Some define a loan officer as someone who is registered with the Nationwide Multistate Licensing System (NMLS); however, an NMLS licensee could be an assistant or a bank employee such as a teller. General NMLS numbers don’t break down and show how many loan officers have changed companies, which ones are licensed in multiple states, whether the licensee actually originates mortgages – or just holds a license because they may discuss loan products on occasion and their company requires licensure. NMLS data doesn’t define the population in useful terms for recruiting purposes, and it certainly doesn’t provide an accurate depiction of how many relevant loan officers are producing at a given time.
It’s more interesting – and accurate – to review the loan officer population in terms of who is closing loans. This graphic shows the number of producing loan officers by year in three categories: Total number of NMLS licensees who closed at least one loan, five to nine loans, and ten loans or more. The following information is provided by InGenius, derived from multiple sources and blended for accuracy:
The overall LO population dropped only 5.6% between 2019 and 2024; however, the number who closed five to nine loans dropped by 14%, and the number who did ten or more dropped by 19%. A consumer who walks into ABC Mortgage and connects with a loan officer they like and find to be proficient may not care about production numbers; but leaders and recruiters do. Straight NMLS numbers do not provide the business intelligence necessary to survive and grow in our current retracted market environment.
Mortgage leaders know it takes much more to succeed as an LO than being 18 years of age, completing twenty hours of education, passing a test, and a background check. There are no reports of a loan officer shortage, and lenders are looking for ways to increase profitability – not necessarily head count. Consumers interested in a mortgage can easily find an originator; but companies looking for producers face significant challenges in today’s retracted marketplace. Rather than fixating on how many loan officers are out there, the industry should be more interested in how they’re doing.
This graphic shows the loan officer population broken down by their production rank and the percentage of overall volume they originate:
The most glaring fact in this data is that the top 10% of producers do more than 50% of the business. Year after year, the numbers don’t change much: The top producers’ share only varied by 1.27% at the widest margin over the six years spanning from 2019 through 2024, and production numbers across all deciles remained consistent as well. The only group that had a change in production over one percent during that time was the second decile group; all other variations were less than a half percent. This data shows that loan officers don’t change even when the market does.
A decrease in loan officer population should come as no surprise. We’re in the fourth year of a bumpy business cycle. Looking back, the nosedive in production sent the industry into phases that resembled the five stages of grief: It was easy to be in denial in 2022 in the wake of 2021’s record originations, and anger was a logical reaction to mortgage more than doubling to reach a peak of 7.79% in October of 2023. Next came the bargaining mode when leading industry economists expressed rate optimism and “Survive till ’25” became a rally cry last year.
The industry has been through a lot; for those remaining, it’s time to get out of the grief cycle and face our circumstances head on. Let’s move into acceptance of what the real numbers are and the important loan officer attributes that will lead to growth and success.
Jeff Walton is the CEO of ingenius.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected].
