The cost of the financial crisis on the mortgage industry can be measured in so many different ways, but one of the most overlooked is how it affected the industry's sales force.
Many young people who had flocked to the business during the boom time were driven out for any number of reasons. Even those who were above the "this is easy money" mentality, which drove the mortgage business during the early and middle parts of the last decade, and instead, truly saw the business as a career, ended up leaving as lender after lender downsized.
The result is that now, the average age of a mortgage originator is 54, the Mortgage Bankers Association's Barbara Hanson said during a panel at the group's annual convention called "Next Generation Loan Originators: Planning for the Industry's Future Workforce."
That is a big problem for the future of the mortgage origination profession. Mortgage companies must take action if they want the next generation of loan originators to be more than order takers, people answer telephones at call centers and turning the profession into the gloried version of the people who ask, "You want fries with that?"
This is what the panel, unfortunately scheduled on the last day of the convention, looked to address.
The next generation mortgage loan officer has to serve the next generation consumer. That next generation consumer is already here, the millennial consumer.
Union Home Mortgage, headquartered in Strongsville, Ohio, has 137 loan officers, but only four have less than 10 years' experience in the mortgage business, said Michael Jones, its national sales manager.
Those loan officers might have the skills to meet the needs of the millennial customer, but the role of the loan officer has to change. The calling card of the on-the-street loan officer who deals with homebuyers has been their willingness to meet with consumers face-to-face, anytime, anywhere.
The next generation of homebuyer is more willing to make the connection with the loan officer by other means, either over the phone or the Internet.
Over the past 13 years, the originator's role has evolved, noted Gregory Sayegh, the MetroWest area manager for U.S. Bank Home Mortgage in Minneapolis.
A mortgage loan officer role now has to be more focused on compliance issues involved in creating a mortgage.
Loan officers also need to be more informed because today's consumer is more informed about the whole process. They are researching potential home purchases and shopping interest rates online, and that's just the tip of the iceberg. Loan officers are expected to be more knowledgeable than their customers.
Still, mortgage origination remains a relationship-driven business and the ability to cultivate those relationships will be the key for a successful loan officer.
But now, the loan officer needs to be a "technician," said Gene Lugat, the executive vice president of New York-based PrimeLending, a PlainsCapital company. Today's sales people need to have digital marketing skills on top of the ability to foster relationships with customers and referral sources.
To get that next generation of originator, lenders might need to change the job description of a loan officer, said Debra Killian, the president of Charter Oak Lending Group LLC in Bethel, Conn.
"I think we are mixed up about what we are trying to attract" in a prospective employee, she said.
Social media is one tool that many sales people in all industries use as part of their marketing kit, but that is one area that many in the mortgage industry shy away from because of the very legitimate concern over violating federal advertising rules.
Any social media posting that contains an offer must be scrutinized by a lender's compliance department because of the needs to protect the business, Lugat said.
There were companies in the convention's exhibit hall that displayed technology looking at keywords which could block the outgoing message from the loan officer or send it to compliance for further review, Sayegh said. There are loan officers who seem to do things the right way, but there are also "marketing geniuses," he said sarcastically, who typically do things that are not compliant.
Part of the psychology of the millennial generation is that they are "fearless," said Killian. From a sales perspective, they don't see the consequences of social media marketing. They don't understand privacy rules.
"It is called social media for a reason and this is a business we are running," she pointed out.
To meet the new environment, Union Home Mortgage brought in technology trainers to meet with its staff. "In today's world, we have to change," Jones said.
Part of the problem might be that today's younger generation is not equipped with the skills to deal with financial services customers. There is a mentoring program which recently brought in a group of 21-year-olds at Union Home Mortgage.
Only one of them had a checking account. They don't understand the workings of creating a good credit profile and of getting a mortgage.
"We have not sold our business" to that younger generation and there has to be something done to attract these workers, Jones said.
But returning to her point about the current loan officer job description, the person the industry has historically looked for to fill the job might not be the one with the right skill set to do what is needed now, Killian said.
She went as far to say it might be time to separate some of the traditional functions of the loan officer between one person who can bring in business and another who has the skills to put together the mortgage application package.
To fill loan officer positions at his company, Lugat is looking for people who have a high level of desire. Having a sales background is not important as PrimeLending has training and mentoring.
It is the mentoring program where PrimeLending has seen the greatest lift. New hires are teamed with senior loan officers for a 24-month period and that brings a "turbocharged effect" to the relationship, he noted.
But another issue besides technology that sets the potential next-generation loan officer apart from the current crop is how they wish to be compensated.
In a business where historically loan officers are 100% commissioned sales people, 25 of 26 college students Killian spoke with said they would prefer being paid salary and a bonus. Just one wanted the opportunity to make unlimited compensation based on personal efforts, she pointed out.
Today's college graduates want more security than being paid on a 100% commission basis, Sayegh said.
People can be taught how to sell, Lugat added, but they can't be taught "the fire in the belly" to be successful. That may be the most important thing to make a successful mortgage loan originator, whether they are new school or old school.