Recruiting The Mortgage Industry’s Next Generation

Attracting a young mortgage workforce | SettlementOne

There are several ‘realities’ posing challenges to the future of the nation’s mortgage industry, but perhaps no challenge is more daunting than the need to recruit a younger generation of lenders.

As America’s population ages—and millions of ‘Baby Boomers’ enter their retirement years—there is a rapidly growing need for the nation’s mortgage sector to recruit young men and women to replace those completing their careers.

The reality that is confronting the lending sector is simple: for the industry to survive the 21st Century, it will have to recruit a new generation of loan officers. And with Baby Boomers retiring en masse, and ‘Generation X’ not far behind them, all eyes are fixing on the younger generation labeled “Millennials”.

However, recruiting Millennials into the lending industry will require enticing a younger generation whose views of life—and work—are vastly different than previous generations. In addition, America’s lenders will have to accept the concept of younger, and therefore less experienced loan officers.

The lending industry’s need to recruit a new generation becomes starkly evident with an examination of the numbers: mortgage industry experts estimate that over the course of the next decade, there will be a need to recruit approximately 200,000 loan officers.

But the depths of the industry’s recruiting problems go even deeper: retention within the industry remains a problem as well, with only 10 to 25 percent of mortgage sales staff entering the industry over the last 20 years, remaining in loan origination longer than two years.

Given the fierce competition to recruit young professionals to the lending sector, industry experts believe that lenders have to do a better job of making the industry more appealing to Millennials.

And although it may, at first, appear difficult for the mortgage industry to compete with the ‘excitement’ and innovation proffered by other industries—particularly those related to technology—the lending sector is not without its own potential to appeal to Millennials.

Lending industry characteristics that could appeal to Millennial professionals include:

  • Flexibility—loan officers most often spend their days working independently, something that many Millennials seek out when selecting a career
  • Opportunity for financial success—while loan officers aren’t likely to earn salaries anywhere comparable to those on Wall Street, industrious and ambitious loan officers can carve out a very ‘comfortable’ career, with opportunity for career advancement in the mortgage sector
  • Stability—In an era of economic uncertainty—particularly in the wake of the Great Recession—the mortgage industry proffers a career in a financially stable sector; while no job is ‘guaranteed’, the mortgage industry remains one of the most enduring on the American economic landscape.

Industry watchers believe that, for its part, the lending sector must also be willing to ‘take a chance’ on younger, less experienced loan officers if it ever hopes to meet its staffing needs.

Additionally, industry experts advise mortgage companies to embrace diversity in their hiring practices. Beyond the legal requirements of not discriminating in hiring, creating a more diverse workforce will assist mortgage companies in serving the growing diversity of their customer base in the years to come.

According to a report by the Joint Center for Housing Studies at Harvard University, there will be as many as 17 million new US households formed between 2010 and 2025; of striking importance to the mortgage industry, as many as 13 million of these new American households may well be comprised of minority families.

Those raw statistics appear to indicate that, in order to meet the diverse needs of the 21st Century American housing marketplace, the mortgage sector must continue to expand the diversity of both its leadership and its workforce.

That same Harvard report found that lending demographics may well be as high as 70 percent Hispanic, Asian-American and African-American by the year 2025.

Several years ago, General Motors ran a marketing campaign with the slogan “Not Your Father’s Oldsmobile!”

That same adage can be said to be true for the nation’s mortgage sector in the new millennium, as it adjusts to the evolving demographics of both its future loan officers—as well as the homebuyers they serve.

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