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Double that Production - Strategy of a Chief Lending Officer



Did you know or see the latest buyer trends in housing? Before I dive deeper into the situation of a Chief Lending Officer seeking to double production, felt it was pertinent to share the latest housing data from Realtor.com. Specifically, the following:


  • More shoppers are looking for homes in areas other than where they live. In the first quarter of 2023, 59.6% of listing views from the top 100 metros went to homes listed in other metropolitan areas on average, an increase from both the prior quarter and prior year.


  • Western shoppers are most likely to look for out-of-market homes, but Northeastern shoppers are catching up. The cross-market shopping share in the Northeast saw the highest growth in the first quarter, when the share was 4.6 percentage points higher than the prior year.


  • Affordability, an opportunity for homeownership, and warmer temperatures seem to be increasingly factoring into relocation patterns.


  • 67.7% of out-of-metro traffic from the top 100 metros went towards metropolitan areas with higher homeownership rates, 1.1 percentage points higher than the same time last year.


  • More than half of online views from the West and Northeast flowed into more affordable markets, a share that is 1.4 percentage points higher than 12 months ago.


  • 58.9% out-of-metro views from the top 100 metros went to markets with warmer climates, a 3.0 percentage points higher than last year.

If you in lending, highly recommend reviewing and leveraging this data in your planning and actions. More of the report and data insights can be found here: https://www.realtor.com/research/q1-2023-cross-market-demand-report/


So let's dive into the subject of a Chief Lending Officer seeking to double their production. It's challenging enough to do even in a great market but to do this in these challenging times, you better have your A game. That means, detailing out the key plays and strategies you are going to run with your team.


Here's a detailed business plan for a Chief Lending Officer looking to 2x their purchase mortgage origination business:


1. Market Analysis:

The first step is to conduct a market analysis to identify potential opportunities and challenges. The analysis should include an assessment of the local real estate market, competition, regulatory environment, and target customers. This can be done by consulting industry reports, analyzing data, and conducting market research. Leverage great data like what we attached here from Realtor.com in addition to your internal data.


2. Target Customers:

After identifying the market opportunities, the next step is to define the target customers. This may include first-time homebuyers, move-up buyers, and investors. The target customer profile should include demographics, income, credit score, and other relevant factors.


3. Marketing Strategy:

Once the target customers are defined, the next step is to develop a marketing strategy to reach them. This may include online advertising, social media marketing, email marketing, and direct mail campaigns. The messaging should be tailored to the target customer profile and highlight the key benefits of the lending services.


4. Loan Products:

The lending officer should review their current loan products and make sure they align with the target customers' needs. If necessary, new loan products should be developed to meet the market demand. The loan products should be competitive in terms of interest rates, fees, and terms.


5. Sales Strategy:

The sales strategy should be designed to maximize the conversion rate of leads into closed loans. This may include implementing a lead management system, establishing a referral network, and training loan officers on effective sales techniques.


6. Operations:

The lending officer should review their current operations and make any necessary improvements to increase efficiency and reduce costs. This may include automating processes, streamlining underwriting, and optimizing loan operations and servicing.


7. Technology:

Investing in technology can help the lending officer improve their operations, enhance customer service, and reduce costs. This may include implementing a customer relationship management (CRM) system, a loan origination system (LOS), and a loan servicing platform.


8. Staffing:

To support the growth of the business, the lending officer may need to hire additional staff. This may include loan officers, underwriters, processors, and customer service representatives. Leverage BPM to build and develop your global talent base and create variable cost structures to help drive efficiencies.


9. Financial Projections:

The lending officer should develop financial projections to estimate the revenue and expenses associated with the 2x increase in mortgage origination. This should include a detailed analysis of the cost structure, revenue streams, and cash flow projections.


10. Risk Management:

The lending officer should also consider the potential risks associated with the growth strategy. This may include credit risk, interest rate risk, operational risk, and regulatory risk. A risk management plan should be developed to mitigate these risks and ensure the long-term sustainability of the business.


It's all about planning out the agenda. Here's how we helped them then break down the top 20 areas to assess and top 20 strategies to implement in their first few months onboard.


Week 1-2:

Assessment:

1. Review loan portfolio quality and performance data

2. Evaluate underwriting policies and procedures

3. Analyze risk management practices

4. Review compliance with federal and state regulations


Strategies:

1. Develop a comprehensive lending strategy

2. Refine underwriting policies and procedures

3. Strengthen risk management practices

4. Ensure compliance with federal and state regulations


Week 3-4:

Assessment:

1. Analyze sales and marketing strategies

2. Evaluate customer service and satisfaction levels

3. Review loan origination and processing efficiency

4. Assess technology infrastructure and systems


Strategies:

1. Enhance sales and marketing strategies

2. Improve customer service and satisfaction levels

3. Streamline loan origination and processing efficiency

4. Evaluate and upgrade technology infrastructure and systems


Week 5-6:

Assessment:

1. Analyze employee training and development programs

2. Evaluate talent acquisition and retention strategies

3. Review vendor management practices

4. Assess the competitive landscape and market trends


Strategies:

1. Implement employee training and development programs

2. Develop talent acquisition and retention strategies

3. Optimize vendor management practices

4. Monitor the competitive landscape and market trends


Week 7-8:

Assessment:

1. Analyze financial performance and profitability

2. Evaluate product development and innovation

3. Review investor relations and capital markets activities

4. Assess brand reputation and recognition


Strategies:

1. Improve financial performance and profitability

2. Drive product development and innovation

3. Enhance investor relations and capital markets activities

4. Strengthen brand reputation and recognition


Week 9-10:

Assessment:

1. Analyze communication and collaboration among teams

2. Evaluate workflow and process optimization

3. Review data analytics and reporting capabilities

4. Assess succession planning and leadership development programs


Strategies:

1. Foster communication and collaboration among teams

2. Optimize workflow and process efficiency

3. Develop data analytics and reporting capabilities

4. Establish succession planning and leadership development programs


Week 11-12:

Assessment:

1. Review progress of implemented strategies

2. Analyze areas for improvement and refinement

3. Assess overall effectiveness of lending operations

4. Conduct a comprehensive review of the first 90 days


Strategies:

1. Adjust and refine strategies based on progress and feedback

2. Prepare for ongoing implementation and optimization of strategies

3. Celebrate successes and communicate achievements to the team

4. Plan for continued growth and success in the future.


Data and metrics was a key area of focus as well. As a Chief Lending Officer, the balanced scorecard key metrics can be categorized into four perspectives: financial, customer, internal processes, and learning and growth. Here are some examples of key metrics for each perspective:


1. Financial Perspective:

- Loan portfolio growth

- Net interest margin

- Return on equity (ROE)

- Net charge-off rate

- Non-performing loan ratio

- Operating expenses as a percentage of total assets

- Revenue per FTE


2. Customer Perspective:

- Customer satisfaction score

- Loan application processing time

- Approval rate

- Loan disbursement speed

- Loan servicing quality

- Referral rate from existing customers


3. Internal Processes Perspective:

- Loan origination efficiency

- Underwriting turnaround time

- Loan servicing efficiency

- Compliance with lending regulations

- Vendor management effectiveness

- Portfolio risk management effectiveness


4. Learning and Growth Perspective:

- Employee training hours

- Employee turnover rate

- Employee satisfaction score

- Performance management effectiveness

- Innovation and product development success rate

- Technology adoption rate


By tracking and improving these key metrics, the Chief Lending Officer can ensure the lending operations are aligned with the organization's overall strategy and goals, achieve financial success, and provide excellent customer service and experience.


Talent imperative. You must focus time here as well and the Chief Lending Officer was going to develop actions and momentum around these key points to recruit the best loan officers for their lending operations: 1. Create a strong employer brand: Develop and communicate a strong employer brand that showcases the organization's values, mission, and culture. This can help attract the right candidates who align with the organization's vision. 2. Leverage social media: Use social media platforms such as LinkedIn, Twitter, and Facebook to post job openings, engage with potential candidates, and showcase the organization's culture and values. 3. Attend job fairs and industry (Realtor, Builder, MBA, etc. events): Attend job fairs and industry events to network with potential candidates and showcase the organization's brand and mission. 4. Offer competitive compensation and benefits: Offer competitive compensation packages and benefits to attract and retain top talent. 5. Provide career growth opportunities: Develop a clear career path for loan officers, with opportunities for promotions and professional development. 6. Utilize employee referrals: Encourage current employees to refer potential candidates and offer incentives for successful referrals. 7. Partner with educational institutions: Build relationships with local colleges and universities to recruit new graduates and participate in career fairs and networking events. 8. Develop a strong training program: Develop a comprehensive training program to help new loan officers learn the organization's policies and procedures, industry best practices, and compliance regulations. 9. Offer flexible work arrangements: Offer flexible work arrangements, such as remote work options or flexible schedules, to attract candidates who value work-life balance. 10. Provide a positive candidate experience: Ensure that the recruitment process is efficient, transparent, and positive for candidates. This can help create a positive impression of the organization and increase the likelihood of attracting top talent.

Enclosing some related links and insight on growing and measuring growth. Please see below:


https://www.mattallendevelopment.com/post/key-measures-strategies-for-the-cro-m-allen-s-po


https://www.mattallendevelopment.com/post/cro-sales-pro-what-s-your-plan-this-month-this-week


About the author:


Matt Slonaker is a highly accomplished business executive, with a strong track record in generating revenue growth and leading teams. He has experience working with both startups and multibillion-dollar market leaders, and has managed over a billion dollars in revenue in the last decade. He has founded his own company, M. Allen, and served over 20 clients since 2020, and has also worked in executive roles at global companies such as Firstsource, Morgan Stanley, JP Morgan Chase, and H&R Block. He is skilled in operations, revenue enablement, information technology, and other areas. Additionally, he is a US Military Combat Veteran and a career coach for military veterans in transition to the civilian sector since 2017.




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