STRATMOR | GROUP We want your feedback REAL TIME • Please use your phone and browse to the URL below • You do NOT need a login • You will be asked a series of questions throughout this session • Answer on phone, and results appear instantly • You can also ask questions through web page www.PollEv.com/STRATMOR STRATMOR | GROUP 2 Who and What We Are Practice Description Practice Leader Benchmarking, and Financial Analysis • The type of work required by CFO’s, whether independent or bank owned • MBA / STRATMOR Peer Group Program (PRG), with over 80 of the top lenders participating • We use our extensive industry data, going back years and through multiple rate cycles • Build financial models for lenders – 5 year P&L, Balance Sheet and Capital projections Jim Cameron Nicole Yung Strategic Planning Services • Strategic planning and executive leadership Dr. Matt Lind coaching • Consideration of entering and exiting channels and markets, competitive positioning IT Procurement and Advisory • Independent evaluation of 26 primary LOS • Typically an exercise in reducing the list, and assisting with procurement • Executive coaching and IT readiness •Implementation and rescue efforts Len Tichy STRATMOR | GROUP 3 “Torture The Data Until It Confesses” Practice Description Practice Leader Capital Markets • From Best Efforts to Mandatory • Agency delivery • Alternate Investors • Pricing strategy and execution Rob Chrisman Mergers and Acquisition • Buy side advisory • Sell side representation • Middle man for interested parties Jeff Babcock Sales and Marketing • Consumer Direct and Retail • Lead generation and Lead Management • E-Commerce and Direct Marketing Garth Graham Herding • Making sure everything works well • Making sure the partnership is moving in the right direction • Helping us meet the product needs of our clients Lisa Springer STRATMOR | GROUP We want your feedback REAL TIME • Please use your phone and browse to the URL below • You do NOT need a login • You will be asked a series of questions throughout this session • Answer on phone, and results appear instantly • You can also ask questions through web page www.PollEv.com/STRATMOR STRATMOR | GROUP 5 Projected Changes in the Population by Age (2012 – 2022) Millennials Home Buyers Gen X Net Buyers Baby Boomers: Net Sellers STRATMOR | GROUP 6 Owner and Renter Occupied Households & Homeownership Rate STRATMOR | GROUP 7 Sum of a Niche! 1. First time buyers 2. Millennials under 35 3. Minority borrowers 4. Evolving Product Sum of Niches! STRATMOR | GROUP We want your feedback REAL TIME • Please use your phone and browse to the URL below • You do NOT need a login • You will be asked a series of questions throughout this session • Answer on phone, and results appear instantly • You can also ask questions through web page www.PollEv.com/STRATMOR STRATMOR | GROUP 9 How Do the Groups Compare? 1 Source: Ethics Reource Center, Ethics.org STRATMOR | GROUP 10 World Events Drive Perceptions Foreclosure! Source: Ethics Resource Center, Ethics.org STRATMOR | GROUP 11 Traits Of The Generations Source: Ethics Resource Center, Ethics.org STRATMOR | GROUP 12 Workplace Attributes Source: Ethics Resource Center, Ethics.org STRATMOR | GROUP 13 How many social media accounts do you actively use? STRATMOR | GROUP 14 How active are you in Social Media? STRATMOR | GROUP 15 Do you have a formalized Social Media program? STRATMOR | GROUP 16 Social Media Presence STRATMOR | GROUP 17 Millennials and Money Millennials keep more of their assets in cash, less in stocks - UBS report described them as “the most conservative generation since the Great Depression” The average Millennial investor has 52 percent of their savings in cash, compared to 23 percent for other age groups Accenture survey found high levels of mistrust of financial institutions among Millennials and a greater reliance on the Internet, social media, and personal networks for financial advice The ten least-liked brands among members of this generation include four of the nation’s most powerful banks—Chase, BofA, Wells Fargo and Citigroup STRATMOR | GROUP 18 Millennials and Money 70 percent of Millennials thought that the way to pay for things five years from now will be totally different and one-third said they didn’t believe that they will need a bank at all in the future Almost all (88%) of Millennials do their banking online and half of those use their smart phone to do so Three-fourths of Millennials (73%) to be “more excited about a new offering in financial services from Google, Amazon, Apple, Paypal or Square” than from a nationwide bank STRATMOR | GROUP 19 Millennial Down Payment Issue 40% of renter say “ability to generate down payment” would change their willingness to pay Only 5% of renters said a 2% increase in rates would impact their willingness to buy a house 74% “know and understand the financial process of buying a home” 44% believe 20% down payment is required 74% fear they wouldn’t qualify admit they have NOT taken the steps to see if they would Source: Federal Reserve Bank of New York STRATMOR | GROUP 20 STRATMOR Originator Census and Compensation STRATMOR | GROUP What percent of Retail Loan Originators are less than 35 years old? 21 STRATMOR | GROUP 22 Millennial originators (less than 35 years old) are less productive than older originators? STRATMOR | GROUP 23 Background STRATMOR believes that the more you can understand and measure the key attributes of your sales force, the better you will be able to proactively manage them STRATMOR Originator Census survey focuses on five key areas: Production Distribution - Consistent with conventional wisdom, do 20% of your Originators close 80% of your volume? Productivity by Quintile - What is the average productivity of your top quintile of producers versus peers? Originator Age - What is the average age of your originators overall? By production quintile? Turnover - What is your Originator turnover overall? By Age? By production quintile? Many lenders maintain that they keep their core group and that turnover is limited to lower producing quintiles. Is that really true? Tenure - What is the average tenure of originators by production quintile? Are your veterans out-producing the less experienced originators? How does your average tenure compare with peer group averages? STRATMOR | GROUP 24 Distribution of Originator Age STRATMOR | GROUP 25 Key Findings from 2013 LO Census 40% of the originators do 80% of the business Top 20% doing 55-57% of the total production Independent Mortgage companies originators top 20% do 61% of the production The Top 20% of originators averaged 10 loans per month which is twice the average production of the next quintile who originated 4.4 loans per month The Bottom 20% of originators averaged less than one loan per month About 50% of the originator population is between the ages of 40-55 with an average age of 47 There was no material difference in ages by quintile We had expected to see the Top 20% age to skew older than the average and the lower production quintiles to skew younger The millennials productivity was the same as the older after normalizing for tenure STRATMOR | GROUP 26 Key Statistics from 2013 All Originators Origination Dollars Originator Statistics # of Companies Count of Originators Turnover % Avg Tenure Avg Age Annual Avg Production per Originator % of Total Monthly Production per FTE Equivalent Origination Units Purchase % Annual Avg Production per Originator % of Total Monthly Production per FTE Equivalent Purchase % Independent Mortgage Company Bank Owned/Affiliated Mortgage 9 12 2,756.0 4,072.0 29.3% 30.7% 2.7 3.5 47.2 47.9 7,621,111 11,484,877 100.0% 100.0% 768,339 1,112,148 49.9% 44.0% 32.0 57.5 100.0% 100.0% 3.2 5.5 51.5% 45.6% Over $5 Billion Between $2 Billion and $5 Billion Between $1 Billion and $2 Billion Under $1 Billion 6 6 3 6 3,718.0 2,166.0 349.0 595.0 33.9% 27.0% 8.3% 29.1% 3.2 3.3 3.6 1.9 47.2 48.1 50.0 46.9 10,556,731 9,743,958 11,040,492 5,986,104 100.0% 100.0% 100.0% 100.0% 1,037,614 906,265 1,150,508 688,406 47.4% 44.8% 44.4% 47.0% 50.1 47.8 48.0 26.6 100.0% 100.0% 100.0% 100.0% 4.9 4.4 4.7 3.0 49.1% 46.3% 45.0% 48.6% 12 3 6 4,276.0 871.0 1,681.0 6,828.0 32.7% 21.6% 28.3% 30.1% 2.4 5.7 3.8 3.2 47.3 46.7 49.0 47.6 8,842,044 11,929,307 11,642,589 9,925,337 100.0% 100.0% 100.0% 100.0% 906,701 1,123,163 1,060,293 971,707 50.0% 34.6% 43.1% 46.4% 38.9 66.9 58.1 47.2 100.0% 100.0% 100.0% 100.0% 4.0 6.3 5.3 4.6 51.7% 36.3% 44.3% 48.0% LO Primarily Stand-Alone Branches LO Primarily Bank Branches LO Mixed Bank & Stand-Alone Branches Overall Turnover averaged 30.1% for our sample in 2013 Average age of our survey group was 48 years old An average originator originated 4.6 loans in 2013 with 48% of those being purchase loans STRATMOR | GROUP 27 Key Statistics - Top 20% Top 20% Origination Dollars Originator Statistics # of Companies Count of Originators Turnover % Avg Tenure Avg Age Annual Avg Production per Originator % of Total Monthly Production per FTE Equivalent Origination Units Purchase % Annual Avg Production per Originator % of Total Monthly Production per FTE Equivalent Purchase % Independent Mortgage Company Bank Owned/Affiliated Mortgage 9 12 548.0 809.0 6.5% 7.9% 4.1 5.3 46.5 47.0 23,656,251 30,491,591 61.7% 52.7% 2,118,118 2,663,041 46.7% 41.5% 88.9 135.1 55.2% 46.7% 7.9 11.7 48.1% 42.9% Over $5 Billion Between $2 Billion and $5 Billion Between $1 Billion and $2 Billion Under $1 Billion 6 6 3 6 741.0 431.0 69.0 116.0 6.2% 9.4% 1.6% 10.3% 5.0 5.2 4.7 2.8 46.2 47.4 50.7 46.4 29,895,989 26,211,558 30,789,378 17,730,567 56.4% 53.5% 55.1% 57.7% 2,587,658 2,249,452 2,855,911 1,908,957 43.4% 44.7% 40.4% 42.3% 123.3 116.6 117.0 71.2 49.1% 48.6% 48.2% 52.1% 10.7 9.9 10.3 7.2 45.1% 45.8% 40.7% 44.0% 12 3 6 851.0 173.0 333.0 1,357.0 8.0% 1.2% 8.8% 7.3% 3.8 8.0 5.8 4.8 46.7 43.9 48.8 46.8 26,509,344 28,227,204 30,596,289 27,731,262 59.7% 47.0% 52.1% 55.5% 2,395,103 2,358,311 2,603,623 2,438,854 48.1% 29.5% 39.2% 43.6% 104.9 140.9 133.2 116.4 53.7% 41.9% 45.5% 49.0% 9.4 11.8 11.2 10.1 49.7% 31.2% 40.1% 45.0% LO Primarily Stand-Alone Branches LO Primarily Bank Branches LO Mixed Bank & Stand-Alone Branches Overall Turnover is significantly lower for top producers at 7.3% vs. 30% overall Average age is the same as the overall average This tells us that Top Producers come from all age cohorts and are not always the older and more seasoned originators The Top 20% average 10.1 loans a month or more than double the overall average STRATMOR | GROUP 28 Consumer Research Online / Offline Behavior STRATMOR | GROUP 29 REALTOR® Challenges Sixty-nine percent of REALTORS® reported having a website for at least five years, 12 percent reported having a real estate blog, and 61 percent are using social media. Realtors NEED more access to mortgage credit – it’s a need that must be met to expand their business Only 17% of REALTORS have personal assistants, and 1/3 of those are shared, so they generally don’t have a lot of help in marketing and other lead generation activities The typical REALTOR® is a 56-year-old white female who attended college and is a homeowner, (Fifty-seven percent of all REALTORS® are female) They are absolutely desperate for the deal to close And there are 100k loan officers calling on 1M realtors --- if each LO can secure 10 relationships, and can convert every referral, that is only 50 deals per YEAR! STRATMOR | GROUP 30 Lengthy research period provides multiple opportunities to connect Typical buyers search for 12 weeks Buyers who use agent, typically contact agents after 3 weeks (which means the keep searching after that) 78% of home shoppers visit 3 or more sites prior to taking action on real estate site Only 24% take action (generate lead) the same day they begin search 36% take up to 60 days And 40% do not take action for up to 120 days STRATMOR | GROUP 31 Age of Internet User Much Different than Typical REALTOR® 86% of those who take action on site are LESS than 55 years old 67% of those take action are less than 44 years old And average age of Realtor is 56 years old! Understanding Realtors is key to being successful AND Diversify the bet into evolving Realtors or direct methods of communication? STRATMOR | GROUP 32 Home Search in the Information Age 1. Look at online listings 2. Check out Mortgage rates 3. Look at more information about homes 4. Find an agent (after several weeks) 5. Look up agent on internet, AND social media 6. Talk to agent 7. Receive referral, Pre-Approval encouraged 8. Search online for comps 9. Check out neighborhood stats 10. Send link to house to influencer 11. Drive through neighborhood 12. Look at house 13. Listen to Realtor spiel about mortgage 14. Look up loan officer on social media and internet STRATMOR | GROUP 33 33 STRATMOR | GROUP 34 Customer Satisfaction MortgageSAT survey system launched August 2013 with over ~45,000 customers surveyed We provide lenders insights into how their customer service performs across a broad range of transaction, demographic, and organizational aspects This reveals details in overall satisfaction Critical points in the process Preference of how contacted How applied Millennials vs previous generations STRATMOR | GROUP 35 Millennial Satisfaction Based on 45,000 surveys, Millennials (those borrowers under age 34) have roughly same satisfaction then older borrowers (88 vs 89) They are even less likely to recommend (87 vs 89) but more likely to comment on social media (74 on a 100 point scale) Survey Size Survey percent of Total Satisfaction Likelihood to use again Likelihood to Comment Likelihood to Recommend Under 34 12706 28% 89 88 74 87 Over 34 32797 72% 89 90 71 89 TOTAL 45503 100% 89 89 72 88 STRATMOR | GROUP 36 First source of information For purchase borrowers, millennials are far more likely to seek internet and friends/family for information 23% friends and family vs 14% older borrowers – highest satisfaction with 91 11% internet vs 7% internet from older borrowers Millennials less likely (7%) to contact a branch office Millennials Pct of Total Sample Size Satisfaction Likelihood to use again Likelihood to Comment Likelihood to Recommend Previous Generations Pct of Total Sample Size Satisfaction Likelihood to use again Likelihood to Comment Likelihood to Recommend Internet Realtor 11% 1172 87 88 68 87 42% 4681 88 89 71 88 Internet Realtor 7% 1362 88 89 70 89 46% 9090 89 90 72 90 Other personal finance Family or friends professional 5% 23% 538 2517 86 91 86 92 67 74 86 91 Branch office Other personal finance Family or friends professional 5% 14% 1064 2803 87 91 88 92 68 75 88 92 Branch office 7% 758 92 93 81 93 9% 1758 91 93 76 93 STRATMOR | GROUP 37 Relationships can be established via Internet or Phone Less than 10% of purchase borrowers completed the application face to face, but have slightly higher satisfaction 19% completed it via the internet 69% completed via phone Customer satisfaction in all three methods was very similar although face to face is more likely to comment on social media Face to Face 9% Pct of Total Sample Size 2900 Satisfaction 90 Likelihood to use again 90 Likelihood to Comment 76 Likelihood to Recommend 90 Internet 19% 5807 88 89 72 89 Mail 2% 712 89 89 72 89 Telephone 69% 21447 89 90 72 89 STRATMOR | GROUP 38 First Time Home Buyers 44% of completed purchase surveys are first time home buyers They are actually MORE satisfied than move up buyers, and far more likely to comment on social media Best practice is to ASK them to comment and drive referrals Sample Size Satisfaction Likelihood to use again Likelihood to Comment Likelihood to Recommend First Time Buyer 45% 13270 90 90 77 90 Not a First Time Buyer 55% 15999 88 89 68 89 STRATMOR | GROUP Importance of Alerts • MortgageSAT automatically alerts lenders when customers are dissatisfied • Quick call back from Senior Mgt has a huge impact on turning around satisfaction • Having that push notification is a key to driving the quick call • Note – Interaction with originator is a key driver of why choose a lender, AND big driver of satisfaction Satisfaction Segment Satisfaction 1-6 Satisfaction 7-8 Satisfaction 9-10 Number of Respondents Reason for choosing lender Interaction with originator or loan officer Lender of my previous mortgage Other Ability to close loan on time Good reputation Have other financial products Material that was mailed to me Good web-based tools Response Count Percent Frequency Satisfaction 8% 1,405 24 10% 1,718 72 82% 14,651 97 17,774 Response Count Percent Frequency Satisfaction 59% 18% 11% 5% 4% 1% 1% 0% 4,037 1,245 784 355 264 72 85 27 94 85 73 89 92 83 83 89 STRATMOR | GROUP • Higher satisfaction appears to exist when consumer only talks to one person • Providing a checklist at application is a key driver of satisfaction (33 point difference!) • Not asking for additional document drive satisfaction from 87 - 93 SPOC for origination? Response Count Worked with person other than Loan Officer Worked with someone else Worked only with Loan Officer Number of Respondents Provided Checklist Provided Not provided Don´t remember Number of Respondents Asked for additional docs Asked Not asked Don´t remember Number of Respondents Percent 61% 39% Percent 88% 4% 7% Frequency 4,172 2,697 6,869 Satisfaction 87 93 Frequency Satisfaction 15,735 91 737 58 1,331 81 17,803 Response Count Percent Frequency Satisfaction 39% 6,214 87 45% 7,063 93 16% 2,458 92 15,735 STRATMOR | GROUP • Customers are most satisfied when lender proactively provides status to lender • 67% of customers say they want status by email or outbound phone call Customer preference Response Count Method for receiving status updates Email from lender Lender called me I called Other Text message Logging into website Mobile app Letter mailed to home Number of Respondents Percent 59% 24% 7% 6% 2% 1% 0% 0% Preferred method for receiving updates Email Phone call from lender Text message Other Placing a phone call Logging into website Letter mailed to home Mobile app Number of Respondents Percent 67% 24% 3% 3% 2% 1% 1% 0% Frequency Satisfaction 4,062 91 1,680 94 508 67 393 80 116 93 73 83 8 88 29 88 6,869 Response Count Frequency 4,580 1,618 216 214 136 50 42 13 6,869 Satisfaction 90 88 88 84 81 88 81 87 STRATMOR | GROUP People matter • Benchmarking performance by all four primary individuals (LO, Processor, Underwriter, and Closer) and • Benchmarking up to all levels of management (i.e. branch, region, area, division) STRATMOR | GROUP 43 Power of Big Data Data gives you ability to predict likelihood of consumers taking action So, a consumer who is qualified for a mortgage is a better lead than one that is not… But it’s a better lead if you know they had a life change event … If they are doing online search for real estate … If they recent listed their home for sale … Had a recent credit pull …. Are active on social media … Have a valid email address STRATMOR | GROUP 44 Monitor Households Corporate Campaign Management - 3rd party Data to drive marketing efforts - Monitor for life change events, such as marriage and divorce - Monitor for property events: change of address, recent home listing, increase home value - Monitor for credit events, such as recent mortgage inquiries Corporate Lead Management - Create corporate standards regarding lead assignment, including involvement of retail and consumer direct loan officers - Recruit and retain better LO’s through a commitment to retail marketing support using best of breed consumer components - Protect relationship with consumer when LO departs - Leverage corporate systems for lead management and referral management - Ensure compliance with regulatory standards, including CFPB, FCRA and Fair Lending13.5 Retail Leads Call Center Leads 50% of total leads 50% of leads STRATMOR | GROUP STRATMOR Executive Survey: Most Important • • 91% said that enhanced tools for lenders to monitor regulatory compliance during the loan cycle and/or to minimize the risk of regulatory non-compliance were “extremely important Both document management and system security tied for the next most important consideration. Overall, 82% of respondents said that greater use of document management or enhancement to imaging technology (e.g. OCR, data extraction, etc.) to improve the efficiency of the staff and the quality of the loan files was “extremely important.” STRATMOR GROUP – PROPRIETARY & CONFIDENTIAL NOT FOR EXTRNAL DISTRIBUTION STRATMOR | GROUP 46 Technology Developments – Less Important • Innovations such as mobile devices (46%) and CRM (41%) and Self Service tools (41%) all were considered less important by lenders. STRATMOR GROUP – PROPRIETARY & CONFIDENTIAL NOT FOR EXTRNAL DISTRIBUTION STRATMOR | GROUP 47 Questions and Comments -- STRATMOR | GROUP Strategies to Generate Millennial Mortgage Opportunities Hire and retain millennials Consider mentoring by successful older staff Creating meaning and inclusiveness Recognition and feedback – “catch them doing something right” Patience – accept the differences, and give them time to grow Millennial Outreach Hire millennials Focus on their needs – down payment for example Embrace their tools – mobile, text and online Self service is expected Use alternative referral sources Embrace Data 48 STRATMOR | GROUP What You Can Do Garth Graham, Managing Director 954-325-7816 Direct garth.graham@stratmorgroup.com 1. The consumer is central to the process – produce happy customers NOT just compliant loans 2. Embrace transparency – Millennials don’t trust! 3. Need to hire younger and need to mentor be successful 4. Invest in technology that enables you to connect with consumers 5. Big Data can generate big results 6. Measure and manage to high customer satisfaction www.stratmorgroup.com Check out my weekly column in National Mortgage News STRATMOR | GROUP 50 Questions and Comments -- STRATMOR | GROUP 51 STRATMOR | GROUP 52 Women and Marriage Women are as satisfied as men They are also more likely to comment on social media And borrowers who are separated are happier then the others Gender Percent Frequency Satisfaction Male 67% 3,917 90 Female 32% 1,879 90 Information Not Provided 1% 69 86 Number of Respondents Marital Status 5,865 Percent Frequency Satisfaction Married 63% 3,672 90 Unmarried 37% 2,162 90 Separated 0% 26 92 Number of Respondents 5,860 STRATMOR | GROUP 53 The importance of Social Media A way to engage for professionals to engage other professionals and build brand So, use linked in, twitter and facebook to find Realtors and other referral sources Provide value added information – something happens nearly every day that is deserving of commentary Make it professional and personal – how do things make you feel? What do you think about changes in the market Engaging consumers in a compliant way – not “offering” loans, but sharing your experience in the industry Use what you are good at – not being phony STRATMOR | GROUP 54 Power of data aggregation Outlook has plug-ins for facebook and linked in (FREE!) Let’s you see picture and immediately link to social media page for those you are connected to Let’s you immediately look up people on social media based on email – new borrowers (before you call them), or new Realtors before you walk in office STRATMOR | GROUP 55 Power Tools - HootSuite STRATMOR | GROUP 56 Sales Activity may not be a Funnel Old model was a funnel, with the opportunities always flowing down, with fallout reducing the amount that comes out the bottom. New Model is more like a flight path, with customers bouncing from spot to spot seeking out information. Data analyzed by Google (search history and behavior) and Compete (click steam behavior) reveals the trend STRATMOR | GROUP 57 New Sales Funnel 90% of home buyers rely on the internet as one of their primary research sources 52% turn to internet as their first step Our MortgageSAT data for last month showed Realtors the first step for financing less than 40% of the time Real Estate search up 50% in the past year, and up 253% in the past 4 years 40% of Real Estate search on mobile devices, an increase of 120% in past year 89% of Real Estate Consumers ALSO use a Real Estate Agent STRATMOR | GROUP Do you have use texts to communicate with borrowers? 58 STRATMOR | GROUP Share borrowers age 25 - 30 years old with new mortgage originations 18% no student debt with current student debt of 100K+ with student debt, current or delinquent 16% with current student debt with 90+ delinquent student debt 14% 12% 10% 8% 6% 4% 2% 0% 2005:Q4 2006:Q4 2007:Q4 2008:Q4 2009:Q4 2010:Q4 2011:Q4 2012:Q4 2013:Q4 Source: New York Fed Consumer Credit Panel / Equifax MGIC.com/social STRATMOR | GROUP 60 Background The STRATMOR Compensation Connection is an annual survey of compensation amounts and structure. Survey is set up in modules: Executive Management Retail Sales Consumer Direct Sales TPO Sales Fulfillment (All Channels) Production Support Results are available to participants and include: Cross tabulation based on: • Independents vs. bank-owned lenders • Production scale brackets to differentiate between large and mid-size lenders • Relevant position-related metrics (tenure, management scope) Key executive, sales, and back office roles within your organization Compensation structures along with compensation levels STRATMOR | GROUP 61 Positions Surveyed for CD Sales Senior Consumer Direct Production Executive The top sales position in the Consumer Direct channel Call Center Manager Responsible for recruiting, hiring, managing, and training call center personnel including loan officers in a particular call center Campaign Manager Coordinates and assists with the marketing activities, including database and direct mail marketing, and ecommerce marketing campaigns. Producing Team Leader Manages the activities of a call center team, including training and managing loan officers; Also acts as a loan officer by originating loans Non-Producing Team Leader Manages the activities of a call center team, including training and managing loan officers; Does not originate loans Loan Officer Located in call center; receives incoming calls (leads) and attempts to convert to application; may make outbound marketing calls; counsel borrowers, recommend loan products ; Takes original application directly with borrower and coordinates with loan processors and underwriters in obtaining information necessary to close the loan. Call Screener Assists the sales consultants by taking inbound calls from clients including providing clients with product, program and rate information STRATMOR | GROUP 62 Sample Results – CD Loan Officer Loan Officer - Non-Exempt Job Description - Located in call center; receives incoming calls (leads) and attempts to convert to application; may make outbound marketing calls; counsel borrowers, recommend loan products. Takes original application directly with borrower (over the phone or in person) and coordinates with loan processors and underwriters in obtaining information necessary to close the loan. Classified as Inside Sales under Department of Labor guidelines. Typically classified as Non-Exempt employees and are eligible for Overtime. 2013 Survey Average 12 Using the average for the year, how many Loan Officers Non-Exempt did your organization employ in 2013? What was your Loan Officer - Non-Exempt turnover for 2013? How many loans, on average, did an Loan Officer close per month? What was the average compensation for the Loan Officers Non-Exempt for 2013? Base Salary Overtime Incentive / Variable Compensation Total 83.7 64% Type of Company Bank Independent 6 6 35.7 40% 131.7 87% Cross-Tabulated Results Annual Volume Under $1B Over $1B 6 6 15.7 100% 151.7 27% Source of Loans Retention New Customer 7 5 62.2 84% 113.8 35% 2012 Survey Average 8 49.8 33% 14.5 11.6 16.9 9.0 20.8 9.9 21.7 25.2 24,407 2,039 63,450 89,895 26,594 2,805 58,499 87,898 22,219 1,272 68,401 91,892 26,403 2,070 56,890 85,363 22,410 2,008 70,010 94,427 27,454 2,295 62,007 91,755 20,141 1,680 65,470 87,291 27,582 928 55,679 84,189 What was the average compensation for the Loan Officers Non-Exempt for 2013? Base Salary Overtime Incentive / Variable Compensation Total 27% 2% 71% 100% 30% 3% 67% 100% 24% 1% 74% 100% 31% 2% 67% 100% 24% 2% 74% 100% 30% 3% 68% 100% 23% 2% 75% 100% 33% 1% 66% 100% Is the monthly Base Salary paid to Loan Officers -NonExempt a recoverable amount? Yes No 0% 100% 0% 100% 0% 100% 0% 100% 0% 100% 0% 100% 0% 100% 0% 100% STRATMOR | GROUP Loan Officer - Non-Exempt Job Description - Located in call center; receives incoming calls (leads) and attempts to convert to application; may make outbound marketing calls; counsel borrowers, recommend loan products. Takes original application directly with borrower (over the phone or in person) and coordinates with loan processors and underwriters in obtaining information necessary to close the loan. Classified as Inside Sales under Department of Labor guidelines. Typically classified as Non-Exempt employees and are eligible for Overtime. 2013 Survey Average 12 Please enter the percentage breakdown of the variable portion of Cash Compensation paid to the Loan Officers Non-Exempt for 2013. FLAT % based on production VOLUMES TIERED % based on production VOLUMES Based on FLAT $/loan Based on TIERED $/loan HYBRID commission equal to greater of % or $/loan Based on the achievement of quantitative and/or qualitative OBJECTIVES DISCRETIONARY OTHER Total Type of Company Bank Independent 6 6 Cross-Tabulated Results Annual Volume Under $1B Over $1B 6 6 Source of Loans Retention New Customer 7 5 2012 Survey Average 8 23% 37% 15% 15% 0% 33% 19% 30% 15% 0% 12% 55% 0% 15% 0% 33% 37% 30% 0% 0% 12% 37% 0% 30% 0% 0% 31% 26% 0% 0% 36% 46% 0% 36% 0% 24% 21% 0% 24% 0% 10% 1% 0% 100% 3% 0% 0% 100% 17% 2% 0% 100% 0% 0% 0% 100% 19% 2% 0% 100% 15% 0% 0% 71% 2% 2% 0% 122% 18% 13% 1% 100% Loan Officer - Non-Exempt commissions vary by: Purchase vs. Refinance New vs. Existing Customers Other: Lead Source - Capture Rate - Customer Service 25% 0% 8% 17% 0% 17% 33% 0% 0% 0% 0% 17% 50% 0% 0% 0% 0% 14% 60% 0% 0% 13% 25% 13% Do your offer more than one compensation plan to Loan Officers - Non-Exempt? Yes, Loan Officers can choose among a variety of plans Yes, but compensation plans vary by geography/branch No, we only offer one Loan Officer plan 0% 17% 83% 0% 0% 100% 0% 33% 67% 0% 17% 83% 0% 17% 83% 0% 14% 86% 0% 20% 80% 13% 25% 50% Loan Officer - Non-Exempt plans have the following features: Minimum Payout Maximum Payout Quarterly volume add-on Annual volume add-on Quality Control Components 33% 33% 0% 17% 50% 50% 33% 0% 33% 67% 17% 33% 0% 0% 33% 33% 50% 0% 17% 50% 33% 17% 0% 17% 50% 29% 43% 0% 14% 43% 40% 20% 0% 20% 60% 25% 13% 25% 38% 50% STRATMOR | GROUP 64 Consumer Direct Percent of Units High of 46% of units in 2012 35% of units in 2014 and actually rising YTD 2015 By state is very interesting… Highest percent of CD volume VT OK MS LA NH RI AR ME AL NM STRATMOR | GROUP 65 CD is rising for both Refinance and Purchase Refinance volume was over 50% of units 2013-2014 Purchase units have risen from 12% of units to over 21% of units in the past 5 years STRATMOR | GROUP 66 Value Proposition For CD CD refinance loans typically have higher rates than traditional retail while…. (4 bps higher in 2015, avg 3 bps over 7 years) CD purchase loans are typically offered at lower rates than retail – 14 bps average over 7 years Traditional Retail Consumer Direct Average Delta 2008 5.87 5.84 (0.03) Refi & Cash Out Only Average Interest Rate 2009 2010 2011 2012 4.93 4.67 4.36 3.77 4.96 4.71 4.39 3.81 0.04 0.04 0.03 0.04 2013 3.70 3.73 0.03 2014 4.18 4.24 0.05 2015 Average 3.87 4.42 3.91 4.45 0.04 0.03 Traditional Retail Consumer Direct Average Delta 2008 6.10 5.96 (0.14) Purchase Only Average Interest Rate 2009 2010 2011 2012 2013 5.12 4.76 4.45 3.71 3.85 4.93 4.60 4.34 3.59 3.74 (0.19) (0.16) (0.11) (0.12) (0.11) 2014 4.14 4.00 (0.14) 2015 Average 3.83 4.50 3.66 4.35 (0.17) (0.14) STRATMOR | GROUP 67 36% of eligible voters are Millennials $1.6T (Trillion) home purchases by 2018 (in a market that is only ….) More racially diverse - Minority young householders = 28% in 1995; 41% in 2014 Married later - Young adult householders living with a spouse: 60% in the 1980s; 50% during housing boom; 42% in 2014 Higher education - Young adult householders that are college grads: 32% in the 1995; nearly half in 2014 12% of renters or 5.2 million renters nationwide plan to buy in the next year STRATMOR | GROUP 68 Power of the Checklist When Millennials receive a checklist of required documents, they have a satisfaction score of 91 (100 point scale) which drops to 51 when they are not provided a checklist When they are then NOT asked for addition documentation not on original checklist, it rises to 95 Sample Size Satisfaction Likelihood to use again Likelihood to Comment Likelihood to Recommend Sample Size Satisfaction Likelihood to use again Likelihood to Comment Likelihood to Recommend Provided 4721 85% 91 92 75 91 Not provided 288 5% 51 49 42 47 Don´t remember 576 10% 85 86 64 86 Asked 1898 40% 86 86 68 85 Not asked 1798 38% 95 96 81 96 Don´t remember 1025 22% 93 94 75 93 STRATMOR | GROUP 69 Mobile Messaging Younger generations over 100 messages per day, and growing STRATMOR | GROUP 70 STRATMOR | GROUP 71