Survey: Inability To Close On Time Is Top Reason Loan Officers Leave

Posted by Patrick Barnard on August 05, 2014 No Comments
Categories : Residential Mortgage

If you think the main reason loan officers leave for ‘greener pastures’ is better compensation, you better think again.

A recent survey conducted by Majestic Consulting on behalf of Lenders One shows that the main reason loan officers leave for other companies is that they cannot close loans on time which, in turn, puts stress on their relationships and destroys borrower and referral agent confidence.

In addition, many loan officers say they are inclined to move on once they feel that leadership lacks perspective on new purchase business and/or fails to provide sufficient training or support for pursuing new purchase business.

A third reason is the loan officer's lack of confidence in the lender's response to industry changes.

In fact, productive loan officers are willing to leave higher paying positions to move to a company where management has a firm grasp on fulfillment and business development, the survey finds.

As such, the survey reveals that fulfillment, training and leadership are the keys to retaining high-performing loan officers.

‘The assumption that loan officers always leave for a better compensation structure somewhere else is false,’ says Tom Ward, CEO of Majestic Consulting, in a release. ‘Issues like a short-term missed closing have a phenomenally long-term impact on a loan officer's book of business and can be just as or more important than compensation to a decision to change employment.

‘The shift from a less time-sensitive refi, to an intricately coordinated purchase transaction exposes a lot of inefficiency in the process,’ Ward adds. ‘Now there is a real deadline: the 'I have a borrower with their belongings in a truck and nowhere to go' deadline. If you miss that deadline, that borrower is unlikely to come back, and that Realtor is unlikely to refer again.’

Jeff McGuiness, CEO of Lenders One, points out that a high turnover of loan officers can be a bad thing for lenders, as it erodes customer confidence.

‘This survey highlights the importance leaders must place on both the manufacturing process and their service teams so that both are in synch,’ McGuiness says in a press release. ‘Production efficiency and quality are directly related to sales and service efficiency and quality, regardless of the market cycle. A holistic approach is crucial to ensure stability and reduce disruptive turnover in the long run.’

The survey also found that it takes almost seven months from the time a loan officer decides to leave a company and when it actually happens.

‘That's a remarkable amount of loyalty,’ Ward says. ‘What's more, we found that the company that may initially start loan officers thinking about leaving is not usually the company they end up joining.’

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