The majority of mortgage lenders plan to add or retain current headcount in 2021, even in the face of declining underwriting activity, two recent reports found.
According to McLagan Data & Analytics, about 54% of insurers and processors said they will increase their workforce in 2021 and 47% of loan processors will do the same. At the same time, despite recent cuts in annual volume projections, only 2% of underwriters and 3% of processors and converters expect downsizing for the remainder of the year. Despite the upcoming lower level of activity, the companies are providing staff to process the high volume from the first half of the year.
"You hear it is 23% of cash buyers [right now], but mortgage financing is needed, 30-year mortgage rate will be here," Marina Walsh, VP of Industry Analysis for the Mortgage Banker Association, said at the 2021 MBA Single Family Home Research and Economics Showcase This Week. “We're not taking the Betamax or Palm Pilot path, the mortgage is here to stay. It just changes. "
The latest data from the Bureau of Labor Statistics reported that mortgage banker and mortgage broker jobs rose from 378,300 in March to 386,800 in April, increasing every month for the past 12. Business intelligence software provider LBA Ware's numbers for the first quarter showed annual and quarterly peaks in mortgage loans as well.
Loan handler turnover fell to 21% in 2020 – its lowest level since at least 2003 – while it was spending 7.6 loans per month, the highest average since 9.4 in 2003, according to a study by the MBA and Stratmor. Periods of high volume, especially refinancing, lead to lower sales, as not only does the time remain to search for a job, but LO commissions increase with your productivity, explained Walsh.
"These loan officers were doing very well financially," said Walsh. "Why move to another company, possibly learn a new lending system and waste a few weeks getting set up and settled in?"
The lower turnover should continue as the flexibilities from home resulting from the pandemic add to employee satisfaction – a boon to the bottom line of lenders. Fewer changes mean less onboarding and sustainable production.
“Sales are a cost factor. So lenders need to create an environment that encourages people to stay, ”said Rob Northway, McLagan partner and global head of retail banking. "That doesn't just mean paying more, it means creating a culture that is really attractive to the employee base."