Dale Larson III of Modex: Three ways to build a better LO team in 2023

Dale Larson III is founder and CEO of Modex, a technology platform. Founded in 2015, Modex enables mortgage companies and loan officers to make smart employment decisions by providing key mortgage, real estate and consumer insights on every loan officer, branch and company nationwide – all in one intuitive digital platform. For more information, visit Modex Recruit (modexconnect.com).

Dale Larson III

In the latter half of 2022, interest rates rose to 7% and new home applications and sales remained more than 20 percent below last year’s pace. Data from Modex tells us that as many as 14% of producing loan officers changed employers and almost 12% left the industry entirely. Compare that with the year before, where 12% of producing LOs changed jobs and 6% left the business, and it’s clear that change and uncertainty defined the 2022 mortgage industry.

Between large scale market shifts and LO employment disruptions, we’re collectively feeling the effects of a market correction. Businesses are making varied decisions on hiring, with some seizing the chance to strengthen their teams by increasing hiring and others deciding to pause or even make layoffs. 

The outlook for 2023 remains equally uncertain – but we can anticipate more change, which necessitates new approaches and solutions. While there is no silver bullet, there are tangible things you can do to meet the moment and strengthen your team in 2023.

Refine your team to drive results

If your strategy involves expanding your team, you’ll have a pool of LO talent to hire from. While there are sure to be outstanding performers in the mix, there will also be weak ones – and in the current market, it’s all the more important to be able to tell the difference. Make sure you have real data up front to understand how an LO is truly performing so you can avoid the risks of a poor hiring decision.

It’s equally important to know how your current LOs are performing if you’re pausing hiring or making layoffs. Letting a great producer go is the last thing you want to do, but when performance is down for everyone, it can become difficult to distinguish a strong performer from a weak one. Come to the decision-making table equipped with accurate LO performance data, in addition to anecdotal evidence, to make an informed decision. 

Another reliable strategy is to prioritize LOs with a balanced and established book of business. LOs who were present for the refinance boom reaped its benefits without building the business they’ll need in a market at a 22-year low in refinance volume. Producers who have built a diverse book of business – whether gradually over time or by focusing on diversification in recent years – will be better positioned to drive results for your business in 2023.

Know how your technology is serving you

As market shifts prompt a broad reevaluation in spending, branch managers are going back to the drawing board to reassess their technology and make sure they’re taking advantage of platforms and tools that provide the most value. Ask yourself a few simple questions to help guide your decision-making: Is this technology saving time? Is it saving money? Is it giving me insights I can’t easily get anywhere else?

As you’re consolidating your technology stack, it’s time to get creative. Consider how you can use platforms and tools to solve new challenges while staying aligned with your overall strategy. If you’ve decided to expand your team, what kind of tools allow you to hire and onboard most accurately, strategically, or efficiently?

Lenders that are decreasing headcount can also embrace technology that provides efficiency and increases results. Sometimes it makes sense to invest now in tools that might not provide an immediate payoff, but are sure to see ROI later. What platforms can you leverage to level up your current LOs with better training and support? 

Resetting your approach to technology isn’t always easy. It takes a willingness to think more creatively, more strategically, and sometimes make difficult tradeoffs. However, when you solidify your strategy and identify which technology is bringing you the most value, your path forward becomes clearer.

Invest in your people to propel your team’s success 

Retaining top performers – and attracting new ones – is about making your team a place where top talent want to be. Most high-achieving LOs want to surround themselves with other high achievers and instinctively gravitate toward challenge. Invest in your best people now to create a rewarding environment that will pay dividends later. 

You can start by asking for perspective from your LOs to understand their mindset. What motivates them every day? Why do they do what they do? You might be surprised to learn what an extra 15 minutes of active listening can reveal about your team’s outlook and capacity to achieve.

It’s also a good time to reflect and perhaps even redefine your team’s purpose. Why are you here? What value are you bringing to clients every day? When you understand what drives you and can help your team understand what drives them, you give your people the inspiration to keep going – an effort that will carry you into 2023 and beyond.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)