Taking a gamble in life

[Mike Gallo]

Through dumb "luck" I received a job offer as a loan officer from a Fortune 500 company. The company specializes in subprime home equity loans.

I present the gamble. I would take a substantial paycut until I get comfortable in the position.

The job pays commission only with a $2000 a month guaranteed draw. I do not have to payback the $2000 if I do not reach commission. I have benefits from day one. The first week I do orientation and in sit with other loan officers. On the second week of employment, I travel to either Milwaukee or Denver for a week of training. The company covers all travel expenses. Week three I sit in the office and take tests based on what I learned in training and continue in office training. Week four I hit the pavement and go sell.

The company does provide leads, however, the company pays a higher commission on self generated sales.

The company has a 80% turnover rate. 1 in 5 loan officers stay with the company. The grinders who stay average $80,000. The top dogs earn over $200,000.

I work in middle management now and this company believes in promoting from within. After 6 months if I have success I can enter the Manager in Training program. The top district managers and regional managers top out at $500,000.

The gamble comes from the fact that I know absolutely nothing about the mortgage industry. According to the way I interviewed and the computer personality test I took my skills sets and personality fit this position very well. I would start at the bottom and have to work my way up.

Has anyone here ever held a job, or known someone, who has had a job like this?

[MyTurn2Raise]

HOw do you deal with uncertainty?

[tolbiny]

How easy would it be to get back into your current position (or something similar), how much does it pay, ect?

[whiskeytown]

sounds like something George Costanza would do..

I say go for it...if it gets bad, tell them you're gay and firing you could be construed as sexual harassment. - LOL

RB

[marsvolta619]

Depending on commission is a stressful bitch

[Evan]

I think it would be helpful to know what you do and what you have done in the past. Having a background in sales is probably way more helpful than having a background in the mortgage industry. You can learn one much easier than the other.

[ QUOTE ]
I work in middle management now and this company believes in promoting from within. After 6 months if I have success I can enter the Manager in Training program. The top district managers and regional managers top out at $500,000.

[/ QUOTE ]
Can you clarify whether the bolded section refers to your current company or the new one?

[ QUOTE ]
Has anyone here ever held a job, or known someone, who has had a job like this?

[/ QUOTE ]
One of my friends from school works a real estate finance firm doing banking. He interned there during his junior year, then got a job doing i-banking at BoA after he graduated. He left BoA after 6 months to go back to he real estate firm.

He is one ofthe smartest people I know and he could work for just about any firm he wanted to, so I assume he likes it (even though "it" is not exactly what you'd be doing).


Congrats on the offer, Mike. Hope it works out well for you.

[Punker]

I had a friend who did financial planning, which was similar in that :

1) You start with nothing and must build a customer base
2) Commission with a draw
3) High turnover

Some people love it, some people hate it. I would have been one of the "hate it"s, but my friend was a "love it". The question should come mostly down to whether you enjoy what you are doing right now or not, and your other life circumstances that dictate whether you are in position to make a gamble of this nature (eg, if you are 35 and have two kids and a mortgage yourself, no. if you are 25 and renting and not attached, yes.).

I'd also be concerned about the longterm market for "subprime home equity loans" but that's just standard "aren't we in a real estate bubble?" thinking which I have no idea whether is true or not.

[youtalkfunny]

[ QUOTE ]
if you are 35 and have two kids and a mortgage yourself, no. if you are 25 and renting and not attached, yes.

[/ QUOTE ]

That sums up my opinion.

[UncleSalty]

I've been in commercial real estate (on the corporate financial planning/budgeting side) for about 6 years, and I would caution you that this is probably not an ideal time to enter the mortgage industry. As interest rates rise transaction volume is going to decrease significantly, leaving those who have been in the business a long time and have already built solid relationships in an advantageous position over those who are just getting started.

Certainly there is always room in any industry for those with above average talent, but it's going to get very tight in the next 5 years or so.

What asset class does the company loan against? If it's residential/single-family I would advise against taking the plunge. If it's industrial, office, or multi-family commercial assets it will be a little safer, but volume is definitely dropping. A lot of the easy money has already been made for the foreseeable future.

Just my $0.02. Good luck with your decision.

Edit: Just re-read and saw the part about sub-prime home equity loans. I have a feeling that this market is going to take a beating as variable rate loans start pushing people into bankruptcy. Tread with caution.

[Mansavage]

I have been a loan officer for the last four years, and if I could give you any advice it is this: Now is the wrong time to get into the mortgage business.

Rates will eventually go back up, and the loan officers who will make it either love to pick up the phone and telemarket for themselves, or have an established base of business. I live in a state that will continue to have a booming housing market, have a pretty established base, and I still worry every day about whether or not I am in the right position.

I do make a fair amount of money, but I also work very long hours. I often find myself wishing I could take a job like yours.

[lastsamurai]

Its tough working on your own...as much as you like the freedom you have to be on the hustle. When i first became a stock broker/financial advisor this was in the year 1999..where you could pretty much throw darts at the wall street journal and your clients accounts would be up 300% in a few short months...

When the market got crappy it was tough...when i was calling new prospects the last thing they wanted to talk about was the stock market and how they bought JDSU on margin at 100 a share...

My advice to you is this... tighen up your belt... Once you become an independent contractor its really hard to go back to the real working world and work for somebody in a 9-5 job. If you are marriend w/ kids i would reconsider and talk to your wife...

[samjjones]

I stopped reading after "guaranteed draw".

[Rhone]

[ QUOTE ]


The gamble comes from the fact that I know absolutely nothing about the mortgage industry. According to the way I interviewed and the computer personality test I took my skills sets and personality fit this position very well.

[/ QUOTE ]

Mike, I work for a company that relies very heavily on the work of its sales group. I'm not in that group (thank God, I would be horrible at it), but I interact with them. That group also has very high turnover, and lots of monetary incentives built in to their salaries.

Anyway, my impression is that what makes for success there is not knowledge of the product (that can be learned) but rather it's just "salesmanship." If you can sell lemonade or widgets or whatever, you can probably sell mortgages. You'll learn the details of the industry in time and be just fine. If you can't sell, no amount of content learning is going to help you.

Good luck.

[SamIAm]

I'm going to try to use the phrase "subprime" at least twice today.
-Sam

[MikeSmith]

id say do it, my dad was a physics major out of college and is now the top dog of a company dealing with 401K's.

[eviljeff]

[ QUOTE ]
id say do it, my dad was a physics major out of college and is now the top dog of a company dealing with 401K's.

[/ QUOTE ]

I was going to recommend not taking the new job based on previous posts, but then I read this one. you should definitely take it.

[ QUOTE ]
[ QUOTE ]
id say do it, my dad was a physics major out of college and is now the top dog of a company dealing with 401K's.

[/ QUOTE ]

I was going to recommend not taking the new job based on previous posts, but then I read this one. you should definitely take it.

[/ QUOTE ]

Yep. If his dad can be a "top dog," anyone can.

[eviljeff]

[ QUOTE ]
Yep. If his dad can be a "top dog," anyone can.

[/ QUOTE ]

also, not sure if you noticed, but his dad was a physics major out of college. you don't have to be a loan major.

[quadzilla]

I have worked straight commission jobs since graduating college. I worked as a loan officer for two years. We specialized in sub-prime loans but, did some conforming loans as well. My opinion of it was that there are easier ways to make the kind of money that you want to make. There are numerous downsides to this type of position.

1. With sub-prime loams you are dealing with the type of people that are sub-prime for a reason. Getting them to give you the documentation that you need can be very difficult. Many of them lie about thier situation (income, assets, etc.), and the is a huge falloff rate.

2. You depend on a lot of other people to make loans happen. There are underwriters, processors, appraisers, title comanies, etc. Any incometence on there part will hinder you.

3. To really make big money you have to take advantage of people. The guys making $200K are the guys that take full advantage of these people. They overcharge fees and inflate rates. This is the only way to make big $$$ as a Loan officer.

4. Paperwork is the worst part of this type of job in my opinion. It is a huge pain in the ass. For example, you are trying to push a big loan through and the underwriter says that you need to have an additional doc signed. It doesn't bother some but, I hated it.

I left the industry and went back to headhunting. Way more money and much fewer headaches. If your job could potentially top out at $500K why would you even think of doing this?

[Alobar]

I think it all comes down to whether you are a salesman or not....if not, then its a huge fat no.

Also unless you are young and unnatached it definitely doesnt even sound remotely worth it. Also the job you are in sounds like it is better long term anyway

[Prime Time]

Unless you hate your present position, stay.

More upward potential (500K), and the fact that the turn over rate at the new place is 80% tells it all.

Stay.

[BradleyT]

Why does a loan officer have to be good at sales? Are they doing lots of cold calling?

[NutzyClutz]

The Loan Arranger is vastly overpaid, Tonto did all the work.

[WillMagic]

Man...commission. Sounds very stressful, and the best-case scenario leaves something to be desired...it seems both more improbable and less awesome than the best-case scenario in your current company.

Plus, that sounds like the kind of job that would really consume your life if you wanted to reach the top...i bet the guys making 200K a year are working 60hr+ weeks.

But, hey, if you've wanted to be Ricky Roma for ten years, then why not.

Will

[soko]

[ QUOTE ]
Why does a loan officer have to be good at sales? Are they doing lots of cold calling?

[/ QUOTE ]

A loan offier is a sales position, the mortgage process can take up to a month and the whole time you are going to need your borrower to cooperate with you while you negotiate things like rates, payments, etc. You have to deal with them checking other companys to see if they can find a better deal, making sure they follow through with documents you need to process the loan, make sure they trust you, it's alot of work and you work on 100% commission, if you dont sell you don't get a paycheck. You can work with a customer for 3 weeks then on the day of settlement they can decide they don't want the loan and you get not a penny for all your work.

[Mike Gallo]

...to everyone for their input.

I might have confused some people with my post. The position offered to me can lead to a position paying $500k, not my current position.

[Mason Malmuth]

Hi Mike:

For what's it worth, many years ago when I worked for the Census Bureau, I took a modest pay cut to change positions. Of sourse, I also was able to move job locations from Suitland, Maryland to Laguna Niguel, Calif. I never regretted it.

best wishes,
Mason

[Luv2DriveTT]

[ QUOTE ]
...to everyone for their input.

I might have confused some people with my post. The position offered to me can lead to a position paying $500k, not my current position.

[/ QUOTE ]

Mike:

Tread carefully. You have a wife, and someday soon enough perhaps a child to take care of. If you are 100% positive you can seize the day then I say go for it... but if you are not and the turnover is very high (only the strong survive in cold calling) then I'd wait for a better opportunity before you move on to a new gig. Potential money is not everythihng... seek an overall balance between happiness, security, and wealth.

TT /images/graemlins/club.gif

[sublime]

[ QUOTE ]
[ QUOTE ]
...to everyone for their input.

I might have confused some people with my post. The position offered to me can lead to a position paying $500k, not my current position.

[/ QUOTE ]

Mike:

Tread carefully. You have a wife, and someday soon enough perhaps a child to take care of. If you are 100% positive you can seize the day then I say go for it... but if you are not and the turnover is very high (only the strong survive in cold calling) then I'd wait for a better opportunity before you move on to a new gig. Potential money is not everythihng... seek an overall balance between happiness, security, and wealth.

TT /images/graemlins/club.gif

[/ QUOTE ]

i think this is one life you may have saved.

[wacki]

[ QUOTE ]
According to the way I interviewed and the computer personality test I took my skills sets and personality fit this position very well.

[/ QUOTE ]

Just curious, company or independent test? If company, i would take an independent test before making any large changes in my life. Or really read up on the job. Guess that's what you are doing here though... kindof.

[Gunny Highway]

[ QUOTE ]
You have a wife, and someday soon enough perhaps a child to take care of.

[/ QUOTE ]

With a wife & kid, you're exactly what a sales organization is looking for - someone with a lot to lose who will work work like a dog to keep food on the table and a roof over your family's head. But at the same time these sales gigs are very high turnover so they'll have 100 more n00bs coming in on the day you leave so they don't care if you actually make it or not.

[Luv2DriveTT]

[ QUOTE ]
they'll have 100 more n00bs coming in on the day you leave so they don't care if you actually make it or not.

[/ QUOTE ]

this is so important it deserves repeating. Sales is an odds game, just like poker. Sales management is also an odds game, you hire a ton of employees and throw them at the wall. Keep the ones that stick, toss the ones that don't. If you are 100% positive you will stick, then go for it. If you are not 100% positive and have no recourse if you do not, then wait a bit longer before making your move.

PS: I think Mike already knows this, I am a magazine publisher by profession. I hire cold-calling salespeople all the time; most don't make it more than 4 months. The ones that last longer are usualy keepers.

TT /images/graemlins/club.gif

[sfer]

Hey Mike, your decision to take this job has a lot to deal with how you handle constant and persistent rejection from people who don't want to talk to salesmen. I have little doubt that you're the right personality to get in front of people and can sell your stuff, it's how you feel after a day where you made a dozen calls that went nowhere that matters.

Best,
Dave

[MaxPower]

Mike,

Is this one of these deals where they call you up and tell you to come to an event where they are going to present a great opportunity.

I got a call from someplace called Primerica which is a division of Citigroup inviting me to one of these. I didn't go since I realized that it can't be a very desirable job if they are cold-calling people in order to get agents.

Either way, I would be a little skeptical if I were you.

Take it easy.

[Ulysses]

Mike,

#1: Don't let them just give you the crap leads because you're the new guy. Be sure to get the Glengarry leads.

#2: This sounds very similar to what bad beetz did for a while. I will sound the BAD BEETZ ALERT.

[Evan]

[ QUOTE ]

#1: Don't let them just give you the crap leads because you're the new guy. Be sure to get the Glengarry leads.

[/ QUOTE ]
Challah!

[swolfe]

What company? Is it Countrywide: FSL Div?

[bad beetz]

1. I did exactly this. It takes a certain type of person to do this and make a lot of money. If you're not that type of person you're one of the 80% turnovers.

2. I'm pissed ElDbeat me to the Glengarry quotes, so I'm just going to let it pass.

3. Stay out of this market. PM haakee. he will tell you why the peripheral jobs surrounding the housing marked are F'ed.

Basically, most people take these jobs because they get wide eyed at the possibilities. But end the end, the market is flooded with competition, and unless you have 1. You're own personal game (something the company can't give you) and 2. 80+ hour work week freakish drive (I'm talking RE agent slapping herself in American Beaty and listening to self helps tapes) you will sink instead of swim.

The top dogs earn 200K. you won't be able to do this for 5 years, and as an above average candidate (I'm giving you a little OOT props credit here) I still think you have about a 1-2% chance of ever reaching that level.

Stay the [censored] away from this job.

[bad beetz]

If you do this you need at least a year buffer of funds when you may not make anything. There is ROR (I didn't fully understand but it sounds like commision only. Don't know what that 2K is about)

[Mike Gallo]

[ QUOTE ]
Mike,

Is this one of these deals where they call you up and tell you to come to an event where they are going to present a great opportunity.

Not at all. I helped one of their officers get a loan and he helped to get my account paid off. After we completed the deal we discussed what he did. He told me the name of the company and its location. Ironically they have an office across the highway from me. I made a few phone calls and worked my way in the door.

I have had many people have ask me if I ever considered this career and I never gave it much thought. I knew nothing about this industry. I decided to at least talk to someone to find out about it. Originally I offered to take the manager for lunch to get information, however, he told me to come into the office.

We spoke for about an hour and he told me to take an online test at my leisure sometime in the next week. If I scored well on the tests I would get called back for an interview.

I got home that night and took the online questionaire /personality test. They asked the same questions in varied forms. The answers consisted either of strongly agree,agree, do not agree or disagree,disagree, strongly disagree. They would ask a version of the question in the always, sometimes, never considered it, often,never. True False, multiple choice scenarious to check consistency.

Example, do you consider yourself competetive.. answer,, strongly agree,agree, do not agree or disagree,disagree, strongly disagree.

Would your friends consider you a competive person.. sometimes, always, sometimes, often, never never considered it.

Do you consider your self a loyal friend, strongly agree,agree, do not agree or disagree,disagree, strongly disagree.

If you had a friend trying for the same position as you, and you knew sometime would hold him/her back, would you tell the interviewer sometimes, always, sometimes, often, never never considered it.

If you had a friend trying for the same position as you, would you do everything in your power to help him/her since you know he/she needs the money more then you sometimes, always, sometimes, often, never never considered it.



A week later I got a phone call and he told me I scored well and he would like to talk more. I met with him for about an hour and we discussed the company. I told him I researched the company, however I knew little of what the position entailed. We talked some more and he told me he would like his district manager to meet with me for a second interview.


A week later I received a phone call. My contact said his district manager had several interviews set up for that day and he would like to see me also. I took the bait and met with him. I interviewed some more, then I had to take another series of tests. They had math problems and simple logic questions. They asked the same questions as the home exam only in different forms. After I took the test they asked me to sit in the lobby while they reviewed my test scores.

I waited about 30 minutes and they called me in. They told me more about the position and made me an offer. They told me they would mail me an offer letter and once I signed it and returned it, I had the position.

I got a call from someplace called Primerica which is a division of Citigroup inviting me to one of these. I didn't go since I realized that it can't be a very desirable job if they are cold-calling people in order to get agents.

Thats harsh

Either way, I would be a little skeptical if I were you.

Take it easy.

[/ QUOTE ]


I agree, thanks.

[Mike Gallo]

[ QUOTE ]
Depending on commission is a stressful bitch

[/ QUOTE ]


I had to live on commission from age 20-27. I know it.

[Mike Gallo]

[ QUOTE ]
I have been a loan officer for the last four years, and if I could give you any advice it is this: Now is the wrong time to get into the mortgage business.

Rates will eventually go back up, and the loan officers who will make it either love to pick up the phone and telemarket for themselves, or have an established base of business. I live in a state that will continue to have a booming housing market, have a pretty established base, and I still worry every day about whether or not I am in the right position.

I do make a fair amount of money, but I also work very long hours. I often find myself wishing I could take a job like yours.

[/ QUOTE ]

This company specialized in home equity loans. They very rarely sell "straight" mortgages.

They have fallen into debt and want to find a way out. They want to remodel their home but dont have the money. The borrowers take out an equity loan to pay off their debts or make purchases. New cars, tuition, the people who can't get certain loans come to us.

[Mike Gallo]

Thats what my wife and I discussed.

The same as having the bills paid for a year if I wanted to become a poker pro:)

There is ROR (I didn't fully understand but it sounds like commision only. Don't know what that 2K is about)

I get paid $2000 a month regardless of whether I sell or not. If I make commission, they take the $2000 from the commission. If I make $6400 commission, I have to pay back $2000. I do not have to give it back if I miss a month.

[Mike Gallo]

Dude, thanks a lot for the advice.

They appealed to my ego and had me convinced I had what it took to become one of the elite.

Reality took over and I realized, its a tough journey.
I just wanted to run it by some of the best minds I know.

[sublime]

I just wanted to run it by some of the best minds I know.

glad i could help mike

[Mike Gallo]

Centrex home equities.