The booming refinance business and a tight labor market are forcing mortgage companies to pony up for experienced loan officers and executives.
With refinancing volume soaring due to falling interest rates, and qualified people in short supply, mortgage executives and recruiters report unusually aggressive tactics being used to attract skilled professionals.
"It's a mad scramble," said Joe Bryant, president and chief executive officer of Roslyn National Mortgage Corp., Hauppauge, N.Y.
Lenders have been forced to offer "unbelievable compensation packages" to snag top originators, said Allen Gutterman, president of Response Staffing Services Corp., a Manhattan recruitment firm.
For example, he said, companies have been offering to guarantee 80% to 100% of the commissions a loan officer would earn if he stayed with his current employer-on top of whatever the officer earns if he moves.
"It's a given that you have to pay a substantial amount of money as a sign-on bonus," Mr. Bryant said. However, his company spreads out such bonuses over three to nine months to ensure the new hires stay on board and produce.
A slight decline in mortgage employment in September-the Labor Department last week reported that the number of mortgage jobs fell by 200, to 296,200-was probably an anomaly, said Douglas Duncan, senior economist at the Mortgage Bankers Association of America. "With rates falling as they have been, you wouldn't expect any appreciable decline, since refi business is still booming," he said.
In this environment, it's "not unusual" to see sales managers offered 20% higher base salaries in an attempt to get them to switch jobs, Mr. Gutterman said. Normally such managers would move for a 10% to 15% increase, he said.
Though the average commission for a new loan used to be 50 basis points, now the average is 60 to 70, and "they have gone up as high as 100 basis points," Mr. Gutterman said.
Most loan officers will have earned $150,000 to $200,000 this year, Mr. Gutterman said. Normally they would earn $80,000 to $100,000, he said.
"It's a very lucrative time to be a loan officer," said Mark Springer, president of M.H. Springer & Associates, a Woodland Hills, Calif., recruitment firm. At some companies, regional sales managers will make $1 million to $1.5 million this year, he said.
It is so tough to find help for the front end of the business that some companies are hiring high school students as processors, Mr. Springer said. Even for temporary assignments, Mr. Gutterson said, he has 100 posts that he needs to fill.