Teraverde Current Commentary

How careful are you when hiring retail loan officers?
Jim Deitch

How careful are you when hiring retail loan officers?

Hiring Retail Loan Officers: How does another highly-regulated business handle this business process?   A new pilot takes an average of 12 weeks to screen and hire. Southwest Airline pilot candidates must have 2,500 hours of flight time, a four year degree, and a FAA-issued Airline Transport Certificate with a Boeing 737 aircraft qualification evidenced by an FAA-issued Type Rating.  Pilots then complete a month long indoctrination training, and must pass multiple “check rides” and proficiency testing to demonstrate competence in company procedures and Crew Resource Management.  Not surprisingly, professional airline pilot turnover at major carriers is about 3-5% due to the rigorous hiring process.

Loan officers are usually hired much more casually, without a thorough background review, without testing of competence and without thorough indoctrination into the lender’s culture.

MBA statistics report that the loan officer turnover rate is about 50% or higher in surveyed companies.  Turnover ultimately arises from poor selection processes. One really disappointing result is that turnover contributes to poor customer experience and to poor economics.  The cost to recruit, hire and train a loan officer can run from $10,000 to $25,000, and sometimes much more.

What happens if a lender’s hiring practices were more selective, and patterned along the lines of the way an airline hires pilots?  We have thought about every aspect of improving the mortgage banking process.  Click here for our Hiring Checklist, plus six other checklists you can use to identify opportunities to improve. www.teraverde.com/lp-profitability-checklist

At Teraverde, we are passionate about your profitability.
We want to share the strategies, tools and techniques that make mortgage banking work better.

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Use this checklist as a roadmap to more profitably mortgage origination.

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