Competition For Seasoned Originators Heats Up

According to the latest STRATMOR Insights report, featuring survey data focusing on lender salesforces put out by STRATMOR Group, the industry is looking for good originators. Included were findings from a recent Spotlight Survey that looked into the ways in which lenders were recruiting and retaining loan originators. As Senior Partner Dr. Matt Lind explained, there is significant competition in the industry for seasoned originators, particularly among independent lenders.

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“Due to a multitude of factors, the mortgage industry today is smaller than in recent decades, and both short and longer-term growth prospects are smaller as well,” said Lind. “In this kind of environment, a key strategy for growing origination volume and market share is to recruit seasoned originators while, at the same time, retaining the productive originators a lender has on staff. Findings from STRATMOR’s most recent Originator Census Survey – representing a sample of almost 17,000 retail originators – prove that to be a harder task than one might imagine. The data shows that nearly 60 percent of originators have been with their current company for just two years or less. This simply underscores what any industry veteran knows: originators like to change companies.”

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“This makes recruiting a competitive affair, and retaining seasoned originators more difficult than ever,” Lind continued. “Our Spotlight Survey results suggest that the most intense competition for seasoned originators is seen as coming from regional and national independent lenders, rather than banks or credit unions. STRATMOR believes this reflects the focus of independents on highly-prized ‘Hunter’ loan originators versus the focus of banks on ‘Gatherers’ who can work as well off of bank referrals. In both cases, banks and independents were far more likely to pay incentives to recruit seasoned originators than to retain originators. Likewise, both groups agreed that Increased commissions – along with non-refundable signing bonuses – were seen to be the most cost-effective incentives when it came to both recruiting and retaining.”

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This month’s report also surveyed 2016 MortgageSAT data to examine borrower satisfaction with the origination process across age, gender, income and ethnicity characteristics. STRATMOR notes the possibility of an upward bias in the sample set because the MortgageSAT data for the roughly 100,000 respondents speaks only to the experience of borrowers whose loans have closed, not those whose applications were rejected or who dropped out post-approval because of negative experiences. With that caveat, though, STRATMOR reports that it finds almost equal levels of satisfaction across multiple borrower characteristics.

Satisfaction by gender was virtually identical (90 out of a possible 100) and there was but a one point difference between significantly younger or older borrowers and those in prime home-buying age groups. A slight differential (-3 points) existed between borrowers seeking smaller loans and the national overall average, but not as great as that between the national average and those seeking loans above $750,000 (-6 points). It also seems that borrower satisfaction decreases – slightly – the greater a borrower’s monthly income, probably because higher income groups expect higher levels of service. Finally, the data indicated a four-point difference between the highest and lowest satisfaction scores by ethnic group. Hispanic borrowers rated their experience highest overall, at 92.

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