Hamburger Flippers

I recently visited with a fellow who is in the software business. More particularly, his company develops mortgage origination software used by loan reps. It is used to fill out applications, then to interface with rest of the bank’s system in the processing, underwriting, and funding of mortgage loans. Their client is a BIG bank, one of the largest mortgage originators in the country.

Now mortgage origination software isn’t anything new. I was a beta-tester for one of the very first systems back in the early 1990’s. Indeed, the developer of that original software package told me that I had discovered more bugs than the rest of their beta-test group put together. But these programs are not terribly user-friendly. They actually are not that difficult for people who know what they are doing, but have a learning curve just like any other program. While tens of thousands of people have learned to use these systems, there still may be a need for a simpler system.

I guess so because he next told me that their contact at the bank, a Vice President, told them their objective was to create “a processing system that is so simple that hamburger flippers can originate loans.”

The first aspect of this was my astonishment at what the bank felt were the necessary qualifications to be a loan originator. Here I had spent all this time in college and graduate school, spent 25 years honing my skills, learning how to solve every imaginable problem, and this big bank thinks that it is irrelevant. Their perception of the job that I do is so simple that they can hire hamburger flippers off the street, stick them in front of a computer terminal, and they can serve the customer just as well as I can.

Of course, they also feel that the value of this job to them is on the order of $8 or $9 per hour, perhaps a notch up for former flippers. I suppose their next move will be to move the whole kit and kaboodle to some foreign country where people will work for $8 per day.

The larger issue is that the bank is merely responding to what it perceives its customers demand, or more likely, what minimum level of service they will accept. We know that ATMs provide a lower cost way of handling many banking transactions, although in their early days, people were uncomfortable using them. I am fairly certain that many banks attempted to drive customers out to their ATMs by providing such poor service inside the branches, that customers just gave up and began to use the ATMs. It worked.

As long as borrowers don’t care about the qualifications of the people they deal with, don’t care about their competence or experience, don’t care if they people can’t solve problems, then I guess the bank may be right in hiring the flippers. If the bank found that they were losing business because they had dropped down a notch too low, they might then upgrade the jobs, but I don’t think that is likely.

The sad thing is that many mortgage borrowers, indeed probably a majority, underestimate the value to them of a trained professional. Not knowing the value, they are simply unable to figure out how shabbily they are being treated in the bureaucratic morasses at their bank. They can’t figure out that not only does their flipper not know the answers, they probably don’t even understand the question.

That Vice President might be astounded to know that a good mortgage professional probably earns ten times what their loan reps make and about twice as much as he or she does. He or she might be unable to conceive what it was that we do that could possibly make us worth it to our clients. But the fact is that all of us top mortgage professionals provide that kind of value by putting the clients’ needs first. That orientation is far different from the bank employee in a very narrowly defined structure whose job is to follow the rules. Our job is to help clients achieve goals in spite of all those dumb rules.

So my hope would be that borrowers are more demanding of the institutions they deal with when getting a mortgage. If they aren’t getting it at their bank, they should ease on down the road and find someone who will lie down on the train tracks for them. It’s not that hard, and it certainly will be worth it.

If you have had an unsuccessful experience with a big lender in getting your last loan, I hope that you will adopt a different strategy next time. And don’t be surprised someday when you go into a fast food place and find your former loan officer asking you, “Would you like some fries with that?”