Building Better Mortgage Officers
Credit unions seeking to hire strong mortgage lending officers should look for candidates with experience, strong communication skills, the ability to build and maintain relationships and a willingness to adapt to the credit union's culture.
These are some of the thoughts offered by leading executives and mortgage consultants as many credit unions consider adding staff to help them convert housing finance operations which had been primarily focused on refinancing existing home loans into operations which underwrite and close mostly loans to purchase property.
“I know I risk sounding like a broken record when I keep bringing it up, but purchase money lending is really different,” said Bob Dorsa, president of the American Credit Union Mortgage Association.
“There are more people involved, the stakes are higher and the timelines are tighter,” Dorsa said. “You can't just take a refinance shop and make it into a purchase money shop overnight.”
That can mean increasing the use of automation in the underwriting process, it can mean retraining underwriters and risk managers and it can mean hiring additional loan officers who have experience at purchase money lending, according to Dorsa and others.
“I don't know that a credit union has to replace existing loan officers, but I think a lot need to hire at least some purchase money professionals to help get their shops going and train others,” said Tim Mislansky, chief lending officer at the $2.8 billion Wright-Patt Credit Union and president of myCUmortgage, a wholly owned mortgage CUSO that Wright-Patt operates.
Mislansky contended that at least some new staff is needed because of the difficulty or re-training staff used to refinancing existing home loans to make new ones.
“Purchase money lending just has a different pace,” Mislansky explained. “There's more hand holding and it's far more competitive.”
Mislansky listed experience as the most important quality to look for in new, strong, mortgage loan officers and recommended those with time spent working for financial institutions such as banks or other credit unions as good candidates. But he also recommended credit unions take time to measure an experienced loan originator's fit with the credit union's culture.
“Sometimes an originator can look great on paper, a really talented closer who can work with members and Realtors and really bring in the business,” he observed, “but it's only after he or she arrives you find out he or she had an assistant at the old operation. You see them writing up mortgage apps with members and then hunting and pecking to type them into the system later. Why? Because that's one of the things the assistant did in the old shop and that's not your culture.”
He also urged a credit union to be careful at how member-centered the new loan officers are. “What motivates that loan officer?” Mislansky asked. “Is it just to close the loan and get the commission or is it to put the member into really the best product for them? That is the credit union's goal. It needs to be the goal of the loan officer too.”
He also urged credit unions to seek out candidates with strong skills in communicating complicated topics and negative news.
“Purchase money loan compliance and underwriting is so complicated now that you need to have loan officers who can explain to borrowers what they need to do and why,” Mislansky said.
“And I am also someone who believes in getting bad news delivered and out the way, so you need loan officers who can sit borrowers down and say ‘I’m sorry, but you’re just not going to qualify for this loan amount, so let's discuss what we can do as a next step.’ Get the bad news out of the way so that you can move to forward with what you can do to help them.” he added.
The last central quality Mislansky said loan officers needed was an ability to build and maintain relationships, particularly across industries.
He pointed out that while obtaining and closing a mortgage loan is something most credit union members will only do a few times across their entire lives, a credit union has to do it every day. That means a credit union can't wait for a member to introduce a Realtor but instead should already have a relationship with existing, popular and busy Realtors in the area.
“They should feel comfortable calling you for updates on where their loans are in the process and they should feel confident that when they recommend home buyers use your credit union to finance their homes,” he said. “It's a two-way relationship and you need to have loan officers who can build these and sustain them.”
Mislansky noted that credit union clients at myCUmortgage prove these principles every day.
For example, the $184 million Canton School Employees FCU had a 2012 loan volume of 133 loans for $12 million, which was OK but not what the Ohio credit union thought it could be. All that changed, Mislansky observed, when the credit union hired an experienced housing finance manager who, in turn, hired some experienced loan originators.
Together, the new team closed more mortgage loans in the first quarter of 2013 than the credit had in all of 2012 – and the majority of the new loans were purchase money loans.
“Putting the right people in place can make a world of difference,” Mislansky said.