Q&A: Ron Vaimberg, AMP, on Investing in LO Training vs. Cutting Staff in Market Downturns

Ron Vaimberg, AMP, is an international success strategist and a trainer and 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.

Vaimberg began his career in 1984 as a real estate sales professional on the North Shore of Long Island. In 1997, he created the New York Mortgage Institute, one of the nation’s first successful training programs for mortgage originators. Ron can be reached at ron@ronvaimberg.com.

MBA NewsLink: What sort of challenges are LOs facing in the current market and what’s likely to happen in the months ahead?

Ron Vaimberg, AMP: We are in an unprecedented market with challenges like we’ve never seen. We have elevated rates, which we’ve obviously had before, but not with the lack of inventory that we have right now. We’ve also never had the kind of affordability issues with homeownership that many are experiencing today. These three forces are creating challenges that pretty much no originator has ever experienced in the modern age of mortgage lending. We saw a huge spike in attrition out of the industry last year. Things have certainly calmed down, but a second wave of companies closing and people leaving the industry has somewhat resumed.

It’s going to continue to be challenging for many originators. In the months ahead, interest rates should remain elevated, and some even say they may go higher. Personally, I am not necessarily concerned about rates. What concerns me more is how many originators are focusing on rates instead of what they can control.

MBA NewsLink: From a lender’s perspective, why is cutting staff usually the most common strategy to save money?

Vaimberg: Cutting staff is the fastest thing lenders can do to stop the bleeding. I understand why this is the first step most companies take—the benefit is realized instantly. However, if companies didn’t just focus on cuts and consistently focused on training their sales teams, they can mitigate the loss of business when a negative market shift occurs. The challenge with training is that it is not something that you see ROI on immediately, but the benefit has a compound effect over time.

The best example is the difference between loan officers that have remained top producers and those that are struggling. Both are impacted when the market slows, but the top producer continually has significantly more business because they didn’t build their business overnight, they did it over time. Training has the same impact. Any organization that keeps a strategic focus on the long term is always in a better position to thrive in challenging times.

MBA NewsLink: In what other areas are lenders cutting costs besides staff reductions, if any?

Vaimberg: As a trainer, I know firsthand that training is often one area, if not the first, that gets cut by most companies. Another area is paying for or subsidizing tools for their originators. Many large and even some smaller lenders pay for technology, memberships, and CRMs when times were good. We have seen a number of companies now cut off these subsidies and basically tell originators that if they want these tools, they’ve got to pay for them themselves.

MBA NewsLink: When rates rise, and volumes drop, what typically happens to lenders’ sales training efforts and why?

Vaimberg: When times are very challenging, fewer lenders invest in proper training. Most want the “silver bullet” approach—they hire a trainer for one day, thinking they will transform their salespeople overnight. Unfortunately, only a small percentage of people will respond the first time they receive any type of training. I’ve seen this time and time again. Of course, there is a greater cost to ongoing training that mentors and coaches people to improve, but this is what it really takes. It’s no different than a professional athlete—they don’t walk on the field and suddenly know the entire playbook. There is a process for learning plays. In sales, if you want to elevate the ability of your team to succeed, you must do it consistently. It’s just like going to the gym. You can only become physically fit when you commit to consistent exercise. Unfortunately, most companies want the silver bullet solution because they are in desperate need for help. They either don’t have the funds for a long-term commitment, or they don’t have the time to wait for the benefits the training is designed to create.

Some companies also create their own internal training programs to save money, but most of them are not very good. This is often because they use staff who might be top producers, but don’t understand the fundamentals of training and coaching. That’s no disrespect to top producers. They clearly know how to succeed. But whether their success is instinctive or they’ve learned what to do along the way, most great salespeople haven’t mastered the skill of imparting their knowledge onto others.

Just like in sports, coaching is completely different than being a player. There are many great players who never become great coaches, and many great coaches who were never great players. Occasionally, a great player does become a great coach. But in lending, most internal training is not done that way. In fact, what usually happens is the “trainer” talks at people instead of talking to them. That is the difference between true mentoring and simply pushing out ideas. Ideas without mentoring doesn’t work. It is one of the reasons why I not only get called in by companies that don’t have training programs, but also companies where training already exists.

MBA NewsLink: How does investing in the success of LOs actually benefit lenders more than reducing staff?

Vaimberg: When lenders invest in the ongoing training, they are usually not hit as hard when the market changes. Yes, they will absolutely feel the pains of the market. But when an organization invests in training, coaching and mentoring on a reoccurring basis, their sales teams are far more receptive to doing things that weren’t previously needed. They’re already accustomed to the mindset of ongoing training, accountability, and adapting.

During the pandemic, training wasn’t as important because business was rolling in. Then the market swung, and suddenly, everyone’s scrambling for training. But the problem is the mindset for learning was never established. You can put people into training, but if they are only looking for a quick fix, it is not going to work.

MBA NewsLink: What advice would you offer loan officers who feel they aren’t getting the training they need?

Vaimberg: That is a very tough question to answer. In some cases, they’re not getting the training they need. But more often, loan officers are not even receptive to training. They’re looking for that silver bullet, too. Their mindset is, “I need something and I need it now.” Often the effort required to make the training work is more than many originators are willing to give. Even though their success or failure hangs in the balance, all too often originators wait until things get very bad before taking action. I would advise all loan officers to find trainers who can teach them the art of educational persuasion in the simplest and most effective way. Find training that is not complex and easy to understand, and act.

Take the concept of buying now versus buying later, which is a great message. Consumers are hearing about higher home costs, but don’t necessarily understand the true cost of waiting to purchase. However, most salespeople don’t know how to present this concept effectively. Just like most internal trainers do, most salespeople talk at people. You can show consumers the benefits on paper, and that will influence some people. But if you want to really change the way someone is thinking, you first must understand where they are and learn to ask questions that uncover their roadblocks. This is what great trainers can help them do.

The first thing an LO needs to do is pay attention to their own words. For example, many originators will agree when a consumer says that rates are high. If a consumer uses the word “high,” the LO needs to substitute in the word “elevated” into the conversation. That simple change in wording impacts the emotions that the prospect has to current market conditions. When you’re able to address the emotions that are involved with someone’s decision, and approach sales from that perspective as well, you become the most powerful salesperson in the world. It’s not about getting someone to buy at any cost. It’s about connecting with people, understanding their circumstances and emotions, and incorporating them into your sales process. It’s these types of skills that will help you succeed in any market.

(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 NewsLink Editor Michael Tucker at mtucker@mba.org or Editorial Manager Anneliese Mahoney at amahoney@mba.org.)