The mortgage industry has been one of the most rewarding careers I could have imagined. The ability to help people achieve wealth management thru home ownership is a blessing. Yes, it has also been one of the most difficult for the faint of heart.
Watching friends lose their jobs and careers overnight in 2008 was brutal. Only the strong survived and those able to adapt first. Credit markets and warehouse lines froze overnight.
I will never forget it. I was on vacation in downtown San Diego at the Marriot, watching it unfold on CNBC. I remember looking at my wife and saying, “it’s over.” She had no clue what I was talking about. I shifted into survival mode, like heading into battle and leading my team thru what it would take to get to the other side. We prospered because we shifted when most of the competition did not. The total headcount in the industry was drastically wiped out.
Now, fast forward to 2022. After years of artificially reduced rates that the industry couldn’t handle, the sheer volume and ease for many to make a quick buck is over. However, here’s what’s different this time. First, people have massive equity built up compared to 2008. Markets aren’t frozen. Never in the mortgage industry that I am aware of have we seen rates increase so violently. They were virtually doubling within months. Who would have predicted a war?
Refinance volume is currently nominal to where we were just six months ago. A complete shift to the purchase market. As I write this, two mortgage companies have already suddenly closed. While any prudent company for the long haul needs to be the right size, a significant player just announced they are reducing their staff by 50%, which is almost 6,000 jobs. Excuse me?
I see many Loan Officers with a deer-in-the-headlights look. They are scared. I believe I know why. I have observed some of the following:
- They never branded themselves and capitalized on using social media. One of the most effective ways to scale your business.
- The pandemic caused many to lose some of their sales skills. They didn’t need to have boots on the street, face to face with their referral partners and clients, and got rusty.
- They don’t understand how they need to pivot. Just because something may have worked for many years doesn’t mean it will work today.
- Many aren’t coachable, and they think that they know it all.
- Many aren’t leaning in during this moment but instead retracting.
So, here are some of my humble suggestions as I believe we will see, at a minimum, a 30 to 35 percent reduction in Loan Officers, not including all of the operation cuts and thus why many won’t make it through. .
- Realize that today we are actually in a regular market. The past couple of years were not typical in how rates were driven down and the amount of refinance volume.
- Are you educating yourself? Studying the economy and following subject matter experts such as Barry Habib?
- Are you educating yourself on product suite and product guidelines, hands down?
- Do you have potential objections written down and how to overcome them, or are you winging it? I have asked many loan officers if I say that rate sounds high; what is your response? Surprising how they answer.
- Do you genuinely have qualified buyers, or are they shoppers? You can stay busy all day with shoppers getting nowhere. Do you have a plan to ensure that your client’s offers get accepted? Do you know what the average over-ask price is in your market?
- Do you know where people are moving to and why? What are the school and municipal infrastructures?
- Do you have a plan or strategy to overcome clients’ fears? Having empathy with factual data readily available is key.
Here’s a last Thought: Are you willing to put in the hard work?
At this point, many of you may be tired or considering throwing in the towel. If your team can’t sell in a regular market with the above suggestions, their future is in question so do this: ASK FOR HELP.
I seek coaching, support, and constant help, especially during difficult periods. My commitment to all that know me is that we are stronger together, and I am 100% committed to leading us through to the other side because what I see is “opportunity”.
Please share with me your thoughts and suggestions anytime.