Mortgage Connects an MGIC Podcast

Highlights of the 2024 Loan Originators Survey

• MGIC MI

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In this episode, MGIC's Stephanie Budnik and Liz Keuler reveal key highlights from the fourth annual Loan Originators Survey by MGIC and Loan Officer Hub, including:

  • How recent trends affect LOs' business activities
  • How originators are tackling affordability challenges and helping borrowers who don't yet qualify for a mortgage
  • Marketing and social media trends in the mortgage industry
  • The most valuable referral sources for loan officers, including a popular referral source for top LOs
  • Originators' goals for the future

Download your copy of the 2024 Loan Originators Survey report at loanofficerhub.com.

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Stephanie Budnik:

Welcome to Mortgage Connects, bringing you the latest insights from top mortgage professionals around the industry. I'm your host, stephanie Bunnick, and with me today we have Liz K. She is the editor of Loan Officer Hub, which is a site that's dedicated to bring tools and insights to loan officers. Liz, welcome Thanks for joining us today.

Liz Keuler:

Thanks for having me. I'm so happy to be here.

Stephanie Budnik:

I'm really excited to discuss the exclusive insights from the latest loan originator survey conducted by MGIC and Loan Officer Hub. This is the fourth year that we have surveyed loan officers about their challenges, opportunities and their activities, and the report is now out on LoanOfficerHub. com.

Liz Keuler:

That's true. You can go and get your copy of the report today at Loan Officer Hub.

Stephanie Budnik:

So, as we think about digging into this, can you just set the scene, tell us a little bit more about the survey in general, maybe who participated and whatnot?

Liz Keuler:

Yeah, absolutely. So, as you said, it's our fourth year. We did conduct the survey in June, as we always do, which is a little bit before the rates came down, so that's something to keep in mind. We had about a thousand originators participate this year, which is about the same as last year, so a nice group, mostly loan officers, a few branch managers, a few sales managers. Just kind of to give you an idea who these people are. About a third of them are mortgage bankers, 22% work for banks, 19% are brokers, 17% community banks and 8% credit union. 64% of the whole group were over age 50, which is a pretty consistent with what we've seen in the past.

Liz Keuler:

But we did hear from slightly more loan officers with less experience this year. So you know we asked them how long have you been in the business? And folks who have 15 or years experience or less - we had 40% in that group compared to 35% last year, so you can see corresponding we had you know, still a slightly more tenured group, but not quite as much as we have had in years past, and we did have a pretty broad spectrum of production numbers for these folks. 20% of respondents said they did 10 or less loans in 2023, and 13 percent said they did 76 or more loans last year, and then we had a mix of tiers in between, so it is a really varied group in terms of how much production they're doing.

Stephanie Budnik:

Yeah, it seems pretty diverse from the organizations to the individuals, and so it's a good mix of you know what's really going on in the market, mm-hmm. So, with this being the fourth year, I know we do often ask very similar questions from year to year, but can you tell me, were there any new questions this year?

Liz Keuler:

Sure, like you said, we do try to keep it consistent so we can compare year to year and have kind of a sense of how trends are changing. But we do ask a few new questions to make sure we're on top of changes in the market, new trends. So this year we did include the NAR settlement as an option under greatest challenges, like uncertainty around what was happening with the NAR settlement, because that was in the news so much. But we only found that 6% of loan officers selected that as a challenge. So it might be something that's more like in the news than actually impacting loan officers as of yet. We asked about technology that's most critical to loan officers' success. It's not really surprising, but loan origination systems, product pricing engines: those are the most important to LOs.

Liz Keuler:

The other thing I would say that's been in the news for every industry is AI. So we did ask, "Do you use AI and how? So 64% said they don't use it or they're not aware. Maybe it's incorporated into a system but they don't know. 26% said they do use it for marketing. So that's like using chat GPT to create a marketing message for you. Write an email or social post and newer loan officers are more likely to say that they use AI than more tenured LOs. So maybe it's that you know they might be a younger crowd, or it might be that they haven't found their niche and they are trying more new things, whereas more tenured LOs kind of have their set ways of how they're going about things. But it'll be interesting to see if that changes next year, as AI continues to be, you know, part of the news.

Stephanie Budnik:

Yep and some of the things you know with. Even with the NAR, the supplement, that more happened in August, right?

Liz Keuler:

So maybe people's results. Yeah, I'm not sure what's going to happen.

Stephanie Budnik:

So yeah, that's very interesting. As we look back at the survey and I had a chance to kind of peek at that it seems clear that originators continue to focus on purchase markets and refis and with refis kind of coming in and out of the market depending on what it's doing and how rates are. One of the things that still remains consistent, regardless of that, is affordability and being a challenge for homebuyers. So what did some of the survey results say around that kind of topic?

Liz Keuler:

Okay, yeah, you're totally right. Affordability was the greatest challenge this year for their business. And then, when we asked them about challenges for borrowers, they also ranked interest rates, mortgage payment, affordability, down payments as greater challenges in 2024 than they did in 2023, where inventory and bidding wars used to be a little bit more of an issue in previous years. Now those are less of an issue. So those are problems for borrowers that persist and originators can't just wave a magic wand to make those go away. So they're doing their best to find solutions for borrowers.

Liz Keuler:

We did ask what they or their companies are doing to reach underserved markets, okay and affordable lending products and programs, down payment assistance, those were top of the list at 76% or 73% respectively. So those are, you know, really product focused solutions that they're looking at. We also asked them for the first time how do you help a borrower who's not quite yet mortgage ready? They're interested in buying a house. They come to you. They may have various reasons why they're not going to qualify just yet, so do you refer? What do you do?

Liz Keuler:

A lot of LOs said they work personally with those borrowers to help them get to the next place. So I really like this quote specifically from one respondent who said, "if credit or DTI related I coach. If they need additional financial assistance, I refer them to local community organizations. So kind of speaks to the way that they're working with their borrowers as consultants in some way. So when they do refer, 41% said they refer to credit repair services, 20% said HUD approved housing counseling organizations and 14% local community organizations. So it was a new question this year and it was interesting to kind of hear how loan officers are kind of keeping those borrowers in their pipeline who might not be ready to go.

Stephanie Budnik:

And I think that's really important with the market today, because it takes a lot longer to be in the home buying process.

Stephanie Budnik:

You could be in the home buying process for years, so getting them really ready so that they don't have as many affordability challenges or credit issues that come up along the line. Having these types of resources is really a great way to do that. As we talk a little bit more about affordability, low down payment mortgage options are a big part of that toolkit, of course, obviously private mortgage insurance being a big one there.

Liz Keuler:

Yay, MGIC!

Stephanie Budnik:

I know right?

Stephanie Budnik:

Did we have a consistent finding on the use of MI from year to year?

Liz Keuler:

Yeah, it was pretty consistently the most popular option. Low down payment option is a conventional mortgage with PMI. Luckily for us, 79% of LOs say that they recommend it often. We found that DPA, which I already mentioned. It has ticked up 45% say they use it often, compared to 39% last year. So again, that might be reflecting the affordability challenges that LOs are looking for, the resources that are out there for borrowers. And we also found that and this is no surprise, it's the same every year loan officers really take the trusted advisor role really seriously. We ask them how do you decide, how do you coach in terms of low down payment options? And you know across the board what they say what kind of options are available to them? So they treat every borrower individually, like what challenges they're finding might have a different solution for each one. So I really always like reading those answers because you know it's kind of to heartwarming to know they trust that they're actually a person on the other side, not just a number.

Stephanie Budnik:

Right, exactly, not just a closing they're trying to get to.

Stephanie Budnik:

Another consistent topic that we talk about from year to year is marketing. I see that word of mouth is still king, and that is no surprise at all for successful marketing media. But what do you see when you look at marketing trends? Maybe for loan officers?

Liz Keuler:

Yeah, like you said, you can't beat word of mouth. That's still going to be the top, with 90% of LOs saying it's, you know, one of the most important marketing avenues they have. Social media tends to grow in popularity, mostly like the big three Instagram, facebook, linkedin. Those are the ones kind of you think of, the most traditional but while not widespread, we do see YouTube and TikTok are growing a little bit in popularity. I think that speaks to the importance of video, both short form on the TikTok side and long form on YouTube. That's ways that loan officers are seeing that they can educate borrowers and they can reach referral partners.

Liz Keuler:

Again, I don't want to overstate it, it's not like everybody's doing TikTok these days, but it's more popular with less experienced LOs. 13% of LOs with five years or less experience say that they use TikTok for business, which is kind of a surprising number to me. That's compared to 3% for the group that's 16 years and above. And then, since we've been talking about social media, it's no surprise. Social media is the most popular way that loan officers are reaching the next generations of homebuyers, so still millennials and Gen Z. So that just keeps growing. So it makes sense that social media in general it's not going anywhere. But more and more LOs are kind of realizing that's where they need to be to reach the next wave of borrowers.

Stephanie Budnik:

I think that dovetails nicely into just a little bit more about word of mouth.

Stephanie Budnik:

So word of mouth can be so many different things, but it's how they're getting their name out to other borrowers potentially, and who might be interested. Maybe they see them on social or their network. But it also really relates to referrals, Of course. And thinking about referrals and who they work with, I noticed on the survey that top referral sources haven't changed year over year. They're obviously still going to be real estate agents and past clients. So, as we think about that and it being the most popular, I want to kind of look at the other side of the spectrum. Were there any other additional trends that we saw in the data as it relates to referrals?

Liz Keuler:

Yeah, you're absolutely right. I don't think it's ever going to change that real estate agents and past clients are going to be the most popular referral sources. The one thing that I found a little interesting little nugget is that I filtered the results by the loan officers who had done 76 or more loans last year according to them, so kind of the top tier, and see, are they doing anything differently from those who are doing fewer loans? I should say they're more likely to list builders among their top referral sources than the overall group, you know, 20 percentage points higher. So that's a pretty significant difference. Just something that loan officers might consider when they're thinking about where their referral sources are coming from and diversifying them. That's a trend that we saw. We also saw that referrals were a big trend for business goals. It's a little bit later in the survey we asked them what are your business goals? And even though you think about referrals as like bread and butter, like they're just, they're always working on those they're always going to have to be working on referrals.

Liz Keuler:

it's still something that's top of mind in terms of diversifying referral sources, increasing the number of referral sources they have from, you know, different people, increasing the number of referrals they get from key referral partners. So that's always going to be a topic. I think that's popular and we do see it in business goals as well.

Stephanie Budnik:

I think you hit on one thing specifically. There was just diversifying your network and your database and, like you said, with the top originators, you know, doing more with builders. If somebody's looking for more of an edge coming up here in 2025, that could be maybe a consideration. I noticed we also asked some questions around partnerships. We added community organizations as an option, as a referral source as well, and so I really like just the multitude of diversity as they're thinking about ways to grow not only their network but within their communities.

Liz Keuler:

Yeah, I think that was a big theme that I started to see throughout the survey. You know, whether it's diverse referral sources, whether it's community organizations that they're referring their borrowers to when they need help because they're not quite ready, whether it's industry groups that they're affiliated with, which could be referral or could be knowledge-based, it's important to recognize that we are all part of this ecosystem. We're kind of all in it together with the same goal of putting more borrowers in homes, and there are different ways that loan officers are using those partnerships, you know, than just strictly like oh, I get referrals from them, it's you know, we're all working as a group. So I think that was an interesting sort of trend throughout as we added some of those questions that saw some of the answers.

Stephanie Budnik:

And I think you had mentioned trade groups as being a way, and I know that that was something new for us as we find community becoming more of a thing. Can you tell me a little bit more about that?

Liz Keuler:

Yeah, that was a new question. We wanted to ask to see what kind of affiliations loan officers you know who they're working with, and I was a little bit surprised, to be honest. You know, the MBA was a popular one. 46% of the respondents said that they are, you know, working with or follow the MBA. But other than that, we listed a lot of other options that we think are pretty popular, like Namba and NARED, et cetera, and it just wasn't a big number for a lot of those smaller organizations, and I think that might be an opportunity again as we're looking toward 2025, is look for your local chapter for some of these organizations that can help put you in touch with other sources of referral partners and borrowers within your community.

Stephanie Budnik:

I definitely think that that's a way that you can step outside of the box and maybe be a little bit uncomfortable or vulnerable, but learn more about what's available to you. You had mentioned about different goals that people stated in diversifying their referral partnerships. Is there anything else that LOs are looking to do in the future, as they were talking about their goals? Sure.

Liz Keuler:

So the survey was conducted in June, as I said, before the rates started coming down. I think everybody it seemed to me everybody's kind of hunkered down Like the 2023 survey felt a little bit like catastrophic in certain ways. A lot of people were talking about survival. There was like a huge difference from 2021 and 2022 and then 2023,.

Liz Keuler:

But then things kind of settled and it's not to say that they settled in a place where loan officers are content and excited and getting all the business they want, but they are kind of making the same amount of loans that they did in 2023. Most of them, when asked, said that they were going to either end the year close to that they did in 2023. Most of them, when asked, said that they were going to either end the year close to what they did last year or a little bit above. So that was, I think, stable. But they are waiting for the market to change the key turn. The thing that, whatever it is, is going to make it suddenly where they're. You know their borrowers are coming out of the woodwork and they're less hesitant and they're ready to go.

Liz Keuler:

But I do think loan officers do have big goals for 2025, looking ahead. A lot of them use words like exceed, double, triple increase in those open field for the goals. We said what are your business goals? So we noticed that a lot of that was a trend that they are looking ahead and they're thinking I'm trying to increase my business, I'm trying to do more. I think they've been laying the groundwork and now they're hoping that they're going to see the results from doing that. So, since rates did come down, it's going to be really interesting to look forward, then, to next year's survey, June 2025. What are the answers going to be to a lot of these questions? I don't know, but I'm looking forward to finding out.

Stephanie Budnik:

I know I love the optimism and a little bit more of the getting back to the grind that I think that some of these results say so. Liz, thank you so much for your time today. The survey has really provided some great insights for us to look at and see what originators are doing around the industry today. So for additional information or your copy of the survey, feel free to go to LoanOfficerHub. com. That brings us to the end of Mortgage Connect's episode. For a recap of this episode and quick access to related content, visit MortgageConnect. com. There you can subscribe for email alerts to be among the first to know about new episodes. Thank you,