillen: This is a very timely issue at the moment. At the end of the day your brand is everything. Banks want to resonate with customers with that trust factor. Why has regulation taken on such a flight? What's the entire purpose behind the Consumer Financial Protection Bureau (CFPB)? It's because people took shortcuts, people were not honest, people were not transparent with their customers. Now, fast-forward, we ended up with the housing crisis that took place. So if you're a professional (keeping in mind the average age of a loan officer is mid-50s), your whole livelihood has been based upon your employers ability to fund your loans, service you loans, and underwrite your loans. The typical mortgage loan officer in the industry have a very high turnover rate. A mortgage loan officer in the industry for 20 to 25 years, it's not unusual to see that they have been with 10 to 15 companies. Most of that was driven by companies that went out of business or merged with other companies.

Mortgage loan officers are highly dependent on your brand, the ability to go to a Realtor, a builder, your customer base and be able to get a loan closed. If a loan officer happened to work for an employer that was not compliant, cut corners, and took shortcuts. Indirectly, that hurts mortgage loan officers.

The sphere of what's happened here has put bank, nonbanks, and fintech companies on an even playing field. When looking at fintechs, they have evolved with what I would say is four basic value proposition drivers: speed, simplicity, transparency, and trust. The one thing that somebody that would come to a bank, especially now with what has transpired with regulation, that trust is now resurrected itself so that consumers are comfortable that they are getting a fair deal, they have options, and they have outlets. While, it's both painful and expensive, I do honestly believe that regulation has resulted in a much better value proposition. The mortgage companies that aspire to and adopt the culture of compliance and a focus on risk and putting the customer first, ultimately, they will win.

MReport: How do you think lenders should seek the best and brightest in terms of mortgage loan officer talent? What attributes should they be looking for?

Gillian: I ask every single person that I interview and every single person that comes here: What brought you here to TD Bank? Without a shadow of a doubt every person says it’s what the brand represents. You need to have the tools and resources behind you and you have to recognize that your business partners and you are joined at the hip. You have a line, roles or responsibilities, and goal and objectives. The biggest complaint that comes up when I interview people is typically: I can’t get my loan closed.

It’s the ability for that processor to take a step back and judge whether or not the loan is good and find a way to get that done. It is somebody’s dream and somebody’s home. The value brand proposition is first, how serious does a company take their customer, and second, the core of the relationship is extremely important.