Get In the Game or Be Left on the Sidelines
Written by: Bill Dolan, CMB, AMP
It’s football season! It’s also budget and strategic planning season.
Just completed a very timely Zoom call this past week with a few industry colleagues across the country and wanted to share some thoughts that were addressed during this discussion.
Lenders who are doing well are those that make faster decisions, but most institutions out there are too slow to react to making the hard changes to reduce costs and expenses.
The faster you let people go, the quicker they can find a job. It’s not fair to hold on to them until the very last minute before you pull the trigger. There is still a job market out there. Make informed decisions and if you need help and support during this time, outsource those services to create a variable cost versus a fixed cost each month (full-time salaries and benefits, etc.). Are all your functions really being performed or requiring a full-time 40-hour per week individual (s)?
Most in the discussion believe that technology will be stalled again in this environment. Utilize the tools you have but make sure you have a tune-up on them. They have gotten you here this far. Just make sure that the systems you are utilizing are performing the way that they can and should be and in a compliant manner. Having an assessment done to determine if the system is running on all cylinders is one way to address inefficiencies, bottlenecks, workflow improvement and industry “best practices.”
One statement came through very loud and clear and that was: “most borrowers out there do not want to put their bank credentials on-line.
Though the ranks of residential lenders have been reduced and many major mortgage lenders are expecting more cuts, one area that has really seen declining headcount has been the loan origination field. Now that many of the MLO’s that were out there are no longer receiving the 1.00-1.50 points on a loan, the major costs remain in originating that loan ($13,000.00 today) and still fall back on the sales costs and compliance expenses.
One colleague stated that he foresees the industry losing over 200,000 MLO’s by 2026 (an industry pandemic of its own).
The factors contributing to this are the high turnover with LO’s, especially new LO’s faster than they can be replaced. To build the business of tomorrow, you cannot lose most rookies year after year. You must nurture this talent and raise up the next generation of originators, providing your rising stars with a period of growth, development, and learning. Think about it. If prospecting is still a difficult task for a seasoned MLO, how much more challenging is it for a new and raw MLO? Investment in the next generation must be stronger than ever if you want your industry to continue into the next era. Make the time to develop new loan officers with dedicated and potent mentorship and training.
Simultaneously, there exists a multicultural demographic of consumers (women, millennials, communities of color, and LGBTQ) that are not being served because lenders don’t have a new or revised playbook to both connect and engage with this $2.9 trillion dollar market.
As I stated, LO’s will continue to exit the business because they have failed to pivot from selling rates, products, and closing cost discounts to educating these young and diverse consumers. And secondly, most LO’s are not on the same platforms (Twitter, You Tube, Tik Tok and Instagram) as these multicultural consumers are on and are using today. I’ll bet these new and young LO’s to the industry are well connected though.
For almost 33 years, SCA has been collaborating with our clients to bring industry knowledge, subject matter expertise and vision in order to drive strategic value directly to them. With budget and planning season upon you, let SCA duplicate this success for your company today.
Contact Bill Dolan, Director at (617) 694-2617 to arrange a 30-minute private video conference call with SCA’s Executive Consulting team or email Bill at: Wdolan@scapartnering.com. While you are at it, visit www.scapartnering.com and learn more about the services SCA provides in the areas of Strategic Planning, Servicing, Technology, Asset Sales & Purchases, Compliance, Due Diligence, Outsourcing, Staffing and Training.
