Fresh off the conference floor at the MBA’s Independent Mortgage Bankers Conference in Austin, TX, our STRATMOR attendees share their insights from the event. On this month’s episode of Advisory Angle, STRATMOR Senior Partner Garth Graham, Principal David Hrobon and Senior Advisor Sue Woodard break down the highpoints and key takeaways from the IMB conference. Whether you attended the conference or not, this episode will provide invaluable insights to help you navigate the challenges and seize the opportunities facing independent mortgage lenders today. Advisory Angle is the go-to show for the latest insights and strategies in the mortgage industry. Tune in for expert analysis and actionable advice tailored to mortgage professionals striving for excellence. Each month, panelists will delve into crucial topics shaping the market, from strategy design and execution, to marketing and sales optimization, customer experience, operations optimization, and mergers & acquisitions. Enhance your efficiency, improve customer experience, and stay ahead in a competitive landscape.

To kick off 2025, Garth Graham, David Hrobon, and Rob Chrisman co-host Advisory Angle presented by the Stratmor Group and cover a wide range of subjects germane to mortgage bankers for the year ahead. The conversation focuses on how companies in the mortgage industry, including executives, CFOs, presidents, and loan officers, are responding to current market challenges to boost their profitability. 1. **Revenue Focus:** - The panel stresses the importance of focusing on revenue generation through strategic product expansions. Non-QM (non-qualified mortgage) loans, for example, are identified as an area for growth, offering higher revenue potential by meeting the needs of specific niches (like investors). - Managing *revenue "leakage"* is another critical focus. This includes avoiding price exceptions, margin erosion, and costly loan extensions at the branch level. Monitoring and reducing unnecessary fee leakage can significantly impact profitability, as small adjustments—like improving fee collection practices—can add up over time. - **Gain on Sale:** Ensuring that the margin you plan for on a loan actually holds until the loan is closed and sold is vital. Any margin reduction (due to price exceptions, free extensions, or other leakages) must be tracked and addressed at the individual loan officer or branch level. 2. **Expense Management:** - **Managing Fixed Costs:** While administrative costs are generally fixed and harder to control, focusing on the variable expenses that can be managed (like marketing, overhead, or fees) is essential. - **Warehouse Fees:** There's a significant opportunity to reduce expenses by negotiating better terms with warehouse lenders. Even small adjustments in warehouse fees can have a big impact on the bottom line. - **Sales Expense Structure:** One key point raised is the growing cost of loan officer compensation. Loan officer compensation has risen significantly due to higher average loan amounts, especially in areas like California. This increases the overall expense per loan, and the panel challenges the industry to reassess whether compensation based on loan amounts (basis points) is sustainable. They suggest that shifting toward a more balanced compensation model, such as a per-loan or volume-based structure, could reduce the expense burden. - **Sales Strategy:** For loan officers, there's an opportunity to focus on *volume* over *price*. Reducing commission rates in exchange for closing more loans could be a more profitable strategy in a competitive market. This would allow loan officers to increase their overall production, despite lower per-loan commissions, which could ultimately result in more consistent business and referrals. 3. **Other Revenue Sources:** - Exploring non-traditional revenue streams, like mortgage servicing rights (MSRs), joint ventures with title companies, and other value-added services, is seen as a way to diversify revenue. These initiatives can help provide financial cushion when the core business faces pressures. 4. **The Importance of Data:** - Successful companies are ones that measure every aspect of their operations, from loan officer performance to fee collection and warehouse expenses. Tracking these metrics at a granular level can help identify inefficiencies (or "leakage") and enable targeted adjustments to improve overall profitability. 5. **Looking Ahead:** - There is a strong emphasis on having a clear, data-driven strategy for both revenue and expenses. The most resilient businesses are those that can pivot when needed, focusing on improving margins, expanding product offerings, and addressing inefficiencies head-on. - The panelists urge executives to have "fortitude" to make difficult decisions, such as changing compensation structures or adjusting branch-level margin control, and to keep an eye on the long-term health of the business rather than getting bogged down by short-term fluctuations. The takeaway is clear: companies need to be vigilant in managing both revenue and expenses to stay competitive in a challenging market. Shifting focus from pure volume to smarter pricing, diversifying income streams, and tightening expense management could help organizations thrive through tough times.

On this month’s episode of Advisory Angle, STRATMOR Principal, and resident ChatGPT expert, Kris van Beever sit down with principal Jennifer Smith and senior advisor Sue Woodard to discuss the potential AI has in the mortgage industry. It was a lively discussion of what AI is, how it is already being used and can be used in the mortgage space, and potential pitfalls to avoid. Artificial Intelligence (AI) has the potential to disrupt traditional mortgage processes by improving cost efficiencies while providing an enhanced customer experience. We’re already seeing several mortgage lenders and solution providers fully embracing AI to enhance efficiency. Others are just starting to investigate the possibilities. Wherever you are on that spectrum, learning more about AI and harnessing its features for your business will be crucial to competing in the mortgage space.

In this episode of Advisory Angle, powered by the Chrisman Commentary, Senior Partners Nicole Yung and Garth Graham share trends from the latest Lender Intelligence TIS module. They discuss changes in the survey over the years, highlight systems that have been added, show how comparisons between scores are determined, and explain what the proprietary Lender Loyalty Score® Analysis measures and how it can help lenders choose their technology providers.

On this episode of Advisory Angle, powered by the Chrisman Commentary, Senior Partner Garth Graham, along with conference circuit veterans and STRATMOR Senior Advisors Sue Woodard and Brett McCracken, share insights from the recent events attended and talk about what we’re looking forward to and expecting at events to come. Plus – we’ll even share some hot tips for how to make the most out of YOUR conference season, too! Register today..

Mortgage interest rates have started to fall making buying a home more affordable again. The decrease in rates certainly SHOULD inject some new life back into the real estate and home finance business — but what will our business look like when that happens? STRATMOR Group Senior Partner Garth Graham believes the upcoming surge in purchase business will not look like it did the last time the industry saw a wave of new business and it won’t benefit all lenders equally. On this episode of Advisory Angle, Garth and STRATMOR Senior Advisors Brett McCracken and Sue Woodard talk about why the ongoing battle between the industry’s largest real estate companies and the Department of Justice over consumer disclosures regarding buyer’s agents — among other things — is having a massive impact on the real estate business and what lenders can do to prepare.

This month on Advisory Angle, we discuss why the next refi wave will differ and how to prepare. From impending restrictions on trigger leads to capacity issues, to non-traditional compensation plans and the customer experience, STRATMOR Group Senior Partner Garth Graham, Customer Experience Director Mike Seminari, and Senior Advisor Sue Woodard will talk about how the refi world has already changed and why it won’t provide the lift all lenders are looking for in this market. There are things lenders can do now to keep their businesses afloat, and Garth, Mike, and Sue will also explore those strategies.