A Rebound is Here. With It, a New Way to Recruit and Retain Good LOs–Certainty Home Lending CEO Franco Terango

Franco Terango is CEO of Certainty Home Lending, a Rate Company, which is a national mortgage lending and FinTech business. He has been a leader in the financial services industry for over 30 years and his career has traversed four lines of business, including consumer banking, investments, small business banking, and 25 years in mortgage lending.

It appears the market rebound is finally happening. Although the recovery may prove to be uneven at times, we will likely see an increase in transaction volume in the coming year. In an industry that has traditionally approached such a transition by ramping up capacity via recruitment, it’s safe to say that lenders will be seeking out and competing for top producing loan officers (LOs) in the coming months

However, this cycle change will be a little different than its predecessors. The labor pool is getting younger and with that reality, lenders will need to realize that a large compensation package may not always be the top (or only) criteria for professionals choosing a new employer. That holds true for LOs, too. Many LOs have a different perspective than previous generations on what they’re seeking if and when they’re looking for a change of scenery. The mortgage world is changing as well, fueled by new technology and evolving client demands. The process itself is not what it once was.

With this transformation, lenders are recognizing that the best LOs want more than a great compensation package. Top producers are beginning to demand environments that support LOs through comprehensive training, flexible product offerings, and effective technology. As a result, the most successful lenders in the next strong market will be taking a different approach to recruiting and supporting the nation’s top producers.

The role of effective technology in recruiting

Driven by the accelerating introduction of advanced technology as well as significant margin compression, lenders are investing in user-friendly and effective tools to streamline the loan origination process. From automated underwriting systems to customer relationship management (CRM) software, technology is transforming how LOs interact with clients and manage their workflows.

It’s not always about having the latest and greatest, either. We’ve gone from seeking “end-to-end” solutions to acknowledging that tech stacks provide the greatest flexibility and customization to each originator’s particular needs. Not every shiny new technology is necessarily effective for a lender’s (or LO’s) specific requirements. Thus, it’s much more important to many LOs that, if changing their place of employment, the technology available to them will be effective as well as easy to learn and use.  Perhaps most importantly, LOs seek technology that will enable them to spend more time doing what they do best: serving clients.

Lenders are taking the position that technology can reduce administrative burdens, allowing LOs to focus on building relationships and providing personalized service. For example, advanced CRM systems can help originators track client interactions, preferences and financial goals, enabling them to tailor their offerings to meet individual needs.

It’s no longer about emphasizing the product the lender wants to offer

The world of mortgage lending has long been poorly understood and heavily regulated by consumers and lawmakers alike. As a result, we find ourselves the object of heavy regulation and heavy agency scrutiny. That’s not going to change any time soon. In fact, it’s likely to get even worse in the next several years.

At the same time, consumers and their trusted advisors are becoming more sophisticated and taking advantage of vastly improved tools and resources when shopping for a mortgage. Yes, the rate will likely always be a significant factor. But, in competitive markets, the opportunity to differentiate on price diminishes.

These two developments mean that lenders can’t simply focus on selling (thus, encouraging their top producers to focus on selling) a certain product. Many lenders have moved away from aggressive sales tactics that may have contributed to past industry issues. In turn, successful LOs want to team up with lenders with good reputations and brands and a diversity of quality mortgage products. The more that top producers can offer to a wider range of potential customers, the more successful they will be. Lenders who are positioning themselves for success as the origination volume climbs are well aware of that truth, and have already been working to build strong brands and offer a number of great products.

A fresh look at LO compensation structure

The customary compensation structure for LOs has heavily relied on bonuses tied to sales volume. While financial incentives are still important, many LOs are now seeking positions that offer a more holistic approach to support and growth. The rising demand for job satisfaction, work-life balance, and professional development is driving this shift.

Mortgage lenders are beginning to understand that offering competitive compensation packages alone is insufficient to attract top talent. Instead, they are focusing on creating a supportive workplace culture that values employee well-being and professional growth. This includes providing robust training programs, mentorship opportunities, and resources that empower LOs to excel in their roles.

A supportive environment not only enhances employee satisfaction but also leads to better customer service. When LOs feel valued and well-equipped, they are more likely to build lasting relationships with clients, leading to higher retention rates and increased referrals.

Additionally, LOs typically despise red tape and delays caused or exacerbated by layers upon layers of administrative hierarchy. Most of them simply want to get out there, support clients, build new relationships and, above all, help their customers find the best mortgage for them. More and more lenders are working toward a leaner, flatter administrative hierarchy to accommodate that.

Flexibility and diversity in product mixes

Another critical factor in attracting and retaining talented LOs is the flexibility of product offerings. The mortgage marketplace is increasingly diverse, and borrowers today are seeking solutions that fit their own circumstances. Lenders that provide a range of products empower LOs to serve a broader client base.

Furthermore, the move away from promoting the “product du jour” is gaining traction. The best LOs and lenders agree as well that the role of the LO has changed as well. Lenders are encouraging LOs to adopt a consultative approach, acting as financial advisors rather than mere salespeople. This shift fosters deeper client relationships and ensures that the right product is offered and delivered.

This consultative approach benefits both the LO and the borrower. Clients appreciate having a knowledgeable partner who can guide them through the complexities of finding and taking advantage of the very best mortgage for them.  For LOs, it means they can differentiate themselves in a competitive market by offering valuable insights and personalized service.

The growing trend of mortgage lenders seeking to recruit and retain LOs by offering support, flexibility, and effective technology is reshaping the industry. As LOs transition from salespeople to financial advisors, they will be better equipped to meet the diverse needs of borrowers in an increasingly complex market. By embracing this shift, lenders can not only enhance their workforce but also build lasting relationships with clients, contributing heavily to a sustainable model for long-term success.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)