By Paul Anastos, president of Mortgage Master, a division of loanDepot.com
With March Madness less than a month away, it seems fitting to look at the similarities between college basketball and mortgage lending, specifically the recruitment process.
The University of Kentucky (UK) has been one of the most successful college basketball programs in the country for decades. The school is the winningest NCAA Division I basketball program in history, with the most all-time wins and the highest all-time winning percentage.
Recently, UK Head Coach John Calipari was interviewed on ESPN on how he is able to get the top recruits in the country to commit to UK year after year, and manage to keep them all happy, when only half of them can play in the game at one time.
“We coach every player like they are a starter, everyone,” Calipari said. “The key is they need to know it works and they are getting better.”
But the players also want to know, “What’s in it for me?”
“We let them know what's in it for them. There’s results here,” Calipari said. “If you want to be a number one pick in the draft or get to [the NBA] and be prepared to perform, why would you not come here?”
So how is Calipari’s strategy analogous to attracting and retaining top loan officer talent in the mortgage industry? Mortgage lenders have to prove they have the best opportunity and system to offer top producers, so they are incentivized to stay and reach their full potential.
In the preliminary results for its 2014 Originator Census Survey, STRATMOR Group found that the top performing 20 percent of loan officers turn over less than 10 percent of the time. By comparison, the bottom 40 percent turn over 40 percent per year, largely because the best origination companies do not keep underperforming loan officers around very long.
By those standards, it seems firms have been pretty successful. At Mortgage Master, 18 or 7 percent of our loan officers were named as top 200 originators in the country according to an industry ranking, the highest percentage of all large firms in 2013. In addition, average closed loan production per LO was an amazing $15 million annually in 2014, which is more than double the industry average. It is important to deliver real value to these loan officers so they do not leave. And we are. Attrition among our top 50 producing loan officers is rare. Over the past three years, we have had 73 loan officers represented in our top 50. During that time, only four of those 73, or 5 percent, have left the company.
Keeping top performers is critical. STRATMOR also found that the top 20 percent of a company's originators are generally responsible for nearly 60 percent of its overall loan volume.
So, how do you attract and keep top performers on your team?
For some companies, the easy answer for attracting loan officers is to simply pay more money up front. But from the loan officer’s perspective, while the most money might look attractive up front, they may be doing a disservice to themselves in the long-term if they are not a model-match for the lender’s culture and system.
Besides, any mortgage lender can attract a loan officer with a large signing bonus if they really want to. But if the lender wants to make sure loan officers do not leave after they received their upfront bonus, they have to have something bigger and better to offer than what a competitor has. The question from loan officers is, “I know I will be good anywhere I go, so tell me how you will make me better if I come to work for you?”
Some things are a given in this competition for top talent. Lenders need to have a great platform of products with competitive rates, an efficient operational infrastructure to close loans faster, most up-to-date technology, and effective marketing tools to help loan officers find new customers and stay in touch with old ones.
But it takes even more to keep quality loan officers; it takes a culture of innovation and accountability.
At Mortgage Master we are constantly striving to stay on top of trends - economic, demographic, and technological. Our marketing and operations are built on being responsive to loan officers’ needs, and we are prepared to invest and change as conditions in the market evolve. On top of that, we recognize and reward excellence, which allows loan officers, and all our employees, to compete with one another in positive, affirming ways.
Our recent merger with loanDepot has enabled us to fill the gaps we had as a super-regional lender by converting us into a national lender. We now have the ability to lend in all 50 states and offer innovative loan products with virtually no overlays, which most loan officers at other companies cannot. We have virtually no limitations on the number of leads available to us, thanks to loanDepot’s state-of-the art, centralized direct-to-consumer outreach operation. We have also enhanced our relationships with the agencies, which enables us to increase our product diversity and improve liquidity, enabling us to approve loans more quickly.
But we’re not stopping there. Our madness doesn’t come only in March, it comes every day of every month. We pride ourselves on delivering what we promise and we have to be prepared to exceed each prospect's expectation on each loan if we are to continue to be the top destination for top talent.
Like Coach Calipari and UK, Mortgage Master continues to attract and retain the very best loan officers in the Country. Our roster is filled with first team All-Americans. We know because they’re successful, successful. We need to make sure we do all the right things to keep them. As Coach Calipari said, you can promise people anything to get them to come, but you have to have the results to get them to commit, and we would add, stay for the long run.
Paul Anastos is the President of Walpole, MA based Mortgage Master, and a Division of loanDepot, LLC. To contact Mr. Anastos, please email him at firstname.lastname@example.org.