Residential Magazine

Prepare for the Peaks and Valleys

Shore up your skills to weather the down cycles of the mortgage market

By Michael Sunnaa

Sitting in the center of one of the country’s fastest-moving business sectors and economic drivers, the mortgage industry attracts an abundance of fresh new faces every few years. These bright, young, shining stars typically enter through the banking and call-center channels, and for nearly two years they have had more business than they can handle.

One of the great disservices that many retail lenders, call-center-based mortgage companies, wholesale lenders and banks do to the newly licensed loan originator is to not adequately prepare them for what is to come. The industry has seen huge volumes of mortgage applications before, followed by precipitous drops in 2009, 2015 and early 2020, according to statistics from Trading Economics. And it will happen again.
If you’ve been in the mortgage industry for seven years, you probably know just as much about originating loans today as someone who’s been in the business for 30-plus years. You may still be learning the ins and outs of getting business, maintaining a database, and engaging clients and referral partners, but as for doing loans, you’re an expert.

If you can persevere, your worst year in the mortgage industry will still be a better year than in many other jobs that exist.

Why? Because loan guidelines change drastically, in general, every five to seven years. Evidence of this can be seen with nonqualified mortgages (non-QM), or loans that don’t meet the qualified mortgage standards to be purchased by government-backed loan programs or the government-sponsored enterprises. Non-QM loans, which work well for the self-employed, foreign nationals and others, became a significant part of mortgage company pipelines in recent years. Then the COVID-19 era hit and many non-QM lenders paused their business for several months or quarters.

Help yourself

The million-dollar question is, “If your employer isn’t going to help you turn the corner and prepare for the cycle, how can you help yourself?” The answer is all about being methodical. Many employers want you to focus on the current task at hand, which is soliciting as many loan applications as you can and letting your operations team figure out how to close them. This strategy works, but it doesn’t work for you. New originators should follow three simple steps:
• Find and utilize a customer relationship management (CRM) platform that separates clients and referral partners.
• Keep your CRM updated with pertinent personal and loan information while ensuring you don’t violate any compliance laws.
• Build and actively farm a list of referral partners that includes Realtors, financial planners, accountants and divorce attorneys.
These steps are simple, but following them will ensure that you are successful in the current robust environment and that your personal production can sustain you through the inevitable downturns. History has shown us that the mortgage industry will experience significant peaks and valleys in terms of application volumes, but the silver lining is that every time it has dipped, the next spike is significant.
According to the 2017 Nationwide Multistate Licensing System report, which was compiled shortly after mortgage applications dropped, more than 89,000 originators withdrew or didn’t renew their license that year. Although nearly 165,000 new applications for originator licenses were submitted in 2017, the number that exited because of what they had experienced represented about 20% of the industry. Many of these originators were call-center representatives, bank loan officers or others who just did the job “part time” to make some extra money here and there.

Define yourself

One of the staples of sales is to create your brand. This is what you are known for in the industry among clients and referral partners, and the beautiful thing is that you get to define your brand all by yourself. One of the first steps in branding is to ask yourself what you like to do and what you are good at doing, then define your “why” for being in the business.
There are no wrong answers to these questions. A great example of this comes from a top industry producer — Christopher Moreno of The More Group in Southern California. When asked these specific questions, he answered by saying, “I’m good at staying calm in stressful situations and finding a path. I really like seeing people grow, whether it’s getting a client into a new home, saving them money or helping a Realtor close more business. And I do this job so that I can help more people in my life.” Moreno has made his brand all about helping others. What’s your brand?
The mortgage industry is an amazing place that creates generational wealth for some and a hard-knock life experience for others. If you can persevere, your worst year in the mortgage industry will still be a better year than in many other jobs that exist. Be methodical about your brand and your business plan, and consistently maintain your CRM.
The country’s most successful loan originators are those who look at each client as though they are a client for life, and they approach each referral partner with an attitude of, “How can I add value to you?” Once you have mastered these things, there’s no looking back. You’re on your way to a rewarding and sustainable career in the mortgage industry. ●


  • Michael Sunnaa

    Michael Sunnaa is CEO of Viewpoint Lending and managing partner at Lending 3. Sunnaa is a 25-year-plus veteran of the mortgage industry with a master’s in business administration who is currently working on his doctoral degree. His experience ranges from broker to banker to direct lender. Sunnaa has trained and managed more than 2,500 loan originators and continues to grow in changing markets. 

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