Do Your Managers Deliver Value to Originators?

As we move into the last days of the year, I wanted to discuss a recent article published in National Mortgage News. I think the article raises a critical issue that senior managers can no longer ignore: the quality of first-line managers in their sales organizations.

The article by Dave Gallegos, covers the economics of loan officer compensation and the math managers are faced with in generating a profit for their companies. Gallegos said that when he recruits loan officers, the three reasons they want to leave their current firms are: “my loans don’t close on time, our prices are too high, and there is no support.” Addressing these issues cost money and when adding the LO commission, the costs can outweigh the anticipated revenues generating a loss for the company.

Gallegos notes that there is no free lunch in business and every service that a company provides has a cost to it. The article generated a very interesting response from a loan officer who said “don’t point the finger at the loan officer. What drives up the cost is the company’s greed and cost mismanagement from multiple layers of overpaid regional/territory managers.” The loan officer further comments, “What do these managers do? Produce sales reports and tell loan officers to complete their continuing education? A well-trained monkey can do that.”

Tough words from the loan officer but he makes a good point that the quality of first-line managers is generally weak in the mortgage industry. Most executives will admit this privately but are perplexed by how to correct it. In my experience, senior management falls into two camps on this topic:

1. The majority who don’t want to rock the boat except to require the managers to coach their originators without holding them accountable for coaching and setting any standards.

2. The remaining group — the enlightened few who have coaching standards for their managers starting with the organizational requirement that the producing manager model doesn’t work in the new world of origination and the coaching activity is structured and organized for their originators. Most importantly, these executives will terminate a manager who is not an effective coach. They are serious about the role of the manager as a coach and will not tolerate a manager who is a sales report generator.

Do your sales managers deliver value to your originators? If not, what are you doing today to install effective coaches in your sales organization.