Ron Vaimberg: Why Most Originators Are Focused on the Wrong Problem

Ron Vaimberg is an international success strategist and trainer/coach of sales professionals. A former top-producing loan originator and real estate agent, he has coached loan officers and brokers who have ranked in the top 1% in loan production and earned over $1 million annually. He began his career in 1983 as a real estate sales professional on the North Shore of Long Island. In 1995, he created the New York Mortgage Institute, one of the nation’s first training program for mortgage originators. Ron can be reached at ron@ronvaimberg.com.

John Tukey, one of the most influential statisticians of the early 20th century and known for coining the term “software,” once said “an appropriate answer to the right problem is worth a good deal more than an exact answer to an approximate problem.”

Originators would be wise to think about these words—especially those who are blaming today’s market conditions for their current production or lack thereof. Because truth be told, the market isn’t the reason why most originators are failing to generate the business they desire.

In other words, they’re focusing on the wrong problem. Identifying the right problem—and solving it—will require them to look a little deeper.

We All Saw It Coming

Everyone understands the housing market was extremely crazy during 2020 and 2021. We had historically low rates and housing inventory, and nobody could originate loans quickly enough. Truthfully, however, the housing market had been on an upward trajectory since the Great Recession, and many originators failed to accept that one day, things were bound to change.

Of course, we have seen some market blips. For example, in late 2018, when the U.S. economy struggled amid fears of a brewing trade war with China, sales of new and existing single-family homes fell by double digits. During this time, home price growth slowed, and some sellers even had to lower their prices to keep buyers coming through the door. But this was only temporary.

The bottom line is everyone knew that the market was going to shift. In fact, we all talked about it. Even during the craziness of the pandemic, we were warned that demand was not going to last and that we better start focusing on the future. And yet, everyone was in survival mode and doing their best to keep up with demand—and money was very easy, too.

The reality is that market has been very strong for so long that many originators took for granted that they could do the same things and still produce the same results. But as they’re now finding out, that was never going to be the case.

The Real Problem

When I ask originators what challenges they’re currently facing, I often hear things like, “there’s no purchase business because rates are too high,” or “people don’t want to cash out,” or “who wants to give up their low rate for a new mortgage at a higher rate?”

There’s truth to these statements as far as what is happening in the market right now. Indeed, rates are higher, and overall, loan volume is the lowest it’s been in over two decades. But when I hear originators say these things, what I am really hearing are the symptoms of a bigger problem that has existed in the mortgage industry since anyone can remember: most originators do not prepare themselves for times like these.

Of course, some originators did heed the warnings that the craziness would end, and most of them who kept their eyes on the future are doing very well. Granted, they’re not living off the refi gravy train, which ran out of track. However, I’m personally working with many individual originators who are still doing 5, 10 or 15 purchase transactions a month, all without the benefit of a large team working alongside them.

So, what are these originators doing differently? At the end of the day, they never took their focus off developing relationships, even when the market was crazy. Regardless of what was happening in the market, they put their heads down and kept prospecting for new relationships and honing their skills. They controlled the only thing they could – themselves. As a result, they’re not only surviving today, but continue to grow and thrive.

Most originators, however, want far more business than their current effort will give them. In fact, the mortgage industry is loaded with people who merely dabble in sales and marketing and don’t take prospecting seriously. When the market was crazy, these originators weren’t prospecting much because they didn’t have to. But as the market suddenly became highly competitive, they are now finding themselves behind the eight ball. The challenge is not only to go out and prospect, but many originators don’t even possess the skills needed to compete.

It’s Decision Time

That is the real problem that most originators face today. The only way to solve this problem is to be willing to out-prospect their competition. Those that do will start seeing more business immediately. But they simply must be willing to put in the effort, and not many are.

As a trainer and a coach, I’ve worked with tens of thousands loan officers over the years. The painful truth is not everyone wants to learn the skills to thrive or even survive this market. Some understand what they need to do, but they are simply unwilling to put in the time and effort required to succeed in a market like this.

To find out whether they are focused on the right problem, originators only to need to ask themselves a simple question: Are your skills, effort and time you put in building business in line with the goals you want to achieve? If the answer is no, then something needs to change. And if that’s the case, you should act fast.

As I write this, origination volume is at the lowest pace in 26 years. Frankly, there is not enough business for every originator, and this situation is not likely to change anytime soon. The originators who are committed to surviving and thriving must not only continue to prospect for business, but they must ensure they have the skills to compete. This is not just a strategy for today; it is the strategy for long term growth and success.

That means originators must constantly ask themselves what problems they’re able to solve for borrowers and their Realtor partners, and what unique opportunities they’re able to create for them. Right now, for example, many Realtors have clients who are fence-sitters, waiting on the sideline to see what will happen. An originator who knows the strategies to get fence-sitters back into the market can help Realtors solve this problem. But they must know how to do it, and be willing to reach out and put in the effort.

The bottom line is that market isn’t the reason why most originators are struggling. The market is creating challenges for everyone. Often, the real problem is looking back at them from the mirror. And to change what they see, they only need to change what they do.

(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.)