Mortgage Origination Is A Contact Sport

by Brian Brady

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Mortgage origination is a contact sport. It’s retailing. It’s selling. Too many of us can get caught up in the irrelevant tasks that top producing originators simply refuse to do. Why do we fall into the task trap rather than be focused on dollar productive activities? We do it because it makes us FEEL productive and we want to appear to have value to our Realtor partners.

Let’s pretend that Russell Shaw was the National Sales Manager of the mythical Bloodhound Blog Mortgage. I listened to the three podcasts of Mr. Shaw’s interview and he didn’t say a damn thing (that you haven’t already heard). That is what was so inspiring about the interview. There is no magic pill that you need to swallow to become the next mega-producer in mortgage originations. You already know what you have to do; take lots of loan applications that have a high probability of funding. Listen to the podcasts and you’ll be as stoked as I am right now.

The first notable piece of advice I heard from Russell Shaw was to write down all the stuff you hate about the business…then…don’t do it. Pay someone else to do it. I laughed so hard at my utter stupidity. I was a superstar rookie originator because I refused to do the “paperwork”. I took good applications, gathered up documentation,, locked the rate, and said…NEXT. I let processors process, underwriters underwrite, and funders fund while I sold and looked for ways to sell more than the other guy.

How easy it is to forget all of the basics. Don’t like placing loans? Lay off this work on your wholesale lending reps. If they’re incompetent, don’t use them. I remember the day when they came to your office and actually competed for the business. You don’t like taking applications? Invest in a website with an online 1003 (about $50/month) and give away a free appraisal to applicants who use that function. Don’t like following the market daily? Concentrate on subprime. Can’t stand Realtors? Market direct for your purchase business through an employee benefits’ program.

The next great piece of advice I heard from Russell Shaw was to perform activities that are in concert with your goal. Perform the tasks you can control. If your goal is to fund 10 loans a month (which is a good but not great producer), you need to take 12-15 applications monthly. You need to carry a pipeline with 30 loans or pre-qualified loans. If you receive one referral out of 5 requests, focus on asking 75 people a month for loan referrals. They can be Realtors, past clients, CPAs, or even the local drycleaner for all I care. The point is that we CAN control how many people we ask for business on a daily basis. By the way, e-mails are not contacts; they’re advertising. Contact is belly-to-belly, or (with much lesser efficacy) on the telephone.

Russell Shaw’s advice, translated for new originators, is to see yourself as successful. He describes the biggest waste of money as the difference between your potential earnings and your actual earnings. Wow! Have you ever heard that gut check before? Sure, we all waste money on new shoes and apple martinis but have we ever had the courage to admit our wasted…potential? Define your potential. Only then, will you have defined what Russell calls your “prize”. The execution is then simply doing everything you possibly can to reach that prize. Does that mean you’ll have to make sacrifices? Of course it does. You’ll have to work nights and weekends. You’ll have to get into the office before the staff to get things done.

This market offers tremendous opportunities for a loan originator. There are $1 trillion in ARM resets this year and we have an inverted yield curve. Foreclosures are rising while values have leveled off, Loan guidelines have tightened from where they were three years ago. I have never seen the perfect storm emerge like this market in over 13 years. There is a need for a professional loan originator today that all the websites and call centers can’t fulfill.

Mortgage origination is a contact sport. We are salespeople, marketers, and retailers. Make the tough choices this year and determine just how much money (potential) you are wasting, what tasks you need to delegate, and what tasks you need to repetitively perform to reach your prize. Then…do it.

If you ain’t selling in this market you won’t be here for the next big boom.

Thanks, Russell.