The LO Down - Thinking of Making a Move? What to Look Out For

It’s Moving Season in the Mortgage Business.?

Ever hear this punchline??“Yesterday you were being recruited, today your staff!”

After 7 years of Recruiting in the Mortgage Business, I have heard too many stories of bad experiences in making a move.?

Hopefully this edition of The LO Down will give you some things to think about when considering a change.?Here are a few tips to consider if you are exploring your options.

1.????Don’t Take Their Word For It

When you’re meeting with someone, they have good intentions, but sometimes fall short in their descriptions.?If something is important to you, and would make an impact on how you serve your clients and run your business, ask to see it live.?Here are few topics that I find helpful to see for yourself.

-??????Pricing Demo – Don’t just take a rate sheet or a log-in.?Have them run pricing for you, in front of you.?Give specific scenarios, run rates at different comp levels and caps.?Factor in everything and see it for yourself.?

-??????Tech Demos – Will this new tech save me time??Will I need an assistant or does the tech replace what they do??Will my clients integrate well with this tech?

-??????Marketing – Does the CRM support your database??Will it transfer over seamlessly??What kind of marketing collateral is already available as plug and play??What additional support does the team offer?

-??????Products and Comp – Do you do a lot of Bond business??What is the comp on bond loans??Brokered Products??Are there teams to support me?

2.????Talk to Others

Now that you’ve heard it from the Recruiter or Manager, do some investigating of your own and see what you find.?Here are a few “others” that I would suggest reaching out to.

-??????LO’s in the branch – Ask about the management style of the Branch Manager.?What value do they bring to them as LO’s??Do they provide support to the pipeline??Are they easy to reach??Are they strategic??What have you learned from them?

-??????Operations Managers – Great opportunity to ask about UW scenarios and hear from them directly on whether or not they could handle the loans you have questions about.?What are the turn times??Who would handle my files??What are the expectations of a Processor on a file?

-??????Additional Support Teams – If you specialize in a product or would like to target a niche (Renovation, Builder, VA, Condo, Manufactured Home, etc.), ask to speak with the support teams or personnel for those products to be certain that they can provide the level of expertise and support you need.

3.????Offer Structures

There are lots of ways to structure an offer.?Some come with more strings attached than others.?Here are a few offer structures to consider:

-??????Inflated BPs – Pretty straight forward, come on board and get higher comp per loan for the first x months.

-??????Guarantee Against Commission – The employer guarantees that you will make at least x amount of dollars per month for y amount of months.?If you out earn that amount, then you get what you earned, nothing more.

-??????Sign-on Bonus – This is an amount of money given in addition to commission earned.?Receive $X in your first month (or spread over time) and you will also get paid on all loans that you fund.

-??????Incentivized – Hit various milestones to earn bonuses along the way.?Typically, this comes with very few strings attached as you are earning each bonus when you achieve the goals laid out for you.

-??????Combination – Take the above and find a combination that works

4.????Read the Fine Print

We are in the “Sign-On Era” of the Mortgage Business.?In my 7 years of Recruiting in the biz, I have seen sign-on bonuses rise dramatically in the past 3 years, and with that, the fine print has gotten interesting too.?Here are few things to keep an eye on:

-??????Non-Compete Clauses – Believe it or not, there are contracts out there that state that if you leave the company, you can not conduct business as a Loan Officer for 12 months.?

-??????Promissory Notes – I have seen this language in some employment agreements.?Essentially this gives the employer the ability to request that you pay back your bonus based on low performance at any time.

-??????“Claw Back” Clauses – These are time commitments that you agree to make in exchange for the sign-on bonus amount that you receive.?Receive $100k, agree to an 18-month commitment.?Leave before 18-months and you will owe back all, or some, of the bonus you received.

-??????“Earn Out” Clauses – Similar to the above, but with the option to out earn the bonus.?“We are giving you $100k based on your production from the previous 18 months.?If you exceed that production prior to 18 months, then you have “earned out” of your time commitment.

5.????What’s the Plan?

Every leader should have an onboarding and business development plan for the incoming Originator.?The Mortgage business has a bad habit of hiring and then saying, “You’re on your own.”?Here are a few things to ask about:

-??????Incoming Pipeline – How do I transfer loans over??Is there someone that will work them while my license transfers??Will I/How much will I get paid on those loans?

-??????Training – Who will train me on the new systems??Is there a dedicated resource for me to call for help??Is it hands on, a collection of demos or both?

-??????Announcements – How will you help me let my Referral Partners and Database know that I have made a move?

-??????Database – Can you import and integrate my database into your CRM?

-??????Marketing and Business Development – How will you support my growth and help me market in my community and with my referral partners?

Finally, always remember that you can negotiate.?That said, keep in mind that this is a small industry, and you never know when you might run into a Recruiter or Manager at another company, so communicate openly, keep an open mind, and don’t ghost.

If you would like to talk further about what to look for in making a move, feel free to drop me a line.?Also, please add any other tips that might be useful in the comments.?Let’s keep an eye out for each other.