https://youtu.be/kEt1PlCLYtg

https://youtu.be/H0mIBn7gJKQ

By Pat Sherlock

In recent conversations with a Board Chairman and the President of a mortgage company, I asked each one separately “What percent of your sales staff meet the company’s annual volume goals?” This productivity percentage is a critical standard for any mortgage company because it is a predictor of profitability.

The Board Chairman said 80% of the loan officers made the company’s volume goal. The mortgage company President said the percentage was only 40% of the sales staff. This raises the question of how two executives at the same company can have such different understanding of the reality of their organization’s sales performance.

[adbutler zone_id="325884" type="asyncjs1.1" ]

[adbutler zone_id="325888" type="asyncjs1.1" ]

While the disparity between the executives’ perception of their firm’s sales performance can be attributed to a number of factors, the ramifications of not having an accurate view of this critical metric is a recipe for disaster. Let me explain why.

If 80% of a company’s sales force is meeting volume goals, they are achieving at acceptable levels.  In this scenario, only 20% of the originators would need to be on a performance plan and managed out if they failed to change their sales results. It also implies that hiring managers have done a fairly good job of correctly identifying sales talent and matching candidates to the company’s culture.

But if the true percentage is 40% or less, there are major problems with a company’s recruiting efforts and the skillsets of their managers. This performance level means 60% of the sales staff are underperformers and not profitable. As Stratmor’s research indicates, carrying a majority of low performers over a long period of time can lead to financial ruin for a company.

Based on my company’s nearly 20 years of research on personality traits of above-average originators, the simple reality is that only certain individuals are matched for a career in mortgage origination. If an originator is not a match for origination, no amount of investment in training or coaching will make up for a lack of sales talent. These individuals are better suited to be customer service reps than creators of loan demand.

Another important issue is that when companies hire those not matched for the sales position, they make their firm unattractive to top producers. Why would a top producer want to join a company that has a majority of poor performers? In a sales organization where only 40% of the sales group is making volume goals, the top producer has the burden of carrying too many underperformers. At the same time, operations has to devote their limited resources to handling poorly originated production. This is not an inviting proposition for top producers.

Detroit-based Quicken Loans has partnered with Vrbo®, a world leader in vacation rentals, to allow rental income earned through Vrbo to be used to qualify for a mortgage refinance. This program uses confirmed and documented rental income so homeowners can more accurately illustrate their full income stream. Mortgages for primary residences, vacation homes and investment properties are all eligible through this  new program.

For the first time, Quicken Loans clients can use income generated from offering their properties for rent as vacation homes on Vrbo to qualify for a conventional mortgage to refinance their mortgage. Traditionally, rental income can only be used to qualify for a mortgage when it is earned from a home that is deemed an investment property, not short-term rentals. Through this program, homeowners can use Vrbo income to qualify for a refinance if the rental income is from a primary residence or a second home. Quicken Loans is the only lender that allows clients to use Vrbo income to qualify for a mortgage.

“Vrbo helps homeowners use one of their biggest assets as a source of income. Now Quicken Loans can accurately review that income and consider it when calculating the debt-to-income ratio – a major data point considers when qualifying for a mortgage,” said Jay Farner, CEO of Quicken Loans. “As our economy continues to evolve, it’s important that our lending calculations continue to evolve along with them.”

Homeowners’ Vrbo income that is used to qualify for a mortgage is accurate, real-time recorded data. They can get their earnings statements from Vrbo to share with their Quicken Loans mortgage banker.

“Homeowners who list their vacation homes on our marketplace have a unique financial opportunity to earn extra income. Over 50 percent of Vrbo owners use their rental income to cover at least 75 percent of their mortgage payment,”* said Bill Furlong, vice president of HomeAway, Americas. “For the first time ever, homeowners can use their Vrbo rental income to be considered for a mortgage refinance, unlocking more value and financial returns on their property investments.”

This new relationship is only the latest in a string of mortgage innovations. In mid-2018, Quicken Loans rolled out Rate Shield, which protects homebuyers from rising interest rates. Buyers can lock their interest rate for 90 days without the need for a purchase agreement, so they can shop for a home without the worry of keeping up with fluctuating rates. As an added bonus, if interest rates go down, their rate drops too.

“For Quicken Loans, innovation takes many forms. From reinventing the mortgage process with Rocket Mortgage to finding new ways for credit-worthy, responsible homeowners to qualify for a mortgage, our priority is always thinking about how we can make Americans’ financial lives easier,” said Jay Farner.