Rookies that pursued a career as mortgage loan originators in 2020 air dropped into a scintillating real estate market. There was easy money to be made – refi opportunities were bountiful, lenders hired tens of thousands of workers to meet capacity, and even showered underwriters with five-figure bonuses on top of $150,000 salaries. Rookie LOs in 2020 could ride the refi wave and rack up a hefty monthly paycheck without Herculean effort. But these days, they’ll have to sing for their supper. Many are likely to wash out.
The refis that propelled the market to astronomical heights last year are drying up, while purchase mortgage transactions now dominate the market. Industry insiders say that the entry-level LOs who made a killing solely off of refis last year will likely struggle to adapt to the market changes.
“It takes months if not years to foster those realtor relationships and then you throw into the mix iBuyers and it just becomes an extremely crowded place,” said Jim Clapp, president of Certainty Home Loans.
Clapp noted that many of his LOs continued growing their relationships with real estate agents “because when the music stops you can’t establish a relationship with a realtor if you haven’t been servicing them throughout the pandemic.”
According to data compiled by the Mortgage Bankers Association, a purchase market usually correlates with an increase in LO turnover.
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