Welcome to a special feature on our blog, where we’re thrilled to present a thought-provoking article originally published on the esteemed Inman website. Written by the renowned Matt Muscat, this blog is a treasure trove of insights, focusing on the dynamic and ever-changing role of Loan Officers in the mortgage industry.

Matt Muscat, with his extensive background and deep knowledge of mortgage and real estate trends, offers a unique and highly informed perspective. His analysis is rooted in real-world experience and a proactive approach, making him a respected voice in the field. In this article, Matt explores the significant shifts in the mortgage industry and the evolving responsibilities of Loan Officers, providing readers with not only a deeper understanding but also practical approaches to adapt to these changes.

This piece is a must-read for anyone in the real estate or mortgage sectors, as well as for those interested in the intricacies of these industries. We’re proud to feature Matt’s insightful work on our platform and encourage you to dive into his detailed exploration of this important topic. Enjoy this enlightening journey through Matt’s expert lens!

According to mortgage industry expert Matt Muscat, changes in the mortgage industry and in the  financial landscape have made the job of Loan Officer more important and challenging than ever.

Published 11/8/2023 on

The verdict is in — the old way of doing business is over. 

The landscape in the real estate and mortgage industries has been in constant flux over the past few years with  major volatility, especially on the mortgage side. Record highs for hiring, followed by the biggest departure from  the industry in a decade — plus further pending changes to how Realtors get paid — will affect how many Loan  Officers (LOs) get business. 

Not a lot is clear, but what is clear is that the job description of a Loan Officer has changed. 

Whether you are reading this as someone in the mortgage industry, real estate industry or as a consumer,  pay attention because working with a Loan Officer who has adapted to this new normal isn’t just in your best  interest — it’s the only way to compete in this market, and it likely will be for the next five years. 

For the past 10 years, maybe longer, the job of a Loan Officer was to take incoming calls from clients and  Realtors and see what mortgage options their computer system would give them.  

At some big mortgage companies, this was so easy that they would let their newest and least educated staff members act as LOs; those who were nice and made a lot of calls often made a lot of money — sometimes more than surgeons and highly trained professionals. 

Market Shifts 

But then something happened — something totally natural and really something that happens every few years in  the real estate industry. The market changed. Refinances essentially went away, wiping out much of the “easy”  business that helped to supplement those LOs who otherwise were just doing OK. To put this in context, there  was a period of time between 2019 and 2021 when you could call almost any homeowner and convince them to  refinance and create win win for everyone. This wasn’t predatory most of the time; it was just the market. 

The downside was there the whole time, but very few people noticed it. During this time, the job of an LO shifted  from being a problem-solver to being an order-taker and a data-inputter. The industry hired in record numbers. I  stopped doing marketing and sales coaching for almost nine months and focused on recruiting operations staff,  so they could help close all the business that was coming in. 

All the while, our industry was teeming with new LOs who had never learned how to be diagnostic in their  approach; some of them only ever worked on narrow niches of certain types of deals. They didn’t learn how to  educate clients, they didn’t learn how to suggest all of the options, they didn’t learn how to sell to Realtors, their  sphere, and the broader public on the pros and cons of homeownership. 

They didn’t truly learn to become mortgage Loan Officers. What’s worse, many of the experienced LOs out there  took all of the easy business and forgot to keep their skills sharp. They lost touch with past clients, stopped  building relationships with Realtors, and by and large lost their edge. 

Now, in 2023 there’s no end in sight to higher interest rates. The transactions are different. The scenarios are  different. The market is different, and the sentiment around buying a home is different. Over 50,000 of the LOs  who flooded the industry before are now gone but so are “most” of the easy deals. We are seeing gimmicky and  misleading advertising from Loan Officers offering “free refinance,” all kinds of “guarantees” and other murky  ads that scream of desperation. On top of that, the vibe is bad in many places. 

Change is Clear 

One thing is clear. The “job” of an LO has changed, and, hopefully, has changed for good. The new job  description is as follows: 

Study the market on a weekly basis, communicate your findings to your clients and realtors.

Ask your leads, clients, and everyone as many probing questions as possible so that you can  diagnose their current situation accurately and then prescribe the correct course of action, all while  educating them on the how, why, and when. 

A modern LO needs to quarterback the sale and not only get people excited but also suggest  strategies for how to win in “this” (i.e. any) market. 

Strategies will change with every market. A modern LO needs to constantly adapt and present  those around them (including their staff) with opportunities to win. In this market, it could be 2-1  buydowns or renovation loans. The strategies will change with the market due to volatility, which is  normal for the housing market. 

What will not change is that buying a home you can afford is always a good long-term bet. A  modern LO can explain this, and provide their clients with confidence to pull the trigger on an  educated decision. In essence, a good LO moves the market. 

Whether you are a consumer buying a home, a Realtor who needs a true partner, or a Loan Officer yourself,  there are great LOs and mortgage companies who have adapted and who operate by this new job description.  Unfortunately, many haven’t. 

Regardless of which boat you are in, it has never been more important to align yourself correctly to win in this market. 

Matt Muscat is the author of TAG – The Tangible Action Guide for Real Estate Marketing. He is also the Marketing  Director at Treadstone Funding and owner of Maltese Marketing.