The Hardest Career Decision a Loan Officer Will Ever Make


Once LOs reach a certain level of success, they will inevitably face the decision of whether to form a team or operate as an individual contributor in their lender’s organization. What success looks like for each originator is different. For some, it is generating over $20 million in annual loan volume. For others, it is about achieving a target income level. This is one of the toughest — and most important — decisions sales professionals must make in their careers. At its core, mortgage lending is a numbers game. How many loans can one person handle and still effectively market to referral sources and former customers?

Of course, the number of loans LOs can handle in a monthly pipeline varies by originator and their level of support. Today, the loan file is larger and involves so much more documentation than in the past. Gone are the days when the cost to originate was less than $500 per loan.

While the home loan process is easier and faster than it once was, many originators are now spending an inordinate amount of time explaining documentation and taking care of issues that arise during completion of the loan forms. Some lenders provide staff to assist LOs in a centralized approach; other companies leave it up to originators to sort out the details. In the latter case, senior managers believe originators are receiving large commission checks to resolve these problems.

In my experience, it is difficult for originators with $20 million annual loan volume to handle all the details without something falling through the cracks. Working longer hours to try and compensate can only go so far and often leads to burnout which can make the situation worse. These producers may then decide to move to another lender that has better support, technology systems, and higher payouts. Or, LOs may form their own sales team to help with marketing, closing loan files, and other tasks.

It isn’t any surprise that top producers in mortgage banking have their own teams to help ensure a superior customer experience. They recognize that having a group you can control makes better business sense than relying on a lender that can’t consistently deliver. The risk of losing long-term customers over minor mishaps is simply too great. The best sales professionals in our business know that building relationships isn’t easy and oftentimes, there is no second chance to get it right if a mistake happens during the loan process.

However, the sales team model comes with its own set of problems. Origination is an individual contributor position, but having a team means producers must step into a manager role and assume responsibility for their staff. Management is harder than it appears and requires different skill sets than what it takes to be a great salesperson.

Forming a team can be intimidating and challenging. During good times, it may not be a problem because production is going well. But, in a difficult marketplace, paying staff out of your own commissions can become a financial drain. Bust cycles can be brutal and could require staff reductions — emotionally hard but part of a manager’s responsibility.

For originators who want to lead production in mortgage banking, having a team is the path forward. This decision requires reflection on why you want to achieve this goal and an objective evaluation on the best way to accomplish it. As 2021 approaches, this is a good time to think about the next step in your sales career.