In an attempt to recruit the best people, those coming into the market offered increased salaries and existing lenders were forced to follow suit, bumping up the pay levels of business development managers and underwriters.
However, according to Eddie Smith, managing director of the Professional Mortgage Packagers Alliance, this has created an additional pressure at a time when lenders are fighting to compete in a tougher climate.
“The new entrants paid highly for the best talent. So they are now sitting on a higher wage bill in a constricting market. With these higher salaries, it will be interesting to see their effect as the outgoings on these new style salaries are not going to be comfortable.”
Bob Sturges, director of communications at Money Partners, admitted that lenders were now being forced to cut their cloth accordingly and would be looking to trim costs where they could, including salaries.
“If volume expectations are having to be scaled down and lenders are having their income streams affected, they will have to look at their cost basis and manage it carefully. The biggest cost is salaries so if there is a contraction at the front end, we will see an according contraction in salaries.”
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