Residential Magazine

Mortgage Industry Leaders Face a Millennial Challenge

Managers today must leverage the talents of novice and veteran originators alike

By Dennis Black

The mortgage industry has gone through a lot of change over the past 10 years, but much of that flux is the result of variables beyond the control of individual mortgage professionals. In the wake of changing lending guidelines, the TRID consumer-protection rules and new compliance adjustments, we all have had to adapt to working, and managing, in an entirely different environment — not only in sales, but with respect to our entire mortgage operations.

The one constant many mortgage professionals thought would carry them through the unpredictable times was the industry’s tried-and-true core-management principles. Still, as the landscape of our industry continues to evolve, mortgage industry leaders also face a generational challenge, in terms of how they manage the influx of new talent — particularly millennial mortgage originators. Many millennial originators have an entirely different outlook on the business than veterans of the mortgage industry.

Yet, if we do not understand how to work with and motivate this new generation, we will not see the growth we want for our team or our company. Addressing that challenge starts by recognizing that, on a core level, the same rules of the road apply to everyone, whether they are veterans or new to the field, but that doesn’t mean everyone should be coached and managed the same way.

Relationships are central

In our industry, it is very common to get enamored with one’s monthly production in terms of units generated or loans funded. Because most compensation in our business is tied to these two dynamic components, we tend to focus on it as a gauge of a well-done job. Sadly, that is the trap that leads to what is known as “peak and valley” production. Imagine a graph like today’s stock market — up one month, down the next.

This volatility is a function of generating loans and getting them to the funding table the next month and, in the process, ceasing the core activity required to maintain growth and volume — sales calls and sales-related activities. The veteran is aware of this trap yet can still fall into it without close management support. Effort is required on the part of managers to hold originators — veteran and novice alike — accountable for maintaining the necessary sales activities, so they avoid this vicious cycle.

Quality managers help to drive people to success and don’t leave them alone to fail. By holding tenured and new originators accountable for making the necessary sales calls consistently to their third-party referral bases (whether it be a Realtor or a builder), managers will help those originators establish what still matters most in today’s home-purchase climate — personal bonds and relationships. If originators do not make the calls and are not managed adequately in that critical relationship-building activity, they will be viewed as a commodity by borrowers and referral sources alike, and price will become the determining factor in the choice of the lender for the customer.

Make a plan

So, how do managers drive originators to build relationships? One strategy is to hold one-on-one review and planning sessions with them for a concentrated period of time. This entails holding a 30-minute meeting every two weeks — in person is ideal but the phone will work — to review the previous two weeks of calling activity and to plan for their next two weeks of calls and/or event appearances, all designed to deepen the originator’s business relationships.

Managers should try this meeting approach for a 90-day period to see what the impact is on the originator — regardless of how long that individual has been doing their job. Mortgage professionals who have the right stuff appreciate having a bar set and their activities measured against it, if those activities can make them money and get them back to the basics of why they were successful in the first place.

“ In today’s lending world, you cannot manage everyone the same way. ”

If, after the initial 90-day period, the results prove beneficial to the originator’s performance, then stay with the plan. If it did not work as you had hoped, adjust accordingly, and get the originator’s input as to what will help them grow their client base and revenue moving forward.

Respect is earned from the originator who followed the plan and allowed you to manage them to success. Varying your approach as a manager, however, before the completion of 90 days, will send the wrong signal to the originator. Consistency breeds success. Changing course too frequently leads to uncertainty and less fruitful results.

Reaching millennials

The future growth of the mortgage industry and our economy will be fueled by millennials. As a manager, understanding what can motivate them — and coaching them to achieve the success you and your company need — is our biggest challenge in today’s mortgage workplace.

The primary differentiators that distinguish many millennials from a typical veteran originator are technology and motivation. Many millennials approach their jobs from a different point of view than the veteran originator does and, more importantly, see the world in a different way than the many of the originators who fought through the market turmoil in the aftermath of the Great Recession, from roughly 2008 through 2012.

The technology in our industry today, and the utilization of it to a high degree of proficiency, can be an asset in today’s mortgage market. Relying on it too much, however, leads to a dangerous perception of how to develop a relationship with Realtor or builder partners.

Some millennials feel that technology alone should be sufficient to get the job done and rely on it nearly exclusively for marketing and customer-relationship management. They feel visiting or seeing someone in person is truly not that necessary. That leads to them being deficient in one-on-one sales-oriented skills. In addition, they become very dependent on price as the primary factor that will yield them a customer, which is a strategy fraught with peril.

Many millennials are comfortable making decisions in their personal lives by relying on feedback from the internet and technology-enabled systems, which can promote a commodity thought process, but a business relationship is not a commodity. As they evolve and grow to understand that price is not the only item they should be emphasizing — and learn the real value of cultivating personal relationships with referral partners and borrowers — many of these millennial originators will develop into the superstars you are hoping for, however.

Addressing challenges

The ultimate challenge for managing many millennials in the workforce is not only a matter of augmenting their sales approach, but also addressing their motivation. Many millennials march to the beat of a different drummer when it comes to their perceptions of success and are motivated by workplace factors beyond money or career advancement. 

So how do you motivate someone who has a broader expectation from a job than getting the next paycheck or promotion? One strategy that can work is to appeal to their desire to compete against each other, not for money — which will be the outcome for you and them, if they succeed — but for recognition among their peer group and the larger company.

Establishing recognition programs and setting up workplace contests can go a long way in tapping into that competitive spirit and boosting productivity and employee engagement in the process. Pairing a veteran originator with a new millennial originator also can help establish good habits for both and make work about more than just the paycheck.

In today’s lending world, you cannot manage everyone the same way. The mortgage originator could be a veteran or a novice, and each one needs a different management touch to drive them toward their full potential. As a manager, you have chosen this and should relish the challenge to get the most out of your team. Being respectful of individual differences and, as importantly, leading by example are critical to a team’s success.

• • •

Never lose sight of the fact that a good manager’s goal is to lead people to success, not failure, and you have a chance to impact that outcome every day. There is an adage that can help you start to realize the magnitude of what you, as a manager, have to put into place: “A quality manager fosters innovation and embraces change.” Live by that motto, and do not be afraid to mix up your current pattern of management and try out new, innovative ideas to help your team achieve their definition of success in the future.


  • Dennis Black

    Dennis Black is the CEO of Dennis Black and Associates, a training organization devoted exclusively to the development of sales and management professionals within the lending industry. Dennis Black and Associates has trained more than 120,000 mortgage professionals throughout the United States, Canada and Australia. Black speaks at conferences sponsored by the Mortgage Bankers Association and NAMB - The Association of Mortgage Professionals about selling strategies and is a frequent speaker at state conferences.

You might also like...