For loan officers looking to change jobs, it's about more than the money.
Compensation, long believed to be the top motivating factor in loan officers' choice of where to hang their licenses, was a runner-up to concerns about professionalism and quality, according to a survey conducted by Majestic Consulting for the Lenders One cooperative in St. Louis.
Being able to close loans as scheduled, receiving proper training to make purchase loans and having confidence in managers' preparation for change were the top reasons why loan officers consider switching companies.
"Relationships are the most important part of any business, especially in the mortgage industry, " said Robert Bram, a managing director and mortgage loan officer for Luxury Mortgage Corp. in Garden City, N.Y.
"The (real estate) agent looks at you and says, 'You're only as good as your last deal,'" he said. "If your deal doesn't close, or if it gets hung up in underwriting and it goes from being a wonderful experience to a torturous experience, the relationships get tarnished."
The survey jibes with what the chief executive of Lenders One, Jeff McGuiness, has been hearing in recent years, especially as the refinancing boom died.
Loan offers want to know, "'When that dynamic changes, are you operationally ready? Are you nimble enough to accommodate that purchase market?'" McGuiness said.
Employers need to be sensitive to these findings because, in a purchase market, loan officer retention and recruitment are paramount, McGuiness said. Almost anybody can answer a phone and do a refinance. The successful loan officer is one who has longstanding relationships with real estate salespeople and other referral sources. They especially want sales training about how to cultivate purchase business, he added.
"Loan officers, in general, are much more future-oriented relative to compensation schedules, and they know that when their reputation has the ability of being tarnished because they're missing closing dates, they know they have the possibility of tarnishing their brand image in the community and losing real estate agents and referral sources," McGuiness said.
And while compensation per se did not rank high, these loan officers realize that if they cannot maintain their production levels, they will lose money over time.
"I would work for a company making half the commission just to get (the loans) done in a timely manner, because you know what, I am going to make it up in volume, I will be able to hold my head up high and everybody will talk wonderfully about myself and my company," Bram said.
Majestic Consulting interviewed 69 loan officers from all parts of the country and at all levels of experience, CEO Tom Ward said in explaining the survey's methodology.
Dissatisfaction was common, including issues with loan pricing, processing and underwriting that loan officers feared could jeopardize their personal reputations.
"A poor backroom gets exposed," as the market shifts from refi to purchase, he explained. Purchases have other parties involved in the transaction, like the seller, the moving company, real estate agents, etc. and deadlines must be met. Those are just more people who can expose the flaws of a poorly run lender. And ultimately they tell their clients to go to another lender.
Ward said some loan officers were given an ultimatum: If they continued to work at their current shop, the real estate agent (and quite likely the other agents in the office) would no longer use his or her services.
Susanne Livingston, co-owner of Residential Wholesale Mortgage Inc., said the San Diego firm has retooled some of its processes to meet the shifting environment.
For example, in the past Residential a member of Lenders One would not put a loan through the underwriting process without having an appraisal report in the file. Now, in order to get the loan ready for closing in a more timely fashion, it will allow the underwriter to work on the file as long as it is complete otherwise.
To limit the number of times the company has to go back to the borrower and/or the real estate agent, it has prepared checklists for them to follow, "so that it is not so stressful for everybody," she said.
No matter where they work, loan officers need to be proactive in the process by reaching out to anybody critical to the transaction and updating them in a timely manner. As long as the loan officer is doing his or her job and being clear and concise in keeping people informed, there are few, if any, misunderstandings on the road to getting the loan closed, Livingston said.
Prospects for internal reforms may comfort restless loan officers, who often cannot or will not jump ship quickly.
It typically takes a long time for these loan officers to make the decision to move on because they want to avoid joining a company with the same problems as their current employer, Ward said.
It took loan officers on average about seven months from the time they first considered making a move to actually leaving their employer, Ward said.
