BEN NILES
‘Getting past barricades’

With the refi boom rumored to be over, lenders are looking for more staff to originate purchase loans. This year’s New England Mortgage Banking Conference offered advice and strategies to current loan officers and companies about how to hire the right people for the job.

A handful of speakers at this year’s convention, held at the Rhode Island Convention Center in Providence, R.I., provided information to attendees on how to find good loan officers, using them to their full potential, retaining them and helping them build a better referral network by using Realtors.

Economist Nick Perna also spoke about the economic factors behind the need for a greater emphasis on purchase mortgage production. He advised mortgage bankers to be aware that the Federal Reserve will likely raise interest rates once more this year, further curtailing refinance business. He also gave mortgage bankers some good news for the purchase mortgage market. Although Perna said he foresees real estate values leveling off in the coming months and years, he said the market is not overbuilt and will not likely see values falling.

There are various places a potentially successful loan officer can be found, according to Kathy Herminghaus, account manager at Freddie Mac in Rhode Island. She suggests asking current loan officers if they know anyone qualified to do the job. She also said checking in with customers, as well as Realtors, could produce a possible candidate.

Checking major print publications under mortgage sales and consumer finance is also an option, but the Internet is fast becoming another medium that mortgage companies can use to locate loan officers.

“[The Internet] is one of your most reliable and least expensive options,” Herminghaus said.

For a nominal fee, an employer can search for jobseekers via Web sites like Careerbuilder.com or Monster.com, Herminghaus said.

Because of the fast-paced nature of the market, Herminghaus said it can be standard practice for lenders to quickly hire a loan officer without extensively checking into their background. Herminghaus suggests conducting a phone interview first to get an idea of the candidate’s potential.

For candidates with lending experience, prospective employers should ask questions regarding the dollar amount of loans originated each month and how much of that business is refinance vs. purchase mortgages.

Questioning whether a candidate will work weekends and evenings is also important, but Herminghaus said people’s schedules aren’t like they used to be.

“I do not see people working evenings like they used to,” she said. “I don’t see mortgage originators at open houses any more.”

Not being at various realty-related activities can hurt a loan originator, however. Herminghaus said loan officers should establish a visible presence in the marketplace.

“That really does mean [being available 24 hours a day, seven days a week], there’s no way around it in this market,” Herminghaus said.

By showing up to real estate office activities, for example, loan officers are maintaining a relationship with a possible referral source, Herminghaus said.

“Loan officers should almost cater their business model to that of a Realtor,” she said.

By offering to help a Realtor during the open house, such as offering to put up open house signs, a loan officer is building a relationship with an agent who will likely come back to the loan officer in the future. Unlike refinance loans, such relationships are essential for generating purchase mortgage business, she said.

In a separate presentation put on in the Learning Center and Motivational Speaker Series at the NEMBC, Terri Murphy, founder of Terri Murphy Communications, also tackled the issue of bridging the gap between Realtors and loan originators.

“[Realtors] need you,” Murphy told the loan officers in attendance.

One way to get more business is by supporting each other’s efforts, Murphy said. When she was employed as a Realtor, Murphy said she delivered apples to doorsteps with her contact information. While this effort may have gotten her some business, Murphy said teaming up with a lender who sends a letter in support of the real estate agent can help business for both sides.

Building relationships with external sources is important, but if the loan officer cannot articulate the advantages of their specific lender and programs, a borrower may go elsewhere.

“What you really need is someone who can convey concisely those options the borrower needs or wants,” Herminghaus said.

Mentoring Managers

While the loan officer is expected to fulfill key responsibilities such as promoting programs and services, a strong sales manager is also necessary for the ultimate success of a loan officer, according to Ben Niles, account manager at Freddie Mac in New Hampshire.

“You [sales managers] really need to be that coach, that mentor Â… to your loan officers,” Niles said.

Niles said loan officers need to have a good communication style and be able to get over the fear of rejection from consumers or at a real estate office.

“Your people have to be skilled at cold calling and getting past these barricades,” said Niles.

Being persistent is also a key quality in being a loan officer, according to Niles.

According to figures provided by Freddie Mac, 80 percent of all sales are made after the fifth phone call.

“[Loan officers] have to go back [to potential customers] again and again,” Niles said.

Asked if their loan officers are allowed to approve a loan for credit at the point of sale, most attendees of the Freddie Mac workshop said they did not trust their loan officers enough to grant them such authority.

Niles questioned why these loan officers were working if they can’t be trusted. In order to increase production, Niles said, a lender can hire more loan officers or make their existing ones better. Niles said he believes in the latter theory. He said employing a “player” instead of a “pretender” will only help the company.

“A player will plan, execute and deliver, and produce the volume,” Niles said. “Your top producers can show the others the way Â… it will make your job as a sales manager easier.”

According to Niles, the top 30 percent of loan originators account for 70 percent of a company’s loans.

“They are your leaders,” Niles said.

Retaining the leaders is also crucial, according to Herminghaus, who suggests providing motivational tools to loan officers, such as wine or a dinner gift certificate.

“A lot of times you give [a dinner gift certificate] to a loan officer [and] they’ll take a Realtor out,” Herminghaus said, turning the reward into even stronger connections with key contacts.

This year was the first year the Learning Center and Motivational Speaker Series was held in NEMBC’s 17 years. Amy Tierce, vice president and branch manger at Prime Mortgage Financial in Southborough, approached the event’s organizers to propose the new program addition after hearing from various loan originators looking for practical, on-the-job advice for generating more loan volume.

The conference was hosted by the Massachusetts Mortgage Bankers Association with support from various sponsors. The conference was well attended, with 3,200 mortgage bankers attending, along with numerous exhibitors, making it the second-largest mortgage banking conference in the country, after the industry’s national conference.