The Next Generation of Mortgage Loan Officers – Part 1 of 4

A few months ago, the National Mortgage News ran an online article titled “Recruiting the Next Generation of Loan Officers.” The article lamented the fact that so few college graduates and younger folks are taking up mortgage lending as a career. It cited a source saying the average loan officer is 54 years old. The article went on to discuss what’s needed in a new loan officer. They need to be well versed in compliance, have strong technology skills, especially social media, have strong financial skills and be more informed than their already well-informed customer, but above all must still be able to develop relationships, whether face-to-face, over the phone or via the internet.

My Credit Union is growing it’s loan originator workforce and recently hired four individuals who would be considered the next generation of loan officers. Why did they choose mortgage lending? Why do they think they’ll be successful? And what else can a Credit Union wanting to be memberlicious learn from them.

Over the next month, I’ll share a profile of our four new originators from a face-to-face and email interview.

Today, meet Mike Davis……

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Up, Up and Away

Last week, my friends at Callahan & Associates conducted their quarterly Trendwatch webinar and data slides. Everything you want to know about Credit Union financial performance is available for your listening and viewing enjoyment. I look forward to it for the analysis of Credit Union mortgage market share.

Credit Unions enjoyed another strong quarter of mortgage production and once again stole market share for others. In the fourth quarter of 2014, Credit Unions originated 9.4% of the total first mortgages made. Yee-Haw – that’s a new record. Check out the chart below to see how much Credit Unions have gone up and up in market share and where they will stop nobody knows.

CU Market Share #s 2014Q4So what happened? Read on………..

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The Problem with the CFPB Expanded Definition of Small Lender

Recently the CFPB published proposed changes to ease rules for small mortgage lenders. The changes are intended to relax certain parts of the qualified mortgage (QM) rule to allow more credit unions and community banks to make mortgage loans that are not subject to the QM rules. On the surface this is great news. Many have been arguing that the 2014 rules issued by the regulator are putting a constraint on lending.

One of the key aspects of the QM rule is to verify that a borrower can afford to repay the loan (a great idea), but it also set an arbitrary debt-to-income (DTI) ratio to determine the affordability. The CFPB picked 43% as that DTI.

Under the current rule, a small lender exemption exists that permits lenders with less than $2 billion in assets and who make less than 500 loans in a year, to put mortgage loans on their balance sheet and thereby avoid the QM designation.

The new proposed rule increases the 500 loans per year to 2,000 loans per year, and also excludes those loans kept on the balance sheet. AWESOME! That would cover probably 90% to 95% of the Credit Unions who are working to be memberlicous. Proponents of small lenders are hailing the proposal because it allows community based, smaller lenders to help their members/customers.

But that’s where the problem comes in. So what’s the hidden statement here?

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Follow Up: Are You HARP-ing?

Thanks to Steve Deggendorf, reader of the blog and Director of Business Strategy in Fannie Mae’s Economic and Strategic Research from sharing some interesting charts about consumer attitudes towards refinance. Check these out.



Their research shows that half of the people survey have not refinanced their loan – meaning there are still great opportunities for Credit Unions to be memberlicious and also to pursue HARP. And further indicates the main barriers to refinance – which include they don’t think they can reduce their payments, closing costs are too high, not sure what lenders to trust and it is too complicated. I can think of lots of ways to build out a marketing theme around this and I ain’t no marketer. How might we use this data to get more HARP loans or more refinance loans and put money back into our members’ pockets – because that would be truly memberlicious!

Fannie Mae has lots great info on their web site from their research teams. You should check it out. Thanks Steve for reading and sharing!

Are you HARPing?

The Home Affordable Refinance Program (HARP) expires at the end of 2015. It’s been a great opportunity for millions of Americans to refinance to lower rates even when they owed more than the value of the home. But some estimates indicate there are still millions of eligible borrowers who have not taken advantage of it. Is this an opportunity for Credit Unions to be memberlicious?

I think so………….

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