It is an eventful week within the Slack channels of Knock, and an anxiety-filled one for the company’s 30 active loan officers.*
On Tuesday, according to multiple sources within the New York-headquartered mortgage lender and “power buyer,” a weekly video meeting of Knock loan officers took a turn when Robert Foos, Knock’s director of sales, told loan officers that they would receive a 33% reduction in salaries effective Jan. 1.
Knock loan officers draw a median salary of about $75,000 a year, according to these company sources.
Both the news itself and how it was presented – with neither company CEO Sean Black nor Chief Operating Officer Jamie Glenn addressing the affected employees – caused a firestorm within the company’s virtual corridors.
But on Thursday morning, Knock reversed course. Glenn sent an email to loan officers stating that their base salaries would, in fact, not be reduced. Moreover, loan officers could expect increased commissions under the company’s compensation plan.
“Over the course of the week, with multiple 1:1s, we have heard feedback about some of the mechanics of the plan and confusion over how it works,” Glenn wrote, in the email obtained by HousingWire. “As a result, we have decided to not roll out the plan we communicated. We are working on a revised plan that will roll out in January, that addresses the feedback, keeps base salaries the same, while giving everyone the 43% increased upside for repeat customers and stellar customer service.”
The revised plan would appear similar to the scrapped pay reduction in one respect – a focus on repeat business from Knock’s network of real estate agents.
Founded in 2014 by Black, a founding member of real estate listings site Trulia, Knock helps consumers bid on a new home by fronting a cash offer. The company primarily works with the consumer in financing the home – including that the homebuyer work with one of Knock’s in-house loan advisors.
Like other power buyers Orchard and Ribbon (Black has noted that Knock was the first of these companies), Knock works with outside real estate agents who recommend the cash offer service. One Knock loan officer, who requested anonymity to speak candidly about the company’s strategy, said there has been an increased focused on building these agent networks.
Reached Thursday after Glenn’s announcement, the loan officer said that employees are generally satisfied with the change in course and that it shows the company’s values remain intact.
A spokesperson for Knock declined to comment on specific questions but provided a statement to HousingWire: “Knock expects another year of rapid growth in 2022, and we want our team to participate in that upside. Our 2022 compensation plan keeps base salaries at current levels and significantly increases upside potential.”
Knock’s reckoning with loan officer pay comes amid a historic housing inventory shortage and fewer deals, though Knock itself is growing. It began 2021 in 14 markets and is now in 70.
More broadly, the mortgage refinancing gravy train has skidded off the tracks for several lending companies. (Knock does not do refinancings.)
Chicago-based Interfirst Mortgage is set to lay off hundreds of loan officers between its offices in Illinois and North Carolina. Freedom Mortgage laid off hundreds of sales professionals in its Fort Mill, South Carolina office.
And Better.com CEO Vishal Garg laid off 900 employees over a Zoom call, with Garg himself then taking leave following extreme blowback.
* UPDATE 12/16: According to a Knock spokesperson, the company has 30 loan officers. The National Mortgage Licensing System states Knock employs 45 LOs, but the spokesperson said that 15 of these employees provide company functions other than advising on loans. The original story stated that Knock has “about 50 loan officers.”