Recently, a mortgage executive told me that an originator had asked to use his personal marketing budget to buy leads from third-party vendors. Fortunately, the executive refused the originator’s request. Unfortunately, these requests are becoming more frequent and are indicative of the poor quality of originators at many mortgage lenders today.
Before the internet, I think that it was well understood that an originator’s job was to either cold call to get new customers or to work his or her current referral sources to get introductions and referrals. Now, originators are asking companies to provide leads to them whether from a bank branch system or third-party vendor like Lending Tree. The issue is that the lender is performing the lead generation, not the originator.
Too many lenders are going down this path and are even advertising that they provide leads while paying full commission on the loan. This doesn’t make any financial sense and is a recipe for disaster for lenders interested in cultivating long-term success.
When speaking to managers about the current state of lead generation, I find their most common solutions are:
- Looking for recruiting tricks that will help them source more non-prospecting originators
- Reducing pricing and /or underwriting guidelines
What I see in the field during consulting engagements is that originators are not prospecting and managers are not holding them accountable for prospecting results. This is not confined to isolated incidents but is widespread in our industry. According to Stratmor, 60% of originators are not generating enough volume (only 2 units or less) to be profitable for a lender. A dismal situation to say the least.
It is a mystery to me why managers will not take a stand on originators who fail to prospect. A sales professional who doesn’t prospect is not a matter of call reluctance but a sign that the individual is not matched for the originator’s position. No amount of training or technology will improve prospecting performance if the individual does not have the self-discipline, resilience or perseverance to talk to people that they do not know on a consistent basis.
At its core, an originator’s job is to create loan demand or in other words, to prospect. This hasn’t changed and is why producers receive the income they do. What has changed is that the lender is now doing it for them in way too many cases. In this scenario, the originator is just a glorified customer sales rep who is overpaid for the contribution that they are making to a company. Isn’t it time that managers take a stand on this issue?