Loan officers burned out by rate volatility and shrinking margins may be tempted by promises of better pay and culture elsewhere. But industry veterans warn: not all opportunities are what they seem.
While talent scouts are playing
"A red flag as a loan officer is someone who promises the world," said Christine Clifford, former president and owner of Access Mortgage Research and Consulting and an ex-Wells Fargo consultant. "Rather, each mortgage company has its unique strengths in the market."
LOs are weighing numerous factors when exploring the job market, from advantageous pricing to geographic reach, said Paul Hindman, a longtime industry consultant and recruiter. A
"Promises repackaged are still promises broken," said Hindman. "I think that's the number one reason why LOs even look outside of their company."
Seasoned recruiters who've helped place hundreds of loan officers across the industry point out common red flags, and green flags, originators ready to jump ship must look out for.
The trap of false promises
LOs shouldn't set out to prove their worth by selling a new product mix. Lenders who expect a new hire to shift away from their strength to a new specialty are naive, said Clifford. She's seen companies recruit talent that wasn't a fit and subsequently not support them on the way to a quick divorce.
"What makes each LO special is their ability to communicate with a certain group," she said. "I'm surprised how infrequently really critical questions are asked, to make sure it's going to be a successful marriage for the mortgage company and the loan officer."
One of those critical questions should be pricing, said Hindman. He described it as the biggest promise broken to an LO: one number today, another after you're onboarded. Figures upfront aren't enough —- originators should track their prospective landing spot's pricing for three months, he advised. Also, professionals shouldn't be lured by promises of increased volume.
"If it doesn't exist where you're at, it probably doesn't exist in the market," said Hindman.
That pitfall has ensnared many lenders and originators who inked contracts with no insight into how the housing market would fare over the next three months, let alone three years. Promises tied to attractive sign-on bonuses have
Turnover is common in the mortgage business, but an industry pit stop is a warning sign. It takes a while for onboarded LOs to ramp up new business, and the process is
"Many companies lie about their turnover," said Clifford. "I think it's something our industry doesn't do a very good job of managing."
On the other hand, hiring managers are also wary of industry journeymen. Scott Bridges, chief consumer direct lending production officer at Pennymac, suggested LOs with job-hopping resumes aren't endearing.
While there are plenty of pitfalls to avoid, the right move can offer real advantages if LOs know what to look for.
What makes a mortgage lender worth the jump
Lenders often tout the cliche that their employees are like a family. Originators can stump recruiters and prospective employers by asking them to define those descriptions in detail.
"Most companies can't define it and don't know it," said Clifford. "Or it's just a very generic statement that's like everybody else's."
Loan officers should ask about a firm's specific practices and mull how those are going to help the originator grow their business. Branch culture, for example, could mean community involvement and home builder relationships; seeing branch managers attending events and developing a pipeline of builder business.
If a lender touts a culture of coaching, loan officers need to ask what that coaching looks like, and how often it's being done. Branch managers on paper can say they're coaches, but they could also be stretched thin by recruiting and production duties.
"Often good recruiters are not good trainers and coaches," Clifford said. "It's a different kind of skill set, and it's hard to find somebody that has all those skill sets."
A strong firm is going to ask candidates about their practices. Bridges, who said he's interviewed over a thousand LOs during his 16-year Pennymac career, seeks traits not unique to the mortgage industry: evidence of completing tasks, ability to explain their work clearly to bosses and customers; a high ethical standard.
"You cannot let interest rates impact your approach to the loan," he said. "You have to isolate yourself from the storm and stay focused on what the point at hand is."
Throughout the process, originators need to ensure their next company keeps their promises to its employees. They shouldn't ask the firm itself for proof, but rather hear it straight from other LOs, Hindman said.
"If they love where they work, there is no way they're not going to brag about it," he said. "And if the promises are kept, they're going to tell you, and if they're not, they're going to tell you that too."
At the end of the day, the best insight doesn't come from recruiters—it comes from loan officers themselves. If a company keeps its promises, its employees will be the first to say so.
