Originators today are operating in a brave new world, so to speak. Market compression has really crippled some businesses and Steve Grossman, partner at NJ Lenders, says that originators need to learn how to operate in the new climate because it’s not changing anytime soon.
“Originators have to recognize that they may not be able to earn the same amount per transaction as they historically have. Not to say that their overall earnings can’t grow, it can, but based on the world and technology and online lenders that are limiting loan officers, there’s going to be continuous pressure on pricing.”
With the total revenue earned on a loan declining, Grossman says that something’s got to give, and loan officers who were used to working in a different climate have to recognize that they might have to adjust their comp plans relative to their market. It’s really the only way that originators are going to be able to compete in the space.
“This is just the new world and loan officers have to make new friends, develop more relationships, get to the customers first, and increase the amount of leads they get, because if they want to maintain their income, they’re going to have to do it with volume, not by higher LO comp.”
With a 27-year tenure in the mortgage industry, Grossman knows what he’s talking about. He was instrumental in the success of NJ Lenders, helping the business grow from having six employees to 200 employees, and becoming the largest privately-held lender in New Jersey. Last year, he closed close to $128 million, which brought his lifetime volume of closed loans to more than $2.5 billion.
The biggest producers don’t think they know everything just because they’re successful. There’s always a new tactic that an originator can implement or a part of their existing process that can be tweaked toe be more efficient. In spite of Grossman being one of the top originators in the country, he’s continually learning from others.
“I’ve learned to network and mastermind from some of the smartest minds in the country. So a lot of the ideas that helped fuel the company’s growth, whether it’s products or strategies, I’ve been able to learn from others who have been practicing this or using these tools or products in their business, so I’ve been able to learn from others to help grow my company,” Grossman said.
His business is all referral based, NJ lenders doesn’t actively recruit loan officers, and he’s admittedly very good at database management, maintaining long-term relationships, and staying on top of innovative industry tools. He’s been big on having a CRM for almost 20 years, long before CRMs were The Done Thing in the industry. And he’s built a reputation with his clients of being the guy to call for advice, because even if he doesn’t provide a service that they need, he can point them in the right direction.
Grossman has found value in positioning himself as an expert and a resource, not just in mortgages, but with regard to the business of his referral partners. He said that for new loan officers, the industry can still be “tremendously” lucrative, but they have to do more than meet bare minimum expectations.
“You have to add value to the realtor, and to add value to the realtor is not just saying you’ll co-market or co-brand on Zillow, or you’re going to pay for postcards,” Grossman said. “Whether it’s being an expert on CRM or whether it’s being an expert on Facebook, or whether it’s being an expert on building teams, or on videos, podcasts, whatever you want to do, you have to be able to show these referral partners how you can help build their business—but not by throwing money at them, it’s by doing hand-to-hand combat.”
Using the tools that successful originators are using when in the trenches with their referral partners can be a true differentiator and a valuable practice for any originator moving forward into 2019.