Hello, LOs!
I had a very interesting conversation yesterday with Scott Crutcher, the founder and CEO of mortgage recruiting firm Maverick Financial Group. Crutcher has been in the business since 1996 as an LO, production manager and now recruiter, and he had a lot of fascinating observations to share about recruiting and personnel changes in the mortgage banking space. Crutcher works with over a dozen lenders, big and small. So I figured I'd share some of that conversation with you all in a Q&A format.
James Kleimann: I've reported quite a bit on the recruiting boom in the mortgage industry in the last year or so. What does it look like now? Are companies still hiring like gangbusters? Is there still capacity left to fill, or are we starting to approach a different, leaner job market?
Scott Crutcher: I think the industry is definitely catching its breath and slowing down a bit. The refis obviously are working their way through the pipelines and the loan officers are starting to look up and see if it's time to make a move or not. We were really, really busy through the first quarter. And then pretty much everybody slowed down on the operational placements and we've even started to see some underwriters, especially those that chased the large salaries last year, involved in layoffs recently. They've reached out to us to see if we've got homes for them. And unfortunately, with most of our clients, we don't. We have a couple clients who are looking for underwriters and processors, but not many.
JK: Scott, could you talk about what you've seen with regards to LOs at big banks? There have been quite a few departures at Bank of America and Wells Fargo in recent months.
SC: The only one I've read about recently and seen in my network that has migrated is Chase. I believe I read something where Chase was going to have loan officers cross sell bank products now, or they're moving toward that model… a lot of those folks have migrated. We saw a large group in the Texas market that migrated from Chase over to Guaranteed Rate recently.
JK: What's a good landing spot for people who have spent decades at Chase, Wells Fargo, BoA, etc.?
SC: I think a great landing spot is some of the big box companies... I think you see a lot of bank LOs that have probably made 50 to 70 basis points for many years. They see the opportunity in the broker channel to make two or three times that amount of compensation. And the ones that do have a book of business and have Realtors that they work with, CPAs and divorce attorneys – they're not relying on bank clients to walk into a bank, especially post COVID. They can generate the business off the street just like your regular loan officer to mortgage banker.
JK: Has the larger trend of work-from-home changed where LOs work? Maybe someone who is a top producer at a regional lender thinks, "Well, there might be another company that pays me better or treats me better or offers me more operational support, and I never have to leave my living room?"
SC: It does. There's folks out there making seven figures in their pajamas, and they like that. We're seeing retail being very steady on the production side. Now, there's always a push to bring on quality individuals, professionals and teams on the retail production side, and that is staying very steady. But now we're seeing a big push with brokers. There's some large national brokers and then there are some small mom and pop brokers that are going after each other. They're trying to offer more basis points or more support and more marketing. We're seeing a lot of brokers leave one shop and go to another one. It could be a small broker going to one of the bigger broker shops. I'm getting a lot of interest in the wholesale side. I work with several clients that have us recruiting wholesale and wholesale is definitely ramped up I would say in the last 60 to 90 days with my clients. We're still seeing some aggressive signing bonuses and aggressive, basis points for transition.
JK: I remember when things were absolutely insane, say, like, October, and people were telling me we're going to see a huge wave of retirements. People made more money than ever in 2020 and as things are slowing down, they'll hang up their mortgage boots. Has that happened?
SC: I've actually seen the opposite. I have helped more folks in their mid to late 60s over the last year than I have and in many years and, and I'm talking anywhere from loan officers that are doing ample loans a month, to executives. There's been so much money to be made over the last year or two, that even if someone was what I call a short timer, starting to flip calendar pages to retirement, they're telling themselves, 'I would be dumb to retire right now, I could do this for two more years, or three more years and probably made more money than I have in the last 15 years.'
JK: For LOs who are looking to leave their lender, what's the primary reason? Are they chasing better comp because margins are compressing at their lender? Is it something else?
SC: I've got over 15,000 connections on LinkedIn, and I did a sample survey a few weeks ago to the originators that I'm connected with and they had a pretty good response rate. I asked: What are you looking for if you made a move or thinking about making a move? What's most important to you? And I simply had four categories: superb operations (ability to close a loan on time), competitive pricing, terrific company culture, and higher compensation. So I wanted to know as the owner of a recruiting firm, you know James, what's most important to you, if you're going to make a move or if you did recently make a move? Why did you make that move? Overwhelmingly, almost 60% of the response was superb operations. I believe competitive pricing was a distant second at 25%. And then having a terrific company culture and moving for higher compensation, both garnered less than 10% of the vote. It's interesting because you know you got a lot of companies out there offering crazy high basis points, comp and this, that and the other, but that may not be in reality what the originators are actually looking for if they're going to make a move.
We will be publishing an HW+ story with more insights from Crutcher in the coming days, so stay tuned. Tomorrow we're going to talk about how to capture millennial business.
James Kleimann
Managing Editor, HousingWire
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