Loan officers across the country say their phones are ringing off the hook—not with client inquiries, but with recruiters’ cold calls. As the mortgage industry sees a rebound, lenders are scrambling for top talent, but many LOs aren’t buying what they’re selling.

“I usually dodge all calls I know are recruiters,” an Loandepot LO wrote in an email.

“I always ignore them because I’m happy where I am,” said Alex Margulis, loan officer at Crosscountry Mortgage. “My initial reaction is always thanks, but no thanks, and then I just hang up. It’s just like any other telemarketing.”

Loan originators say outreach in recent months has been “spammy” with talent acquisition specialists barely understanding who they’re calling, or what company they’re recruiting a potential candidate for.”It’s just like a headhunter, and they’re reaching out completely oblivious,” said Alex Naumovych, a loan officer at First Alliance Home Mortgage. “Sometimes, out of curiosity, I’ll ask, ‘Can you tell me about your company, about the policies?’ They don’t know anything, so I usually tell them not to call me again.”

LOs say if recruiters want to at least pique their curiosity, introductory conversations need to be insightful and give a glimpse of company culture. “I want to hear about potential company guidelines, overlays, what are their rates? I don’t care much for sign-on bonuses,” added Naumovych. 

The challenging mortgage market has fueled a surge in recruiter cold calls, according to Union Home Mortgage owner Bill Cosgrove.

“There is a lot of noise in recruiting today. I think it’s a byproduct of there simply not being enough business to go around,” Cosgrove said. “You’ve got winners and you’ve got losers in this marketplace. And for the successful loan officers, they are getting bombarded in recruiting.”

The intense competition for talent isn’t helped by the fact that there are also less loan officers in the field. As of Jan. 1, 158,152 individuals requested to renew their MLO license, data provided by the Conference of State Bank Supervisors, which oversees the Nationwide Multistate Licensing System, shows. In 2020, 143,082 individual MLOs renewed their licenses, and the following year saw a 16% increase, with 166,759 MLOs applying for licenses to originate. Cosgrove has observed that as the market has soured, “recruiting has also turned very negative.”

“Some recruiters will tell recruits 10 bad things about their company that they work at currently, or 10 bad things about any company that they are thinking about making a change to, and Union Home is not perfect, but we’re not going to disparage the competition,” he said.

Playing the long game

While many recruiters take a scattershot approach, others believe recruitment is a marathon, not a sprint.Jim Clapp, chief lending officer at Assurance Financial, thinks the most effective way to recruit is to be “ethical, moral, genuine” and slowly cultivate relationships with potential hires.

“You can have the best sales guy recruiting for you, and he could do this or say that, but if he doesn’t have all those previous characteristics [being ethical, moral, genuine], you’re just not going to be successful,” Clapp noted. “Now that said, it’s more of a slow build. I think the good recruits are very thoughtful, but they take a while to be recruited.” 

The most effective recruitment strategy is to create a company so exceptional that employees don’t want to leave, he added. 

“If a sign on bonuses is the biggest lever you have to pull you’re going to have a revolving door,” Clapp said. 

Paul Hindman, industry consultant and sometimes recruiter, has similar views of recruiting being a “long-term game.”

“It’s best played by developing relationships and trust,” said Hindman. “Recruiting people is figuring out a way to solve their problems, which is usually bad interpersonal relationships at their current place of employment.” 

Union Home’s CEO noted that while his in-house recruiting team carefully researches candidates, they also use sign-on bonuses—though their approach is always developing. 

“As the market evolves, I think we’re all evolving in how we approach it in a healthy economic way for our company, while also trying to get the attention of potential loan officers that may be a good fit for the organization,” he added. “With the upfront, transitional bonus structures, it’s evolving as well, and we’re all learning how it goes and how we go. We’re all learning as an industry.”

Sign-on bonuses and clawbacks

Sign-on bonuses and the clawbacks often tied to them have become a hot topic in the mortgage industry, as litigation has been filed against employees who left before the vesting period ended. This has spurred conversation regarding whether sign-on bonuses should play such a pivotal role in recruiting to begin with.

Clapp says Assurance Financial doesn’t offer sign-on bonuses to originators, but it does reward LOs on loan volume.

“Signing bonus I think is just a bad concept, but a success bonus where you come in and you do a certain level of production the first year, there’s definitely a bonus for that,” the Assurance Financial executive said.In a shifting mortgage market, the most successful lenders aren’t the ones making the most calls—they’re the ones making the right connections.