MBA Annual Conference: The Fight between the Old Guard and the New Guard

I just returned from the MBA conference and as mentioned in Rob Chrisman’s blog, attendees were generally positive as a whole and many were having a good year and felt that the TRID issues were pretty much behind them. Certainly that was my impression as well, but I also thought on a deeper level that there is a huge split in mortgage banking between the old guard and the new guard. In my view, the issue is more than generational and really concerns differing philosophies, strategies and mindsets about what the sales organization should look like and how the value proposition should be delivered. The old guard wants to do the same old thing of recruiting branches and the new guard wants to start anew with college graduates and utilize technology.

There is no clearer reflection of the divide than the party Freedom Mortgage hosted on the USS Midway battleship last week. At one time, the ship was the largest in the world. Decommissioned in the 1990s, the ship serves as a museum in the San Diego harbor. It is an impressive ship and is well worth the price of admission to tour it. Now, the Midway can be rented out for celebrations and Freedom Mortgage used it as their party center. People were talking about Freedom’s party for days after and how much money must have been spent on it. Frankly, everyone mentioned how it reminded them of the old days and the parties lenders used to host.

The new guard felt it was an embarrassing display of the worst of mortgage banking and that the party was tone deaf to presenting a professional imagine. Whatever side you choose, it seems to me the difference is more than just the party people versus the non-party people, but also reflects a philosophical change. The new guard consists of primarily younger people who want to change how mortgage banking is done. They are looking at every part of the sales process and asking, how can we do it better? This is nowhere clearer than in their view regarding sales talent. They realize that how they succeeded in the past has very little to do with how they will succeed in the future. The new guard recognizes that hiring the right people and ramping them up as fast as possible is a critical strategy.

Selling today is all about creating deeper relationships faster and not every originator can or wants to do that. The new guard recognizes the infrastructure and investment needed to make these changes and the old guard wants to ignore the issue and hope for the refinance market to continue. I think the new guard is right and that selling and origination is changing right before our eyes.