5 Ways Mortgage Leads From Google Ads Eat Facebook Leads for Breakfast

5 Ways Mortgage Leads From Google Ads Eat Facebook Leads for Breakfast

5 Ways Mortgage Leads From Google Ads Eat Facebook Leads for Breakfast

2021 Edit:  I wrote this back in 2018 and many things have changed.  If you are interested in growing your mortgage business, shedule a strategy call and from there we will be able to determine whether or not a more in-depth conversation makes sense.  

Updated September 2018 – Let me preface this article by clarifying that reverse mortgage leads are the exception to this situation, as reverse mortgage prospects are not using the loan as a means of closing on a home.  This makes the window of opportunity much wider to capture reverse mortgage prospects.  If you are seeking reverse mortgage business, skip this gigantic article and get right to the September 2018 good stuff.

You’ve searched high and low to find a consistent supply of high-quality/exclusive mortgage leads but your mission continues to fall short.

With every new attempt returning more of the same, your optimism leads you to hope that you are one more attempt closer to finding the holy grail of mortgage lead generation.

Maybe this sounds familiar.  “I’ve tried generating leads with IDX websites and the leads were crap.  I’ve paid Facebook lead generation companies to generate leads and it didn’t work out.  I’m starting to wonder if high-quality mortgage leads are even a real thing or if this whole situation is some kind of mythical Sasquatch.”

If you have never run a single Facebook advertising campaign, simply replace the ‘Facebook ads’ with whatever means of advertising you have tried in the past.  The reason they all fall short is essentially the same – across the board.

Whether you have actually run any advertising or not, there is a wealth of mortgage business wisdom to be obtained with the information I have to share with you today.

I’ve generated many thousands of mortgage leads using both Facebook Ads and Google PPC ads, and if you have hired me for Facebook lead generation, there is an apology in order.

While I do feel that I made a valiant effort to emphasize the right way of handling the leads generated with Facebook ads, which is to use them as a resource for building referral relationships, I don’t feel that the message was clear enough.

In taking a step back to re-evaluate the entire situation. clarity has emerged.

With that in mind, let’s take a look at the 5 ways mortgage leads generated with Google ads eat Facebook leads as part of a balanced breakfast.

5 Ways Google Leads Eat Facebook Leads for Breakfast

1. Google ads enable you to deliver a specific solution to a specific intention/question/problem.

Facebook advertising is designed to target a specific audience based on their demographics/interests/behaviors.

Google search network advertising is designed to target people making specific searches at the exact moment they are ready to receive information.  Having that information handy, it’s best practice (and expected) that you will utilize the searcher’s intent to craft your landing page content specifically for that.

If somebody searches for ‘lowest mortgage rates in Idaho’, this is not where you want to show them ads or landing pages talking about ‘fast and easy online prequalification’.   You could definitely mention that, but it should not be the focus of the page.  It would be an even greater mistake to run the ads to any pre-existing page on your website that has not been optimized for AdWords conversions specifically.

Google’s objective is to show relevant information to searchers.  They even rank the ads based on the ad copy/landing pages/overall situation being directly relevant to the search.

If your ads and landing pages are not directly relevant to the specific keywords being searched for, you will be (and may have already been) witness to the fastest way to waste an ad budget ever created.  It’s not the right way to approach this situation.

Leads generated with Google Adwords have shown a specific buying intent immediately prior to seeing your ad. They are looking for a solution to their mortgage financing right at that moment, but they are looking for it based on the type of search they are making.

2. High-quality borrowers are not spending more time than necessary shopping for home financing.  Your window of opportunity is equally narrow.

Let’s talk briefly about a hypothetical family with a sizable bank account, consistent revolving credit lines, and zero credit issues at all.  Your dream borrower.

If they do not have a pre-established relationship with a mortgage loan originator they trust in a meaningful way, how do you suppose they will go about finding one?

Or better yet, here is a hint/question.  When was the last time you helped a family obtain a mortgage in a situation where nobody used search engines?

This Pew Internet survey from 7 years ago (most recent I could find) showed that 92% of internet users used search engines to obtain information.  It’s fairly safe to assume that this number has increased since 2011.  There is no way to use a mobile phone these days and get around using a search engine.   That’s the world we live in.

Combine that wisdom with this research from the Consumer Finance Protectiontal Bureau, “Seventy-seven percent of borrowers only end up applying with a single lender or broker, instead of filling out applications with multiple lenders or brokers to see which can offer the best deal.”

Now let’s throw in the CFPB’s 2,000 pages of regulations, a shorter attention span than ever known to the human race, concerns about personal data leaks, concerns about getting SPAMMED to death for the next five years, and concerns about the impacts of multiple credit inquiries on credit, and you have a perfect storm.

People have changed the way they do everything.
Shopping for mortgages is not fun.
High-quality borrowers are not interested in spending any more time on it than they have to. And they are not.

The reason your lead generation efforts continue to fall short is because you are not reaching borrower prospects who are searching.

If high-quality borrower prospects obtained information about businesses using the old school Yellow Pages book, we would be having a different conversation.

The mortgage process is, after all, the least fun aspect of the entire homebuying process (other than possibly moving).

High-quality borrowers who know they can get the best rates are looking for financing they can live with.  Something that allows them to get their family into their new home and move on with their life.  That’s it.

This makes the window of opportunity to catch a prospect at the right time extremely narrow. As narrow as a single moment.

Since Facebook ads are not displayed based on specific behavioral timing (such as conducting a search), you might as well be playing the high-quality mortgage lead lottery.   And even if you do find them, how is offering information about downpayment assistance or hot deals on the market going to help you find borrowers that have selected homes already and who have money for a downpayment?

If you want to get leads using a Facebook campaign, you cannot assume that anybody has found a home, because the vast majority have not – and will never.  Its a basic choice between zero leads, crappy leads, and righteous leads – and the choice is yours alone.

If you have a $20 sunglasses business, we are going to have a completely different conversation. Almost anybody can be in the market for a $20 pair of cool sunglasses at any moment in their life.  The timing is not so important.

Facebook leads for Realtors can even be effective because Realtors generally have a wider window of opportunity. In fact, our entire Facebook mortgage lead generation strategy was based on the idea of generating leads for Realtors in an effort to establish a referral relationship. And if the leads are used in that way, they CAN work.  It’s just not a short-term strategy.

After all, people can be house hunting for two years without having even talked to a Realtor.  Unless they have significant problems, they are not spending two years finding a mortgage.

Google search network ads ensure the timing of your information is always delivered at an appropriate time.

3. Since the relevancy and timing situations are corrected with Google ads, you can get paid back faster.

For example’s sake, let’s say you’re a mortgage broker and you are looking for mortgage prospects which are planning on & capable of closing on a home loan in the next 60 days.

Since Facebook users have not shown any specific buying intent, the ad must be delivered with a very low perceived threat level.  Considering a very small percentage of any audience is going to be in a position to close on a home in the next 60 days, we are disadvantaged from the very start if we run Facebook advertising to get mortgage leads.

If you want to connect with people, you have to give them something to help them in their situation.  If you start telling people about your fast and easy online mortgage pre-qualification you are going to scare them – nobody wants to get a mortgage and when they are on Facebook they are not looking for one.   You’re scaring them!

Two often-effective Facebook mortgage advertising strategies include offering exclusive access to the best deals on the market (delivered through a Realtor) and offering information about government assistance programs.

Since both of these approaches assume that the prospect has not already found a home or has not researched enough to know about these programs, you can safely scale realistic loan closing timelines to match.

These leads can be used effectively but in order to do that, you must be prepared to focus on generating referrals for insurance companies, Realtors, contractors, and anybody else.

Even if you decide to prioritize building referral relationships – it takes time.  And you are not in a position to make referral demands in return. This is, after all, an indirect growth strategy.

The problem is that your window of opportunity is much smaller than every other service provider I just listed.

On the other hand, if you are running Google Adwords campaigns to generate mortgage leads, and your landing pages/ads/and keyword targeting are all optimized in the right way, your landing pages are linked to your privacy policies, you have a chatbot designed to engage potential customers, and you are good at what you do – prepare for an avalanche of high-quality mortgage leads, because that is how this works when it is done properly.

You will still get the occasional lead who has not found a Realtor, providing you the opportunity to refer them to one – but properly generated Google AdWords leads are going to be of a much higher quality in general.  You won’t have to spend as much time strategizing a year of follow-up emails to each person, and figuring out how to do that in a way that doesn’t piss them off (good luck).

Google Adwords campaigns allow you to track your investment much more closely, scale it accordingly, and pay yourself back for your investment in a much shorter time frame.

4.  Consider the quality and consistency of the market/audience data you are working with.

According to the Genworth Mortgage Insurance First Time Homebuyers Report, “Between 1994 and 2016, first-time homebuyers purchased on average 1.8 million single-family homes each year, accounting for over one in three of all single-family homes sold, and 45 percent of the purchase mortgages originated. “

Add in this Statistica research showing Facebook’s US market penetration at around 63% in 2018.  If we assume the data is even among users and non-users, that should mean somewhere around 1.134 million first time homebuyers are at least monthly Facebook users.

That’s fine and dandy until we build a first-time homebuyer audience in Facebook ad manager consisting of people who live in the USA, excluding people who work in the real estate industry and those who own homes already.  In doing that, our potential reach is 68,000. That’s a long way from 1,134,000 (63% of 1.8 million).

Mortgage Leads Facebook First Time Homebuyers

This implies that either the Facebook data is massively inaccurate and/or that somehow people who have been labeled as likely to be a first-time homebuyer, are also getting labeled as homeowners (also… inaccurate).

The truth is that we may never know the truth because the data being used is proprietary.  Considering the recent heat Facebook has been receiving about its use of data collected, its safe to assume their market data is not going to get a significant quality boost any time soon.

Google search network ads, in contrast, are shown when people are interested in your product/service, in their search results, before the actual search results.

Google Search Network Ads for Mortgage Leads

5. Is the context/means of communication you are using appropriate?

Many people (including myself) are not prepared to make a large financial decision based on an ad that popped up on their Facebook newsfeed.  Not everybody is me, obviously, but I would personally go out of my way to avoid the ad in order to keep somebody from soliciting me over a personal communication app, like Facebook Messenger.

Even if a prospect likes you, it would be wise to assume there will be at least one Google search conducted at some point along the way – and it’s likely to be right when they are ready to have a real conversation.

If you have not prepared a strategy for remaining in front of these prospects every few days, for at least a year or so, without bothering them (fine line to walk), how are you going to stay relevant in their minds when the right time arrives?

If anything, generating Facebook leads that are earlier in the process than they would ideally be, is more likely to take you out of the running than it is to keep you in it.

If you fail to seal the deal, they are likely to move on.

You could try snail mailing a refrigerator magnet to each one.  It’s worth a shot.  If you do, please let me know how that goes.

If leads generated through Google search are so much better, why does it seem like fewer mortgage companies use them?

Three primary reasons.

1. Google Adwords campaigns require more work to implement.

In order to run a Facebook ad campaign, you have to create a Facebook page, be able to navigate the Facebook business manager/ad manager backend, and understand the audience targeting.

After that, you are well on your way to generating lead form leads. You don’t even need an external website in place at all.  Up and running in about 10 minutes, if you have an ad template that works.

On the other hand, generating leads using Google Adwords requires more work.  Outside of simply running the ads to the right audience, Google uses a quality score rating to rank your ad among other keyword competitors.

In order to obtain a high AdWords quality score, your ad must match the intent of the search term.  The landing page the ad directs visitors to must match the ad copy.  You have to have a consistent, and highly relevant message.

Your privacy policies must be linked to your landing page.  Your various calendar scheduling, email follow up, and chatbot creation/integration must be created and implemented accordingly.

This can create a large number of needed landing pages, relevant content, and corresponding tracking/conversion codes to follow the conversions and ad remarketing throughout Google’s display network avenues and even to follow people back onto Facebook with retargeted advertising.

One possible solution to minimize some of this is to use landing page personalization with dynamic page content, which adjusts the content of the page to match the ad link clicked on.  It can also use a number of other knowable details about a prospect and change the page content based on that information.

The content still must be created and the dynamic pages still must be tested and set up.

In order to get an Adwords campaign up and running, all items mentioned above must be addressed, in addition to landing page design considerations, keyword metrics to decipher, domain name/website hosting situations to set up, a variety of thank you page/tracking code implementations, call tracking systems to integrate, and A/B tests to run on all of it.

I said the mortgage leads generated are higher quality, I didn’t say they were easier to generate.

2. Adwords campaigns can require a greater upfront (and even ongoing) investment.  

Since the work required to implement the Adwords lead generation campaigns, the cost to implement has a tendency to scale accordingly.

In addition to requiring more work, people who are capable of and willing to do everything needed to run an Adwords mortgage lead generation campaign are much fewer and far between than those who can watch a quick Youtube video to learn how to run Facebook ads.

Google Adwords campaigns should start slowly, then budgets should steadily increase as results begin to come through. This is not a place to cut corners in regard to data collection, testing, etc… It’s also not a place to try and rush the results.

3. Like everything that is worth doing in life, this takes time.  Most companies want to see something immediately.  If you want something immediate, buy more leads from Experian and see how it goes.  Maybe the 5th time will be a charm. 

This is a quality of life issue for me.  If you can’t afford to start running Google AdWords campaigns, do not start.  Putting pressure on anybody responsible for your campaigns would be the wrong way to approach this.  You want this person to be in the right state of mind at all times.  Any additional pressure would be a mistake.

That said, you are going to be excited when results begin rolling in.  That’s normal.

It’s not OK or normal to check in every hour for status updates.  There is no amount of money that will make it OK, either (don’t believe so anyway).

‘Patience, young grasshoppa.’

– Mr. Miyagi

How are the top mortgage lenders generating mortgage leads? 

Might be a coincidence (probably not) but, 6 of these top 10 mortgage lenders dominating the mortgage market all appeared just on the first page of this PPC competitor analysis created with SEMrush.

The others are further down the list and are all included in this single report. This was the first one I ran, actually.

mortgage leads google ppc ads

In fact, the lowest estimated Adwords ad budget, of all top 10 lenders specified, is Flagstar with an estimated $67,400 monthly Adwords budget.  They also closed only $26 Billion in loans in 2016. Poor guys.

These companies are not blowing money on AdWords just for the fun of it.  It’s also no coincidence they all appear in this SEMrush PPC competitor list.

They just have the resources to take a sip from the fountain of high-quality mortgage leads.

A couple detail disclaimers/clarifications.  

All statements made here are, of course, assuming that a strategic keyword/ad/landing page analysis has been conducted and that ads/keywords/landing pages you put into place have been created with success in mind, based upon those findings.

You have to know what you are doing, or hire somebody who does.  Otherwise, you will be witness to the fastest waste of an ad budget you have ever laid eyes upon.

If you go out and run Google PPC ads to your homepage or some other random page, do not expect better results.  This is the most common AdWords mistake I see, and I see it more often than not.

Sure, both Facebook leads and Google leads are capable of coming fully equipped with prospect phone numbers, email addresses, and much more.  Ultimately, the lead quality varies substantially between the two advertising channels.  Particularly if you are in the mortgage business.

Also, for comparison’s sake, I am simply comparing Google Adwords search network ads to Facebook ads, and am assuming for the sake of personal sanity, that there is no prior Facebook Pixel / Google remarketing data which has been previously been collected to use.

If you are looking for somebody who has experience with every aspect of generating high-quality mortgage leads using AdWords and other PPC advertising, who has also been licensed as a mortgage loan originator and real estate agent, you found me.  Feel free to reach out.


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Recruiting Mortgage Loan Originators To Generate Leads? Stop.

Recruiting Mortgage Loan Originators To Generate Leads? Stop.

Recruiting Mortgage Loan Originators To Generate Leads? Stop.

“Your assumptions are your windows on the world. Scrub them off every once in awhile, or the light won’t come in.”

― Isaac Asimov

Have you had the feeling that the mortgage business has become increasingly complicated over the past 5-10 years?

You put all of your energy into this business and ensuring you have the right team put together, but sometimes it feels like an uphill battle in every direction.

You have tremendous value and experience to offer borrowers but recruiting mortgage loan originators, generating exclusive leads, and closed deals feel more complicated today than it was five or ten years ago

Could it be that your perspective on recruiting mortgage loan originators and the state of the mortgage business needs a little scrubbing?

After all, hiring the right people and implementing the right systems doesn’t happen overnight. How are you supposed to create a mortgage closing machine when it feels like your loan officers keep falling short?

Something is off. You’re overwhelmed.

Your fingers are crossed that the next loan originator will break through. Hitting the quota would be great but if recruiting mortgage loan originators resulted in closing an additional 500 deals per year, your business problems would be solved. Unfortunately, the fear that this will be another turnover is far more likely.

What if that star loan officer is only in your imagination without having the resources in place to facilitate the success you are looking for? What if the loan originators you already had were actually more than plenty but they are simply spread too thin?

A Lesson About Asking the Right Questions, Borrowed From the Wealth Management Industry.

Life is all about asking the right questions. Tony Robbins has said that the quality of your life is determined by the quality of the questions you ask. Tony gets it.

I recently had dinner with a friend (we’ll call him Joe). He’s the operations manager for a branch of a fortune 500 financial services giant. This company recently began closing and consolidating offices from coast to coast. Joe’s future isn’t looking too bright.

Interestingly, the primary metric for branch performance has always been the # of advisers hired. Everything is actually based on hiring. Including all-inclusive company vacations to Cancun, bonuses, job stability, etc…

Under the heat of corporate collapse, Joe started to ask some tough questions. These questions enabled him to understand the nature of the issue. This understanding has slipped by the corporate executives for the past decade. It’s here to wreak havoc.

As it turns out, Joe’s company was measuring performance with the wrong metrics.

Joe’s branch has hired and trained 100 new financial advisers over the past 10 years. They pay new hires a non-recoverable $2,000 per month. 6 months guaranteed draw against commission. It’s the same arrangements I had as a loan officer except my employer took out taxes so they called me an employee. Joe’s office is full (empty) of independent contractors. I broke out of the draw setup the 2nd month licensed but that’s neither here nor there.

Joe knew most of the advisers they had hired over the past 10 years were gone within a year. But how many generated a profit for the company and how many were only an expense?

The picture isn’t pretty.

Joe found the company only turned a profit on 1 out of the past 100 advisers they had hired over the past 10 years. This individual hired several years ago, generated more revenue than the sum of the other 99. Additionally, had they hired 0 advisers, they would have been more profitable. It’s safe to call that a slight oversight.

Keep in mind, this is a Fortune 100 company. Their client acquisition model broke a long time ago. They train their advisers on selling to their family and friends. That hasn’t been working for the past 10 years. The company isn’t going under because they manage a whale of an investment portfolio. Mortgage brokers do not have the same luxury.

So much for 80/20. Try 99/1.

Sure it sucks to have the walls crumbling around you, but it’s even worse realizing that you have dedicated the past ten years of your life making the wheels of a broken business model turn.

Since financial advisers serve the same purpose for the wealth management industry that loan officers have in the mortgage industry, I couldn’t help but think that maybe this wasn’t an isolated situation.

The questions started rolling.

Could the same problem be running rampant in the mortgage industry? Are people still buying for the same reasons they were 10 years ago? Has Google made an impact on the conditions that lead consumers to make financial decisions? Is it time to reconsider the circumstances in which salespeople are necessary to hire?

Additionally, why would anybody invest or finance their home with their nephew just because they have a job now, anyway? It looks like they wouldn’t. Apparently, they would have a long, long time ago. Loan officer fairytales.

Doubling Loan Volume Requires Double the Qualified Leads. Not Double the LO’s.

Read it again.

If Joe would have known what he knows today back in 2007, he would have likely hired about 90 fewer people and focused the remaining time optimizing the resources those individuals had to optimize their ability to connect with other humans in meaningful ways.  He gets it now.  Hindsight is always 20/20.

If you are a loan officer, this information can be useful to you as well.  It might be the calling you needed to figure out how to differentiate yourself from every other loan officer trying to beg Realtors for leads.   It might be your calling to figure out where else your gifts can be of service to fellow Earth humans. It’s not all doom and gloom but it would be wise to prepare yourself.

Get Leads, Not Clicks!In 2016 there were 487,973 state-licensed mortgage loan originators in the US.

In 2016 the US mortgage industry processed $2.065 trillion in closed mortgage loans. If every loan originator somehow made an equal split of that business, $4,130,000 would be there for each. This wouldn’t be near enough to support Indeed.com’s data.


Its safe to say as many as half (or more) are no longer necessary.

Or rather, advances in technology have reduced the time it takes to close a loan.  It’s reduced the time quality borrowers spend looking for a loan.

More importantly, it has created means of connecting with people much more efficiently and relevantly than ever before.

With the right perspective and technology in place, companies can position themselves to dominate this industry in ways that Blockbuster Video could tell you all about.

And the beauty is, for the time being, the corporate giant lenders are missing the boat.  You have the ability to create a human connection with borrowers in ways that they can’t.  You don’t have the corporate red tape preventing you from making the changes you need to correct your course.  They do.

Regardless of the accuracy of Indeed’s salary figures, there are far more LO’s than the industry can support. Combine that with digital loan processing, a short attention span, and ad technology and you have a very small portion of the brokers producing a very large portion of the business.  And a whole lot of thumb twiddling.

A loan officer purge is imminent.  You don’t need more LO’s.  You need to figure out how to help the LO’s you already have become more.  After all, how many LO giants have you ever stumbled into while they were looking for a new job?  It’s unlikely you will find the best via their resume.  And even if you do, what do you offer to their situation that is going to make them eager to jump on board?  

You might be thinking ‘But this is the way everybody does it.’  And for the most part, as of December 14th, 2017 you are mostly right.  But I work with several exceptions personally and If I was a betting man I’d take a step back, realize what is actually taking place with humans right now, and go all-in against the grain – while I still had the opportunity to optimize the situation.

In a recent interview with Aaron Ross, David Skok brings up some interesting points that further elaborate on the shortcomings of a system relying on LO’s to do their own prospecting.  As a general rule of thumb, salespeople are not effective lead generators/prospectors.

“One of the biggest productivity killers is lumping together a mix of different responsibilities (such as raw web lead qualification, cold prospecting, closing, and account management) into one general “sales” role. This creates significant inefficiencies:

  • Lack of Motivation: Experienced salespeople hate to prospect, and are usually terrible at it.
  • Lack of Focus: Even if a salesperson does do some prospecting successfully, as soon as they generate some pipeline, they become too busy to prospect. It’s not sustainable. Any individual that tries to juggle too many responsibilities, will have a much lower ability to get things done.
  • Salespeople have a reputation for having ADD: How does adding more responsibilities help that? For example, qualifying web leads is a much lower value distraction for salespeople than managing current clients. And managing a large current client base is a distraction from closing new clients!
  • Lack of proper training and support: Their company doesn’t train them on how to prospect effectively, give them helpful tools or reasonable goals. Usually, the guidance is along the lines of “make more calls!” Wow, that’s helpful.
  • Unclear or Wrong Metrics: It’s harder to break out and keep track of key metrics (inbound leads, qualification and conversion rates, customer success rates…) if all the functions are lumped into single areas. Different roles make it much easier to break out different steps in your processes, which means better metrics.
  • Less Visibility Into Problems: When things aren’t working, lumped responsibilities obscure what’s happening and make it more difficult to isolate and fix issues with accountable follow through.”

Failing to plan is planning to fail. If you’re setting yourself up with a disadvantage, do yourself a favor and reconsider.

Recruiting Mortgage Loan Originators as a Lead Generation Strategy. Does it Work?

A report by C.M. “Corky Watts, CMB, paints an all-too-familiar picture of the mortgage industry. Below is a quote from a recent evaluation he conducted for a small mortgage shop in the Southwest.

“It was a “garden variety” mortgage bank with a net worth of around $1M, retail originations, small warehouse line with one bank and selling loans best efforts to three investors. Unlike many small mortgage banks, the CEO/part owner was not an originator; he managed the company.”

He continued…

“One of the key findings I uncovered from my interview was the number of loans each loan officer funds on average each month. The company has 50 loan officer and funds an average of $5M or 25 loans per month (average loan amount is around $200,000K). Doing the math, each loan officer funds 1 loan every 2 months. Best case scenario each loan officer might generate $3,000 in gross commissions per loan, splitting it $1,000 for the shop and $2,000 for the agent. Each month a loan officer generates $1,000 and the company generates $500 from each loan transaction (this does not include fees and gain-on-sale).”

Does that sound familiar? If so, this information is for you. Mr. Watts goes on…

“I hope these loan officers have another job or a wife that has a high paying position. I also hope the mortgage banker generates 300 basis points in gain-on-sale and fees from each loan to help pay expenses and generate some profits.

I realize that many loan officers today are struggling to originate at the levels they did several years ago. The market, products, and regulations have changed dramatically, making it more difficult to compete and generate commissions. Many mortgage professionals have left the industry and more will in the future. I expect this shop has the 80/20 rule whereby a small number of loan officers originate 80% of the loans. Most of the 50 loan officers probably need to exit the business, either voluntarily or involuntarily.”

Mr. Watts is onto something. Introducing specialization at each point of the borrower’s journey could rock your world.

Enable LO’s to focus on what makes you money, what makes them money, and what enables them to be productive.

Top mortgage loan originators are closing three to four loans per day. If your LO’s are not closing 5 per month, it’s time to stop looking for more and start looking in the mirror. This will seem counter-intuitive but at some point, there has to be a realization. It’s not that every LO is incompetent. It could very well be your system.

Let’s say the broker in the example has a monthly goal of 100 closed loans per month (4x their current situation). If they are still processing loans on paper, they are particularly ripe for change. If they were to immediately identify the 20 loan officers who will produce 5 loans per month – then invest in generating high-quality mortgage leads – they could contribute to their team’s success, save money, and improve morale. All in one swoop. Not to mention the creation of an environment in which LO’s are proud of their work.

With the right technology and back-end help, these numbers could multiply. And everybody would work 40 hours per week.

If you are an LO, keep in mind there are there are 502 active job listings on Indeed for ‘loan officer leads provided.’ Consider me to be the messenger that helped you make the leap. There are industries and companies out there who are willing to support your success. Don’t settle for less.

Change is never easy. Sooner is always better than later when it comes to making the necessary change.

Would You Rather Have 5 Loan Originators Closing 5 Deals Per Month or 50 LO’s Closing 1 Every 2 Months?

‘What’s the difference?’

About 45 desperate loan officers wondering around trying to figure out lead generation. They have to keep their lights on, after all. By narrowing to 5, the remaining LO’s would be happier & more enthusiastic. Desperate salespeople are not effective, regardless of what they do.

I’ll take a leap here. The ‘lead generation strategy’ used by the struggling brokerage mentioned above is likely pretty close to Joe’s. The failing financial advisory strategy relying on salespeople to generate their own prospects. If it wasn’t they wouldn’t be in that situation.

If it’s not already clear, now is the ideal time to stop hiring more LO’s to bring in leads.

How much is this costing you anyway? Get into the books and look it up for yourself if you have to.  That’s what Joe did.

In my experience, most brokers are recruiting loan officers to boost sales. It’s easy to see why somebody would assume that some of the LO’s will generate enough loans to make it worthwhile.

Are the loan officers on staff closing at least 5 loans per month? If not, hiring should be the last thing on your mind.

You need more high-quality/exclusive mortgage leads, not more loan officers.

And hiring more loan officers to bring in leads is costing you money, peace of mind, and office morale. Not to mention, it’s a very ineffective round-about way of approaching lead generation.

90% of the time there is a shortage of quality leads – there are already plenty of people.

Relying on loan originators for mortgage lead generation actually silly. It makes as much sense as it does for any company to rely on people who don’t understand lead generation to be in charge of it. In the past, hiring LO’s was a reasonable way to reel in high-quality, exclusive mortgage leads. People used to have real relationships. Times have changed. Social media has changed everything. 

If the LO’s do not have the experience they need to generate leads, it’s not happening. And very few have this experience or understanding. Lack of education, understanding, or training plus responsibility = frustration and desperation.

Even many of the lead generation companies out there, don’t actually know how to generate high-quality mortgage leads that close within 90 days.  It’s not an easy thing to figure out.  

At some point, the smart LO’s figure out that if they don’t have the financial resources to hire it out, they have to do it themselves. And if they are not already tech-savvy, we wish them well. It’s not one specific skill set. It’s a bundle. I recommend general advertising strategy, web design & development, and Google Analytics. Plus Facebook Pixel Integration, PPC advertising strategy, and social media marketing – for starters.

Let’s say you’re hiring loan officers with a Master of Business Administration degree from Notre Dame. They still won’t have the skills they need to generate leads to support their business. Sure they might know a couple things about finance, business management, and ‘marketing’. What does that do for you?

Marketing and lead generation are two different animals. They happen to have some overlapping features, like capturing and managing attention.

So, under what circumstances would it make sense to rely on LO’s, without the MBA, to generate their own leads?

Mortgage Marketing Has Changed But It’s Still About Connecting With People.

In the past, a half-page yellow pages ad could fill your pipeline all year. The problem is, people don’t pay attention the yellow pages anymore.

Personal relationships used to drive sales. Now, information (aka, Google) is much more available to borrowers. Establishing trustworthiness and expertise is still applicable. The difference is in the perception. Now there are many more ways to try to capture audience attention. , And just as many to try to capture/keep it.

Let’s look at some stats around how humans are interfacing with the world around them. Things should begin to fall into perspective if they have not already.

Find more statistics at Statista

Prepare for Profitability.

Effective advertising campaigns, mortgage sales funnels, and mortgage chat bots serve many purposes. Not only do they generate leads but they also allow for more the collection of more info from the start. This enables LO’s to get more work done in less time as they can rank their leads by priority.

Where are your current loan officers spending their time? Are they spending their time doing the same thing you’re doing right now? Wouldn’t it make more sense to work as a team, save some time, and get on the same page? Let the salespeople close deals instead of wasting their time weaseling them. If you have to, let the participating LO’s split the investment. Make arrangements for round-robin style lead distribution.

Make them pay for it if you have to – that’s not the point. The point is having a plan for them to succeed. And that is where most are lacking at the moment.

If the financial industry provides any kind of a viable hint, consider a new approach.  What is the worst that can happen?  You help your loan officers by organizing a system for them to have exclusive mortgage leads and they don’t close deals, I suppose.  They are

The ‘recruiting mortgage loan officers’ hoping that they figure it out is a system that might allow you to scrape by for just a little while longer. Enjoy it while it lasts.

Don’t Take My Word For It.

Here are a few questions to get you started. Answering these will help you determine the extent of the course correction needed. Question everything you don’t know certainly.

These questions may lead you to the conclusion that your course needs minimal correction, and that would be fantastic. But if you don’t answer them for yourself, you are assuming that’s the case.  Ask the tough questions.

How much have you invested in the form of guaranteed draws against commission/salary payments over the past five years?  Money, Time, Human Resources, Mental Health, etc..

How much company profit have those individuals generated?

Has recruiting mortgage loan originators proven itself to be profitable for you in the recent past?

If it has been profitable, how could that potentially change in the next 5-10 years? Technology is rapidly evolving all around us.  If not, how much of a loss has it generated? And how else could that investment generate business through your existing team? Is the problem with the loan originators we are hiring or is it something else?

What could be done to improve the lives and job satisfaction for my existing team?

How can you help your team connect with people in real, meaningful, and valuable ways?

Is your training establishing realistic expectations? Do your LO’s have skill sets they need to meet the expectations of their position?  Is there a more effective way to structure their role that might make sense to consider?

How could training be better?

Why are loan originators expected to generate their own leads? Is there a better way?  Are there other industries that can be looked at for answers?

In reviewing the past 25 closed loans, why did the clients make the decision they did? Is there a way to optimize this kind of exposure?

Analytics and tracking technology, combined with ad targeting technology has changed the game. Today it’s possible to generate higher-quality mortgage leads and real estate buyer leads more consistently than ever before. Don’t be Joe’s crumbling wealth management company.

How will you proceed?

The choice is yours. Choose righteously.

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