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Dallas — Three panelists from different sectors of the mortgage industry each talked about how they think success can be achieved in the mortgage business.
Business planning and building a business model around financial advice are among the keys originators must use to achieve success in the evolving mortgage industry. Those suggestions were given by Michael Busker of Sebring Capital Partners LP, Linda Davidson of The Davidson Group/SFMC LP, and Jim McMahan of CTX Mortgage Co. during the recent “Achieved Success” seminar at the Texas Mortgage Bankers Association’s 55th Annual Education Seminar & Marketplace in Dallas. Busker, vice president of wholesale and correspondent lender Sebring, emphasized the importance of service in attracting and retaining accounts. Regardless if prices are higher than those by competitors, he said his clients say they choose Sebring because they trust the company will deliver through on its promises and close the loan. He also pointed out that while many investors have policies where underwriters cannot communicate with loan originators, Sebring has a “very open door” policy toward such relationship because having underwriters get to know originators and the types of loans they do creates efficiency. Returning calls in a pleasant and timely manner, planning the week, month, quarter and year, having the discipline of following through and knowing when to reward oneself to avoid burning out, are all keys to providing the service clients seek and a successful environment, Burke indicated. Davidson, a senior mortgage planner, stressed that originators and a business cannot grow without a plan of action and its implementation. Business planning “is a subject that most originators hate” and find boring because they “love to go talk to people and meet people,” and just like to do loans, she said. But “if we’re not masters to the ultimate — what our goals are and what our disciplines should be, then we’re slaves to the immediate.” She explained that every November she creates a business plan for the new year, which she breaks down with weekly and daily objectives. Each person in her team has “non-negotiable daily disciplines,” depending on their role within the team, that consist of a checklist of written, detailed duties that must be done in order to have a successful loan and workplace in general. For example, on her team, where loan officers are also underwriters, one person’s duties for the day can be taking in loan applications and setting up files, and within each loan file is a list of “non-negotiables” the person must perform and take notes on, such as calling the real estate agent, talking to the buyer and doing follow ups. This allows Davidson and teammates to know exactly what is going on with each loan file and ultimately close the loan on time. Davidson said she also assigns “non-negotiables” such as watering the plants in the office every Thursday morning or restocking the fridge with drinks to eliminate any obstacles that can decrease the appeal of the office or job efficiency. “You will not find a successful originator without a business plan,” Davidson said. McMahan, a CTX branch manager and president of McMahan Mortgage Consulting, recommended that businesses in today’s mortgage world focus on creating an educational environment for loan originators because borrowers “want to deal with people who know what they’re talking about and want lifetime relationships.” Mortgage originations surpassed $1 trillion in 1998, more than tripled in 2003, and, today, home equity lines of credit, at $990 billion, nearly make up the entire mortgage volume seven years ago, he noted. “We’ve transformed so much,” he said. “Seventy percent of adult Americans own a home and experts predict a 73 percent homeownership by the end of decade.” And while the extra three percent represents millions more loan prospects, many originators focus on closing the loan, but lack the financial literacy necessary to educate borrowers on using a mortgage as a financial instrument to build wealth over time and miss building a client for life. According to McMahan, seminar audiences since last April have consistently revealed that 60% of originators have been in the industry six years or less, and in one seminar, the figure was as high as 90%. “We feel like we’ve got an industry full of originators that are really sharp people and know how to close on time and serve the customer, but are clueless when it comes to finance,” McMahan said. “They couldn’t tell you why the Fed has tightened the funds rate 12 times at this point and why rates are actually lower right now than when the Fed announced it would go into neutral” stance in January 2004 after the refinance boom was over.
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Coco Salazar is an assistant editor and staff writer for MortgageDaily.com. e-mail: [email protected]