MPAMAG.COM ISSUE 11.04
ORIGINATORS ON BRANCH NETWORKS
Originators speak out on what they’re looking for in a branch network partnership
SPECIAL REPORT
ORIGINATORS ON BRANCH NETWORKS
ORIGINATORS ON BRANCH NETWORKS Originators speak out on how well networks are supporting branches and what they can do to improve branch partnerships BREAKING INTO any industry has its hurdles, and the mortgage industry in particular is full of roadblocks and challenges – even for the most seasoned loan originator. For some in the industry, joining a branch network provides crucial support in navigating a dynamic business without sacrificing independence. Branch partnerships give originators the opportunity to focus their efforts on what matters most – securing the
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American dream of homeownership for their clients – rather than time-consuming yet important business decisions such as compliance and technology. MPA wanted to uncover what matters most to today’s originators and find out how branch networks have helped – or hindered – their business. Originators were asked which of nine key qualities are most important in a branch network on a scale from 1 (not
important) to 10 (very important). They also provided comments on how networks can help originators do their jobs even better. As in previous years, most originators agreed that underwriting support was the most important benefit they receive from a network, although loan programs and communication also rated highly. What else did originators have to say about their network partners? Read on to find out.
WHAT’S MOST IMPORTANT TO ORIGINATORS? MPA asked originators to rate nine key qualities of branch networks on a scale of 1 (not important) to 10 (very important). Here’s how this year’s top priorities compare to last year’s.
2018
2017
Underwriting and turnaround time Loan programs Communication and support Technology Compensation
Culture Marketing Compliance support Onboarding (training and education)
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UNDERWRITING AND TURNAROUND TIME
1st
Importance to originators 2018 score
9.23
2017 score
9.28
Securing mortgages is the bread and butter of every originator’s business, and underwriting is the foundation of each closed loan – it can make or break a client relationship. The majority of originators who responded to MPA’s survey named underwriting and turnaround time as the most important aspect of their network partnership. In this highly competitive industry, maintaining an edge over peers is critical for longevity, and underwriting plays a large part in that success, making it a chief area of consideration for originators when choosing a branch network. “Fulfillment and execution is my number-one priority,” said one respondent.
A few originators praised the great turnaround and underwriting support they receive, while others criticized the at-times cumbersome process, suggesting ways to improve it. “In order to meet the demands of our industry, we must shorten the turnaround time and have simpler, less complicated underwriting procedures,” one originator said. “Automation and diversification of job duties would help facilitate this process.” Another originator stressed the need for files to “get to the underwriter faster,” adding that “files cannot sit around in preprocessing before getting to the processor. Pay attention to closing dates and work backwards. Have a calendar for closing, underwriting and processor so they have specific dates of when a file needs to be where.” Overall, originators emphasized that great underwriting support relies on reasonable and reliable turnaround times, along with open communication, to ensure the client receives the best service possible.
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SPECIAL REPORT
ORIGINATORS ON BRANCH NETWORKS
LOAN PROGRAMS
COMMUNICATION AND SUPPORT
2nd
Importance to originators 2018 score
9.06
2017 score
8.89
Last year, originators rated loan programs as their fifth priority among branch networks’ offerings. The score this year – which jumped from 8.89 to 9.06 – tells an entirely new story. A variety of loan programs is now the second most important thing originators seek from branch networks. It’s not hard to see why loan programs would be of such great importance: Having a full and diverse suite of options means an originator can service a wide range of borrowers. In the age of the ‘internet broker,’ the need for competitive loan programs is a must. One originator described loan programs as his “arsenal” when going out to prospect new clients. Another elaborated on how he never wants to risk losing a client, or be forced to turn a client away, just because he’s missing a product that fits that borrower’s needs. A few others mentioned how access to niche products – such as programs that address the needs of a specific area or market – has changed the game for their businesses by ensuring a certain market can always be serviced. However, some felt that a branch network with a long list of programs isn’t always in their best interest, pointing out that offering a vast range of programs can lead to inefficiencies and complications that cut into productivity and jeopardize the “special touch” of focusing on a few products.
3rd
Importance to originators 2018 score
8.61
2017 score
8.93
Some would argue that communication is the pillar of success in any business. When it comes to branch networks, one thing originators agreed on was that thorough communication across the board is essential in all aspects of the process. If there’s a break in communication or something goes without being addressed, it could jeopardize the entire deal. Because there are so many individuals involved in the mortgage process, everyone needs to be on the same page and maintain the same standard of communication. “As long at there is open communication from the corporate office and they provide competitive mortgage products and pricing, along with technology and marketing support, I am satisfied,” said one originator. Others noted that while the regular communication they experienced was OK, it can always be better. One originator pointed out how his network’s in-house system gives all parties handling a loan, from processors to underwriters, access to one another, paving a clear path for communication across departments. “Communication and support are essential for a smooth transaction,” he added. For another originator, good communication goes beyond everyday interactions: “Make monthly sales calls more inviting and not boring,” he suggested. “Have real meaning to the meeting, and then don’t do something that was not what you said you were going to do.”
TECHNOLOGY
4th
Importance to originators 2018 score
8.51
2017 score
8.90
This year’s survey indicates that while technology isn’t the most important aspect of a branch network for originators, networks can’t skate by with below-average tech offerings. Originators rated this area an average of 8.51 out of 10 in terms of its importance, and while that represents a slight decrease from 2017, it’s still top of mind for many branch partners. Many respondents voiced dissatisfaction about their networks’ technology, elaborating that while improvements have been made in recent years, their networks still lag behind what’s available in the broader market. “We are not doing well in this area; we need class-
leading technology,” one LO said. Having the wrong technology can be just as much of a differentiator for a business as having the right technology. Networks that look for quick technology fixes or don’t carefully consider the chosen technology before implementing it risk causing more harm than good. “Find something better,” exclaimed one unhappy originator, highlighting how taking the time to choose the right technology upfront can prevent headaches down the road. Originators also listed several tech areas that they believe need improvement, including availability of a smartphone app, a more user-friendly online application and an improved CRM that can mix loan types. But originators were also quick to stress that technology isn’t a be-all, end-all solution in the mortgage industry: “[Tech] does nothing to improve communication; it should [function] as a support system, and not do what we do,” one respondent said.
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SPECIAL SPECIAL REPORT REPORT
ORIGINATORS ON BRANCH NETWORKS COMPENSATION
5th
Importance to originators 2018 score
8.42
2017 score
9.21
What was once one of originators’ most important criteria in choosing a branch network – compensation – has now slid to fifth place. This shift in sentiment could be attributed to most originators agreeing that their pay is fair and reasonable, along with the realization that improvements in areas like loan programs and technology can have a direct effect on compensation. “I feel my comp is fair,” wrote one respondent – but not all originators were satisfied with their pay. “Corporate needs to take less of the overall margin,” one discontented originator said. “I am not competitive in my market because of this; I can’t work for free.” Another mentioned rising health costs as the reason for being dissatisfied with pay: “Medical costs eat away significantly at what is made after the draw is issued; would be nice if we could reduce medical costs.” One respondent noted that good pay doesn’t make up for poor systems and management, and that he would gladly trade higher compensation for a network that provides dependable support. Another expressed similar sentiments: “No company can pay any sane individual enough to compensate for the stress of not being able to adhere to any of the common-sense principles needed for good business.”
HOW CAN NETWORKS IMPROVE THEIR SERVICE TO MEMBERS?
“Solidify their business plan for future stability” “Branch networks need to provide tools, technology and marketing that will target today’s buyer” “Do what you say you’re going to do. If for some reason you cannot accomplish a goal, let everyone know about it”
“Better access to management and input on decisions that impact our ability to sell/produce” “Keep moving the mark to improve processes” “The originator is the client – serve them” “Know what is important to the originators”
CULTURE
6th
Importance to originators 2018 score
8.16
2017 score
8.57th
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Culture can make or break an organization, which is why many originators find it to be a critical component of a branch network. Although the area ranked sixth in importance, garnering an average score of 8.16, originators recognize that finding a network that ‘fits’ culturally is just as important as partnering with one that offers great business support. A solid culture, one respondent said, means everyone in the organization is on the same page, which translates to great results for the customer. Some originators offered positive feedback on their network’s culture, but several described their networks as lacking culture. “Culture
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is usually a bunch of hype and lies [about] how wonderful the company is,” said a frustrated originator. “If they have to say it, it usually means it isn’t so. Just do the work.” Understanding that culture encompasses various areas of the business, one reader pointed out that inadequate communication can result in a poor company culture: “I don’t feel like there is enough communication between branch managers, nor is it pushed. There are no branch manager meetings online, nor at our annual conference. We really do not know what our culture is.” Another originator suggested “more local and national events,” reminding networks that large-scale events aren’t necessary, as there are plenty of budget-friendly ways to keep employees engaged. Another originator chided his superiors for setting a poor example, thus damaging company culture and morale: “Managers are compensated for all the work the loan originators do.”
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SPECIAL REPORT
ORIGINATORS ON BRANCH NETWORKS
COMPLIANCE SUPPORT
MARKETING
7th
Importance to originators 2018 score
7.94
2017 score
8.01
Marketing has jumped from ninth to seventh place this year in terms of the qualities originators prioritize in a branch network. More so than last year, originators are voicing their need for marketing support, acknowledging that in order to gain business, you need to have your name out there. Most originators said that while they have marketing tools at their disposal from their networks, what’s available is insufficient to help them compete in the current marketplace. “We [need] better marketing support – not just fliers and websites, but real help creating business relationships and recruiting qualified candidates,” one LO said. Another originator suggested that networks “[provide] corporate company marketing instead of providing individual LOs marketing materials. We need to get our name out.” Another echoed that sentiment: “Marketing is all done by the LO. Corporate needs to provide more marketing for the company name.” Leads were a sore spot for a few originators, who felt their networks weren’t providing the tools needed to procure quality leads, which can end up being a waste of time and money. On the flip side, not all originators are on board with marketing support – a few said they’d prefer their networks to narrow their focus to areas that directly affect the loan process. “Any good loan officer is only as good as the last loan they close on time without hassle – end of story,” one respondent said.
8th
Importance to originators 2018 score
7.74
2017 score
8.25
Although compliance support received the second lowest score from originators out of any category, several named it as the number-one reason they joined a branch network. “My experience has shown that the only benefit to network branching was the compliance burden taken off my shoulders,” said one LO, who advised his network to “give the originator a reason to want to be a part of our organization with what you can do for them.” Originators largely welcome help with compliance requirements and staying attuned to changing regulations; however, some are frustrated with how their network’s handling of compliance has impacted their business and customers. “Don’t hold up my pay because you have compliance issues” and “compliance should be totally invisible to the client and not an obstacle” were among the complaints. Bottom line: Originators agree on the benefit of compliance support, especially when trying to focus attention on servicing clients, but networks need to be mindful that their compliance efforts don’t restrict the business of their branches.
“Give the originator a reason to want to be part of [the network] with what you can do for them”
ONBOARDING (TRAINING AND EDUCATION)
9th
Importance to originators 2018 score
7.35
2017 score
8.30
Receiving proper education and training at the beginning of a branch network partnership is critical for a good long-term relationship. Although originators didn’t find onboarding to be as important as other areas of their branch network partnership, it nonetheless garnered a relatively high average score of 7.35 out of 10. The understanding that a team is only as strong as its weakest link is crucial for networks to grasp at the very beginning to ensure every person who comes through the door is offered the same level of educa-
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tion and training. Similar to other areas of the business, originators found a few areas in onboarding that could use improvement: “Training is good, but there needs to be more emphasis on sales approach and best practices,” one respondent said. “Trainers can get pretty monotonous,” said another. In such a fast-paced industry, where changes can occur in an instant, having the right education and training upfront can make a huge difference in an originator’s career. Equally important is having a reliable point person at the corporate level who can facilitate training and education throughout the life of a partnership. “Having one person in charge of training and education is extremely important,” said one originator. Another agreed: “When … there is one person to go to with questions – and not get thrown around to someone else – it makes life much easier.”