How to Set Smart Branch Volume Projections that Motivate Originators

As the holidays approach, so does the task of creating next year’s volume projections. Some mortgage companies take a top-down approach, where the CEO or leadership team sets the overall volume goal the year then allocates targets to the individual branches. Others will take a bottom-up approach, giving the individual branches a voice in setting the overall corporate goal.

Both approaches have merits – and their shortcomings. Top-down projections are often met with resistance from boots-on-the ground producers, whereas bottom-up projections don’t always meet the expectations of company executives and investors.

Whether your company employs a top-down or bottom-up approach to make volume decisions, you still have power to control your numbers. This four-step process will help you carry out leadership’s volume objectives and make them relevant to the individual producers at your branch.

Step 1: Ask the right questions

The first step to building a plan that gets results is by asking your originators what their individual goals are. Start by asking each originator the right question – and it’s not how much volume they plan to do next year. The better question is: How Much Money Do You Want to Make Next Year?

Giving originators an opportunity to influence the success of the branch by asking mow much commission they want to earn next year is a much more motivating conversation than simply asking how much volume they plan to do. Your team will have greater respect for the projections when they understand how it relates to their own goals. What’s more, by tying commission goals to overall branch objectives, your producers can see the direct impact they have on the overall success of the business, further fueling drive and motivation.

Step 2: Use data to keep goals grounded in reality

Once you know how much your loan originators want to make in commission, make sure those aspirations are grounded in reality. Keep it simple and pull out the following metrics for each producer:

  • Application pull-through percentage
  • Average loan amount
  • Average commission (in basis points)

Factoring in historical data enables you to create realistic projections on an individual level. Not only is it an effective way of helping individual originators understand what they need to do to reach their goals, it also gives you benchmarks to track performance over time.

PRO TIP: Download our free Branch Projections Worksheet to help get started!

Step 3: Convert desired commission into specific KPIs

Now that you have each originator’s commission goal and their historical data, you can leverage it to establish a game plan and reach an agreement on what each originator’s key performance indicators (KPIs) should be for the year.


Mike Manager asks Olive Originator how much she wants to make next year. Olivia says she wants to make $200,000 in commission.
Commission Goal: $200,000

Mike reviews Olive’s year-to-date performance and enters the following metrics into an Excel spreadsheet:
Application Pull-Thru: 15%
Average Loan Amount: $250,000
Average Commission: 100 bps

The Excel model indicates that Olive will need to close $20,000,000 in volume to achieve her $200,000 commission goal. Using her historical performance as a reference point, the Excel model calculates what her monthly production needs to be and how many applications she needs to take, providing two use cases:

Use Case 1: Lower Units at Higher Average Loan Amount
Units/Month: 6
Average Loan Amount:$277,788
Average Applications/Month: 40

Use Case 2: Higher Units at Lower Average Loan Amount
Units/Month: 7
Average Loan Amount: $238,095
Average Applications/Month: 47

By using this method, LOs are more likely to be motivated to hit a goal that they had input into setting, rather than having a target set for them. For instance, Olive doesn’t need to close an average of 6-7 loans a month because that’s what leadership mandates. Olive needs to close an average of 6-7 loans a month because that is what the numbers need to be in order for her to reach her commission goal.

This model also offers the opportunity to talk about the different lever’s originators can pull when they want to see higher earnings. If the LO asks for more basis points because they heard that that’s what another lender down the street pays, you can talk about other ways to increase commissions, such as strategies to increasing the number of applications they are taking or provide coaching to help him improve turn time.

Step 4: Put it all together into a branch budget

Now that each originator has identified their earnings goal for the year and you’ve converted them into agreed upon KPIs, you’re armed with the knowledge you need to create your branch budget.

Regardless of your organization’s approach to budgeting and forecasting, creating your own branch budget allows you to make adjustments necessary to achieving goals. For example, if corporate sets a target of $175 million in volume for your branch, but your team of 10 producers determines 600 units for a total of $162 million in volume is more of a realistic, attainable goal, you can show corporate that you plan to bring on one more originator in the new year to cover that $13 million variance.

Your branch budget is also a guide to track progress throughout the year. By looking at application pull-through rates each month, you’ll be able to determine the quality of leads being brought in. If you notice a LOs pull-through rate is dropping, you can help come up with strategies to improve lead quality or build referral partnerships.

This approach is a great way to merge executive expectations with input from producers in the field. Going through these steps provides you, as a manager, with insights to drive your strategy.

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