New LO Survival 101

I remember telling a neighbor in 2007 that 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 mentor the top two loan officers in the county. She looked me dead in the eye and said, “You’ll never make it.” I was stunned at the time and thought she was a terribly negative person whose life must have taken a sideways turn before she said that to me, her lovely neighbor. She was an escrow officer, so I thought she had a good understanding of the industry; however, she was convinced I would fail. At the time, I rejected her and followed the optimism of my mentor, Ron Shaw.

Years later I think back on that conversation and realize that she was not filled with malice, but had simply been there for a long time. Here’s the scary truth: Only about 30-40% of loan officers survive the three-year term. After 17 years in the industry, I can share one of the top reasons why so many fail.

New loan officers have very little to no training and very little support. Every day a loan officer in America just passes the NMLS and goes on to brave the industry. They have a slim chance of survival if they go straight to the broker or private lender path without a solid mentor. The NMLS training and test does not prepare you for the life of a loan officer, nor does it teach you guidelines or how to close 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 is assigned to get customers, but has no idea how plumbing works or how to fix anything. How could this end well? They’re told to “go get real estate agents,” but they’re not taught how to set boundaries or what a loan officer’s job really looks like seven days a week. They are set up to fail. If you “hire a realtor” and don’t close that loan on time and without drama, you’ll never get another deal from them, and they can badmouth you to the entire city. Career over in the blink of an eye.

It is a systemic problem in the industry that hurts both lenders and consumers. One of the requirements for obtaining your mortgage license should be education on how loan structuring works and how to read and understand guidelines. It has always been shocking to me that with the amount of regulation in the mortgage industry, the serious lack of education has not been corrected. Buying a home is the largest purchase most Americans will ever make, yet we direct consumers to “professionals” who may have no idea how loans work. We give people a license that identifies them as a mortgage professional without teaching them anything about lending. Take a moment to let that sink in, because that’s the brutal truth.

There are no winners if people don’t learn how to do the job they were hired to do. So, what’s the solution? First, it would be great if someone at the CFPB would take the mortgage course and try to get a loan. It would be an eye-opener and lead to additional educational requirements, which would be a GOOD thing. However, that does not solve the problem at hand. What should new loan officers do to increase their chances of survival?

• Read guidelines and talk to insurers 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 learning how processors and insurers view files. It helped me qualify right out of the gate. I know from day one what questions to ask and what problems to look out for. Processors and insurers are key to providing your customer with a great experience.

• Get a mentor. I come from the era when people were encouraged to become mentors. Those days are gone and it can be challenging to get someone to become a mentor. However, it is not necessary for anyone to agree to be your mentor. I’ve had many mentors who didn’t realize they were my mentors. It’s about gathering all the information you can get, learning from them, watching what they do and absorbing everything like a sponge. There is so much information online. Instead of looking at how the major lenders are marketing and trying to copy that, LISTEN to what they say. That’s where you learn.

I was fortunate to have mentors who guided me along this path early in my career: Ron Shaw, Bart Kort, Paul Karmouche, and Cory Carroll. They were there the first three years I was in business. They didn’t build a boat for me and sail it. Still, they showed me how to survive and taught me the most important lessons: to know your guides better, to develop a thick skin, and most importantly, don’t dare try to sell something you don’t understand. They also taught me to laugh and enjoy life, even in the most difficult times. That’s a survival skill we all need in this industry.

If you’re looking for a mentor and don’t know where to start, visit YouTube. There are several channels that offer solid guidance to any LO willing to do so. 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 sell. They know how to structure a loan and provide a seamless experience for the customer. They also know how to make it clear to the customer that everything will be fine if they work with them. They have done the hard work to become an expert. To survive, that’s what you have to do. I hope this helps.

Jennifer Beeston is a nationally known mortgage lender.

This column does not necessarily reflect the opinion of HousingWire’s editorial staff and its owners.

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