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In-House Isn’t Always Better

Industry Commentary

In-House Isn’t Always BetterHow to handle in-house originating

July 5, 2006



While there are many benefits for an originator to house inside a Realtor’s or builder’s office, constant scrutiny and higher accountability are not among them. So salespeople in this opportunistic position need to approach origination a little differently.If you peruse mortgage-industry training, you would think that every originator had the same task in front of them.

Obviously, this is not so and one of the best examples of this differentiation comes from studying those who are “in-house” loan officers servicing banks, builders or real estate companies. If you currently occupy this space you certainly know what I am talking about.

My own first job was to service three real estate offices for a mortgage company that was owned by a real estate company. I went on to manage sales forces in this segment of the industry. One of the stops in my career was a national bank. So certainly I recognize this “difference.”

How is this job different?

For one thing, it takes a different person to thrive in an “in-house” environment. All too often managers try to hire “good” loan officers that do not fit the mold of the in-house originator.

Why? Well, let me give you a few examples.

Many times an originator serving an office or a builder site must keep the same hours as those offices.

Many originators are free-spirited sales people and one of the things they love the most is the flexibility — set your own hours. In addition, many loan officers are used to choosing their targets. Don’t like a certain agent? Just fire them. Now they are in the same family. It is hard to fire your children or brother.

In short, this person must like belonging to a team. And their personality must fit the team.

I have had loan officers fail in one real estate office and thrive in another.

Do not underestimate the fit.

And the most important part of the fit is the manager of the office or the sales agent on the site. This is a relationship business and the relationships you will develop inside will be paramount to success.

Service delivery is also different when you are inside.

It is said that bad news travels 100 times faster than good news in an office (not that all loan officers are not supposed to be great service providers). And it is not as if those who are in-house do not have an advantage with regard to easier access to their targets which facilitates communication.

But when an “outside” loan officer has a real service issue — they can virtually disappear (author note: certainly not recommended).

For an in-house loan officer, there is no where to hide. In addition, it is said that agents and other targets hold their own companies to a higher standard. I can’t believe how many times I have heard the phrase “it is like I am putting my name on the line twice.”

So, the question is — when something goes wrong (and this will eventually happen), how do you react? If you are not a leader under crisis — this will show much more vividly when you are in-house because your targets will see you under fire.

Builder reps have an even more unique challenge. It may be six to eight months from loan application to closing. That is a lot of time in which to deliver service. And it is also a lot of time in which the client can be shopping or being inundated with calls, e-mails and letters from outside loan officers.

But its not all bad news.

Many originators like being part of a team and especially enjoy having first-hand access to targets of which other loan officers can only dream.

But the one thing to remember is that this access comes with great responsibility.

Your targets are in business to make money. They all have goals. There are plenty of outside loan officers who are willing to help them make more money.

So my question is — how are you doing that?

Good service must be a given. To really succeed they must know they have an expert at their disposal.

But being an expert is more than just knowing how to close loans. You need to be an expert that will help them make more money. That may mean many different things in many different situations — from training to lead generation.

You need to ask yourself — are you sitting around waiting for referrals come to you or are you proactively partnering with your targets so that you are a significant part of the process?

Even more importantly, do you see the big picture? What is that? The big picture is actually the sphere of the office, site or company. When you open your eyes and see this sphere, you will see opportunities that you could not believe existed.

Dave Hershman is a mortgage industry author and speaker — with 8 books and hundreds of articles to his credit. He also heads Mortgage School. You can e-mail Dave at

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Residential real estate news and coverage of how residential real estate impacts the mortgage industry and residential mortgage-backed securities.


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