Mortgage Industry Talent Trends: A Deep Dive into LO Retention and Hiring Patterns

In an evolving mortgage market, understanding talent movement patterns becomes crucial for industry leaders and professionals alike. Our recent analysis of ten major mortgage lenders reveals fascinating insights into hiring strategies, retention patterns, and workforce management approaches across the industry.

The Tale of Two Strategies

Our analysis reveals two distinct operational approaches to talent management in the mortgage industry:

The High-Volume Recruitment Model

Companies like New American Funding and Guild Mortgage have adopted an aggressive growth strategy. New American Funding brought in 1,415 new staff against a total headcount of 1,929 - a remarkable 73% hiring ratio. This approach has led to significant net growth (+467 staff, +24.2%) but also comes with higher turnover rates of 28%.

The Stability-Focused Model

In contrast, companies like NFM Lending and CMG Financial demonstrate a more measured approach. With turnover rates of 19% - significantly below the industry average of 24.7% - these organizations show that selective hiring and retention-focused strategies can maintain stable growth while minimizing disruption.

Key Industry Metrics

Turnover Patterns

The industry shows clear segmentation in retention success:

- High Retention Leaders (19-21% turnover):

• NFM and CMG leading at 19%
• Guild Mortgage at 21%

- Higher Turnover Group (27-31%):

• American Pacific Mortgage at 31%
• Movement Mortgage and New American Funding at 28%
• LoanDepot at 27%

Workforce Evolution

The data reveals significant shifts in organizational size:

- Growth Leaders:

• Guild Mortgage: +25.5% net growth
• New American Funding: +24.2% net growth

- Contracting Organizations:

• Movement Mortgage: -16.1%
• Fairway Independent: -15.5%
• American Pacific Mortgage: -16.0%

Strategic Implications

These patterns suggest several key considerations for industry leaders:

1. The high-volume recruitment model can drive rapid growth but requires robust onboarding and training infrastructure to manage increased turnover.

2. Stability-focused approaches might sacrifice rapid growth but demonstrate better retention metrics, potentially leading to lower recruitment costs and more stable operations.

3. Market conditions appear to be driving divergent strategies, with some organizations aggressively pursuing growth while others focus on optimization and efficiency.

Looking Forward

As the mortgage industry continues to evolve, these talent management strategies will likely face new tests. Organizations must balance their growth ambitions with operational stability, considering factors such as:

• Training and development infrastructure
• Recruitment cost efficiency
• Long-term sustainability of their chosen model
• Market cycle positioning

Understanding these patterns helps industry professionals and leaders make informed decisions about their own career moves and organizational strategies in this dynamic market.

Coming Soon: A Cross-Channel Analysis

Stay tuned for our next deep dive where we'll expand our analysis to include mortgage brokers, credit unions, and banks. We'll explore how talent retention and hiring patterns differ across business models and channels. Key questions we'll address:

• How do broker retention rates compare to retail lenders?
• Are credit unions showing different patterns in this market?
• What unique dynamics do we see in bank mortgage divisions?

Follow for our upcoming analysis comparing talent strategies across the full spectrum of mortgage origination channels.

Data analyzed from January 1 - November 30, 2024, covering ten major mortgage lenders.