Deep Dive On 3 Lender Growth Strategies For 2024-25

Lenders grow primarily from customer acquisition, loan officer (LO) recruiting, and operational efficiency – and in this panel, top lenders share strategies in these 3 areas. On customer acquisition, what's the right balance of LO salesforces and marketing strategies to acquire customers, especially if you want to get to customers before realtors? On growing your LO base, is the focus M&A dealmaking, or traditional recruiting powered by superior data and tactics? And on operational efficiency, how do you optimize purchase lead-to-close metrics, what's your staffing strategy for a potential refi wave, and should you have LOs provide more homebuyer services as NAR rules change?


Transcription:

Kristin Messerli (00:09):

Executive Director of First Home IQ, a nonprofit focused on bringing financial literacy to the next generation. I'm super excited about talking with our panelists today. We're going to get some really practical strategies and insight in LO recruitment and customer acquisition and operational efficiencies. So I want to just kick this off by having everyone, we have a really short period of time. So just really briefly introduce who you are, your company, and what you think is the most significant opportunity over the next year. So we'll start with you

Eric Mitchell (00:44):

Eric Mitchell, Chief Revenue Officer for Client Direct Mortgage. Largest opportunity in the next year certainly is going to be just who's going to capitalize on the refi credit that's coming? There's a tidal wave coming. Who's going to, who's prepping for it properly and who's going to capture it?

Jacqueline Frommer (00:59):

I'm Jacqueline Frommer. I'm the COO and head of growth at Figure Figure is a HELOC lender. So of course I have to say the biggest opportunity, although there may be some refis, but there's so much home price appreciation right now in the US that I think it's going to continue to be a great market for being able to extract that home equity, whether it's through a HELOC or other home equity extraction products.

Karen Chiu (01:23):

Hi, I am Karen Chiu. I'm a Senior Vice President at Motion Lending at Cross Country. I think the biggest opportunity in the near future is definitely the refinance opportunity that we have along with figure like the HELOC market is going to be great and those are what we should focus on. And I do think that the purchase market is going to pick up probably by the mid 2025.

Jay Promisco (01:48):

I'm Jay Promisco, the Chief Bottle Washer of Sierra Pacific Mortgage. Biggest opportunity is working with Figure.

Jacqueline Frommer (01:57):

I love you guys. Oh my gosh.

Jay Promisco (01:59):

And then recruiting Karen to come over work at Sierra. No, I'm just kidding.

Kristin Messerli (02:04):

Okay, well let's stay over there with Jay. I would love for you to, you have experience on the retail and joint venture side. We'd love for you to talk a little bit about some of the core strategies and customer acquisition that you're looking at and how you keep Sierra Pacific innovative in that.

Jay Promisco (02:24):

Yeah, it's been, that's tough because the last two years everybody's like, I really want to grow, but what are you really growing when there's no mortgages to do

Jacqueline Frommer (02:36):

Luck?

Jay Promisco (02:37):

And so I go back to, so there's companies over the last couple of years that wanted to grow and acquire customers and like, okay, well that sounds great, but there's some companies that spent the last two years retooling their entire platform to get ready for the next market that comes. And there's this problem with the industry where they want to grow, but they haven't figured out the reasons why they want to grow. So let's just grow. Okay, well that sounds great. I'd like to be six foot four in good looking. It's not happening. So I think to your point, what keeps Sierra relevant is this continuous focus on innovation regardless of what the market's doing. And the other part of growth, which people miss a bunch, is they're so focused on growing outside the organization. They don't grow their existing people. And so during this time, the last two and a half years, which has been not so fun, we decided, well, instead of going and acquiring companies and bringing a bunch of people over that are going to be unproductive, let's invest some resources and technology and process and improvements that are going to help our existing people.

(03:57):

So retention of your people is likely more critical than growing right now. Inside that, if you're able to develop your process, your procedure, your technology, when the market changes, it's going to be easier to grow. And there are going to be companies who didn't invest in their infrastructure during this period of time who are going to struggle when volume starts to come in. And so for us, growth, using a patient methodical strategy has been very successful for us. And then even more critical to that is if you're a company out here wanting to grow, you really need to take some time, some really deep introspection and decide who am I? Right? So there's Alice in Wonderland, the cat, who are you really? Who are you? What's your reason for growth? And volume and growth doesn't mean you're making more money. So there's an ego play here in the industry, which is really bad, that it's really sounds sexy. Like I funded 5 billion this month, but I made no money. That was likely a bad strategy. So knowing who you are, investing in your existing people first, and then if your existing people are happy, they're they're best advocates to go grow outside your organization.

Kristin Messerli (05:18):

That's good. I think that's something we could circle back to on the recruitment side as well, knowing your identity and would love to come back to that. So Eric, you have emphasized the importance of providing valuable tools to your loan officers. And over the years have really invested in that. We'd love for you to speak to balancing that with marketing strategies around customer acquisition or just your general thoughts on getting to the customer even before your realtor relationships.

Eric Mitchell (05:49):

So I hear all the time loan officers talking about social media, got to be on Facebook, got to be on Instagram. And I'm not saying you don't. My next question is when you're spending that time and energy on that, what's your client acquisition cost? How much time did you spend? How much money did you spend? And then as a direct correlation, how many loans did you fund? And so a really good friend of mine is very successful on social media. He's got 70,000 Instagram followers and he puts out all these reels and it looks amazing. And I said, so how many loans did you close last month? He said, oh six. I said, great. So that guy who follows you around all the time with a camera and all the editing and all the like, what do you spend per month? He said, oh, it's like $8,000 a month.

(06:34):

I say, okay, say $8,000 divided by six is not good ROI. Okay, you close it to your point, you're not profitable. Your client acquisition cost is too high. So it's great that you have 70,000 followers, but you're not monetizing it properly. And so what I look at is as a company, what are we doing to better support our loan officers in understanding client acquisition strategies and client acquisition costs? Things like can you go out to bankruptcy attorneys and offer credit repair and or mortgage product non QM products one day out of bankruptcy? Can you go to immigration attorneys and offer 97% financing for, excuse me, anybody with a visa? Can you go to divorce attorneys and help 'em understand that the loophole that got closed by Fannie Mae's actually still available through non QM investors? Can you go to the market and be unique and valuable, drive pre-approved buyers into your funnel, then provide those pre-approved buyers to your realtor partners?

(07:33):

And I've never met a realtor says no to a meeting when you're walking with a pre-approved buyer. Like I've never met this realtor, but if you're out there as a loan officer, the things that we're trained, certainly I was trained this way, is that you go out and you sell yourself. You talk about how you have great service and you'll go out, close your deals on time and how long you've been in the business and blah, okay, but you're the 15th loan officer today to say that to realtor and it is just not valuable. And so what are you doing as a company? What are we all doing as a company to lift our industry from a level of professionalism to stop with the soundbites and the scripts about how great we are and what is it that you're offering to the person in front of you that's valuable to them? That has nothing to do with price, product and service. Because if you're talking about price, product and service, by definition, you're not unique and you're not valuable. And as an industry, we need to raise the bar. We just, all of us collectively need to raise that bar.

Kristin Messerli (08:28):

That's good. So we're going to talk a little bit about operational efficiency, but I do want to give both of you, and I know you both have a lot of really great things to say on that. But before we move on to that category, is there anything else that you guys would like to add to pipeline management Or, yeah.

Jacqueline Frommer (08:47):

I would just like to add one thing. I grew up in the, I didn't grow up, but I spent a number of years in the wealth management space and wealth managers act as advisors to their customers. And we in the mortgage industry tend to focus on transactions. And I think if we can shift that mindset a little bit, and the home is the biggest asset for most of our customers. They might have other investments and things like that, but given how much appreciation there is in people's home, it's a huge asset. And if we can help advise them on how to use that asset efficiently, even if there's not a transaction there today, I think that can be pretty valuable. And so there were some sessions where people were talking about looking at folks debt and offering alternatives to credit cards and things like that that are super expensive either with a cash out refi or a HELOC, but there's a number of ways that we can provide people with advice on their home. It doesn't have to be a transaction to sort of stay with them through the journey so that we are there when there's a purchase or a transaction that they need to make.

Karen Chiu (09:45):

Okay. So I want to talk about on a personal journey, I went from building a very elite small team builder team to when cross country was trying to recruit me, they did an analysis on me on what I did on the last five years. I didn't even know what I did. So I think on AI and on technology, if we can use the predictive analytics and growth targeting, if they can help us with that, it is a homegrown product they did. But they told me basically how I've grown, where I've grown, what segment I have done. I think that will really help with LL growth and whether it is acquisition or whether it's retention. I think that's a good segment for us to stay in. Cross Country grew the Salesforce in the last five years from 1100 to over 4,000 loan officers. But I asked Ron, I said, how do we grow that much and why are we growing the right way? Are we just growing for the heck of growing? I don't want to be part of this. So his point was we do the analysis of the LOS that we hire because we want to be the most referred lender. We happen to be big, but we don't want to be the biggest, we want to be the most referred. So they get people with that type of mentality. So I think his technology, our CCM technology has helped us to get on the journey. So that's my 2 cents.

Kristin Messerli (11:13):

So it's a good segue into talking about operational efficiency and we will leave time at the end for you guys to hop in with questions as well. So keep those written down as you have them on the operational efficiency side. Jackie, why don't you open us up by talking about how automating key aspects of the mortgage process can reduce lead to close times and just overall improving the operational efficiency? Yeah,

Jacqueline Frommer (11:40):

So we are focused, I think as most people here know on the HELOC. And we've created a process where we can improve somebody in under five minutes. We can actually get them through the whole process, which is a hundred percent digital if they choose to actually go through the process digitally in a number of hours. We have a three day recission period that we have to honor. So we can't actually fund people until that's up. So we say we fund in five days, but the process is really fast. It costs less than $400 for a loan that before we automated it would've cost somebody $4,000 to originate. And so there's a huge cost savings, but more importantly it's a much better user experience. So historically, all the paperwork that everybody here is familiar with in terms of what typically it takes a mortgage to get through the process, we've digitized, which means that people just get through the funnel faster.

(12:29):

There's not as much friction and more people end up getting to the funded state because the momentum of them being in the process and being able to make sure that they're getting all their information in a timely basis is just very efficient. And so there's a combination of a big cost savings as well as a much better user experience which results in a better conversion, which is definitely important for our customer base. And so I would say the other thing that people have talked about in a number of sessions here is one of the big issues with the mortgage industry is it's really hard to scale. So when times are good, you have to all of a sudden hire all these people and when times are bad, you have to fire all these people. And there's a lot of overhead that goes into that process as well as maintaining a certain base of resources so that you can have people in their seats when times are good.

(13:19):

And by automating and digitizing everything, you've really taken all of that overhead out of the system and created a much more scalable process. And so as we've grown over the years, when I started we probably were doing a hundred million a month, we're doing 500 million a month. We really haven't added that many more people because we've continued to automate our process and we've continued to make everything we do more efficient with technology, which means we don't have to add bodies, which is definitely helpful in terms of just being able to ride through the cycles. That's great.

Jay Promisco (13:50):

And I don't actually work for figure, but I'm going to do just plug a commercial. We added a figure as a partner a while ago, and we have them available for our broker channel and for our retail people. And it's changed our lives. And to your point, it sounds like it's all automated, it's consumer driven, but it still requires an originator to start the process, which I'm happy about. So originators are able to provide another service. We're not taking originators out of the platform. You're going to hear some things today which is like, Hey, originator's going to go away. It's not going to ever happen. So thank you.

Jacqueline Frommer (14:27):

I was going to say they're not. So we've taken them out of the processing business, so we've taken them out of the paperwork and put them in and enables 'em to be much more value added by actually providing advice and helping to go out and find new customers as instead of being drowned in paperwork.

Karen Chiu (14:41):

I actually want to add to that because I'm a user of Figure CCM also have a partnership with them. So only if we can make the first loan the same as the figure model

Jacqueline Frommer (14:53):

Be

Karen Chiu (14:53):

Whoever can

Jacqueline Frommer (14:55):

We have the figure product team is sitting over there. So it is on the roadmap,

Karen Chiu (15:01):

but that's only for HELOC, right? so

Jacqueline Frommer (15:03):

No, no, we're working on first Mortgage now. Oh wow. Right's the team over there. You could go afterwards and

Kristin Messerli (15:08):

Easy

Jay Promisco (15:09):

We'll get there.

Kristin Messerli (15:10):

So Karen, you started talking about the use of technology and I know that's a big part of your recruiting as well, but speaking of operational efficiency, can you talk a little bit more about the strategies that you deploy as a manager, top producer and how you have improved your loan to close?

Karen Chiu (15:30):

Like I said, I came to cross country not too long ago and less than a year ago, and I was attracted by the technology and the technologies has taken a lot. I don't know if they're originally is out there, they have many different platforms from CLM to encompass. They're all different. But I think shortening to one seamless program or one seamless, less clicks, less processes is the key to who will be successful in the mortgage space and who will not be. Because we need to cut the steps out so that we have more operational efficiency, less steps, more convergence of information, seamless transfer. Like I said, figure has done a great job. I'm using, I told Jackie I know all her 13 steps. So on the first mortgage part we probably need to do that. And I think whoever mortgage company that do not have that process or do not have the investment in the state of the art technology will be left behind probably in the next few years. I think there's a bold statement, but I do believe that technology is the only way we can minimize the number of steps and more seamless steps that we need to take to deliver a mortgage to the homeowners.

Jacqueline Frommer (16:49):

Yeah, I would say the other thing that we found out with technology and automation, which wasn't the reason we did it, but a great byproduct is there's just a lot less errors. So we have the same processes for every single loan. We have the same algorithms for every single loan. And so when we actually go for any sort of review of our portfolio, people are reviewing a process as opposed to some subjective processor that may be in the middle. And so we get very few kickbacks all our loans go through because we're using the exact same process. So that's also a real benefit too, is if you can streamline and automate and have everything done identically, then you don't have a lot of exceptions.

Kristin Messerli (17:31):

Did you have more to Jay or Eric, do you want to add?

Jay Promisco (17:34):

Can I just jump in? I think something to address if you're a company owner or an IT guy or production person, I would just share a quick anecdote. So Jeff Walton posted something on LinkedIn a couple weeks ago and I think it was a slide about digital mortgage conference four or five years ago. And it showed here's all the vendors, you guys have to use all these fancy shiny objects. And out of that there was like 15 of them on your slide. Three of them are still in existence because if the technology was good, but it wasn't great, it wasn't scalable, it didn't actually help a mortgage company or an originator. And so you have to be awfully cautious right now about putting a shiny object in where you think you're going to get more efficiency, you're going to be more productive, maybe it's going to save you some money, but what likely will happen more times than not, you're going to deploy a process or a vendor that's just going to cost you more money and screw up your system. And so to the degree that you're at this conference, be awfully selective about the vendors you work with that is it going to fit into your long-term strategy and figure. But it sounds like a figure commercial that we're sitting with that

Jacqueline Frommer (18:53):

Sounds like a figure commercial.

Jay Promisco (18:54):

We're thoughtful about the process and getting to one way of doing things super important. And back to as a company, who are you? You have to decide this is the way we're going to manufacture loans and it's going to be one way, not 15 ways because when you go to 15 ways, it's not going to matter. But I think the lesson to be learned is technology is great, but only if it's used appropriately and you're aligned with the right tech provider who has a three or five year vision of their technology platform. So a lot of lenders over the last few years deployed technology that didn't work and they spent time, energy, resources and doing that. And by the way, the key to all of this, it costs us more today to manufacture a loan than it did six years ago. Why? Because of all the technology we deployed and it was supposed to make us efficient, productive and all these things.

(19:42):

And all it did was add cost and complexity to the transaction. We look back when we had trans boxes and stacks of files on our desk, we were underwriting 15 files a day, now it's two. Why? That's the Rubik's cube and to Jackie's point, figuring out ways to automate process and loan quality. And the key to all of this is there a loan officer out here, anybody a loan originator? It starts with you taking a really good 10 0 3 with really accurate information and using the technology upfront to validate income and assets. After that, everything is easy.

Kristin Messerli (20:22):

Eric, anything you would add to the operational efficiency conversation?

Eric Mitchell (20:26):

So much. So the way I look at things again is if you can reduce your cost to manufacturer. So if you're spending $8,000 per loan to manufacture a loan with your processor salaries and your office rent and whatever that is to manufacture a loan, if you can get that to 7,000 a loan, 6,000 a loan, 5,000, whatever you can reduce, you're increasing your company's profit margin or hopefully you're reducing your company margin, allowing your loan officers to sell a better rate and that's going to help you grow even faster. To Jay's point about growth might not be your key strategy, but the analogy that was provided to me that I thought was most impactful that I've ever heard was comparing manufacturing a mortgage to manufacturing a car. I think most of us can understand manufacturing a car, you take a frame of a car, you put it on the hooks, we've all seen those lines, you put it on the hooks and it goes down the manufacturing line, they put on the doors and the tires and the engine and the hood and it drives off the end of the line.

(21:25):

And there you got a car. So imagine a mortgage the same way it started. Well it starts with a loan officer. A loan officer takes an incomplete loan application, then it moves to the loan coordinator, the loan creator looks at it, kicks it back to the loan officer, says, dumb ass, here's all the stuff you missed. So then the two of them figure out, okay, we got the loan, we're good, let's push it into processing. What does the processor do? Kicks it back, says dumb asses, here's all the stuff you missed. Now the three of you figure out, okay, now we have a complete loan, now we can finally submit it into underwriting. What's the underwriter do? Kicks it back with all your underwriting conditions, dumb asses, here's all the stuff you missed. I want you to imagine manufacturing a car like that. And then we wonder why the cost of manufacturer mortgage is so high. It's because of the just nonstop redundancies because of human error. And so automation, it's not that automation is going to replace loan officers, it's that loan officers and companies that embrace automation that's efficient, not just costs more, but automation that's efficient will replace loan officers and companies that don't. And so that's the importance of it.

Kristin Messerli (22:27):

That's the statement. So while we're talking about loan officers, I want us to move into talking about recruitment, which is the last of the three major categories I wanted to talk about today. So could you share a little bit of your thoughts on the role of traditional recruiting versus acquiring teams or companies as a recruiting strategy?

Eric Mitchell (22:54):

I mean, my belief system is when you look at recruiting traditionally in our industry, you're paying somebody bips overrides on someone. And so I hear all the time, Hey Eric, I can bring you 50 loan officers, but you got to jack their rate by 20 basis points. I want 20 basis points on all the people I recruit. And I say, okay, what are you doing to earn that 20 basis points? We're not Amway. I'm not going to pay you 20 basis points forever and ever and ever because you gave me some names and phone numbers. That's not reasonable and that's going to affect their margin and I'm just going to lose them at some point because I've jacked their rates by 20 basis points for no reason. And so as an industry, you can see it, companies are downsizing. I see divisional vice presidents and divisional presidents getting terminated all the time because they got to get rid of those margins.

(23:42):

Either that or you lose the loan officers. They're selling rates that are stacked with margin for no reason. So I believe that attracting quality loan officers comes from a place of being transparent and giving choices and say, I don't know if I'm a good fit for you or not. Here's what I can tell you. I'm going to be transparent. I'm going to be honest. I'll tell you what my margins are, tell you what we're doing. If that's what you're looking for, great. Let's do business. More often than not, I feel like our industry is like boiler room where it's like, no, just convince them. No, you got to grind them, you got to sell 'em. You got to say, do you, I don't know. I don't like being spoken that way. And I can tell if you're speaking to me that way, I can smell it and I don't like it.

(24:29):

It doesn't make me feel good. And I believe our loan officers have become a lot more savvy. I think certainly branch managers have become far more savvy. And so what are we actually doing to create value for them from a place of transparency? Be valuable. If you're trying to grow your company by saying, well, I really care about people, look, that's a bare minimum just to be in business. That's like saying I opened a grocery store down the street from, you should come check out our grocery store. We sell milk. No, I got 2%, I got 1%, I got skim, I got cottage cheese. We never run out. Oh my god, it's amazing. You should come check out our grocery store. I expect you to have milk. I expect you not to run out. That's not a reason why I'm going to come to your company.

(25:10):

Tell me what you've got that's unique and valuable that will change my business. And if you don't have that, stop calling me now. You're just wasting my time having conversations that aren't going to, and I say this all the time, I'm loyal to my family. I'm not loyal to you. That's what I'm with. My job is to go out into the marketplace, be as valuable as I can to the marketplace, come home to my family to have dinner as big a paycheck as I can by being valuable, not by being persuasive, not by coercing, not by convincing, but by being transparent and valuable in the marketplace. And as an industry, the barrier to get into our industry, like all of us, everybody in this room, I don't think any of us could go out to corporate America and get a job. Me for sure not.

(25:54):

There's no way. But that's also a problem and it makes us lazy as an industry. And I would love for all of us to be on the same page. What can we do to raise the bar to say caring about your people is the bare minimum to be in business. That's not a reason. Someone's going to come to your company and help you grow. How are you uniquely valuable? And there's so many different ways. There's not one way to be valuable. There's hundreds of ways to be valuable, but dialing in on one or two or three of them and then making that your corporate identity, that would be my biggest recommendation.

Kristin Messerli (26:32):

Well, and this is a good time to circle back to what Jay was talking about, the beginning around really communicating your identity. Jay, could you continue that conversation around how do you communicate your identity to hire and recruit the right lo talent for you?

Jay Promisco (26:50):

Yeah, for us it's simplicity I guess. So we know who we are. I also know what I'm not, right. So to be frank, this industry gets a little gross because we have recruiters calling you saying, we've got the triple indi, we're going to do backflips for you, we're going to do all these things for you. And then you get there and it's not true. So know who you are first and be honest and transparent. Secondly, which is exceptionally hard in this business because recruiters are trying to feed their family too, but you can only be good at likely three things. When you try to be really good at 10 things, you probably get a couple of them, right? The other rate you're not so good at. So I tell loan officers all the time, well, we have a loan officer that's a veteran. And I'm like, well, why aren't you a VA specialist?

(27:51):

I'm really into builder business. We should get really good builder business then you shouldn't be doing builder business, HELOCs construction to perm, jumbo, non-qm. What are you really focused on? What are you really, really good at? For us, we just know who we are. And in that regard, something that is, I have a couple rules in life. I like to sleep really good at night and I do that by telling people what's going on so there's no surprises. And sometimes the industry talks about production. It's the only good thing that can happen. So production, Uber s So to give you a case in point, one of the best things I ever did as a leader of an organization is I took a 40 million branch and fired them the whole thing. You want to know why they were not a cultural fit? They irritated every single operations person.

(28:51):

I had underwriters crying on the phone and processors ready to quit and we took that production out and guess what I did? I slept good at night. And so I think companies these days, they're trying because they need to outrun their cost structure. And in some ways the answer to that is to just hire as many people as possible. Let's put branches right next to each other and let 'em fight it out and see what happens. I think that's a problem too. So back to growth and recruiting and character and culture. You hear culture a lot. What does culture mean? It means you like working with the people you work with and you respect them and take care of them. That's all that means. Culture doesn't mean I have cool and we have ping pong on Fridays. That's not culture. It's every day. Do I enjoy coming into work with the people I work with and do we respect and love each other? And by the way, that doesn't mean not disagreeing with each other in a respectful manner. So for us, we've purposely in many ways turned down a bunch of really big opportunities because it's not worth a headache. And I encourage most companies to think that way.

(30:06):

And you can hire, I see a lot of these companies going on these acquisition sprees. Some of them work out some of them. And it all has to do with how upfront were they on the way in? And then can you keep the originators happy? And what does an originator want more than anything to sleep good at night, right? Not worried about is my cheese getting moved tomorrow? Are you going to move my comp plan? Are you going to pull my processor off by loans? And so this industry needs to focus on quality, not quantity. And there's all the data in the world to tell you whether an originator's going to be good or not. You're going to take some swings, you're going to miss if you've made a bad hire, fix it. Right? Oops. I've made a lot of bad hires in my career and Gary V says it a lot.

(31:05):

Nobody's good at hiring. Nobody is good at hiring, right? You're going to make some mistakes, but just staying true to your core principles as a company, if you're a company owner, the company owner should explain to you, these are our non-negotiables to everybody you talk to. And maybe you're a fit, maybe you're not, but this is how it's going to work here. And for that, the slow methodical growth over time is much better than trying to hit home runs every day. It's not the right way to do it. Long-winded way of saying this industry, if you've made it this far, like you've made it through the last three years, congratulations. You did it and there was three years of harvesting or planting your fields over the last three years, you're about ready to get to harvest it. And so hopefully on Jerome Powell next week,

(32:05):

But I encourage a lot of people like recruiters all the time, we need to come over here. To Eric's point, we have this and this and this. Well, I've got that where I'm at. Are you happy where you're at? Yes. Okay, then stay there. I'm not going to pull you out of your chair to come over here and have the same experience. So you definitely need to offer something different. But it's going to get really exciting here over the next six to eight to 12 months, it's going to be really hard to recruit. So if you weren't doing recruiting already, you'd miss the boat.

Kristin Messerli (32:34):

Wow, that's good. Karen, you have focused a lot on traditional LO recruiting and you focused on the technology piece and the optimization, the efficiencies as kind of part of that brand communication. Do you want to speak to anything else related to how you're approaching traditional recruiting?

Karen Chiu (32:57):

I think technology is a tool. I'm really impressed with what Jay is saying.

Jay Promisco (33:02):

I'll give you my card after.

Karen Chiu (33:03):

Okay. Traditional recruiting where she's, okay, I want to reference, but I have been in the industry for almost 20 years, 19 and a half years. And I've only done traditional recruiting all the way till probably less than a year ago. I never used any tool is, oh, I heard Trisha's good. Let me call her up. I know Jay knows Trisha, what do you think about her? So that's really how our industry was. And personally, I have talked to more recruiters than I want to admit, but I think technology is the tool of finding the right fit for myself, for yourself, for each company and the culture, the identity is that the right fit for you? But I never had the tool until I really come to my current company and cross country. I think it's an assist, but not the basket you're looking for to make or the grand slam you want to.

(34:09):

So I think technology will help you, but maybe I'm just an old school traditional team manager, still want to recruit the right fit. I want to go to work with Jay and say, Hey, how's your weekend? I want to, the people that I work with, I personally also is committed to minority lending. I want to join a company with the commitment with that. So that's who I am and that's who I want to recruit. I want to help veterans. And I just think that of all the AI tools of recruiting, coding, I think it's just a tool to help you grow. And for example, myself, someone told me that, Karen, you don't have any non qm. You need to learn the product and expand on that. That helped me with growth. And that's happened a few years ago.

(35:07):

That's my 2 cents is that hopefully you guys will continue to provide us with the tools to find the right cultural fit for expanding teams. Not everyone's right for the right team. I mean, I don't even want to work on my own team. Very demanding. I mean I work builders. I mean what Saturday, what Sunday? I started my day this morning at 6:00 AM and last night someone called me at 10 40. Okay, so who wants to have that and how do you draw the line? I mean the culture fit of who you are and if it's fit with the company, with the group products is products, technology, technology. So that's just an assist, not a be all end all. That's my 2 cents

Jay Promisco (35:50):

By the way. Being a builder loan officer is likely the hardest job in the face of the planet. You want stress? Tried missing a closing at the end of the month. Super awesome.

Karen Chiu (35:58):

I was crying on September 29th, not 30th. That was the last day, last year crying. And I think so everyone to know DU went down on that day. So we were not able to find, sounds

Jay Promisco (36:14):

Like a cross country problem. I dunno.

Karen Chiu (36:16):

It wasn't a cross country.

Kristin Messerli (36:18):

He live in action. So as we are wrapping our time up, I want to leave time for a couple questions as we're coming to a close, does anybody have any questions that you want to bring forward to the panel? And as you're thinking about it, I will say with the next generation, I mean I've surveyed over 7,000 millennial and Gen Z consumers and over and over with the research, it's distrust that comes up as a huge barrier not only to home buying but also recruitment. And so just thinking about culture fit and how you communicate that is going to make a huge impact for this next generation.

Jay Promisco (36:56):

By the way, I've learned a few new terms because my daughter's 16 and

(37:02):

My son's 13. But just a quick success story because I'm looking across the room and a bunch of us have been in this business for 20, 25, 30 years. Some of you like four or five, there's going to be this next generation of loan officer that's going to come in and take this thing. Don't discount a new upcoming young person to bring into your organization. And by the way, it gives you the opportunity to teach them everything not to do. And so we started doing that with new upcoming salespeople. We took two solar people, the annoying guys to knock on the door and we brought 'em in. We gave 'em some mortgage 1 0 1, and guess what? I'm like, I need you to make 80 phone calls today. They're like, okay. And they don't have any of the war wounds, the scars, the nose, all the times you've been beat up as a loan officer.

(38:00):

And they're like, ignorance is bliss. They're like, Hey, I got somebody to take a loan app today out of 80. That's perfect. And this younger generation, they speak differently. They talk differently. They interact differently online. And thinking through the next three to 5, 7, 10 years of your company's career, a lot of us are not going to be in this room five to 10 years from now. Why? Because you're going to be retired fishing or doing something. And so this next gen loan officer technology is just part of the deal for them. But I would highly encourage, if you're running an organization to figure out a training platform, that's what kicked off my career is a training platform at Greenpoint Mortgage. And I was in finance, I worked for Barclays Global, which is BlackRock. Trading options and mortgage was easier. I made more money and got to play more golf. It was way better. But I think this next gen is something we highly need to focus on, the minority community we need to focus on because if you look at the demographics of home buying over the next five to seven years, it's not going to be guys like me. It's not. It's going to be a younger generation that actually enjoys working with younger people, not old white guys. So anyhow,

Kristin Messerli (39:22):

Great. Thank you. Are we out of time? Oh great. Okay. So for just to wrap things up, if you do have questions, please come up after. But I would love to hear from each of you just really briefly to wrap us up over the next year. There's going to be, as you have said, lots of change. What do you think would be the most critical factor for lenders to focus on to ensure sustainable growth?

Eric Mitchell (39:48):

There's a great video that Simon Sinek did that talked about how Navy Seals choose new team members. And for me, I would encourage all of us, if you're going to grow and capitalize on the market, if you get a chance to watch the video, but he described the chart, so it's a graph and the top up down is level of competency. How good are you from one to 10? And then the bottom line is, how much do I trust you, one to 10. And all the Navy seals would rather they trust you than you be competent. There's certain minimum competency level to be a Navy seal, no question. But the real question came down to if I have to leave somewhere, do I trust you to take care of my wife and my children? And if I don't, I don't want you on my team.

(40:35):

And as a mortgage industry, we're focused on the opposite. Can you close loans? Can you get me loans? Then I like you. I don't care if I trust you, I care. But that conveys that message to the marketplace. That is your brand. That person is representing your brand in the marketplace. That is what is being communicated to your consumers, to your realtors, to your referral partners. And whether you think that's damaging your brand or not, it is. If you have a loan officer closing one loan every other month, that loan officer that you think is not costing you anything is damaging your brand. And so I would love as an industry for us to embrace that same methodology as in Navy seals. And it needs, for me, I want it to mean something. If we're going to be on the same team together, I don't want just because of numbers and you produce whatever. I've reached a stage certainly in my career that I search for meaning and purpose, not just numbers. And as an industry, I would encourage all of us to embrace something similar.

Jacqueline Frommer (41:44):

I would say just maybe don't be shortsighted. I think when the mortgage industry is used to sort of boom and bust, and so when a refi market comes along, everybody sort of drops everything that they were doing that was strategic and just works on what's at hand, which is trying to generate as much revenue as possible today, which is really a good thing. But just don't leave behind some of the strategic initiatives that you were building out that was going to sustain you for the future. So balance sort of long and short term and make sure you stay long sighted as well as shortsighted.

Karen Chiu (42:18):

I'm a hot-blooded originator, so have a different perspective. In 2020 and 2021. Me personally, on my team, we did over 90% purchase and I missed the refi boom. So I'm not going to miss the next one. That's why I have the technology ready to cut the steps, right? Baron, we are going to have the steps ready to go. We are ready and then we'll boom. And then I do agree with Jay significantly about training the new generation, learning the lingual, what's important to them. I spent a lot of time, but at the end of the day, ChatGPT is not going to close loans, loan officers is going to close loans. You still have to talk to a human being. We still have licensed individuals, but I am learning how to commute with younger generation. And my youngest in my pipeline right now, the youngest person that's applying for a loan right now that I was talking to earlier, because she called me, was born in 2004.

(43:24):

So she's barely 20. So first time home buyer, 5% down, very proud of herself that she has the five and she's a realtor. So those are the markets that we have to cater to understand what their needs are and how I allocate my time as I spend more time understanding what they need and how best to communicate with them. And everyone wants to know you care about how they feel. Okay, I'm going to say that my daughter's here, then I'm training her to help me with my book of business and she's helping me understand how the young people look at them. And that's where my focus is. The next generation is not j Karen or Jackie, maybe Eric. We're not the one that a big demographic. The next boom will be from the people that are born in 2000, probably 1995 and after, because when interest rate is low and these people have good jobs and they're going to qualify. And how we service them is our duty to find out how we can best be of service to them.

Jay Promisco (44:30):

I'll answer this three different ways. One, for company owners, like your priorities should be getting your cost to originate down. It's one thing to have trust and you're a really great loan officer, but if your price sucks, you're dead. It's just that simple. It's not going to work. You have to be somewhere in the game market wise, but you can't be there if you have a really expensive cost to originate. There's no way to make this thing make money. And as a company owner, as somebody who deploys capital every day, at some point I want to return on my money. And so if you're doing mortgages for the sake of doing mortgages and the company's losing money, it's a problem. So my friend, I use it a lot. Bad things happen to good companies that don't make any money. What's going to happen if I was an IT person, my priorities this year would be making sure my vendor stack is correct, that I have the appropriate technology deployed or a pathway to deploy new technology that's going to do what?

(45:37):

Lower my cost to originate period and make it easier for a loan originators to succeed as a loan originator. My parties would be to expand my influence, right? As in, and I'm not talking about being a LinkedIn influencer, that's not what I'm talking about. It's about expanding your reach, making sure everybody in your community, whether it be through Facebook, LinkedIn, Instagram, all the other different platforms that I don't know about or can't speak about, make sure everybody knows what you do for a living, right? And that's one thing I would be highly, highly focused on is expanding your influence. And then two, making sure you're a student of the game as in every single product at your disposal so that you're not just selling 30 year fixed mortgages, right? Get really, really, really good at your craft. And by the way, you also need to protect your book.

(46:33):

I'm sorry, I'm rambling. Just because every free agent loan officer that has sat on the sidelines for the last two years selling cars, the minute these rates go down are going to be coming over here, buying trigger leads and stealing your business. That's what's happening right now. And so protect your book at all costs, which means, again, expanding your influence, talking to your book of business and staying in front of your customer because these, I call 'em scabs. They come in, they come out, refi, boom happens, they show up, they take a bunch of loans away from all you people that worked hard the last two years. So those would be my priorities.

Kristin Messerli (47:12):

Thank you so much. And I'm so sorry, Heidi, I didn't realize we were over, but thank you guys so much for being here. Let's give the panel a big round of applause.