Can Older LOs Really Serve Younger Borrowers?

STRATMOR Group, a mortgage industry consultancy, released the December edition of its STRATMOR Insights Report.  This month, the company draws upon aggregate results from four years of STRATMOR’s Originator Census Survey to address the belief held by some in the industry that loan officers (LO) today are too old to meet the needs of younger borrowers, particularly the much-sought-after Millennial homebuyer. According to STRATMOR Senior Partner Jim Cameron, the perception that loan officers, as a group, are “old” and borrowers aren’t satisfied with their LO — at any age — isn’t reality.

“There’s a concern expressed by many lender CEOs that their loan officers are getting too old for the borrowers they need to serve,” said Cameron. “Many believe that the average LO is 52-55 years old, that the LO’s age makes a difference in his or her productivity and that younger borrowers — like Millennials —would prefer dealing with an LO closer to their own age. The data just doesn’t support this view. STRATMOR’s Originator Census Survey, covering thousands of LOs working at both independent and bank-owned lenders, shows both the average and median LO age to be between 46 and 47 years old. That’s about four years higher than the median age of all American workers, but just two years higher than financial industry workers. Likewise, the data shows that age has no discernible impact on an LO’s ability to produce.

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“Looking at things from the borrower side, we see some interesting findings as well,” Cameron added. “The average age of a purchase borrower is just under 43 years old — hardly an impassable age difference from that of the LO. If we take first-time homebuyers out of the equation, that average age climbs to 46, right on par with the LOs themselves. Loan officer age doesn’t seem to matter to borrowers, either — not even Millennials. Based upon borrower satisfaction data from STRATMOR’s MortgageSAT program, there is little difference in satisfaction levels, regardless of the age of the borrower. The story here is that, like much of corporate America, the mortgage industry is facing an aging workforce and as an industry, we need to be bringing in younger talent to become the knowledgeable, dependable loan officers that serve borrowers of all ages.”

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Cameron goes on to note that lenders must develop better tools and techniques for attracting and developing new originator talent and retaining existing talent. The alternative is to grow market share by cannibalizing successful LOs from other lenders. This “business-as-usual game of musical chairs” often involves costly signing bonuses and guarantees, a situation that is obviously beneficial to LOs, but not for lenders. “If current trends continue and consumer direct and self-service origination technologies become dominant long-term for both refinance and purchase originations,” Cameron says, “The problem may simply go away, with LOs losing the market power and leverage that they have today.”

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Click here to download the December 2017 edition of STRATMOR Insights for much more. To sign up to receive the report each month, please click here.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at