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National Mortgage News
January 2, 2015
BYLINE: Mark Fogarty

No one really knows what mortgage employment will be like next year. The best guess seems to be modestly upward, tracking the macro economy’s ongoing run-up in employment and a modest increase in hiring in the mortgage industry.

One thing is for sure, though. Good originators will remain in high demand.

“Loan officers will always move around,” said Mike Hardwick, chief executive at Churchill Mortgage in Brentwood, Tenn., which hired more than 100 people in 2013and continued to aggressively recruit this year.

“We’re always looking to employ experienced and aggressive originators,” Hardwick said, though he is predicting that he will be more aggressive hiring on the operations side in 2015.

“I think you’ll have a lot of demand for top production people,” added Cy Brinn, chief operating officer of VirPack in McLean, Va.

One caveat from a recent Stratmor Group survey: Loan officers from the bottom two production quintiles turn over at a 40% rate annually, while better ones are harder to lure away.

Next year’s industry employment is “hard to predict” Hardwick said, but he was willing to give a vote for “cautious optimism.” Hardwick said he believes mortgage rates will be up in 2015 but not dramatically – perhaps 50 to 75 basis points – and not enough to dramatically crimp volumes, or the need for people.

“Our volumes will increase next year by 8% to 10%,” he said. “We’re looking to add staff, more on the operations side, such as processors and underwriters.”

Hardwick said he expects 2014 hiring at the retail lender, licensed in more than 30 states, to wind up with 75 to 100 new hires, adding that “2015 will somewhat mirror that.”

Churchill, which largely focuses on conforming lending – about 25% of its volume involves government mortgages – has roughly 400 people now, represent a big expansion from when it started in 1992 with just Hardwick.

Brinn, with electronic document management vendor VirPack, said he sees some hiring tightness in his sec-tor of mortgage automation firms. “Mortgage technology space will continue to be a tighter than average market,” he said.

“People have left and gone to other industries,” Brinn added. “It will take a little more time and a little more effort to hire people. There will continue to be a challenge to find good people on the ops and production sides.”

That being said, Brinn said he believes employment in all sectors of the mortgage business will increase a little bit in step with gains in the macro economy.

Which sectors might be hot spots? “Nothing really comes to mind,” Brinn said. “Regulatory compliance people might be needed.” At VirPack, “we expect to add a few positions at a minimum.”

Jay Brinkmann, principal at BrinkEcon in New Orleans and a former chief economist at the Mortgage Bankers Association, said he is looking for 2015 to be a flat hiring year.

“We’re seeing a leveling off of regulatory hiring,” Brinkmann said. Still, he said there may be an increase on the technology side and, while the market for originators should be flat with “a churn more than net new hiring.”

The most recent figures from the Bureau of Labor Statistics show that nonbank mortgage hiring has been sluggishly rising this year. Total employment in mortgage banks and brokerages edged up to 289,400 in October from 284,900 in January, or a 1.6% increase. Such tepid growth was still better than 2013, where jobs fell 7.8%. (Industry job totals have varied, boom to bust, from about 500,000 to about 250,000.)

Turnover will likely be greater among less-desirable recruiting prospects.

“The best companies don’t keep the lowest performing LOs around very long,” Garth Graham, a partner at Stratmor Group in Peachtree City, Ga., wrote in a recent National Mortgage New sblog. “As you might imagine, Our data bore this out, with turnover of the lowest two quintiles (or bottom 40%) at over 40% per year and then falling by half or so for each quintile as you move up the ladder until the top 20% turn over less than 10% of the time.”

As for next year?

“Scooping up these lower-performing loan officers is pretty easy,” Graham wrote. “They move often and they don’t command high incomes. Turning them into star performers is more difficult, but not impossible.”Still, mortgage hiring patterns lack uniformity, according to the results of a recent survey by Stratmor.

“Some companies appear to hire a lot, cut or lose the bottom tier and have even higher productivity from the top tiers,” Graham wrote. “Others are much more balanced, with few top performers, but more in the middle tier.”