The mortgage industry has undergone massive downsizing after experiencing banner years during the pandemic. Shant Banosian, EVP at Guaranteed Rate and a top producing loan officer who eclipsed $1 billion in mortgage production in each of the last two years, said he also cut his team size by half while focusing on growing market share.
Banosian funded $1.7 billion in loan volume in 2020 and topped his record at $2.2 billion in 2021, becoming the top LO of the year, according to Scotsman Guide‘s list of top mortgage bankers.
“Even though the volume was going down, my biggest focus this year was to increase market share, more important than getting volume,” he said in an interview with HousingWire.
With the shift toward remote work and homeowners buying second homes, Banosian’s core group of clients moved to new markets — ones where his team wasn’t connected with local partners — setting up a challenge for the top producer.
Banosian said he turned that barrier into opportunity, shifting back to the old fashioned way of building relationships with the local players.
“It’s not an easy or quick thing; it’s the long game we are in,” Banosian said.
HousingWire CEO Clayton Collins sits down with Jon Irvine, Chief Production Officer at Change Wholesale, to discuss Change Wholesale’s approach to a shrinking market.
Presented by: Change Wholesale
The top agent in charge of all the production with the help of assistant LOs on his team posted more than $900 million in origination volume as of December 12. This gives Banosian about two weeks to reach the $1 billion sale volume in 2022 to continue his landmark streak.
Read on for how the shrinking mortgage industry affected Shant Banosian’s sales volume this year, the opportunities he seized in a downmarket and his prospects for next year.
This interview has been condensed and lightly edited for clarity.
Connie Kim: Mortgage lenders have been downsizing as the market rapidly shrank in a rate-rising environment. How was business for you in 2022? Do you expect to continue your $1 billion sales streak this year?
Shant Banosian: We’re going to be very close; it’s going to come right down to the wire. We’re already over $900 million, so it just depends on how the next couple of weeks shake up. In 2019, I believe we did $937 million. We came up just short. Then in 2020, we hit $1.7 billion and $2.2 billion in 2021.
In the last three quarters of the year, there was very little refinance activity, and in the second half of the year, the purchase market slowed down. It’s been a challenging year in general because inventory levels and new houses available have been very, very low all year. And then refinances disappeared altogether when they were about 50 to 60% of all volume being written throughout 2020 and 2021.
CK: You’ve been in the industry for about 20 years since you started in 2003 and I remember hearing that you thought about leaving the industry in 2007 and 2008. Fast forward to 2020, you became one of the few to join the $1 billion club. What helped you get there – was it a specific software, certain communities?
Banosian: It was a combination of really everything. It was building out a great team, it was utilizing the really great technology that my company has. Guaranteed Rate has got some amazing tech that allows me to be very mobile. As a loan officer, we get that access to all different tools.
It starts with a digital mortgage, where clients can apply and get pre-approved within minutes from anywhere, but the loan officers also can access that information from anywhere. So it allows me to be on all the time, 24/7, when the real estate market is on. It allows me to search for products, price of products, issue pre-approvals, check client documentation, all just from my mobile phone.
Being able to market myself utilizing all different mediums, whether it’s social media, in person, direct mail, text message, email, you name it. We’re just really aggressive with our marketing and business development.
CK: What does your work day look like these days?
Banosian: We have over 30 employees on the team. We have different functions in the team within sales, business development, marketing, operations, administrative support, client retention, customer service, and I’m very involved at a high level working on all of those. So a lot of it involves meeting different team members in different departments as a team.
The majority of my day is spent talking to clients for new pre-approvals, for purchases they have going on actively, contracts being accepted. And then a big portion of my day is spent communicating with real estate agents, whether it’s actively on files or developing new relationships and networking.
CK: At the height of 2021, you had more than 60 people on your team. Has it shrunk like the rest of the industry did this year?
Banosian: Yes, we grew just like the whole industry did [in 2021]. So we were up to over 50 people, but as our volumes were cut in half, just like the rest of the mortgage industry, we’ve scaled back our headcount to be more in line with what kind of business we’re doing right now. We’ve reduced the size of our staff by about 50% in the last 12 months.
The production is done all by me. I have licensed loan officers on my team that act as sales support, I have assistant loan officers on my team that support my business, but it’s not like my total funding volume is including any other loan officers’ own individual production. The whole team is a function of my brand and my business.
CK: The mortgage industry is projected to halve this year from 2021, but that isn’t stopping people from buying homes, although it slowed down significantly. As a top LO in the industry, how have you seized this opportunity to pick up more customers?
Banosian: Even though the volume was going down, my biggest focus this year was to increase market share, more important than getting volume. It’s all about how many new real estate agents we are working with, how many clients are coming to us in new markets. It’s easy to monitor the number of units that you’re doing and the total number of units that are being done within each state and all across the country. On top of that, just very simply, what kind of professional types in our network – real estate agents, financial advisors, accountants – are giving us referrals compared to the previous year?
CK: A lot of your business was closed in the East Coast this year. How are you and your team members targeting new markets across the country?
Banosian: One of the things that happened with the pandemic was that there was a huge increase in remote work all across the U.S. Two things happened – remote work, a lot of people moving all across the country and then we saw a huge surge in second homes. So my core group of clients started buying homes all across the nation, whether it was in vacation type resorts, or moving to more affordable areas, or just a good old fashioned way – if they got a new opportunity to work.
That allowed me to go into [new] markets and that was tough. That was one of the biggest challenges we had. We [would] lose touch with our clients if they [did] business in states where we are not functioning. And then as they went to do business in these new states, we figured out where the real estate agents are, and who the players are, where the markets they’re buying and did some research and started making phone calls. We tell them about the rates and products we have, the speed at which we can close, the value that we offer to our partners and just organically grow it.
The more transactions you do in a certain market, you get to know all the players. It’s not an easy or quick thing; it’s the long game we are in.
CK: Mortgage rates are expected to drop next year, but the origination volume projections are not looking so great in 2023. What is your forecast for business for LOs next year?
Banosian: I think 2023 is going to be better than a lot of people are expecting. I think the purchase market will be very strong in the spring. There’s a lot of pent up demand. Although the Fed has been raising rates, income levels across the country are up. I think the stock market will recover. So I think the purchase market is going to be strong, home prices are going to remain propped up due to a lack of inventory. Then I think in the second half of the year, rates are going to come down. I think we’ll be in a really strong refinance market. So I’m pretty excited about next year.
CK: What product types do you expect to gain traction next year?
Banosian: I don’t think it’s going to be a great new product year. What tends to happen is, whenever there’s a lot of recession talk, that’s not when you generally see brands rolling out new products. I think we’re going to head into next year with a very similar product set as we have right now.
One of the exciting things that we’re doing internally at Guaranteed Rate, we’re offering home equity loans now and home equity lines of credit. That’s a new product that we weren’t able to offer before, and that’s been a huge shift. There’s been a huge demand for home equity products. On top of that, we are now also offering personal loans. So, we’re getting into offering different kinds of products, outside of your standard first mortgage position.