Surviving this market is going to be a challenge. The market will never revert back to the way it was before. Average fees are going down, not up, and the level of skill and expertise that its going to require to put a package together is going to intensify. Banks are going to be choosy about which loans that they pick, and underwriters will no longer be beholden to brokers and in house originators.
There are huge rewards for sticking with this market.
Right now, the number of transactions seems to be on pace to go down by 20% per year–maybe 30% per year. However, the number of originators will be only 15% of what it was at the 2005 peak. This means that each originator can do 3-4 times the number of transactions. That means that getting through this crazy makret has a lot of upside and a of stability.
The rewards are huge.
What Every Loan Officer Must Do Today
From an operational standpoint, each individual loan officer must establish written “best practices” for the following:
- Taking Applications,
- Putting packages together,
- Handling stips,
- Working with Realtors,
- Communicating to all transaction partners (listing/selling agent, buyer/seller, title company, attorneys, inspectors + lender),
- Generating Leads
At the end of every transaction that I do, I write down: what went right, how long in underwriting, what we could have done better, what went wrong, where the lead came from (long, detailed description), what kind of referral opportunities exists, what scenarios would make an attractive refinance for the customer, and what the customer thought about our service.
I take this information and add it to my ops manual every month–an example would be me recently requiring that EVERYONE turn in 1040s before I submit a loan, even W2’s people because we had a 4506-T problem that came up recently on a 22 year old borrower. That will never happen to me again, no matter how long I’m in the business–and it just takes an additional question in the application process.
I’ll go through this week, here on principles–strategies–not techniques–that we can use to cover the core functions of what we’re doing so we can be among the 10% that triple our businesses going foward!
Chris Johnson runs the Ten Day Team at First Ohio Home Finance in Westerville, OH. He can be reached at chris@tendayteam.com.
In the current state of gloom and doom, what a great perspective!! I also think it’s becoming more and more important to trust your gut during a first interview. If we are going to be doing 3x the transactions, we need to be more careful of how our time is spent.
Change is right. I was in the middle of a loan when Qicken emailed me and said they now couldn\’t refinance my construction loan because I wanted to get money out and pay off other debt. I find the change causing ethics of doing business problems for mortgage folks. Needless to say I am reshoping for a refinance of a construction loan AGAIN.