The Hiring Rollercoaster

Hiring-rollercoasterIt looks as though the spring buying season may be extending into summer. So, mortgage lenders need more people to handle the business. Some still say that 2016 is going to be a breakout year for new home sales with Millennials jumping into home ownership. That’s good news but that also presents some real challenges for mortgage lenders.

With improving home sales and all the new regulatory changes, how’s a lender going to find experienced people to handle the increased business? The mortgage lending business is a complicated process and one that does not lend itself easily to bringing on new inexperienced talent. The problem is those with the knowledge and training for these jobs mainly exists at other lenders. Let the pilfering begin.

This ends up with experienced people being lured to move from existing lenders. That may satisfy one lender’s need but it sure creates problems for others. Plus, to get the experienced people to leave, lenders need to pay higher commissions or salaries. That artificially inflates wage levels across the board. For a while, the existing workforce benefits but in the long run everyone suffers.

Once the rush is over, the layoffs begin until the next bump in originations and the whole thing starts all over again. It’s crazy but it happens every time. There’s got to be a better way.

One way is to utilize technology to streamline the process to reduce the need for more labor. Another is to outsource some tasks that are directly tied to production levels. Things like closings, delivery, and pre and post-closing QC reviews. Tasks where the expense is fixed but the volume and income may fluctuate.

A Lender’s biggest challenge lies in developing new loan originators and paying them while they are learning to originate loans. It’s tough for a 100% commission job. Some, like Quicken, have gone to call centers, some offer hybrid comp plans of a small base with overrides on production. However, in such cases, the lender needs to be the one generating leads for business creating additional expenses.

Then, once the originator is trained and bringing in business on their own they start looking for greener pastures with a better comp plan and there are plenty of takers when the market is good.

This is one rollercoaster ride you don’t want to take.

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