Business Development Manager at Southwest Funding, Michael Taylor says that there is one universal constant right now: housing values continue to improve and the market continues to inch towards recovery, while still offering attractive rates. That spells increased production for lenders, with growth challenging capacity.
“What is not universal, however, is the way an originator provides customer experience and service,” says Taylor. “Some of the biggest challenges for lenders involve the originators and if they can get their loans closed on time. As the Business Development Manager, I engage in daily conversations with originators seeking new opportunities.”
It is from that perspective Taylor has discovered four categories mortgage originators fit into.
“‘Jumpers’ are those who react in a knee-jerk fashion to current or recent pipeline challenges that involved missed closing dates or deals that did not go smoothly,” he says. “On one side of the coin this is rightly so, because the referring agent’s commission and relationship to the borrower are put at risk; however, on the other side of the coin there is a growing void in originator knowledge and ability to set expectations. This in itself requires a more detailed discussion and bleeds into another group.
“The Jumper I reference is the originator who gives into their first reaction, which is to jump ship. This is evident by seeing multiple jobs with no longer than a three-to-eight month employment history on their resume.”
“These veteran mortgage originators have been going through cycles in the industry for many years and they know change will continue to come; and they focus on relationships and setting expectations,” says Taylor.
However, as for originators who have cut their teeth in the last decade, some still tend to hold residual fears from the mortgage crisis – a fear that can prompt what Taylor calls a “tipping point.”
“Their main fear is they cannot jeopardize what they have built in referral relationships and they need to act and do something about it,” he says. “Some of these originators even threaten employment change to their company. In response, some employers try employing counter measures as solutions, such as cash to stay.”
However, most of these are just Band-Aids and the net result reveals either the employee endures and holds on longer, says Taylor, or the employee makes their move over some paid bonus inducement elsewhere.
Not exactly teenagers, but originators who have been in the industry less than a decade.
“Their struggles are not with service levels as they claim,” says Taylor. “These originators have been subjected to full processing support when times were less lean in our industry and in addition they may have been supported by centralized RESPA services and other centralized services that have impeded their ability to master the old-school mindset of being able to take a loan from A-to-Z.”
This lack of knowledge surfaces when they point the finger everywhere else and neglect to look in the mirror.
“This group of originators has become dependent, less knowledgeable and needs training,” he says. “They do not know how to process a loan and if they try to process the file themselves; they feel all they do is process the two or three loans they have for the month and they cannot originate any new deals.”
The real problem is that this lack of knowledge puts the Realtor and the borrower in for a terrible loan experience, affecting the company service level for everyone else.
“The more time it takes to accommodate these originators ultimately slows the service level and all originators pay the price in service,” says Taylor. “Originators need to be able to set expectations, create a constant sense of urgency and know how to manage their file flow. This becomes evident especially when production is backlogged with turn times even when under normal growth pressure.”
Those extra days to get files closed are long gone, says Taylor, and timing is everything
This knowledge gap or void will continue to expand TRID requirements come on stream, he says. “As these increased requirements kick-in, more time constraints extend the loan life cycle; but for the originators who knows how to set expectations, they will still close loans ahead of the competition.”
There are distinct types of originators in today’s mortgage market, and knowing where you fit is half the battle.