recruiterchuckcowan

A GENERATIONAL OPPORTUNITY TO MAKE A CAREER MOVE IN MORTGAGE BANKING ORIGINATIONS?

  Right Now, just might be the best time in the last 15 years to consider a career change if you are in the profession of originating mortgage loans and/or managing a team of loan originators.

  You might be thinking: How can that be? No Way, that makes no sense! Things are too good right now!  I am closing more volume than ever!

   Counterintuitive? The definition of counterintuitive is “contrary to intuition or to common-sense expectation (but often nevertheless true).” So, hear me out…….

With the Feds projecting to keep rates at record lows at least through 2021. On June 18^th, 30YR rates hit an all-time low of 3.18 according to Freddie Mac. And the latest aggregate forecasts (all have been raised each of the last 2 quarters) from the Mortgage Bankers Association/ Freddie/Fannie for 2020 is Total Originations coming in at 2.65 trillion and 2021 at 2.30 trillion. Adding that to the originations of 2.38 trillion in 2019, we are in the middle of the 2^nd best 3-year period of total originations of 7.33 trillion. That was only surpassed by the 8.80 trillion originated between 2003 – 2005 (highest on record).

There are projections that there are over 3 million homeowners with mortgages with an accumulative balance $4.2 trillion, that would benefit from refinancing if rates stay at or below 3.25% for the 30YR. A high probability to say the least.

  And, I have not even brought up the positive outlook for purchase originations over the next few years. More first-time buyers are coming to the market at a rate never seen before, and only one in three of the buyers under the age of 35 own a home today. Plus, we have more existing homeowners that have more equity than anytime over the last 20 years. They will likely become repeat buyers as more inventory becomes available driven by the expected increase of new homes from builders. Additionally, the pandemic has started a shift of renters wanting to leave urban areas to more rural areas were the cost to purchase is more reasonable. Sum all that up and we are at a “once in a generation” type of origination market very similar to the early 2000s. And today Mortgage Industry is without that era’s speculative buying, low housing equity, risky products and subprime credit factors. The mortgage origination market is more diverse and as financially stable as it has been in the last 20 years. Just look at the growth of the Broker/Wholesale Channel and the Consumer Direct channel over the last few years. And there still is enough business for everyone. 

  I state all this, to clearly show you that most of the transitional risk that are involved in making a career change in today’s mortgage industry are largely being mitigated by this “once in a generation” type of origination market that we all are enjoying.

  Transitional risk is simply defined as “the income lost or delayed due and during your transition”, and will that be a cost or an investment in yourself to improve your future business which also can be defined “what has been the opportunity cost for you to make the change and will you return of investment on that money and get a better return long-term?”

Still you say, “I am busier than ever” or “I am making as much money as I have ever”, or “I am happy, and I have everything I need” or “my pipeline is full”. Those might all be truthful statements.

  Now let’s look at that the “Buyers’ Market” for “You the Mortgage Origination Talent”– those would be the entity’s that originate mortgages (and no, not all companies are not a good fit for you individually). Mortgage companies have just come through an extended period (2016-2019) with intense margin compression, rising cost to manufacture the loan and rising interest rates. Then this spring, we have a pandemic and the industry experienced market liquidity and capacity issues. Now, it is summer of 2020 and it is great to be in the mortgage business! Most of today’s mortgage companies are better off financially today than any time over the last 5 years. This is driven by greatly improved margins resulting in profit per loan at its highest level in a decade. Overall profits are rising for most companies. Just look at Quicken. They are considering an IPO (the last 2 mortgage companies to consider an IPO was Stonegate in 2013 and loanDepot in 2017). Do you think Quicken’s profits look good right about now and for the foreseeable future? The answer is yes. And depending on the valuation of the IPO (Estimates at 25BB), it could and should prompt other large independent mortgage bankers to follow suit. Additionally, it should create an uptick in M & A activity due to the increase in privately held mortgage companies’ valuations. And this just might be the best time since 2006 to sell a privately held company or for a Hedge Fund to maximize its return on its investment in the mortgage industry. They are only following the Sell High-Buy Low mantra, just as you should be with your revenue producing talents.

  Yes, there are a lot of mortgage companies that are meeting and, in some cases, exceeding their originators’ expectations, wants and needs. And if you are getting your expectations, wants and needs met, then this might not be that “once in a generational opportunity” to make a move. If so, it makes total sense to stay where you are at today and maximize your income opportunity. Don’t even consider the “what ifs”.

  But, (always a but), there is group of originators and sales leaders that are not having their aspirations being fulfilled. The definition of aspiration is a strong desire, intense longing, or ambitious aim. Yes, today you may or may not have all or some of these: good product menu, fair market pricing, above average compensation, effective operational support, efficient technology, competent marketing, reasonable cultural fit and quality leadership. And if you said “yes, I have some or all of those and but there just might be something better for me”, you are not having your aspirations fulfilled.

  Most successful people have a “Next” on their horizon. That can be the next level of origination volume, better operational and technological support, more diverse product menu, a more competitive pricing model, superior compensation plan, better work/life balance, industry leading marketing support, great cultural fit and great leadership. Once you define your “Next”, are you in the right place for that to happen as quick as you want it to happen? Is it the most effective and efficient way for you to get there? Will you be encouraged and supported to that “Next”?

  Remember, Sell High-Buy Low. Your most valuable asset is You and Your Talent. And the most common method of valuations of that talent is measured by your and/or your team’s origination volume and potential profitability which equates to an asset of present and future revenue and profit for any mortgage company.

  Just as an NFL wide receiver coming off a “career year” in catches, yards, TDs and overall productivity, they will demand an elevated contract, so should you right now. It is in your best interest that you get your talents acquired at a high price point. This is true of any professional athlete in any sport and the same is true in Mortgage Banking Originations. (I can’t wait to see what Patrick Mahomes contract will be.)

A sizable percentage of you are having some of the best closing months you have ever had. (And if you are not, you should have probably already called me to make a move.) So, this is an “once in a generational opportunity” to see if you are maximizing your aspirations and your career. The final answer is 100% in your control, if you are willing to be open to that possibility. Contempt prior to investigation will leave a person in ever-lasting ignorance.

  Now, go contemplate your “Next” and call back that Sales Leader, Independent Broker and/or Recruiter that has been building a relationship with you with the intent of recruiting you, as it might be to your benefit.

June 25, 2020 - Posted by recruiterchuckcowan | Uncategorized