New LO survival 101
I remember in 2007 when I told a neighbor I was about to become a loan officer. I had been working at Washington Mutual for a few months when I was offered the opportunity to go into a mentorship under the two top loan officers in the county. She looked me dead in the eyes and said, “You will never make it.” I was taken aback at the time and thought she was a horribly negative person whose life must have gone sideways for her to say that to me, her sweet neighbor. She was an escrow officer, so I thought she had good insight into the industry; however, she was convinced I would fail. At the time, I blew her off and followed the optimism of my mentor, Ron Shaw.
Years later, I reflect on that conversation and realize she was not filled with malice but had just been around for a long time. Here is the scary truth: Only about 30-40% of loan officers survive the 3-year mark. After being in the industry for 17 years, I can share one of the main reasons so many fail.
New loan officers have very little to no training and very little support. Every day, a loan officer in America just passed NMLS and is off to brave the industry. They have a meager chance of survival if they go straight to the broker or retail lender paths without a solid mentor. The NMLS education and test do not prepare you for the life of a loan officer, nor does it teach you guidelines or how to do a loan. They are told by the company or person who hired them to “go get loans,” but they are not taught how to structure or close them. Imagine a plumber being told to get clients but having no idea how plumbing works or how to fix anything. How could this end well? They are told to “go get realtors” but not taught how to establish boundaries and what a loan officer’s 7-day-a-week job really looks like. They are set up to fail. If you “get a realtor” and do not close that loan on time and without drama, you will never get a deal from them again, and they may bad mouth you to the whole town. Career over in an instant.
It is a systemic problem in the industry that harms the loan officer and the consumer. One of the requirements for getting your mortgage license should be education on how structuring a loan works and how to read and understand guidelines. It has always been shocking to me that with the amount of regulation the mortgage industry has, the severe lack of education has not been corrected. Buying a home is the biggest purchase most Americans will ever make, yet we are leading consumers to “professionals” who may have zero clue about how loans work. We give people a license that identifies them as a mortgage professional without teaching them about loans. Take a minute to let that sink in because that is the brutal truth.
There are no winners when people are not taught how to do the job they are hired to do. So, what is the solution? First, it would be great if someone at the CFPB did the mortgage licensing course and tried to get a loan. It would be eye-opening and lead to additional education requirements, which would be a GOOD thing. However, that does not solve the issue at hand. So, what should new loan officers do to increase their chances of survival?
Read guidelines and talk to underwriters and processors. Read and read and talk to everyone you can. I learned to structure loans by making good friends with underwriters and processors. To this day, the most significant impact in my career has been from learning how processors and underwriters look at files. It has helped my ability to qualify out of the gate. I know the questions to ask and what problems to look for from day one. Processors and underwriters are the key to providing an amazing experience to your client.
Get a mentor. I am from the era when people were incentivized to be mentors. Those days are gone, and getting someone to commit to being a mentor can be challenging. However, you do not have to have someone agree to be your mentor. I have had many mentors who did not realize they were my mentors. It is about taking all the information you can get, learning from them, watching what they do, and soaking everything in like a sponge. There is so much information online. Instead of watching how top loan originators are marketing and trying to copy that, LISTEN to what they are saying. That is where you learn.
I was lucky to have had mentors early in my career who guided me along the path: Ron Shaw, Bart Kort, Paul Karmouche, and Cory Carroll. They were there the first three years I was in business. They did not build me a boat and sail it. Still, they showed me how to survive and taught me the most important lessons: that you better know your guides, develop a thick skin, and most importantly, don’t you dare try to sell something you do not understand. They also taught me to laugh and enjoy life even during the toughest times. That is a survival skill we all need in this industry.
If you are looking for a mentor and don’t know where to start, visit YouTube. There are several channels offering solid guidance to any LO willing to take it. Learn from the videos.
Read publications such as HousingWire, Scotsman, Mortgage News Daily and pick up one of the many books loan officers have written about loans. The top producers I know are guideline experts. They are at the top because they know the ins and outs of the loans they are selling. They know how to structure a loan and provide a seamless experience for the client. They also know how to convey to the client that everything will be ok if they work with them. They have done the hard work to become an expert. To survive, that is what you need to do. I hope this helps.
Jennifer Beeston is a nationally known mortgage originator.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
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