Becoming a New Originator. . . .

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On Friday I met with a long time customer who over time has become a friend.  As we devoured far too many chips and a bowl or two of Chevy’s salsa, we discussed the state of the real estate industry and mortgage lending in specifics.  My friend is a manager at a local company and has almost a hundred people who report to him.  He’s incredibly talented and I’ve always enjoyed and appreciated his opinion.  But I wasn’t sure how to prepare for advising him about my industry.

It’s not the first time we’ve met for lunch but this time things were different – my friend was asking me about the logistics of mortgage lending as a career.  Prior to lunch I had taken a couple of days to think things over and had a rough idea of some strategies to suggest and some general information to cover.  For example, new loan originators must contend with State and Federal licensing requirements which necessitate tests, continuing education etc.  My friend is a smart guy so I’m not too concerned with him passing a test or two. 

The biggest hurdle that new originators face, in my opinion, is how long it takes to gain practical knowledge and insight.  Passing tests that cover the minutia of the legal and legislative elements of lending are fine, good and necessary; however, they don’t take into consideration what happens when the general public come knocking at your door.  In general, we all have a bit of “crazy” in us and it seems like it leaks out in a very pronounced way when lending is involved.  All of our darkest and most private secrets come to light and some of our choices in the past can make it difficult to obtain financing for that single-wide manufactured home on 100 acres we’ve always dreamed of.  No test can prepare for the general public and real life scenarios are very different from what fills the pages of manuals and training books.

Lending has changed but basic human behavior has not.  Sometimes people want what they simply cannot have and being able to identify roadblocks is one of the crucial abilities that a good loan originator needs to have. 

I also mentioned the harsh reality of the last five years and what it has done to our numbers in this State.  At our heyday in 2007, we had over 14,000 licensed originators operating in the state of Oregon.  The last time I checked the number was closer to 3,000.  If you’re doing the math, that’s an attrition rate of close to 80%.  Staggering, absolutely staggering.

One of the tough realities of any sales industry is that it’s very difficult to predict who will be successful and who won’t.  Some are able to master the intricacies of compliance, rules and regulations but lack the interpersonal skills needed to interact with customers and Realtors in a meaningful way.  Others are personable and have great personalities but no organizational skills or ability to discern a bad deal from a good one.  I’ve seen a lot of originators come and go over the years and have been surprised at times by ones that end up doing poorly.  Conversely, there have been some success stories that I never saw coming.

It was a good lunch and as we shook hands and went our separate ways I felt genuinely grateful for the insight and perspective the meeting brought.  I’m glad to be one of the 20% still doing mortgage lending in our State.


One thought on “Becoming a New Originator. . . .

  1. It’s great to get a fresh perspective from someone not in the biz, about the biz. And I’m sure he got a ton from your point of view too. You’re right on about the practical part of lending being the real challenge. The tests are easy enough for someone who can study the material…but in the real world, where according to an industry study a transaction can have between 20,000 and 30,000 data points (things that can trip up a loan) in it, and you have to put it together in 30 days or so…that’s a real feat, even for someone experienced.

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