While the mortgage and banking industry is improving, it’s still pretty unpredictable. One minute economists are saying we’ll see a growing demand for mortgage and banking jobs, and the next they tell us the opposite. We’ve identified several workforce trends to help you navigate your way through this sector despite the industry turmoil.
How are current regulations affecting hiring needs?
Everyday more federal legislation changes how organizations in this field do business. Three major regulations to pay attention to include the Dodd-Frank Wall Street Reform and Consumer Protection Act, Qualified Mortgage rules, and the S.A.F.E. Act.
- Dodd-Frank, while not necessarily new, requires greater transparency from corporate entities to lower risk to the person requesting the loan, as well as adherence to stringent rules to ensure compliance. The most recent provisions went into effect in January of this year, and they not only require a significant investment in retraining existing personnel, but may potentially result in the need to add various consultants who understand and execute mortgage lending practices under the new law.
- The S.A.F.E. Act (Secure and Fair Enforcement for Mortgage Licensing Act), also not a new law, still poses barriers to acquiring quality talent as it requires employees who serve as mortgage loan originators to be licensed by the government, pass several background checks, and participate in ongoing continuing education courses – not always and easy candidate to find.
- The Washington Post sums up the Qualified Mortgage rule nicely. This rule is designed to ensure borrowers “understand the true costs of the mortgages they apply for.” While this latest law may make it harder for lenders to offer qualified loans, they’ll be afforded more robust legal protection than if they offered non-qualified loans.
So, what do these regulations mean for the mortgage and banking workforce?
Rising demand for mortgage professionals
Because it’s such a rocky market, employers are having trouble finding and retaining quality talent for mortgage and banking jobs. Although there has been an evident decline in lending-related positions, and economic forecasters are reducing their projected number of mortgage originations for this year, the BLS predicts that there will be an uptick in hiring for these roles, particularly loan officers, by about 8% annually from now through 2022.
In 2013, banks earned record profits due to the highest level of home refinancing since 2009. Consequently, employment in this sector is rising too. The BLS reported that “employment tied to mortgages has risen 9% this year through September… the most since 2008.” Hiring demand increased in both 2012 and 2013.
Some parts of the country–California, Texas and Florida, to name a few–are feeling a positive increase in overall employment already, which could be a signal of good things to come for this market within financial services. If mortgage and banking does make a full-fledged national comeback, what does employment look like? What are the job seeker profiles and skill sets that employers will need?
- Proper licensing and solid understanding of regulations and compliance laws, such as the Qualified Mortgage rule, will be important.
- Loan officers are in very high demand, particularly if they have a long track record and experience with significant loan volume.
- Job seekers with experience in the reverse mortgage lending areas and private lending markets are also expected to see an employment boom this year.
- Cultural fit and promoting an atmosphere of trust between colleagues as well as clients. According Noma Bruton, “What is needed are leaders talking with employees, explaining the special trust that must exist between Bankers and their customers and the high standards to which Bankers are rightly held.”
Once you’ve got great people in the right roles, what can you do to keep them? Here are a few retention practices you can implement in your organization:
- Benefits and retention programs tailored to specific employees make a big difference compared to umbrella packages that don’t have an individualized approach
- Tuition reimbursement or other educational opportunities
- Leadership development programs. According to McKinsey, “One financial services firm undertaking a recent cost-cutting initiative elected to use only nonfinancial measures—including leadership-development programs—to retain the pivotal players it had identified as being at risk of departure. One year later, none of those players had quit.”