How TOP LO Thuan Nguyen plans to expand his business in 2023

As the refi market dries up in 2022, company CEO Thuan Nguyen’s business is turned upside down loan factory and top loan originator scotland guide in the past two years. Before the downturn, more than 90% of Nguyen’s business came from refinancing.

Nguyen said he had initiated $467 million in originations this year and closed 1,311 units at the end of November. That’s well below the landmark $1 billion he’s reached in 2020 and 2021.

Predicting another buying market in 2023, Nguyen started using his proprietary software to do something new — seek relationships with realtors.

“I never had to work with realtors, but now I spend a lot of time with them — supporting them and working with them,” Nguyen said in an interview. Hull wire.

He developed features to meet the needs of realtors, such as weekly real estate market updates, daily mortgage rate alerts, and keeping realtors informed on borrower pre-approval status.

While Nguyen has had to cut headcount by about half this year, he plans to expand the company in 2023 by hiring 1,000 LOs and targeting the buying market in the Loan Factory’s 44 licensed states.

“I think I built a really good system—good process and good technology. But then it was underutilized,” Nguyen said. “If I can open it up and share it with a thousand LOs(…) instead of winning one-on-one, now I can win 1,000 one-on-one while doing the same thing.”

Read on for Nguyen’s new business strategy for 2023, how he plans to expand his business, and what’s ahead for the real estate market.

This interview has been condensed and lightly edited for clarity.

Connie King: Thuan, your origination volume reached a record $2.47 billion last year, making you the Scots Guide’s top loan originator for the second year in a row. But how much does this affect your business since most of your trading volume comes from refis?

Ruan Ruan: not good. If you look at that (Scots Guide) number, about 94% of my business comes from refinancing. Now, there’s no more refinancing, so that’s a big change.

The beginning of the year was much better, now it is not. I only do about 60 loans a month.I’m sure I won’t make a billion dollars [in origination volume] This year. As of the end of November, my production stood at 1311 units or $467 million. That’s about one-fifth of what it was the year before. I don’t even know if I’ll be on the list again.

It affects everyone, but for me, it’s harder because most of my business comes from refinancing.

CK: Are all these works done by you alone? How is business delegated among team members?

Nguyen: I do have a team that works for me and supports me. I can’t do that many deals alone.I cut [my team] Dropped a lot. I have about 5 loan officers helping me and 30+ processors and assistants helping me.

CK: Did Loan Factory also lay off staff?

Nguyen: I would say that Loan Factory laid off over 100 people, many of whom also left voluntarily. Last year we had over 200 employees including LOs, processors and assistants.

CK: With the market shifting sharply from refinancing to a buying market this year, how do you change your business strategy that relies on refinancing?

Nguyen: I changed strategies a lot. In the past, I never had to work with real estate agents, but now I spend a lot of time working with real estate agents – supporting them and working with them.

Secondly, I didn’t recruit LO, and now I’m hanging up. My company only has a few LOs, but right now I want to go full speed and focus on recruiting and supporting LOs.

My plan is to open up my platform, my resources, [and] My tech can help join my LO. Instead of focusing on myself, I would focus on recruiting LOs, training and supporting them, and building an awesome platform where they can make easy money. We have about two or three dozen individual LOs, but the goal is to have 1,000 LOs by 2023.

CK: The software you developed for Loan Factory – Moso Software – automates many of the mortgage business models that other lenders require loan originators to talk to borrowers. How can your software help build relationships in a market that relies on buying mortgages?

Nguyen: We built some functionality to support realtors. For example, we subscribe to realtors on a weekly basis. We’ve had approximately 8,000 realtors close with us out of 27,000 transactions. So the system puts them in the database and emails them weekly market updates.

We also have another subscription that sends daily alerts to realtors because a lot of them want to know what the rates are today, especially when rates change so quickly. We also help realtors follow up with their clients.

Many agents send us loan pre-approval applications. Our system will monitor and update real estate agents in the borrower application process. The software helps us monitor the production, the referrals they send us, the referrals they send to them.

We track referrals in two ways, which will allow us to improve their relationship. Every month we send them a report showing how many deals they’ve sent us, how many customers we’ve sent them, and their status. So, with technology, we can do a lot and it scales.

We also build relationships with existing clients. For example, whenever we have a new client, we ask how they found us, and we track them. We contact the recommender and say thank you.

For example, if our customer is satisfied with us, he will recommend his friends and family to us. We track that. We know who referred new clients to us; we say thank you. We appreciate it. And I don’t think anyone will. So we put a lot of emphasis on customer service.

CK: With mortgage originations expected to shrink further next year, how do you plan to manage cost reductions as you plan to hire more LOs?

Nguyen: We have a great system. Everything is very automated, highly automated, so we don’t have to cut costs anymore. In fact, if we had 1,000 LOs coming in, we’d probably need to hire more people in the support system. I don’t expect more layoffs, but we would like to hire more people.

I think I built a really good system – good process and good technology. But then it was underused. If I could open it up and share it with a thousand LOs that could use it as a tool to help consumers. Now I can go 1,000-to-1 by doing the same thing instead of one-on-one.

I’ve been selling subscriptions to my software, but LOs who join my company can use my software for free. When they join, they can take advantage of everything I have – from technology, process, marketing, pricing, support, and even mentoring.

CK: During the pandemic, retail lenders are offering huge signing bonuses to the most productive LOs. Is this something you plan on recruiting top producers?

Nguyen: We want to recruit high volume LOs, but at the same time, I see some LOs with great potential, so I’m open to everyone. Most of the signing bonuses come from retail lenders. They charge super high interest rates. I don’t think this pattern will continue.

The bottom line is how they (LO) attract a lot of customers, how do they close a lot of transactions. When a LO joins a company, they think about how much they can get paid per transaction, what kind of support do I need, what kind of pricing can I offer my clients? These are more important than signing bonuses.

CK: Besides hiring more LOs in 2023, are you planning to expand your office like you did in 2020?

Nguyen: In fact, I’ve expanded so fast. Now, we’re working in 44 states. So we’ve pretty much covered the entire country. We’re pretty much everywhere when it comes to licensing. The next step is to have 1000 LOs in the company – that’s how we scale.

CK: At the lower end of the mortgage market, there’s been a lot of talk about retail LOs moving to wholesale channels. Are you seeing this trend too?

Nguyen: Yes for sure. With retail prices so high, I see a lot of advantages as a broker, especially pricing. I think this trend will definitely continue. I don’t see any advantage in retail LO.

In the past, a lot of retail loan officers chose to work with lenders because they had a great process, a great system to support them. But now the broker system is improving a lot. Some brokers offer all kinds of support, or even the same level of support. So, working with a mortgage broker who has a good support system, a good process, [and] Good pricing is much better than working for a retail lender.

CK: Who are your key wholesale partners and what about them makes it easier for you to work with them?

Nguyen: Rocket Mortgage. We’ve had a lot of support from them – always great pricing, no prepayment penalties, underwriting support, no extension fees. They gave us a lot of allowances, it was written in the contract. They have Pinnacle partners – I believe the top 15% of brokers get better pricing.

CK: What products will gain attention in 2023?

Nguyen: I think non-QM is very popular right now. The new Freddie Mac Home Possible mortgages and Fannie Mae HomeReady mortgages to help first-time home buyers and low-income borrowers will be a big hit. Fannie Mae and Freddie Mac are helping low-income people, so I think this will catch on because it will benefit a lot of people.

CK: Mortgage rates are expected to fall, but the expected home sales numbers are not encouraging. Would you still like to see an increase in housing activity?

Nguyen: I think we’ve already started to see interest rates start to come down [as of] two or three weeks ago. I think we’ve hit rock bottom. That’s why I’m optimistic. Many people can still afford and qualify. They’ve been waiting, so they’ll hit the market early next year.

CK: With mortgage rates expected to drop to the 5% level, some LOs expect refinancing activity to come from homeowners who locked in rates at the 7% level. Is this in line with your expectations for next year?

Nguyen: No, because not many people take out loans at this rate. There weren’t many deals in that period either. Also, what good is it for them to refinance if their loan amount is small? So I don’t see many people upvoting this. There will definitely be a lot of purchases next year.

CK: For those LOs who will stick with this industry, what strategies should they deploy?

Nguyen: It’s all about relationships with family, friends, [and] Realtors, so keep an eye on social media. There are so many loan officers, but only some will be successful. The LO will have to spend a lot of time marketing on social media. Loan officers must let the public know who they are and why they are good. They must educate the public.

It takes a lot of effort and it is important to choose a good partner. If you don’t have a good system, good pricing, [and a] With good processes in place, how do you compete? It’s all about technology and pricing. Consumers have been hit by high interest rates. They want to shop around. So if you work for a retail lender with high interest rates, how can you win? How can you get clients? That’s why I said next year, you’ll see more consolidation, more retail LOs joining the broker channel.

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