The "Hybrid" Loan Officer

It’s not going out on a limb to say we’re at the dawn of a new era in the mortgage business. In the past, it was external disruptors that caused the shift. Remember when everyone lost their mind that Google was getting in the mortgage game with the launch of their mortgage calculator? Then it was the CFPB, new TRID rules, COVID, and now AI. But I’d argue there’s an internal shift that is more important to focus on - because we can control this one. It’s the creation (or proliferation) of the “Hybrid Loan Officer.”

The mortgage industry is typically made up of two types of Loan Officers:

1. Consumer Direct Loan Officers - call-center reps who answer the phone within seconds to capitalize on an incoming lead. Their lead funnels are optimized by really smart marketers to ensure minimal leakage from the marketing funnel. These types of LOs are typically great at serving a client’s transactional needs. But they can struggle at providing advice, building relationships or driving new production. Their lender is supposed to take care of those problems with Biz Dev teams, PR and big marketing campaigns.
2. Distributed Retail Loan Officers - these are the rainmakers (or soon-to-be rainmakers). They spend their entire day focusing on sales activities with referral partners, past clients or pounding the phones for new prospects. They have a great personal brand and eat what they kill. These LOs are great at building relationships, providing advice, and structuring deals, but they typically struggle with digital lead capture. I’ve heard for years from most of these LOs that ”digital leads suck, they don’t convert.” Well…that’s true, but it’s because their marketing teams give them a standardized LO webpage with just an “Apply Now” link and leakage is significant. All of their volume typically comes directly to their personal cell phone number, which is a nightmare to scale or control.?

*There are a handful of retail LOs who utilize third-party lead conversion partners on their own dime; those are the unicorns who have started the “hybrid” model. There are literally only a few dozen of these in the entire industry.

To be a successful lender in the past, you had to choose one of either of these models and build around it. But the internal shift I’m suggesting is shifting from an “either/or” to a “hybrid” model. The problem, however, is lenders are stuck in whichever of these models they chose from the start. They’ve spent years investing in infrastructure, processes and teams built around one model or the other. This makes it difficult to transition - or even add - the other type of model.

The advantage of any new lender (ahem…like Novum Home Loans ) is the ability to start fresh without any legacy constraints.? New lenders are blessed with the ability to build a Hybrid Loan Officer model. And here’s how to do it:

1. ?It starts by creating a team of LOs who can give expert advice, build relationships and aren’t afraid to door-knock or cold call. This is a cultural decision.
2. Amplify each individual LO’s personal brand with your marketing spend. Then create a digital lead conversion system to capitalize on every lead generated by the LO’s personal brand - not the company’s brand. This is a budgeting decision.

Seems simple, but the trick is going all-in on a hybrid model instead of either of the traditional models. The Consumer Direct lenders seem to be more than happy being entrenched in their model because it’s the most scalable. But their problem is they’ll always lose to the local LO who can build local relationships. The traditional retail lenders are simply playing a game of mercenary. They pay the rainmakers a signing bonus to bring their relationships and past clients over with the promise of better tools and infrastructure, only for those LOs to leave when their retention expires. They’d also argue that you shouldn’t build a Hybrid Loan Officer model because the LO will just leave you for a large signing bonus. That’s like telling a professional sports team they shouldn’t develop talent because they’ll have too many superstars and won’t be able to pay them. That’s where culture matters (see San Antonio Spurs and Patriots).

You can probably guess which model we’re betting on at Novum.

Note: If you want more detail on the Hybrid LO concept, check out the book “Rethink Everything: You know about being a Next Gen Loan Officer” by Kyle Draper?? and Brian Vieaux . Highly recommend reading it whether you agree with my thoughts or not.