New and Excited Mortgage Broker Prospect

[HopefulBroker]

Hello!

Some background on me:

I have a Bachelor's in Finance and 4+ years in mortgage compliance. I want to jump to the broker side of the business, and would like to get some good advice about this move to 100% commission....

Right now, I am being recruited by a broker that is very upfront with fees, they only charge origination points and the YSP (all earnings less than 5% of loan amount) and have internal leads (mostly refi's). They also have internal processing, and have a fair amount of processors for every originator so things get moved through the pipeline.

Last year the brokers did fairly well on just the leads with most making over 100k in salary. I think that these leads will serve as a good base to support me until I can build up a network of realtors, construction companies, and other finance professionals... but I need some encouragement taking the leap...

How hard is it to close 5 loans a month? How hard is it to build a steady, strong pipeline?

What is your advice to a young mortgage professional?

Thanks for any help/suggestions/ideas...

Elizabeth

[carlo@CreditReportAtlas]

Welcome to MBL.

Carlo

[The Wizard]

Welcome to the Forum Elizabeth,

The mortgage industry can by very satisifing, put your goals down on paper, do not accept defeat, carry yourself as a professional, put others people need before yours, excute, excute, excute each and every day and you will be successful.

Also if you have any questions regarding processing or underwriting feel free to drop me a line.

To your sucess.

[HopefulBroker]

Thanks for your responses!

I realize that it is very rewarding as well as hard work...

How consistent is the salary if you come in to work and play the same game consistently? My biggest fear is giving up the mediocre salary I have for 100% commission that can't guarantee anything...

[Erik]

Hello and welcome to MBL, Elizabeth.

Your income consistency is totally dependant on you. Being a broker is definitely a sales position and I'll level with you about getting started: there are few people who walk into this business and instantly close a good number of loans consistently.

There's an old saying in mortgages and real estate that 10% of the brokers close 90% of the deals. I don't know how accurate that is, but there is some truth to the statement that there are a good number of people who don't close all that much, while others close a lot.

I'm not trying to scare you or anything - just want to be realistic with you. Don't expect a cake walk. Expect to work hard, especially in the beginning while you learn the ins and outs. It might be a good idea to plan as if you were starting a new business and weren't going to have any income for a few months. If you can, have enough in reserve to cover your expenses for 3-6 months while you get through the learning curve and start to make money, so that you aren't constantly worrying about paying your bills. The worrying can be a major roadblock to success because it can consume your train of thought.

Income boils down to your sales and marketing skills and the support you have at your company. A good processor and experienced mentor can be invaluable in the early stage.

Going to a company that provides you with leads is a good beginning to consistent earnings. If they're good leads and you're a fast learner and decent salesperson, then closing a few loans your first 1-2 months is quite realistic.

Well, I hope this helps. Keep us updated on your new venture and of course stop in to ask questions anytime. Soon enough you'll be a resident expert answering questions for others

[HopefulBroker]

Well, I really think the company I am looking at has great opportunity...

50% commission splits... BUT if you can close 35k in fees, you get 60% split..

If you can close 35k in fees 3 months in a row, the company will pay for your OWN processor.. right now they have 4 processors that work for about 20 L/O's, but things seem to get through the pipeline as some of the processor income comes from commission on getting things through..

They do mailers and calls come in regulary, and people that are new still get about 2 appointments a week from the calls that come in from the mailers...

Two new people (sales experienced, non mortgage experienced) made 10k and 14k in fees their first full month off of just the leads...

I do have some experience with mortgage but its on the compliance side... I am just tired of reviewing HUD's, GFE's, TIL's... etc, and seeing how much brokers get in Origination points and YSP... I want a share!

I make sub 40k right now, how hard would that be to replace assuming 1-2 closings per month in Ohio our average loan amount is 120k...

I am driven, in fact, I drive people in the office nuts with my ambition... they are content with just leaving how it is... I am always trying to think of better alternatives, faster results, and am a perfectionist...

Heck, I go to these type of sites "for fun" because I love the business, I just don't know if I can succeed in the first few years while I build rapport with other professionals on just leads/refis alone...

[Erik]

Only one way to find out...

1-2 closings a month shouldn't be too tough if you are provided with plenty of quality leads, IMHO.

[HopefulBroker]

Yep, I agree... I just want to make sure that I am prepaped for the worst and then aim for the best...

How can you analyze companies for good/bad leads...

The mortgage company I am looking at provides leads, and over half of their L/O's do well and make 16k worth of fees just in the calls they receive without building other relationships... it seems that they do good marketing, but what do you think?

[Erik]

Well if you ask any of our resident lead providers (which would be wise to do), they'll tell you that a quality lead is only half the battle. The LO needs to be able to close it as well. If you give 100 of the same leads to a few different people (hypothetically), they'll probably all close a different number of them.

However, if others are closing the leads then it's probably a good sign that the leads aren't the type that have been sold to 100 other brokers and been called to death or are too old and have already acted.

If you search the forums here you'll find plenty of discussion on leads. I think you'll find some useful information.

One question you might want to answer for yourself is why are half closing over "x" amount and the other half not closing that much (assumably using comparable leads)? Seeing why some of their LOs are successful and why others aren't seems like it would help in your analysis.

[HopefulBroker]

I totally get what you are saying...

They allowed me to job shadow and see what the brokerage firm had to offer me, and what I noticed was those that were closing and going on appointments and such were the ones actually working...

The phone would ring (free lead to whoever picks the phone up if the secretary is away from desk) and some would just ignore it...

HELLO you are on 100% commission pick up the darn phone is what I wanted to say... One girl was to busy analyzing her metifast diet to figure out what she wanted for lunch to pick up the phone... come to find out she was one of the lowest producers... but still made more than I do in salary...

I will probably be back with more questions and thoughts and ponderings...

Thanks for all of your help, this has been more useful than meeting with anyone in the business and asking questions.

Elizabeth