Take Back Valuable Time

BY SARAH WOLAK, STAFF WRITER, NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

Sure, originations are down, which means less money in your pocket. So it might seem like this is the worst time to add on the cost of an assistant. Yet, as companies in the mortgage industry strive to increase productivity and manage workloads with fewer workers, it may be too expensive not to hire one.

Why? You’ll have an extra set of hands to handle administrative tasks and time is money, literally. There will be more time to originate, which puts more money back in your bank account.

“Think about it this way: by hiring an assistant, you’re getting another 40 hours per week to play with,” said Andres Munar, broker and cofounder of Co/LAB Lending. Munar himself started out in the industry as a broker’s assistant and worked his way up into opening his own mortgage company and later, co-founding Co/LAB with Megan Marsh.

“Back in 2006, there weren’t strict guidelines on what an assistant could do and really anybody could quote interest rates, do loan officer duties, process loans, and even handle client calls,” Munar said. “Since the guidelines were so lenient, I was able to take more on my plate and ended up bringing in 80% of the sales at the brokerage that I was assisting at.”

Jay Dacey, president of the Minnesotabased Jay Dacey Mortgage Team, said that hiring an LOA was a large step when he and his small team set up an independent mortgage shop. “I made the decision to seek out an assistant because I needed more time to focus on my own tasks as a loan officer,” Dacey explained. “I have just one LOA on my team now, but it’s allowed me to take back my time and produce more.”

Making Room For An Loa

The apprehension toward hiring an LOA is how to pay them while still being able to profit and make a comfortable return on investment. “Back then, I probably made $13 an hour and maybe an additional $50 cut per file. If I brought my own clients in, back then I got a 50% commission split if I brought that client in,” Munar said. “Nowadays, it’s based on your geography and how much you produce or the volume of the loan officer’s production.”

When Munar first hired an assistant in December 2012, he paid the salary from his own pocket.

“Many [mortgage professionals] are scared to make that jump and hire an LOA,” Munar said. “I made the jump to hire my first assistant when my business started to take off. It changed the whole way my business ran: I was able to talk to more Realtors and clients as the face of the business while I had someone on the back end handling the rest.”

Even though Munar says that conferences he attends continue to recommend hiring an assistant to boost business, many are still reluctant to take the step to hire. “A lot of people fret about how they’re going to make that extra money per month to pay an assistant, but what they’re forgetting is that the extra 40 hours per week that the assistant is working is more time to make more loans per month, which in turn, makes the money to pay an assistant.”

Munar also said that mortgage shops tend to stock up on LOAs during busy markets to crank out loans, but that doesn’t mean that they can’t readjust their staff in a down market when money is tighter.

Dacey, on the other hand, says that he decided to take the leap and splurge on an LOA after hearing repeated advice to do so in the industry and after his business began growing. “I made the decision to hire an assistant because I heard on a webinar that you can’t afford an assistant until you make the jump and hire one,” he said. “They become a part of your regular team. Like my other employees, they receive health insurance and a 3% match IRA plan.”

Munar says that as someone who is on the road a lot, having four LOAs has been instrumental in Co/LAB’s success. “The simple fact is that you can’t do it all. Ronald McDonald doesn’t cook his own french fries,” Munar quipped.

“Sales and fulfillment cannot be the same person. It’s a decision that most people wished they had made sooner.”

Toeing The Line

Today, the line between an LOA and a regular mortgage loan officer is more defined than it was in the early 2000s, thanks to the Dodd Frank Wall Street reform that established regulatory requirements for each role. LOAs can work licensed or unlicensed, which gives them specific job constraints.

Michael Barone, a managing partner of Abrams, Garfinkel, Margolis & Bergson Law’s mortgage compliance practice, specializes in mortgage regulatory practices. He says that the best way to avoid confusion between licensed and unlicensed LOAs is simple: Companies should disclose what duties each LOA is allowed and not allowed to perform.

“The key difference is that unlicensed LOAs are not allowed to quote interest rates or really make recommendations to clients,” Barone said. “A processor, LOA — licensed or unlicensed — all have limitations on what they can do.” Munar provided a similar perspective and said, “An unlicensed LOA can really just do paperwork. They can’t talk about the rates or solicit business.”

Barone also said that what licensed versus unlicensed LOAs can do is also scenario-based and some gray areas exist. “I think it’s very easy to script what an LOA should say or do, but it’s hard to guess what the consumer’s response or questions will be,” he explained. “That’s why LOAs should get training on how to respond to certain situations that they may not be sure they’re permitted to answer.”

Sometimes, Barone says that LOAs may have industry background ahead of time, which is one complication that he sees in many practices. “While these LOAs [with experience] may be able to answer questions through their own knowledge that the customer or Realtor is asking, those answers may be outside of their job duties, especially if they’re unlicensed,” he said.

Barone said that an ideal LOA may have no industry experience or knowledge at all. “They’re less bound to step outside of what they can and can’t