Firm crossed milestone records in 2020, but leader is confident unique model positions them for more growth
Ward Morrison (pictured), has set one key challenge to his team every year: double. The franchising president at Motto Mortgage is coming off a record 2020, with Motto originators closing nearly $2.5 billion in 2020, more than doubling the company’s 2019 volume. That follows several years of significant growth at or near that doubling target. Even though analysts are forecasting a slower 2021 as the refi boom tails off, Morrison believes his company can still meet its annual doubling goal.
Morrison is so confident because of Motto’s unique position in the purchase market. As a RE/MAX company based on a franchise model, Motto’s loan officers are directly tied to a purchase pipeline driven by real estate agents. Moreover, as franchisees, Motto’s LOs are often equipped with more local experience and community connection, intangibles that are absolutely key in building a purchase pipeline.
“If you take 2019 as an example, as a network we were around 80% purchase and 20% refinance when the industry average was basically 50-50,” Morrison said. “In 2020 we picked up more refi volume like everybody else, but our balance only shifted to 60% purchase and 40% refinance, compared to a 35% to 65% industry average.”
Morrison attributes that maintenance of a purchase majority in Motto’s pipeline to the franchisees’ direct tie to real estate agents, who have been having a record year of their own. While Morrison is proud of reaching nearly $2.5 billion, and closing deals for around 10,000 families, he said he’s most proud that Motto has had almost twice the percentage of purchase volume as the industry average. He believes the strength of that existing pipeline will mean that as other lenders pivot back to purchase, Motto will already be a step ahead and ready to grow further.
As Motto looks to grow further, Morrison explained that he’s bullish on the broker channel. Key to building out those broker relationships is providing choice in product set and rates that can serve a whole range of borrowers. In a heightened purchase market, he believes the convenience and choice brokers offer will be key.
Motto is also looking to grow by expanding its franchises. Morrison started in the industry as a young LO cold calling real estate agents. He explained that if he could have joined up with a firm directly tied to real estate agents, he “would have taken that all day long and twice on Sunday.”
As part of his doubling goal, Morrison is looking to make between 60 and 80 franchise sales this year. He believes the franchise model is an attractive one for loan officers looking to branch out on their own or new industry entrants looking to get established. Key to the value proposition is the institutional and legal support Motto provides to keep franchises in compliance as they start to produce.
Morrison believes that unique combination will be enough to attract the best talent in the industry. He’s aware of the increased levels of consolidation the industry is already experiencing and the power some big players have to bring in top performing LOs with big signing bonuses. He’s confident, however, that the prospect of a purchase-oriented franchise model will be enough to attract LOs looking to shift their pipelines away from refinances. That value proposition is enough for Morrison to set his annual doubling challenge again.
“It’s going to be a competitive marketplace,” he said. “Can we do $5 billion this year? Can we help 20,000 families get into homeownership? Because we’re tied to those purchase money referrals, I don’t think we’re going to see as bad a flex away from refis as other firms will as rates increase. It’s going to be a challenge, but I think we can do it.”
