Driving Mortgage Growth in a High-Rate Market

Val Buresch (00:01.657)
Welcome back to CMBConnect. I'm your host, Val Buresch, and my guest today is David Jackson, a newly minted CMB, Certified Mortgage Banker. He's also an Area Manager SVP at Ruoff Mortgage, and he covers the Michigan market. Today we are going to dig into the how. How...

Do you drive growth in a high rate environment and how does Ruoff retain their loan officers? David, I'm so happy to have you on the show. Welcome.

David Jackson, CMB (00:36.888)
Thank you so much. It's an honor to be here and I appreciate the opportunity.

Val Buresch (00:42.155)
Likewise, I'm really excited about our conversation today. David, I sent you a chart and we just talked about that a little bit from HMDAVision earlier. It ranks the main markets of Ruoff state markets. And what jumped out at me wasn't just that Ruoff is a relatively speaking a large IMB, but that it has different rates of growth based on the market.

And we looked at Ohio and Kentucky were relatively flat, but Michigan, the Michigan market by loan unit count grew 36 % over a year in 24 compared to 23. And I just want to ask you what went right in that year? Was there a specific strategic shift you made in Michigan back then?

in 2024 in order to see that increase from 2023? Was that product focus, builder strategy, recruiting that caused that lift? Can you share something from your strategy and best practices with us today?

David Jackson, CMB (01:55.874)
Yeah, absolutely. It was really a focus on recruiting and retention. So from a product standpoint or from a niche standpoint, I don't know that we made any material changes that would have caused that. So it was a significant increase that said, know, it wasn't a mature market, still isn't yet. you know, I think companies realize at some point you've reached a saturation in a given market or state.

that it naturally will level off a little bit. Michigan is a market that Ruoff has been actively wanting to grow. I've certainly been involved in that. you know, recruiting isn't the sole piece of it because if you're recruiting at a rate where you're not having retention, then it's, you new talent in the front door and other talent out the back door leaving you.

And that's very disruptive if there are a lot of people coming and going. And that certainly hasn't been the case. Certainly there's been some attrition, but we've tried to keep it minimal. think that the market did help a little bit in 24 over 23. think by the time we got to 24, we realized that this is what the market's going to be for a while. 23 was, maybe rates will come back down and things will...

change back to how it was in early 22. I know a lot of loan officers were hoping for that and myself included, The higher for longer rate situation is not what we were hoping for. So by the time 24 came along, I think people in the sales space in mortgage started to take a deep look at where, were they in the right spot to succeed in this market?

so it's, it's been a big focus on finding talent, growing really, and it wasn't really acquisition of multiple groups of people at a, at a time. and if you look at headcount, it wasn't that big of an increase. Some of that, you know, a good chunk of that increase was our existing, loan officer population, increasing their production, realizing, okay, I have to get out on the street. I have to set a schedule and do these things.

David Jackson, CMB (04:24.322)
consistently week in and week out. And the more consistently, the better. That's what I preach. I've been through a number of coaching programs. And for me at the end of the day, they kind of boil down to those things, which is, know, consistency, the more calls you make, the more people you talk to, the greater your success is going to be on the sales side. And so, so we had some growth there, but also, you know, definitely on the recruiting front and retention was

probably a very difficult part of it still is today where, you you've got loan officers that have been with you for a period of time. The market is tougher. And so all of a sudden, maybe the grass somewhere else looks greener. it's those relationships are critical. You know, I view myself as a resource to a large extent, an assistant to the salespeople that we have, our branch managers and our loan officers.

I'm here to serve them as a resource. I'm stuck on this loan situation. I can't, this builder won't let me in the door. How do we do that? you know, real estate office, you know, we need to wow this broker and do some education or just get our foot in the door with this opportunity. That's what I'm here for, which is just to provide that and know that they have somebody they can go to that will be super responsive.

and I truly care about every transaction. So there's a way to make it work and we're going to try to do that. And as long as it meets guidelines and regulatory compliance and all of that, we're going to find a way to make the transaction work any way that we can. And I think that's a big piece of the management structure that we have. And there are companies that have a much leaner management structure as far as

branch manager oversight where there's 30 or 40 branch managers reporting to one regional manager or area manager. And that works for those companies. That's great. In our world, especially in Michigan, we do a lot of low to moderate income lending, which can be trickier. That number needs to be smaller so that I can provide the responsiveness and get involved in difficult situations.

Val Buresch (06:24.676)
Mm-hmm.

Val Buresch (06:35.617)
Absolutely.

Val Buresch (06:43.813)
Mm-hmm.

David Jackson, CMB (06:44.426)
and help people out. And our loan officers, take vacations, they have time off for various reasons, they need coverage for that. And somebody to kind of be their backstop. So we've got the manager doing that, I'm someone who will roll up my sleeves and get involved in those things. I think they know that and that's something that at least has earned me an opportunity to talk with them if they're having thoughts of maybe, you

The grass is greener somewhere else or I've received an unsolicited offer that looks pretty attractive, at least upfront. Can we talk about it? I've been given the opportunity in most cases to have that conversation and find a way to have retention. I think we also as a company have loan officers who have left us for, mean, really across the board, it's been on good terms.

Val Buresch (07:20.581)
Mm-hmm.

David Jackson, CMB (07:43.534)
You know, I'm shocked in doing this over 30 years. We found a way to have relationships with people that they're not embarrassed to come back to us. So we've had a number of loan officers and that was part of that for me, that 23 to 24 jump. We had a couple of loan officers who thought, you know, in 23, mid 23, maybe it's better over here.

Val Buresch (07:57.854)
that's nice. Yeah.

David Jackson, CMB (08:10.604)
you know, maybe this is a better spot for me. We did have the conversation. They were open about it and left on good terms. And, know, my position is, you know, whatever is best for you and your family, that's, know, that's where you want to be. Now, hopefully it's us and I'll do everything I can to be that person. And we as a company do everything we can to be that company. So.

I'm surprised, I guess not surprised, I shouldn't be surprised, but I've never been at a company that has had as many people come back as we have. And we just had a few more. it's, and I think that's the relationship that we're welcoming. If you want to try something else, we don't love that, right? We want you to stay, but if you leave, that door is open to have a conversation with us if down the road.

Val Buresch (08:44.911)
Hmm. Yeah.

David Jackson, CMB (09:03.598)
Maybe it wasn't the right fit. know, Ruoff was a better home.

Val Buresch (09:08.109)
Yeah, that makes sense. Yeah, that's a wonderful way of approaching and managing people, especially salespeople. I really like that story a lot. And our analysis of NMLS records, we actually acquired that data and we blended with the HMDA data. I shared this little statistic with you is that what's impressive for us as data analysts is that Ruoff loan officer tenure.

is about five years, which is much higher than the IMB industry average of about 3.9 years. So this is just a proof to what you're saying, that you have both culture and management best practices that are keeping those loan officers more more successfully than the average IMB.

David Jackson, CMB (10:02.494)
Yeah, now we just have to figure out how to get it to 10 and 20 years. You know, be that place that, you know, again, it's that's a challenge because it's such a big expense. You know, bringing loan officers in, you've got a big time commitment of training. You've got transition costs and setting up marketing and things that loan officers definitely need. But

Val Buresch (10:07.407)
Yeah.

Val Buresch (10:16.548)
Mm-hmm.

Val Buresch (10:21.739)
Absolutely. Yeah.

David Jackson, CMB (10:30.286)
you know, if we can find a way to have that tenure to keep people engaged with us and know that this is the home for them. And I think that's what companies need to look at is, you we also, guess, one of the biggest things our owner, Mark Music, said very early when I was interviewing here was we're not going to bring on additional sales at the expense of our existing sales. Meaning we're not going to bring on 20 and 30 loan officers at a time.

Val Buresch (10:55.269)
Mm.

David Jackson, CMB (11:00.43)
and not have the back room to provide the support. that's underwriting capacity, processing capacity, those things that, you know, if all of a sudden, you know, we've had times where we have a group of loan officers join and sometimes a big production all at once. But we're looking out for that already. We're running over capacity enough that we know we can absorb that and not have turn times for, you know, our existing loyal

know, loan officers, don't want to have turn times change for them just because we've brought on somebody new. That's a recipe for disaster. along the way, the companies that I've been at that weren't paying attention to that are gone.

Val Buresch (11:46.275)
Yeah, that's right. I actually wanted to ask you about that. I have heard that the street, so to speak, is very aggressive these days and competitors are always offering sign-on bonuses for loan officers. Do you find that kind of pinging your own loan officers increasing or is it a constant rate of trying to poach your loan officers?

David Jackson, CMB (12:10.99)
It

It seems to go in waves. It's certainly picked back up again. This is the time of year, know, we're in December year end is where even just fourth quarters where I see tend to see more of it. And tend to see that, you know, the numbers change based on future projections, right? The industry is saying next year should be a little better than this year. Maybe not massively better, but 10 % lift maybe on average, but if you look at the different estimates out there.

Val Buresch (12:16.482)
Mm-hmm.

David Jackson, CMB (12:43.694)
Um, so now in the recruiting space, you see people that the offers have gone up a little bit saying, okay, if we recruit these people, our return will be better because next year overall will be better in the industry so we can afford to pay a little more. they, feel like those numbers probably bottomed out in 24 got a little better this year. I've seen a few recently, um, that are a little startling. I think that if, if

The number is startling for a loan officer. You've got to look at, you know, this is an investment made by the company hiring me. You know, they have to recoup their investments. How does that happen? Because, you know, a short-term bandaid, and those are some of the folks that have left and come back, you know, they've taken kind of a short-term bandaid where maybe financially they're feeling some stress because their production is down. They accept this other bonus to kind of short-term solve the problem, but then...

What's the pricing look like down the road? How competitive are you? Because that's out there. The company needs to recover it. And how much is translating into your compensation, your pricing, all those things daily. But certainly there's been an uptick, and I think that's a bet on how things are going to be going forward, maybe a little bit lower rates. And fewer loan officers also.

Val Buresch (13:47.939)
Mm-hmm.

David Jackson, CMB (14:08.19)
substantial decline in the number of originators.

Val Buresch (14:08.773)
Yeah. Absolutely. Yeah. We see that in the data. It's this way going down downwards. but with that, just maybe my last question about recruiting here, because I really want to focus more on the retention and, and those growth strategies, but, do you prefer to, or what is your recruiting strategy? Are you recruiting rookies or very experienced?

loan officers and how are you thinking about that mix of very new people to the industry who have maybe some skills versus experienced loan officers with proven production?

David Jackson, CMB (14:49.742)
We tend as a company towards experienced loan officers with proven production. However, the rookie part is very important, right? Our average age is, you know, I think in the loan officer population is you may know better than I do, but in the 50s, and I'm there, I don't want to do this forever. I'd like to retire it someday. So there, you know, we need new people. We need young people coming into the business.

But that is a strategic decision you have to make as a company because that fallout rate's pretty high. So you're investing a lot of training, a lot of time, and for a small percentage to make it through. We prefer in those situations mostly, not always, but mostly to maybe have a junior loan officer situation where they're working alongside of one of our more experienced loan officers, learning the ropes that way.

before the way that it happened to me, which is a stack of business cards and a telephone. And that was my introduction into go out to real estate offices, here's some cards and the telephone was plugged into the wall because there weren't cell phones. But that sort of training doesn't work today. So that side by side is good for us, but we like to find experienced or loan officers who maybe have a few years.

in and they're looking to grow their personal brand or, you know, that just kind of break out of it. They've figured out the business somewhat, but maybe there's somewhere that may not have the support they want on the marketing side to kind of take things to the next level. So that's been a lot of the recruiting opportunities we've had in Michigan where, you know, got some experience, very, you know, very bright and energetic and, you know, wanting to do more.

but maybe feel held back where they are. And that's, I never understand that company-wise where we run into that where why wouldn't you want somebody to succeed at a higher level? But sometimes you see that and those are the opportunities that we certainly jump on when we can just to, if we can show somebody a better way to take that next step up in their career volume-wise, production-wise, or even just life, some of it's that they're doing the volume. It's a...

David Jackson, CMB (17:13.738)
It's how do we provide a platform that makes their quality of life better? So it's all about support and keeping salespeople in their lane, which is selling, just making calls and seeing people, not pushing paper, not chasing conditions.

Val Buresch (17:31.301)
You have a unique perspective also, not only because you're now managing people and making those decisions, but I found that your perspective is very interesting because you spent a decade in the depository world with Flagstar, with Evolve, before returning to the IMB, the independent mortgage bank world.

I have a couple of questions here for you. First one is that I hear a lot of credit unions, banks are kind of increasing their recruiting efforts. And from loan officers' perspective, they think this is a good deal personally because there is a lot of stability in the banks, at least perceived stability from compensation perspective.

So how do you think about that? First of all, IMB versus banks versus depository institutions, including banks, credit unions and banks.

David Jackson, CMB (18:39.502)
From a loan officer perspective, don't, at least at a certain size, I think the stability is equal. Cause I learned the hard way that I left my first time with a bank was I was exiting an IMB that had failed in the crash. And it was the largest IMB. It was First Magnus. They were failing and I thought I have to get to a bank.

Val Buresch (18:58.969)
Mm-hmm.

David Jackson, CMB (19:06.662)
And, you know, this is safer, but, you know, I got there and realized that, you know, they had some issues. Private equity came in and did a rescue. Otherwise it would have been kind of the end of things for the bank. So just because the bank label or the credit union label doesn't necessarily mean that it's completely stable in a way that's different from IMBs, right? And as IMBs were constantly fighting to level that playing field.

you know, with, with the banks from a regulatory standpoint, especially, but, and, licensing and things like that. But, you know, I, I found that there are a good number of banks and credit unions that do mortgages very well, and they are in tune with the mortgage business. They know how to market and they know how to, attract, you know, talented salespeople onto their teams and take good care of those people.

At the same time, I found a number of them where they're kind of in the mortgage business, but not really. And that becomes more problematic because I found that especially in smaller banks, probably smaller credit unions, mortgage is a little different than bank. We seem to think a little bit differently. We seem to market a little bit differently. And there's a lot of times this natural friction between the two.

So I've been at two companies that were bank owned, both cases that, you know, the CEO that had hired me in both cases had left really at a kind of some frustration between bank versus mortgage side. You know, I think that there was friction there that may have been holding things back a little bit. And so again, there's, there's a lot of great ones that totally understand it, but I think there's some that are, they're doing mortgages because they know they need to do mortgages.

Is it a priority? they excited about it? Are they constantly thinking about how to make the platform better in just the mortgage space? And that also tends to be the place. We don't hire a lot from depository institutions, but the ones we do, that's often where that comes from for us is that they end up somewhere that is kind of in the mortgage business.

Val Buresch (21:20.773)
you

Val Buresch (21:31.589)
Yeah, no, I totally understand. I used to work for, in the mortgage department of depository institutions as well. And I know how mortgage was viewed as a sticky product, but one of the products. And that was the only kind of real strategic value for mortgage. But I was wondering also when you...

When your loan officers are competing against loan officers from banks, does the speed, the execution at IMB like yours, is that a differentiator with mortgage borrowers or that process efficiency is not important these days?

David Jackson, CMB (22:23.134)
I think that delivery piece is the number one differentiator. So, when we're competing for a consumer to work with us for a mortgage and maybe they have an offer from a bank or credit union that is similar in as far as terms go, that you have to be in the game as far as terms. It's got to be competitive there, but the execution is the biggest part. And that's also driven by real estate agents. Most of what we do is referred by real estate agents.

Val Buresch (22:46.65)
Right.

David Jackson, CMB (22:52.122)
and closing on time and as agreed is paramount and number one. And I think that there are banks and credit unions that do that and do it very well. But I also think there's a good number of them that don't. that real estate agent memories are long. Like when that deal didn't close because they were backed up in processing or underwriting and it was a 30 day closing and it took 60.

Once that happens, they remember that. And that's not a good place to be. you know, I compete in a market where, you know, that has really helped us, that speed, you know. we needed 10, 12 day closing, okay, you know, we can find a way to do that. Where those flexibilities don't always exist, you know, in larger...

Val Buresch (23:36.399)
Mm-hmm.

Val Buresch (23:43.257)
That's impressive.

David Jackson, CMB (23:49.228)
especially bank and credit union institutions. They don't always do well with maybe. It's kind of very yes or no type. Yes, we can do this or no, we can't. We kind of operate in that. Well, maybe we can make this work. Maybe there's a way we can get this done. I think being more nimble is the key to making that happen.

Val Buresch (24:09.029)
Right, right. And my final question is about 2026 and planning and how, first of all, how is 2025, first of all, how is 2025 looking for you right now? And based on your assessment of where the market is now, how are you setting the bar for next year for 2026?

David Jackson, CMB (24:36.078)
We are up a little from, know, obviously not quite finished yet, but we are up a little from last year, which is good. It's not as big as a boost from the 23 to 24 number. So, you know, trying to find ways to have that kind of growth in 2026 and certainly not waiting for, you know, the tide to rise for everybody. We hope it does, right? Lower rates, more housing units being transacted. Hopefully.

But my goals are very clear around recruiting and finding talent and finding people that, know, I tell everybody that I'm talking to, you know, this has to be right for you, you know, just because you're doing this much volume and, you know, it seems statistically like your type of business is our type of business and it's a fit. It's got to be both ways because pushing too hard on somebody as far as timing, as far as, you know,

Val Buresch (25:28.409)
Mm-hmm.

David Jackson, CMB (25:34.342)
trying to tell them what they need, that's never worked for me. It's always been an approach of, we need to be a fit for you as much as you need to be a fit for us. So it's got to be comfortable and feel good to make a transition over to us. So it's identifying those people that works. And sometimes they don't. Sometimes we start down the path and realize that for whatever reason, one way or the other, it's not a fit. And you have to...

I think in the recruiting space, stop trying to force those situations because they, you know, if you're trying to force it and even if it goes together, it's not always a good relationship. So trying to find, again, it's for me, it's talking to more people, having more meetings, and, just finding those opportunities. Cause I think that, waiting around for somebody to show up or a company to merge and, and

you know, maybe there's some people looking as a result of that. That's like bonus opportunities of recruiting through mergers and, you know, consolidations, things like that. You can't wait for that.

Val Buresch (26:42.661)
Yeah, that you can't time the market in a way. Yes, you just have to keep having those conversations with loan officers in your market with real estate agents as well. So they probably give you a sense of also of people you should talk to.

David Jackson, CMB (26:45.676)
Yeah.

David Jackson, CMB (26:59.416)
Yeah, absolutely. And sometimes it's a long game. We have people here that were, were conversations for two years before we got them here. You know, so it's, and it was just a timing, you know, we realized, we thought we liked each other and thought maybe there's a chance to do business together. And then, you know, things, you know, just timing not right. And, but then all of a sudden, you know, timing, if you keep following up, of the timing is right. And, you know, an opportunity.

Val Buresch (27:01.133)
Ahem.

Val Buresch (27:07.119)
Yes, yeah.

Val Buresch (27:27.973)
Very well said. I really learned a lot from you today, David. I want to say big thank you to you for being so open with us and really sharing those insights and best practices around recruiting and retention. And for me, the biggest takeaway is that this investment in being thoughtful and how you manage and keep your team for the long haul has a big return on investment and has a big positive impact on the company's success. So that's what I took away from our conversation today. And again, thank you for being with us today.

David Jackson, CMB (28:14.217)
My pleasure. Thank you so much.

Val Buresch (28:17.807)
Thank you again and I'm Val Buresch and I'm the host of CMB Connect as well as CEO of Polygon Research. Thank you for listening and we'll see you on the next episode of CMB Connect.

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