Technology That Will Inspire You (Or At Least Make You More Productive)

A sampling of technology applications that can be used to further your business efficiency and productivity.

It is one thing to forecast about future developments and how they will impact our lives and our businesses. It is another thing entirely to look around and be totally cognizant of the tools we already have available to us, and to take full advantage of them. In many cases, we are waiting for developments that are already in place, and that we can use to further our businesses, reduce drudgery and wasted time, and improve our overall professionalism in regards to how we project ourselves and manage our businesses.

The following items represent some of the best examples that are in place now and that we can use to further our business efficiency and productivity.

1. Remote File Access
Most of us are thinking of our loan origination files when we talk about the ability to leave our offices. We may also be thinking of access to other files and programs that we may have on our office computer, or available to us from our computer networks. Two current products exemplify what is now available for the Originator desiring freedom from the office.

Ellie Mae introduced Encompass several years ago, and has further increased its capabilities with the remote processing center concept. This system allows the user to access their files centrally and with full control over the way its users access these files.

Calyx has recently introduced its latest version of the Point Data Server, which also allows full control of loan files in Point. In addition, this product allows distribution of important master templates and custom documents from a central location to offsite locations.

If you want to access every file you have on your computer, you can take advantage of Microsoft or Citrix Terminal Services to access your office remotely. This product not only allows access to your loan files, but also to any other program you may have centrally installed on your office server, such as email or Microsoft Office.

Coupled with a small sub-notebook, remote access for the mortgage originator is finally here. Any originator with a laptop and high speed Internet card (available from Sprint and Verizon, among others) can operate as efficiently from the vacation hideaway as they can from their own office. These changes taken together mark the greatest enhancements to mortgage productivity in the last five years.

2. Document Scanning and Electronic File Storage
The ability to scan documents and eliminate paper file storage has long been the Holy Grail of the mortgage business. While there does not exist a true industry standard at this time, we have seen some real progress made. Del Mar Database has added scanning and file storage to their popular DataTrac product used by mortgage bankers. LOS vendors are starting to take notice of this common request for new product features and some add on products have appeared to work in conjunction with the LOS, such as Paper Clip Software’s product that attaches files and scanned documents to a loan file inside of Point.

Any of us can partake of some of these advantages right now. Several simple examples include the use of a computer for receiving faxes, where the received file may be available on the hard drive as a file, so it may be forwarded with no further degradation in the image quality. A combination scanner and copier allows us to convert paper into a file format that we can retrieve whenever we need it. We simply don’t need to copy every piece of paper we encounter in a loan transaction, and can achieve the same results by scanning the documentation and printing it as we need it. If we look at the costs of running a copier machine compared to scanning everything, the economies of electronic data storage over paper storage become obvious. Also, it is a significant cost and space burden to keep files in storage for years, when they could be archived using a scanner and optical or disk storage. The missing piece of this puzzle is the software and search software to find this data and keep this available as part of the loan record in our LOS. This last issue is still being resolved as the systems are being developed by various parties in the business. What we need is a clear recognizable standard to develop for this important product feature.

While I mention the use of scanners for document archiving and storage, don’t forget the utility of having a low cost scanner available to you at your desk to simply make that copy of the occasional important article. And consider some of the specialized scanners that provide you with the ability to scan business cards and easily bring them into your contact management software easily.

3. Virtual Meetings
Ten years ago, Internet video-conferencing systems were first tried in the mortgage business, and some very significant changes have occurred since then. First, we have all discovered that successful Internet-based meetings do not rely on video in order to be effective. A successful web-based meeting requires an efficient way for participants to present information to each other, and a high quality phone connection, since audio still carries 60 percent of the information in any meeting. The combination of very low telephone rates nationwide via PCS and Voiceover IP phone systems, and Web-based collaboration tools first pioneered by Webex and Microsoft NetMeeting, have turned the virtual meeting into a clear reality and a major technology enhancement in the last few years.

Virtual meetings have given us the ability to meet across the country on short notice, at a fraction of the cost and inconvenience of a regular meeting involving air travel and hotels. In the training area, they have changed the overall focus away from classroom training to online sessions, more appropriate and more effective in our busy professional schedules. Today, Webex and Citrix GoToMeeting provide the most common tools available to arrange these online meetings or training sessions. A mortgage-specific product called provides the extra step of allowing an originator to demonstrate loan products live to a client during a phone call, without the requirement for an onsite personal visit. I have used all three of these products and can testify just how effective they all are.

Video may have returned to the interest of mortgage professionals, as current equipment and available Internet bandwidth allows the quality of video experience that we demand before we start to use it seriously in a meeting context.

4. Efficient Offsite Backup of Key Office Data
Any office with two or more locations has an easy way to provide a backup solution that is foolproof from a theft or fire viewpoint. If each office location will back up to another location, to a server or hard drive located at that other location, there will always be a good, recent backup available in short order if something goes wrong at a particular location. VPN or dedicated links between offices are all that is required, since even relatively low bandwidth is very adequate for file backups that are done overnight. Windows comes with software suitable for making these back-ups.

Several software utilities and service companies are available just for the purpose of providing these back-ups if you have only one location, and want your data stored offsite. In fact, I just renewed my subscription to for $10 a month for 750 Mbytes of data capacity, because this is an easy way to quickly copy data to another easily accessible location across the Internet, and to provide a place that I can always get to if I need a backup of critical data. In my case, I want copies of my loan origination files, ACT! files, and Quicken files, and my software will automatically copy this over when I click on a utility on my laptop, regardless of where I may be. This is far more reliable than trying to remember to do the backup when I return to the home office, plug in the USB key, or remote hard drive. It simply has to be easy to use, relatively transparent, and relatively fast before any of us will use it. Inexpensive offsite backup of data using an Internet connection is the way to go.

5. Enhanced Phone Communication
In the last 10 years, we have moved from a time when we relied on our cell phone for remaining in touch with our office to effectively converting that cell phone into our office, even while on the move. Many of us rely on a digital cell phone as our primary business number. The cost of using a phone for business use has decreased by as much as a factor of five to one, coupled wit the near total freedom that this technology has afforded us. Along the use of the Internet, we now have the ability to easily address each other by phone or computer anywhere on the planet in a matter of a few seconds.

Probably the most important recent tool that a small or large mortgage broker could apply to their telephone system is VOIP (Voice Over Internet Protocol). First started by Vonage, a number of major players now offer telephone service based on using an Internet connection in lieu of a conventional landline connection with a regular telephone carrier. Taking your VOIP phone enables you to carry the phone line with you from one place to another. For example, my Sacramento-based associate will carry his Vonage adapter with him to Israel on vacation next month. He will plug his phone adapter into the high-speed connection in Tel Aviv, and immediately call into the provided voice-mail to pick up messages received while he was in transit. He can then place and receive phone calls with his Sacramento-based business and remain available while out of country (he does not seem to mind taking the 1 p.m. PDST calls late at night in Israel).

While out of the office, this system allows easy forwarding to his cell phone. He may also use local phone numbers for other U.S. cities that can be received as local calls by his service in California, a feature known as virtual telephone numbers. VOIP technology is an incredible cost savings to an operation needing long distance telephone capabilities at local telephone costs, and provides a myriad of new marketing possibilities to the small operation trying to appear larger.

6. PDA/Blackberry/Treo Advances
We all know about the legions of individuals who spend their business day sending and receiving e-mails and typing responses on their PDA or Blackberry devices. While the mortgage business seems to be much more reliant on the telephone than real time e-mail access, there is some reasonable application of the portable devices in our contact intensive businesses.

I personally use a Treo 650 combination phone and PDS in my daily business. I use my Treo extensively for two things besides making phone calls: looking up the phone numbers that were synchronized from my laptop to the Treo, and Internet browsing current business news relative to the economy and mortgage rates while waiting for lunch in a restaurant or on a layover in an airport.

One application that I could see for the combo phones is using the internal e-mail capabilities for a separate, private account with a specific list of only the most key individuals in my business. It is simply too cumbersome and frustrating to receive the bulk of your normal e-mail on your phone or PDA device. This is better left for your sub-notebook.

7. The Ultimate Portable Office
I would sooner leave the house without my wallet than go out without my Dell sub-notebook. Other than providing my main avenue for receiving e-mail, it also serves as my main office computer for managing LOS files, looking up phone numbers and contact information, or paying bills online. In short, even though I have a home office, regular office, multiple PCs and servers, and remote access to these servers and computers, I almost always opt to work on my sub notebook, whether I am at home or in a meeting in San Diego.

The ultimate portable office is not a PDA or full size PC or laptop, it is a light sub-notebook PC weighing five or six pounds, including a five-hour battery. This machine has a 12-inch high contrast LCS display to allow good performance in brightly lit locations, has 1 Gigabyte of RAM, an 80 Gigabyte hard drive, and a power efficient Intel or AMD mobile processor.

This machine is outfitted with a Sprint or Verizon wireless Internet card. The latest versions of these cards provide near DSL level speeds into the Internet. These cards add the last important capability to all of the other ideas I discussed in this article: the portable office provides a reliable terminal into your loan files safely secured back on your office server. Other important files are password protected, encrypted, and backed up remotely with the wireless Internet connection. Even if this sub-notebook is lost, these techniques render the data on the machine unavailable to prying eyes.

Several of the items I have covered are already very mature technologies and several have arrived fairly recently. A short review of what you have in your office should allow you to easily find one or more ways to improve your efficiency and lower your anxiety level. It is up to you to take a little time and find the ones that you can apply now.

One or more of these technologies can make your business run easier, faster, and make you appear more professional. They can reduce the frustration of managing your data while maintaining contact with your customers. Above all, they provide the piece of mind that even a lost laptop or single server does not take your business down. Try diligently to apply these ideas into your business today.

By Stephen Breden

The ABCs of Building Relationships

Essential ingredients for creating long-term associations with customers and referral partners.

Whether you have been in this business 15 years of 15 minutes, you have no doubt been told that mortgage loan origination is a business of relationships. Your success is directly linked to your ability to build and sustain strong relationships with real estate agents, builders, borrowers, CPAs, financial planners, attorneys and others. Do a good job at this, and your phone will ring continually with leads, referrals and opportunities every day. Ignore it, and you’ll be relegated to cold-call prospecting for the rest of your life.

Some people think that relationship building is easy and it comes naturally. Wrong! If that were true, then these statistics would not be:

  • Over 50 percent of marriages end in divorce.
  • 70 percent of people who quit a job do so because they cannot get along with their boss.
  • The average person has 3.5 “close” friends.
  • 45 percent of parents with teenage children say they do not have a “positive” relationship with their son or daughter.
  • 15 percent of American adults have at least one sibling they no longer speak to.

Relationships take time and they take work; in life and in the mortgage business. If it is your intention to start new business relationships this summer or grow existing ones, here a few A, B, Cs to doing so:

Approach Your Customers. Mortgage lending offices today are full of unproductive loan originators waiting for customers to come to them, like fisherman sitting in a boat hoping the fish will jump in. Maybe it’s laziness or maybe its call reluctance, but you know as well as I do that there is a not a whole lot of “approaching” going on out there right now.

Selling is a proactive sport. You must be willing to get up, get out, and go after the opportunities and the relationships. If you want to meet Realtors, you should join your local real estate association, make phone calls asking for appointments and stop by open houses. If you want to approach builders, you should join the builder’s association, make sales calls and visit model homes on weekends. If you are trying to develop relationships with your borrowers, you’ll need to attend your closing settlements, phone them once in a while and mail out periodic letters and post cards to stay in touch.

The key to all of this is making the time and effort to approach the people you want for your relationships. A recent survey I conducted revealed that most mortgage originators invest less than five percent of their time approaching new relationships. This is either because: they don’t need any new relationships right now or they need new relationships but simply aren’t making the time or effort to approach them. Many of these same loan officers in the second group are hungry (if not starving) for business.

We could talk for days about the right ways to approach customers, and if we did, these three pointers would summarize our conversation:

  1. You have to know who you want to approach. The old “shotgun selling” approach is old and dead. Start off by identifying exactly who you are targeting for a relationship. If you want to work with real estate agents, select and name those agents in your market with whom you would enjoy working, and do some homework. (The same approach works for any strategic referral partner.) Since you will likely face some disinterest and rejection, make a hit list of more prospects than you need. (For example, if you wanted to begin relationships with two new builders, start out with 10 names.) Plan on the fact that some will not want to meet with you, others will have a preferred lender, and some may not even return your phone call.
  2. You have to have a professional approach. Forget the “stop by and see if they are in” sales approach and go for a more professional method. First, send out a letter of introduction with your personal color brochure included. Then, follow up in a few days with a phone call asking for an appointment. This simple two-step approach will differentiate you from perhaps 90 percent of other mortgage originators who won’t take the time or effort to do so. Some customers will say yes to your request, some will say no. That’s okay. You have your list. Who’s next?
  3. You have to go for the relationship. Remember that you are approaching people for a relationship, not a loan. If you form and build the relationship with the right customer, the loans will come. So many salespeople try to close too soon and chase opportunities away with their brash style. Smart originators know that relationships are built upon trust, and that trust takes time and must be earned. Be professional and be patient. Relationship selling is a long-term commitment for a long term payoff. Going in, think relationship, not commission.

Build Rapport. Entering into a new relationship, it is natural for both parties to feel a bit skeptical and guarded. Your first goal is to get the customer comfortable with you. The best way to do this is to put the focus on them. People love to talk about the greatest topic in the world: themselves! Let them. In your first visit, avoid the tendency to “show up and throw up” with information about you, your company, your products, your great service, blab, blab, blab. “The customer doesn’t care what you know until he knows that you care,” is sage advice for any salesperson. The best way to build rapport with a customer and start a new business relationship is to focus on your customers, ask questions, and listen carefully. Such questions might be:

“What should I know about you and your business?”
“How would you describe your customers?”
“Where do you see opportunities to expand your business?”
“What could a mortgage professional like me do to help you?”

Questions like these show a genuine interest in the customer and send the message that you are not there to try and sell something; you are there to learn something and to form a mutually beneficial relationship.
But rapport building goes well beyond what you talk about. In the advent of a new relationship, the customer is trying to size you up; who you are and what you stand for. Little things like showing up for your appointment on time, dressing sharp, taking notes and other non-verbal skills make a powerful statement about who you are and how you conduct your business. Too many loan officers are arriving late for appointments, dressing in “business casual” clothes and doing all the talking. No wonder they are failing. Look at it from the customer’s point of view: If you were a top producing real estate agent who had given a new loan originator an appointment today and he/she showed up late, dressed casually, asked no questions, took no notes, and dominated the conversation by telling you how great he/she is, would you want a relationship with this person?

In every good relationship there is a bit of “chemistry” involved. Not everyone will take a liking to you and your style. You may not take a liking to them and their style. This is to be expected. Remember that your objective going in is to build a long-term relationship with another person that may last for years, even decades. Entering into the wrong relationship with the wrong person for the wrong reasons is a dead-end to disaster. (Remember the divorce statistic?) To be a successful loan originator, you only need a handful off good relationships. Be smart. Be selective.

Contact Them Regularly. The best loan officers are great at sustaining relationships over the long haul. They do this by staying in touch with their customers in a variety of ways. These include:

  • Monthly sales visits
  • Weekly phone calls
  • E-mailing notes, quotes and messages
  • Personal letters
  • Greeting cards
  • Lunches
  • Attending outings and sporting events together
  • Breakfasts and coffees
  • And more

This kind of frequency of contact maintains you and your relationship as “top of mind” as well as keeping your customer from saying yes to another lender’s advances. You send your customer the message that: “Our relationship is important to me, and you are important to me. Important enough to take the time and effort to write you, call you, and come out and see you.” People like attention, and customers are people too.

I conducted one of my seminars recently entitled “Relationship Selling” with a group of highly experienced lenders. At the beginning of the session, I asked the originators: “How many of you would like to have more loans to work on right now?” To no surprise, every hand in the room went up. Then, we launched into the exercise of identifying their key business relationship partners and determining their frequency of contact.

It didn’t take the participants long to discover why they weren’t writing as many loans as they had been in the past: they weren’t making many contacts! Few were making sales calls, almost none were sending out regular mailings, and the last customer who got invited to lunch by anyone in the group, we discovered, was over Christmas! This group had the right relationships with many of the right people, but they were failing in working those relationships. The prevailing attitude was: “My customers know where I am if they need to get in touch with me. I don’t have to contact them.” This all to assuming way of thinking was costing them business, and I had to show them how to get it back.

Our next step was to identify key customers where we knew the opportunity for more leads and referrals existed and then build a proactive monthly contact plan to get back in touch. This plan would require a time/effort investment of just one hour per month per customer. While many excitedly embraced their plan when completed, a few still held to the stance that they didn’t have the time. (Interesting how they have the time to write more loans, but not the time to build the relationships that bring them those loans.)

Once relationships are established, contacts are the keys to sustaining and growing that relationship. Just like spending one-on-one time with your spouse or your kids helps strengthen your bond; time spent with your customers strengthens your relationship. Many highly successful loan originators tell me that they get leads and referrals every day from the customer relationships they have worked hard to build and maintain. They truthfully believe that they get these leads and referrals not because they have the best rates, most products or fastest service, but because they have the best relationship with the customer. The time and effort they invest in those relationships is paying off…all the way to the bank.
There are few things more valuable to you and your career in mortgage lending than great relationships. Isn’t there someone you should go see today?

By Douglas Smith

Surveying the Product Options Menu

During the last decade, the number of loan products and programs has increased significantly, with some aimed at “mainstream” (conforming) borrowers and others developed specifically for niche markets.

While many originators strive to narrow their product offering to a manageable number, others are constantly looking for the latest and “best” product that will meet their clients’ needs and help the LOs stand apart from their competition.

All originators have their favorite loan products; following are highlights of a few of the most popular.

No Payment for First Year

Certainly one of the most innovative loan products available is the “no payments for first year” program that Rick Jones, president of Cal Pacific Mortgage in San Diego, Calif., recently introduced and which so far is exclusive to his market. Jones determined that borrowers would welcome this type of product, and after extensive discussions and legal review with one of his major banks, unveiled the program late last year. “It enables borrowers to put off making payments for the entire first year and then resume payments on the 13th month,” he said.

The program involves the seller providing the buyer with a credit for up to 12 months of payments instead of lowering their (seller’s) sales price. At the close of escrow, the homebuyer receives the credit in cash to be put toward the first 12 months of payments. Credit is allowed for the first mortgage up to 80 percent loan-to-value. (The buyer pays the taxes and insurance and second mortgage, if applicable.) The buyer’s regular monthly payments will be slightly higher than if they hadn’t taken the “no payment for a year” loan.

Since its introduction, Jones said that the program has become popular with his Realtor and builder clients (and others) who find it is especially appealing to first-timer borrowers. “The initial savings can allow borrowers to remodel, buy furniture and/or save a little extra. Of course, it’s a great way for Realtors and builders to market properties to interested borrowers,” he said. Jones added that he relies on word-of-mouth referrals to generate visibility for the product.

Jones noted that this type of program requires extensive upfront evaluation and legal review, but can be worth the investment. “It’s been good for us,” he said. “We’ve had a great response and handled a number of these loans so far, although other lenders are starting to test similar programs. This is an example of meeting a specific borrower need that also has helped distinguish us in the marketplace. Originators and lenders have to figure out different ways to do business in today’s competitive arena. Think outside the box and come up with a creative approach.”


Some originators have complained that Home Equity Lines of Credit (HELOCs) don’t provide much incentive—the fees have been on the low side and banks offer stiff competition in order to hold on to one of their mainstay products. Others see HELOCs as a “necessary evil” that are important to offer existing and new customers. Pattie Romanzi, president of Par East Mortgage, East Hampton, N.Y., has watched her HELOC business expand during the last couple of years. She said that the typical origination fee was in the $500 to $750 range, and she considered the HELOC an “accommodation” to customers rather than a profit maker; thus most LOs weren’t especially interested in handling them. “However, as banks began paying us better fees (an average of $1,250), we were finally able to give originators a few extra dollars as an incentive to do them,” she said.

Romanzi said that in some cases, customers have found banks to be a cheaper source for HELOCs, “although in others they’ve been more expensive for the customer.” She emphasized that her primary goal is to offer them so that borrowers won’t go elsewhere. “Customers will remember you later on when they need another loan,” she said. “This (HELOC) helps to ensure their loyalty; we don’t want them going to the local bank in the future.”

Robert Moulton agrees that HELOCs are worth doing, although he’s even less concerned about making money on them. “I consider them to be a loss leader,” said Moulton, president of Americana Mortgage Group, Manhasset, N.Y. “You can’t make money on every loan. I’ll do HELOCs as a standalone deal or as a piggyback, as a service to current, past and new customers.”

Moulton doesn’t charge customers a fee for doing HELOCs and said lenders provide a “stipend” of approximately $500 for each loan. “It’s a no closing cost loan for us,” he said. “But the customer will remember the place they got their last loan, and once I do it, I’ve got the client’s information in my database. I’ll send them newsletters, postcards and other contacts from then on.”

In the past, Moulton has marketed HELOCs with a postcard that advised customers to “Tap into Your Equity.” He added that the timing for such direct mail pieces is critical. “I did that three years ago when the HELOC rates were attractive at four percent, now they’re at eight percent and not as appealing.”

ALT-A Alternative

ALT-A programs have given lenders and originators more leeway in serving borrowers who may be on the fringes of A-paper. Sharla Ellis, vice president/originator at Chase Home Finance, Salt Lake City, Utah, considers them ideal “for borrowers who don’t quite fit A-paper but aren’t subprime. These are full, stated or no doc programs on either interest-only, fixed, or fully amortizing ARMs,” she said. “The stated or reduced doc or no doc programs have provided for the ‘void’ that existed between A and subprime.” Ellis suggested that originators explore the potential that Alt A programs offer. “My best advice would be for originators to read the policy or product guidelines so they know these programs exist and also know the ins and outs to them. I’m not sure everyone knows how great these ALT-A programs are and how they can help borrowers who need to fit into a round peg with a square hole.”

Bradley King, vice president at Wachovia Mortgage, Jacksonville, Fla., also has seen ALT-A products become more popular during the last couple of years. He said his ALT-A customers possess slightly lower credit scores or have stated income/asset or employment issues. “The loan typically involves a different combination of add-ons, a bump in rates and points,” he explained. “The last couple of years, many lenders were seeing how they would evolve—rolling them out as they performed (well), then becoming more aggressive. This year, with the overall mortgage market contracting, they’ve been more aggressive with this product to create volume.”

Bi-weekly Payment

For customers inclined to reduce their mortgage faster, a bi-weekly payment plan might be just the answer. Essentially, they will be making payments every two weeks rather than on a monthly basis. For example, by authorizing the lender to deduct a half of one regular payment bi-weekly, they will hasten their home’s equity growth while reducing the time it takes to pay the loan in full. Certain lenders have formal bi-weekly payment programs and in other cases the borrower can do it on his/her own by making a regular monthly payment, in addition to including a second payment equal to 1/12 of one payment.

“I am a big fan of the bi-weekly payment concept,” said Ellis whose company offers a special program. “I don’t think people realize how easy it is or can be to add a little extra money on a regular basis and then watch years and interest come off their mortgage. As an originator, I like to add value and this is one way that I do it, discussing this concept and helping my borrowers build wealth through mortgage management.”

Rajeev Rajpal, an originator with Wells Fargo Home Mortgage, Staten Island, N.Y., concurred that the bi-weekly program provides customers with a special option. “Many customers are more comfortable with this type of payment because it fits their own pay schedule,” he said. “They realize that by making one additional payment a year, they could be knocking off up to 7 ½ years of their mortgage term.”

Rajpal noted that even though the bi-weekly mortgage isn’t appropriate for all borrowers, originators should present it as an option. “It’s a good selling point and offers them some good benefits that should be explained.”

A Jumbo Offering

Resort communities, second home markets and many other higher-priced markets are all prime locales for jumbo originating, which currently falls in the $417,000 to $650,000 range (with super jumbos to $1 million plus). While he has a mix of customer types, King has developed a special niche of second home and investment customers in several Florida communities. Of course, these aren’t the “average” buyers. “We’re seeing more investors and second home purchases by foreign nationals, someone who resides in another country, and is here as a temporary visitor on visa,” said King. “Lately the 7/1 ARM (amortizing) has been the most popular jumbo product.”

King noted that a majority of his business is in construction and lot financing, at a higher dollar volume. He doesn’t do much marketing; but prefers direct contact with his “high-end” referral sources. “I cultivate referral sources and they know that I have the expertise and with a company has breadth of services to offer a range of products. I’m targeting the Realtor or developer who does that price point.”

Mark Klein, an LO at Pacific Coast Lending, Agoura Hills, Calif., is a jumbo originator by choice—having selected that as his desired base when he began originating expensive Southern California region. “From day one, we went after the bigger loans and my most logical focus was CPA and financial planner clients,” he said. “To make more money, you need to go to the right referral sources. Our average loan size is about half a million dollars.” He added that the majority of his jumbo clients are self-employed.

Klein noted that to excel in the jumbo arena, originators should be well versed in the stated income category. “You need to know the investor guidelines and be familiar with the nuances of credit scores, liquid assets/reserves and LTV. “The most common product is the five-year fixed, interest-only, it’s generally some form of hybrid fixed/interest-only loan. Self-employed are generally interested in cash flow. We rarely do a 30-fixed product for jumbo borrowers.”

Despite the criticism of interest-only and other nontraditional mortgages, Moulton is a believer. “I think they’re still a good program, especially if the customer is getting bonuses or a commission (enabling them to handle the eventual additional payments),” he said. Moulton said his ideal I/O customer is one who is able to prepay a portion of the principal on some regular basis, so that he isn’t caught short when the five, seven, or 10-year term is up. “I don’t think this loan is for everyone,” he said. “For instance, it’s not right for someone with a fixed monthly income who wouldn’t be able to deal with the increase. However, someone with a commission or bonus situation can pay an extra amount (toward principal) at the end of the month, which will reduce their amount the following month.”

Ellis offers customers the more basic interest-only programs, for example, those that are fixed for five, seven and 10 years with no negative amortization or COFI ARMs. “I deal a lot in the high-end and my borrowers are dazzled by the automatic recasting of the interest-only after they chunk down the principal.” She agrees that it’s not necessarily suited for beginners. “I would not really consider the interest-only for a first-time homebuyer. I like to think of it as a sophisticated program that is not best suited for everyone, but is safe and sound for those who can handle it, perhaps those who will see appreciation and will make money on the appreciation, rather than the small amount going to principal each month.”

FHA Programs

FHA lending may seem too involved for some LOs, but it’s a major portion of Linda Davidson’s business, primarily because of her market. “Being in an area where the average sales price is $120,000, FHA makes a lot of sense to our buyers,” said Davidson, senior loan officer/underwriter at Service First Mortgage, Garland, Texas. “The most beneficial part of FHA is that we have the ability to underwrite using common sense versus having to use an AUS system. This allows us to give the buyer a market rate rather than taking them to a subprime market.”

Davidson noted that most of her buyers use a first-time homebuyer program to purchase. “The majority use the FHA 203b loan (normal FHA loan), but the 203k loan (home improvement wrapped into an FHA loan) has become more popular due to the new and improved changes in the guidelines,” she said. “We have also had the opportunity to use the FHA 203h program which is for buyers coming from an area that has been deemed as a federal disaster area (hurricane victims,) which gives them the ability to purchase without a down payment.”

Davidson has used a variety of strategies to market her FHA expertise. “For example, we participate in all of the first-time homebuyer programs in the area, market local builders whose houses are in the FHA price range, run an ad in the local real estate book (with a call-capture system) and teach classes to our Realtors on how to differentiate their listings from others in the neighborhood (advertising a $999 move in).”

Clearly this is just a sampling of the today’s varied residential loan menu. However, these originators have underscored the importance of adapting new and used programs to meet their clients’ diverse needs and generate name recognition in a crowded marketplace.

By David Robinson

Harnessing Your Ego-drive

Successful LOs are motivated by challenges and opportunities.

Someone once said that the level of success we achieve in life has much more to do with our tenacity than our talent. Here’s a case in point. I went to high school with a guy named Rick. In addition to being a real nice guy, he was a phenomenal basketball player. Playing one-on-one on any outdoor court, Rick could take on all comers with ease. (He used to smile while he played, almost to show that the game was so easy for him it was amusing.) Although he really enjoyed playing basketball, Rick, however, never played organized sports or even tried out for the high school basketball team. While Rick possessed the talent, he lacked the drive and tenacity for after-school practices, the fitness regimen, learning all the plays, and attending weekend games. Rick’s skills could have taken him to popularity, and even through a paid college education. But he simply didn’t have the heart for it.

There are a lot of extremely talented people working as loan originators who are doing so-so or even struggling to survive. While they have the essential skills of what it takes to do well in mortgage lending, they lack the fire, drive, tenacity, and “heart” to succeed. I talk frequently with sales managers and broker/owners who face this dilemma with their new hires. “I just don’t understand it,” they say. “That guy had all the right stuff to succeed. He had the personality, the brainpower, and the contacts. We trained him and spent time working closely with him to teach him the business. And yet, he failed. Why?” Indeed, why do people like this fail or perform only marginally in this business? An equally important question we should ask is: Why do so many “average” people do so well in mortgage lending?

You have no doubt completed a few self-assessment tests before. Honest answers to a good self-assessment can reveal a lot about who you are and what you have the potential of becoming. Before you read on, I’d like you to invest five minutes to take a simple self-assessment test. Read the 10 statements below and then mark the appropriate number next to each statement:

3 = For me, this statement is absolutely true
2 = For me, this statement is somewhat true
1 = For me, this statement is not true

  1. I am an extremely competitive person.
  2. It is important that I am admired and respected by my peers.
  3. I enjoy sales contests and perform even better when participating in a contest.
  4. It is important that I build a reputation for myself in my marketplace.
  5. Each time I reach a new level of success, I strive for the next level.
  6. I like to display trophies, plaques, and other signs of my accomplishments.
  7. It is important to me that I am (or become) one of the top loan originators in my office, my company, or my marketplace.
  8. I push myself hard every day, I expect a lot out of myself.
  9. I enjoy taking on new challenges and risks in my business.
  10. I would enjoy mentoring, coaching, or managing other loan originators to success.

Add up your total and mark it off to the side.

Two decades spent in this business has shown me that there are certain common characteristics of successful mortgage loan originators. While many come from different walks of life and conduct their business in different ways, most all LOs enjoy a universal trait: ego-drive. Ego-drive is a personal need for achievement in every endeavor, including sports, education, and career. Those individuals with strong ego-drive are always trying to better themselves and are motivated by challenges, opportunities, and the high standards they themselves create. Donald Trump has strong ego-drive, as does Oprah Winfrey, Tiger Woods, Hillary Clinton, and Bill Gates. Ego-drive is a positive, propelling force in their lives and one of the key factors in their success.

How is your ego-drive right now? While the self-assessment you completed is a short one, it will give you some insight into where you now stand.

If your total score was less than 20, you have low ego-drive. In essence, you are saying:

  • I am not very competitive.
  • I don’t like to push myself all that hard.
  • How I stack up in my company or industry doesn’t really mean much to me.
  • Admiration and respect from my peers doesn’t excite me.
  • I avoid a lot of new things and am fearful of taking risks
  • I don’t see myself advancing much beyond where I am now.

You may not like the sound of that, but it’s true. You might have other talents and attributes, but a strong ego-drive for success isn’t one of them. If I were your coach, I would ask you to seriously consider what you are doing in this business. Mortgage loan origination is a fast-paced, pay-for-performance based sales profession that is competitive and challenging and always changing. Your assessment results reveal that the tenacity to push yourself through your career day by day just isn’t there, and perhaps you’ve been wondering whether you are working for anything more than your next paycheck. It is time for a good “come-to-Moses” meeting with yourself and some somber soul-searching about your future. It is extremely rare that you see anyone with low ego-drive make it in competitive, professional selling.

If your total score was 20 to 25, you have moderate ego-drive. While some of the statements in the assessment describe you very well, others only partially define who you are and what you want. You are probably in the same boat with most mortgage originators in business today. You achieve moderate success month after month, but rarely lead the pack on your team or in your company. You are somewhat motivated by competition, contests, and comparisons to other loan officers. You push yourself, but only to a comfortable degree, and may shy away from taking on bigger challenges or taking risks by promoting a new product or trying a new marketing idea. You rely too much on your company, your product line, and your pricing for results. You look for others to move you forward.

Not happy with how that sounds? Want to change things? You need to begin to take a greater ownership for your results, your success, and your future. Don’t feel awkward about your ego-drive, it isn’t a bad thing. It’s not about bragging, beating others, or being self-absorbed. Ego-drive is about pushing yourself to become the great originator you have the capability and desire to be. In a business where you pretty much manage yourself, you have to be a tough manager. You have to want success for your own gratification (ego-drive defined) and realize that no one can push you, challenge you, and appreciate what you do more than you. Motivation comes from within. Passion and heart are also internal forces. Your score says you have the fire inside, now stoke it and watch what can happen. Let your ego-drive out and allow your desire for success take you to places you never before thought possible.

If your total score on my assessment was 25 to 30 (and you were honest in your answers), your ego-drive is in high gear. You are saying:

  • I am highly competitive and want to win.
  • I am out to build a solid reputation for myself in my profession.
  • I am never satisfied with what I have done, only with what I am going to do next.
  • I am willing to push myself to the limit, take on new challenges, evolve, and take risks.
  • I am looking for my next horizon; the next great opportunity.

Now, does that sound like a top performer? You bet it does! Top performers own extremely strong ego-drives. They are the pacesetters, the trendsetters, and the record setters of this industry. They are driven by an internal energy and initiative to succeed. Your score says you are one of them. You are either a high producer or on your way to becoming one of the best in the business. Tap into your high ego-drive. Use its dynamic force to accelerate you forward. There may be smarter loan originators with better products, or lower pricing, or snazzier marketing fliers than you, but they don’t have that magical ingredient you have: ego-drive. This strength will differentiate you and keep you going long after others quit or simply give up. For you, failure is not an option because you will not allow failure to happen. Achieving what you want is too important for you to settle for a life of mediocrity. You are the reason you are a success.

Yes, ego-drive is a powerful force in any sales profession. It can make you or break you. It will keep you strong and it will keep you challenged throughout your entire career. Ego-drive indicates, above all else, that you believe in yourself. And that alone says a lot about you.

By Douglas Smith

Originators Have An Affinity for Referral Partners

Loan originators share their techniques for establishing relationships with CPAs, financial planners and attorneys.

While many loan originators consider Realtors and builders to be the prime sources of referrals, others have turned elsewhere to seek profitable “partnerships.” They have established mutually beneficial associations with attorneys, CPAs, financial planners and others.

Following is a close-up look at what several successful originators are doing to market to and with these affinity partners.

Financial Planners
Some originators have experienced a gradual entrée into the affinity marketplace, resulting from their already established customer base. For example, Gina Jackson, Cornerstone Mortgage, Dallas, Texas, realized that a core part of her customer base was tied to a group of financial planners. “Working with planners started as a result of having a large percentage of high net-worth clients, many of whom used the same financial planning group,” she said. “I met the primary planners, did many of their own loans, and then they began referring customers to me. When they started a professional networking group, I became the mortgage person.”

Jackson subsequently joined the Dallas chapter of the Financial Planners Association as an affiliate member/sponsor and attends their regular events. “I was recently able to make a brief presentation at one of the luncheon meetings. In addition, I have access to the association’s membership and plan on sending an e-mail regarding my services.”

Steve Hines approached planners on an individual and corporate basis, introducing himself as a “no-frills” potential business partner. “I tell them that their customer is going to be happy (with his service) and that is what they want to hear,” said Hines, Southern Capital Resources, Birmingham, Ala. In their meetings, he (and company vice president Janie Hannah) evaluates his comfort level with them, as well as his perceived value as a referring partner. As he expanded his contacts, Hines hosted luncheons for North Alabama’s Financial Planners Association, enabling him to make presentations about his services, with an emphasis on the mortgage-related educational courses. “This was a way for them to develop a comfort level with me and my credibility as a mortgage consultant. I also suggested that I could refer clients to them, and they to me.”

Hines eventually took advantage of combined marketing efforts. For example, he has written articles for the association’s monthly newsletter and includes some of their writing in his publications. However, he has refrained from distributing mass mailings to financial planner clients. “I think that clients respond better to an individual contact, where the planner has referred us.”

Brian Comer, Advanced Mortgage Services, Norwell, Mass. got started by working with financial advisors at an American Express office. “They were easy to approach; they wanted to use my database as much as I did theirs,” he explained. “I met with a few planners and we discussed the potential of working together. We’ve done some joint marketing through each other’s database. For example, one planner has included a letter of introduction to me to their clients.”

Comer subsequently expanded his financial planner connection, by offering monthly seminars on reverse mortgages. “We developed a university style training room to provide seminars and hired an originator who specializes in reverse mortgages,” he said. “We help planners better understand what reverse mortgages are and how they can help their clients by showing that reverse mortgages can be an effective estate management tool. We’ve had a great response to the seminars, with a number of referrals recently.”

Marc Brinitzer, Big Valley Mortgage, Roseville, Calif., has taken the financial planner association in a slightly different direction, partially based on his own experience as a planner. He initially capitalized on his financial planning background by advising customers on their long-range housing/finance goals. He cultivated relationships with other financial planners as well. “I sent letters and met with them to explain our interest in developing a mutually beneficial referral arrangement. Most planners (and CPAs) believe they don’t get much business from originators; they’re more concerned with providing their clients with recommendations for other quality professional services.”

Brinitzer eventually took the next major step by adding a financial planner to his office. “This was someone who had previously counseled some of my borrowers and I thought there was a good fit so I put him on retainer.”

While he no longer focuses on such affinity relationships, John Hicks previously developed a successful working relationship with his CPA at American Express Financial Services. He created a marketing piece to present to them and offered to combine it with their own for a special mailing. The CPAs incorporated some of the information from the piece with the company mailing and introduced Hicks, who subsequently contacted clients from his CPA’s database, asking if they would like to receive e-mails, rate updates or newsletters. His name was already familiar to the clients, setting him apart from other LOs. “The conversion rates from these leads was probably 50-60 percent, as I was strongly recommended by someone they already have a relationship with,” said Hicks, M&I Bank, Maitland, Fla. “To maintain the reciprocal nature, I let them know what I was mailing each month and offered for them (CPA) to include something. It is not just about a network—it is about becoming growth partners.”

Scott Mazur, Professional Mortgage Partners, Downers Grove, Ill., got started with this niche after handling a few loans for CPAs, during which he assessed their client types. “If it (working with their clients) seems it might work out, I mention what kind of service I can offer, and try to arrange a lunch meeting at the CPA’s office (which he provides), where we can get together and discuss mutual areas of interest, rather than just ask for referrals,” said Mazur. “It’s a way to get acquainted with the CPA. Then we can go from there.”

He emphasizes his customer-centric service, such as same-day approval. “I offer to send the good faith estimate to them and their customer, showing that I was confident in what I could do for them,” he said. He also provides amortization schedules and other value-added material and sends periodic updates to show CPAs how he can help clients. “People love it when you tell them they can save $100,000 over 15 years and their CPAs also appreciate that,” he said. “It helps when you’re fresh in their minds, having received something from you.”

Mazur emphasized that it’s important to select the best referral sources at CPA and other firms. “You want to be meeting with the principals or others who are involved in the daily contact with their clients and more likely to give you referrals, rather than number crunchers who are in the backroom offices,” he said. “Overall I’ve found this to be a good niche, and more refreshing than working with real estate agents.”

Jack Lieberman stressed how basic the referral relationship concept can be with CPAs and other affinity partners. Lieberman, USA Mortgage, Austin, Texas, encourages the originators in his office to take a simple yet effective approach. “We follow the concept of developing a network, partly by surveying prospects to find out who their CPA, financial planner, attorney and other advisors are, so that we can subsequently contact them,” he said. “When we started, I was constantly on the phone introducing myself and stating ‘We have a mutual friend and I promised I’d call you. I wanted to see if we can help you now or in the future.’ Of course, I’d ask permission to call their CPA, attorney and others. This is how we expanded our database, which is the foundation of our business.”

Lieberman noted that when he speaks to CPA (and attorney) groups, he makes sure to provide a value-added message, devoid of self-promotion. “I talk about what will be of importance to them and their clients, such as home equity, credit issues and building their own practice through referral marketing,” he said. “I never talk about what I can do for them. I’ve had a great response (with referrals).”

Forget the attorney jokes, these business partners can be a valuable source of leads. For example, Comer learned that attorneys are especially receptive to referral working relationships, depending on their specialty. In addition to receiving referrals from elder care attorneys who attend his reverse mortgage seminars, he has benefited from contacts with divorce attorneys. Following initial meetings to discuss the potential of working together, he discovered another referral tactic. After receiving a customer referral from an attorney, Comer suggested to the borrower that he should consider taking the attorney to their closing. “Of course, customers are often nervous during the closing and having an attorney they know and trust can make them more comfortable,” said Comer. “And the attorneys appreciate the opportunity to be there.”

Mazur built a growing base with divorce attorneys as well. “There will always be situations where couples are parting ways and need a new home purchase or a need to refinance the previous property,” he stressed.

Roy Meshel, State Mortgage, Scottsdale, Ariz., has forged an informal network of attorney referrals through everyday contact rather than a targeted campaign. “I take a soft-sell approach,” he said. “I’ve established contacts with attorneys through a variety of ways, including social settings and my own personal experience. These include divorce, real estate and labor attorneys, the latter working with business owners and executives. Attorneys also introduce me to others at their law firm. The referrals we get are usually high-end loans.” Meshel noted that attorney referrals are especially valuable because the customers usually aren’t shoppers. “Clients trust their attorneys and typically take (their suggestion for) referrals without question.”

As these originators have illustrated, affinity referral relationships can be developed on an elementary scale or a more sophisticated approach. While the specific actions can vary, the end result is usually the same—a steady stream of customers who will continue to generate business.

By David Robinson

The Need for Esprit de Corps

“Esprit de corps provides people with a desire to focus their attention on creating success for their profession as a whole, rather than just doing their work in a corner.”

The mortgage origination industry has been taking a lot of shots lately. Big company settlements for consumer abuses make big headlines, and each day more mortgage broker fraud cases are made public. All of them reflect on the mortgage business in the perception of the public—our customers. Even though the bad apples comprise an appallingly small percentage of the origination community, the taint rises odiously from the bottom of the barrel and touches all in the industry. From the 5,000-foot view, it seems to come down to a sense of cohesion. The mortgage origination industry needs more esprit de corps to keep itself glued tightly together.

By definition, esprit de corps is a military concept, forged by those who faced death together on the battlefield. Leaders throughout history have understood that esprit is the intangible spark that enables people to prevail over seemingly impossible odds. How else could Caesar’s 55,000 legionaries triumph over almost 300,000 Gauls at Alesia, or Alexander’s 40,000 Macedonians defeat 250,000 Persians at Gaugamela? Tactics play a role, but esprit de corps makes a tremendous difference.

The mortgage origination industry’s sense of esprit is in the development stage. The industry is fairly new, only two decades old, really. But there are other factors slowing the growth of professional pride. For one, the industry is somewhat fragmented, with originators working for banks and mortgage bankers, as well as independent mortgage brokers. Among the brokers, there are also many working under the shingle of a net branch provider, sometimes co-branded with their own name and sometimes not. There is also vigorous competition from retail and Internet-direct lenders who are certainly mortgage originators, but are well outside the realm typically associated with the term. It’s tough to build a sense of community, of “brotherhood in arms” when there are so many component members. Another factor is the level of activity that is required to be successful in loan origination. It’s beyond a full-time job when you’re building a company; it’s absorbing to the point of leaving little room for other activities, no matter how constructive.

These impediments do not diminish the importance of esprit, given the current climate of suspicion and rhetoric about originators in general and mortgage brokers in particular. The NAMB is working hard to build solidarity among its members and to grow its membership. They understand there is strength in numbers and are doing much to increase those numbers—and along with them the odds of maintaining dominance at the all-important point of sale. The education initiatives are also headed in the right direction, but more people need to get with the program NAMB has put in place, which calls for a “drive for designation” on the part of management. Oftentimes, this sort of aim needs to be driven at the grass roots level, which happens locally if the esprit factor is to exceed the hassle factor when there are loans to be funded.

Creating esprit de corps in an entire industry has to start somewhere. The central value, according to military leaders, is integrity. “Integrity is the foundation of leadership and the key to building organizational esprit de corps,” according to comments by Air Force Wing Commander J.R. Tillery. “At the heart of integrity is a consistent value system that promotes respect and trust.” This is certainly a good place to start when it comes to your own shop. If you are a leader in your business, you can readily demonstrate this value. Col. Tillery steers us to “The Art of the Leader,” by Maj. Gen. Bill Cohen, who advises, “If you want to build esprit de corps, you must demonstrate integrity and if you do, it won’t be long before everyone in your organization knows that you can be trusted, that you say what you mean and you mean what you say. The members of your organization will demonstrate integrity in dealing with you, and each other, and the esprit de corps in your organization will soar.” If this is too simplistic for the industry at large, it certainly carries huge validity for your organization. As a core value, integrity is, well, integral.

What are some other ways to add esprit de corps within your business and within your industry as a whole? Consider some of these suggestions:

  • Band together. If you’re not a member of your local chapter, change that. Get involved with the national organization. NAMB and MBA are working hard to unite the industry. As a single originator or as a single origination business, you’ve got about as much clout as a letter to the editor. As a member of a profession that touches two thirds of the mortgages originated in this country, you’re somebody, but only if you speak as a single voice.
  • Get active. Once a member, participate actively in your local industry association chapter and in the NAMB or MBA. It’s like a love affair: you’ll get out of it what you put into it, so it’s no time to sit back and not pull your weight. You either have a stake in your long-term success or you don’t. Offer to serve on committees to strengthen your chapter. Teach classes, organize seminars, do whatever you can to increase the professionalism of your association’s members, because they reflect on you.
  • Rock the vote. Bring others into the organized sector of the industry; too many brokers out there are content to let others do the heavy lifting. Be a recruiter. Or better yet, be what the computer industry calls an “evangelist.” An evangelist is someone who visits user groups and talks up the product, pointing out the advantages of using, say, a Macintosh over a windows machine. They take the message directly to the people who will benefit and point out the advantages of the product—in this case, industry involvement. There are even benefits apart from the obvious ones by participating in NAMB’s Medallion Program.
  • Get educated. Professional designations bring you closer to your ‘band of brothers’ and sisters. NAMB has created good programs to boost the cachet of their Certified Mortgage Consultant and Certified Residential Mortgage Specialist designations. There are several hundred CMC and CRMS designees; there need to be thousands. Several colleges and universities have introduced MBAs in real estate finance. Industry associations should work with institutions to make these programs as meaningful for their members as possible. While they’re at it, these organizations can lend instructional expertise and co-brand the program with the college in the process. This would certainly boost the prestige of the association, and by extension, its members.
  • Run for office. It’s high time for more mortgage industry representation in government, both local and national. More senior executives in lending and brokering are already giving back by serving in national association offices. We have a lot of highly intelligent people in this industry, and it would be nice to have more intelligent people in government. Imagine, for example, if NHEMA’s Debbie Rosen, the MBA’s John Robbins, and NAMB’s Jim Nabors were representing us on Capitol Hill? The industry continues to suffer, especially at the state level, from legislation that seeks to protect consumers but ends up making life impossible for lending. Having more industry-experienced people in those state houses could help a lot—and boost the esprit of the industry in the process.
  • Meet the minds. It’s a good idea for leaders of the major trade organizations to support each other’s gatherings. By making themselves available for roundtables at industry conventions, they would be making meaningful contact with all points of the process, from the point of sale to the point of investment. Imagine, for example, if Rosen, Robbins, and Nabors were available for panels together, talking about the salient issues affecting each of their associations’ members. Great for the associations, great for the listeners, great for the press, always looking for stories and quotes, and great for the business of mortgage origination, which would gain knowledge, prestige and esprit.
  • Show the colors. The industry will never have a fellowship of the ring as powerful as that of the United States Naval Academy. But you can always wear the pin of your local and/or national organization. As the industry gains prestige the pin will grow in esteem for wearers and customers alike. Use the logos of your associations in your print and Internet advertising, for two reasons: it will raise the public’s awareness of the existence of the organizations and it will show that you care enough to meet the professional standards required to belong. Think of it as the Health Department’s “A” placard in the window of a restaurant. Many people don’t dine without the sign.
  • Think locally, act globally. Build integrity in your own organization and you plant seeds that will grow beyond your sphere and into the industry as a whole. This is a slow but irrevocable process that the Mortgage Bankers Association has already experienced. Their CMB designation, for example, had little cachet 30 years ago, even though it was harder to obtain then. The group has considerable clout across the halls of congress and in the financial community. Members and associate members alike proudly display the MBA’s placard in offices, in exhibit booths and in their advertising for the simple reason that they represent professionalism.

The NAMB could have even more name/image recognition success for a simple reason—their members have more access to consumers by virtue of controlling the point of sale. As the association’s prestige increases, so does the esprit of its members.

And what, exactly, would the benefit be of increased esprit de corps for the business of mortgage origination? How about additional consumer confidence, less government persecution, decreased competition by virtue of obsoleting those who can’t deal with raising the bar for admission to the business, and increased market share. The other big gain would be increased respect among regulators and Wall Street, along with a place at the table when decisions are made that affect the business at street level—product design, as an example. It’s not a small thing.

By James Hennessy

A Superstar is Born

The essential qualities of a top producing loan originator.

Today, somewhere in America, the next mortgage originator Superstars are being born. New to mortgage lending and still learning how to spell FHA, these rookie originators have taken on the challenges of a new career with anticipation…and probably much apprehension. It’s a long road to success, but these men and women possess the skills and stamina it will take for that journey. Although they may not yet know it, in a few years people will celebrate their achievements and recognize them among the best in the business—as Superstars!

Today’s Superstars all pretty much started out the same way. We hear and read about $100 million loan originators, $500 million loan originators, even $1 billion loan originators. What we must remember is that they all began at the bottom; new to the industry with no experience, little knowledge, no client base, and a head full of dreams and fears. I interviewed a $125 million Superstar and 15-year veteran last year who confessed: “If someone would have told me back when I started in the mortgage business that I’d achieve this level of success, I would have never believed them. I had my sights set on making $100,000 a year tops. If I reached that, I figured I will have died and gone to heaven.”

It’s fascinating to talk to Superstars like these about their rise to the top. One common thread you’ll find is that most of them got into the business quite by accident and many had no initial intention of staying for a life-long career. “A friend of mine talked me into this job a few years ago when I got laid off from a tech job,” one very successful originator shared with me. “I saw it as a temporary thing. But after I got into this, I learned to like it; not just the money, but the whole idea of what I was doing.” That Superstar today writes about 300 loans a year from his broker shop in Connecticut. Like others, he did not find his passion by design, his passion accidentally found him.

This month we spotlight the top mortgage loan originators in America in this issue of Mortgage Originator Magazine. As we gaze at the names and phenomenal numbers they produce, we are awestruck by their achievements. It begs us to ask those most obvious questions: Who are these people? How do they do it?

The DNA of a Superstar
It is my belief that every Superstar loan originator shares a common DNA; a make-up of traits and characteristics that distinguishes him or her from the average or mediocre producers. In meeting many such individuals, I have noticed five things they all have in common:

  1. “Passionate Enthusiasm.” I watched a TV interview the other day with Jerome “The Bus” Bettis, star running back for the Super Bowl champion Pittsburgh Steelers. He was talking about his difficult decision on retirement from pro football. This is a man who has been obsessed with what he does for a living. The workouts, the practices, films, play studying, and weekend games are what he lives for. He pours himself into his profession because he is his profession in every way. Superstar originators are no different. They play the game not just because they make great money, but also because they love to play the game. Superstars love what they do, and it shows. This drive, passion, and excitement for the career they’ve found are reflected in their work every day and with every customer they meet.
  2. “People Power.” Superstars know that it is people who make the business go ’round. They don’t hide in their offices or shy away from introductions. Superstars are out-reaching types of folk who enjoy meeting and working with others. This not only includes borrowers, real estate agents and builders, but appraisers, loan processors, underwriters, home inspectors, attorneys, other originators, and more. They understand that mortgage lending is really not a paper business, but first and foremost a people business and a community business. They embrace the fact that the more people you know, the more contacts and opportunities you create. Superstars have established a strong personal network that produces dozens of new prospects for them every week.
  3. “Sponge Brains.” Not long ago I had the chance to conduct a research project for a major mortgage company with thousands of loan originators. The purpose of the project was to interview the top 10 percent of the sales force and determine what they felt separated them from the rest. The #1 answer most often mentioned as the reason for their success was the fact that they were “students of their profession.” It is this group of individuals, the Superstars, who are most likely to read good books, listen to sales CDs, and attend seminars. They hire personal coaches, study new products, learn the latest technology, and expand their mental scope of knowledge year after year. They are on a mission of learning, soaking up everything they can, feeling that to maintain their competitive edge, they can never know enough. They are “sponge brains.”
  4. “Roll-the-Dice Resourcefulness.” Superstars got where they are at today because they were willing to take some risks. As their business grew, they had to evolve and grow with it. That is why you’ll see Superstars exercise their resourcefulness all the time. They spend money to advertise, hire personal assistants, set up state-of-the-art Web sites, approach emerging markets, and constantly tweak and experiment with their systems. They gamble, try new things, and are willing to be seen as a bit of a maverick. Superstars know that mediocre people follow in the path of other mediocre people, and that to be out in the front of the pack, you’ve got to be willing to be a leader, not a follower. Being a leader means taking some risks and doing what everyone else is not doing.
  5. “Horizon Vision.” Imagine you are standing in a field and begin walking toward the horizon. While you may reach certain landmarks on your way, you never reach the horizon itself. The horizon keeps moving forward, always there, but always changing and just out of reach. This is the best way I can illustrate how Superstars see their career and their goals. First, they are long-term thinkers. They don’t just try to make it through the month; they are focused on building a successful business practice over many years, down the horizon. When they reach certain goals, say 10 closings a month, or $25 million in volume a year, they keep looking beyond at what’s next. Superstars are rarely content to rest on their laurels and are never short-timers in the business. They are always looking far down the road of success to that next horizon and where they want to go next.

Playing in the Big Leagues
So, do you think you have the DNA it takes to join the ranks of the Superstars? Good! You’ve passed the first test. Now, to join the ranks of the Superstars, you better be ready to play the game—and play it big! Superstars think big and act big. They are dealing with hundreds of millions of dollars of mortgage loans every year, hundreds of customers, and earning hundreds of thousands, perhaps millions of dollars, in personal income. The realm of Superstardom is no place for sissies. Consider these true stories:

  • There is a Superstar in Tennessee who throws a giant family outing and Bar-B-Que picnic for her clients every year. She hires a band, clowns, and caterers, reserves a public park, and invites hundreds of referral clients and past customers to her event at a cost of thousands of dollars out of her pocket.
  • A Superstar in Florida teaches the only real estate school license certification course in his market. He meets every new agent because to become a licensed Realtor in his city, you are required to go though his course.
  • In Michigan, there is a top producer who takes off one full day each month, without fail, to work on her business. She retreats to her community library for a full eight-hour day to work on her business plan and strategies for the upcoming month.
  • A Texas Superstar spends over $5,000 a month to mail postcards to his database of past clients asking for their continued and referral business.
  • In Illinois, there is a Superstar loan originator who purchased 10 billboards with his picture on them. The next time you are driving through Chicago, check out his huge billboard signs along the interstate sporting his message and smiling face.
  • In Washington, a Superstar rents out an entire movie theatre once a year and invites her clients and their families to a private showing of a first run feature—on her!
  • A Superstar in California, now about 15 years in the business and looking at retirement, has hired an apprentice to take over his business in a couple of years. The apprentice will pay the Superstar $50,000 a year in residual income for 10 years to acquire his database and book of business. This Superstar will retire at age 45, not only a millionaire, but with an additional $500,000 in income!

There are countless stories of what today’s Superstars are doing to build, grow, and sustain their successful businesses. These are only a few. I’m sure every one of the Top 200 featured in this year’s Superstar list could add another story to my list. These are stories we need to hear because they inspire us, and show us what is required if we want to be Superstars ourselves. The game of mortgage lending is played at many levels. At what level do you now play the game? Do you have what it takes to play at the Superstar level?

The Next Generation of Superstars
I began thinking about how Superstars will look 10 tears from now, in 2016. Will they be a whole lot different from what we see today? I think that the same DNA mix will be needed, as well as most of the sales skills and attitudes. But the business is always changing, and tomorrow’s Superstars will change with it. Tomorrow’s Superstars will be different in three ways from many Superstars today:

  1. Consumer-direct Mindset. It is clear that Realtors and builders are losing their grip of control they once had. Today’s consumers are more informed and sophisticated, and rely less on the referral of their agent or builder. They choose to seek out answers and resources on their own. This will accelerate in the years to come. As more and more people “see their lender first,” Superstars will depend less and less on these strategic referral sources and spend more time and money targeting the consumers directly. It is becoming a race to the customer, and whoever gets their first wins the business and controls the relationship.
  2. Adaptation to High Tech. It would be a conspicuous oversight to mention the future of lending without talking about technology. Just a few years ago it was hard for us to believe that people would actually apply for a $250,000 mortgage loan on the Internet and close that loan without ever walking into a lending office or even meeting their loan officer who arranged the transaction. Many said it would never happen. But that same scenario now takes place hundreds of times every day. This trend will grow. My daughter, now a sprite 14-years old, is much more computer savvy than I am and can navigate the Internet with complete confidence. By the time she’s 24 and ready to buy and finance her first house, she’ll probably choose the method that she is most comfortable with—the computer. So will the millions of others in her age group. Tomorrow’s Superstars will take advantage of every technological asset they can find because they know that the best way to do business is the way the customer wants to do business. Tomorrow’s consumers will want to acquire information on home financing and borrow money quickly, conveniently, and stress-free. The Superstars will be ready for them.
  3. Proactive Management of the Mortgage Loan. We have seen this growing over the past few years, yet only a small percentage of originators (mostly the Superstars) have embraced it. The concept is taking a proactive position on managing your client’s mortgage “portfolio.” No longer will we watch for rates to drop and wait for people to call us. We will act similar to stock brokers and manage opportunities for our customers. When Superstars see the market move, their advanced technology that tracks their customer’s portfolios will alert them that an opportunity exists. The mortgage professional will phone or email the customer with the opportunity to refinance, consolidate debt, purchase an investment property, or convert from an adjustable rate product into a fixed-rate loan. This will revolutionize the mortgage business in ways we can’t even imagine now. Tomorrow’s Superstars will evolve to fulfill this role and in turn rule the industry.

A Giant Step Forward
No one, no matter how skilled or talented, climbs the ladder of success in this business to Superstardom overnight. Like climbing a ladder, becoming a Superstar happens in steps, one move at a time. Small moves lead to big moves and big moves lead to big results. If you are ready to start your climb to Superstardom, consider some of the steps you may have to take. For example:

  • Sit down and write a business plan.
  • Jettison low performing real estate agents.
  • Purchase new technology (hardware and software).
  • Build and manage a client database.
  • Hire a personal assistant, maybe two or three.
  • Learn new products.
  • Start consumer-direct marketing.
  • Attend several sales seminars.
  • Join networking clubs and civic organizations.
  • Tear up your resume (remember that this is it!)
  • Spend 5 to 10 percent of your income on marketing.
  • Double your annual production goal every year.

There is nothing on this list of activities that is impossible, since many Superstars have done all of them. But it is a fact that many (and I suppose we can say most) loan originators will never reach the halls of Superstardom because they are not willing to do these things. They don’t want to take the time to write a business plan, they don’t maintain a database of clients, and they are afraid to get rid of under-performing real estate agent relationships. They don’t want to hire an assistant, they won’t go to seminars, and they are reluctant to spend any money. In some ways that’s good. It is good because if you truly want to become a Superstar, the pathway is clear and the competition is light. Go for it!

David, a good friend of mine who was one of my first mentors in the mortgage business, recently retired. He’s a rich and happy man. He enjoyed a long and satisfying career. He made a lot of money, he met and worked with hundreds of fun and interesting people, and helped thousands of his customers fulfill their American Dream. Most importantly, he left a legacy for others to follow. He is a Superstar in my book, one who helped show me the way to success. The opportunity is there for you to be the next “David” to someone and to enjoy the riches of a well-lived life. How far you choose to go in this business and what you hope to achieve is up to you. There are no limits but those you place upon yourself. You could very well be this industry’s next Superstar.

By Douglas Smith

Making Lifelong Customers

The art of developing customer-for-life campaigns.

Most loan originators know the importance of maintaining long-term loyalty with their customers. After making sure the initial transaction is a positive experience, the next step is staying in touch with customers, so that a competitor’s marketing doesn’t interfere with your valuable relationship.

Some LOs have very involved and expensive programs, while others take a more basic approach. However, they share a similar goal—to keep in contact with past customers on a regular basis. “It’s all name recognition,” said Larry Montani, a mortgage officer with First Interstate Financial Corp., Shrewsbury, N.J. “I can’t tell you the number of people who note that they were thinking of refinancing or purchasing and got our card.”
Added David Jaffe, originator with Chase Manhattan Mortgage in Westlake Village, Calif., “Staying in touch with your closed loan customers is the absolute best use of your time and resources to maintain and grow your business.”

Following is an overview of what some originators are doing to make sure their customers never forget them.

Database Support
Of course, you can’t have an effective customer-for-life program without an organized database. Scraps of paper and logbooks are passé, woefully inadequate to keep current with an expanding customer base. Jim Schmidt realized this early in his origination career, and now uses a combination of Outlook and Excel to maintain his database and schedule follow-up materials. Outlook is suited for everyday contact—including his basic e-mail updates—and Excel (Office Suite program) enables him to organize a database in such categories as rate, date closed, term, and attorney. “For example, I can sort past customers by their rates, or use a combination of factors, including customers who have a 15-year fixed, at a certain rate that closed during a specific time period. Then I copy and paste names into an e-mail I’ve prepared and it’s sent,” said Schmidt, an originator with Poli Mortgage Group, Norwood, Mass. “It’s a valuable tool for sorting data in a variety of ways.”

Schmidt said that ACT! or Goldmine probably would be “more sophisticated,” but that he prefers his current set-up because it’s already included within Office Suite. “It’s easy to use,” he said.

Randy Lund, a loan consultant with Silver State Mortgage in Las Vegas, NV, likes Goldmine because of the flexibility it offers. The program keeps track of past borrowers along with those who have been pre-qualified but not yet become customers. Lund can organize his database into various subgroups including Realtors and past customers, along with trigger dates, such as birthdays and loan anniversaries. “Goldmine is the backbone of much of my marketing program,” he said.

In addition, it helps him monitor his referral partnerships. “We’re able to track the quality of referrals,” he said. “For instance, we can analyze the number of an agent’s leads that actually turn into closed loans.”

Other originators prefer ACT! or other programs, including those highlighted in the Database Roundtable.

Regular Mailers
Once the deal has closed, many originators rely on “snail mail” to maintain visibility with their past customers. There are a variety of options from which to choose.

Newsletters- There is an abundance of newsletter options; some have a mainstream design and others are a bit different. Dorothy Reid distributes a quarterly newsletter—”Homes & Neighbors”—to past customers as well as agents. The newsletter (from offers general real estate/homeowner information, and includes her photo. “I’m providing them with value-added information and this gives the borrower one more reason to use me rather than the competition,” said Reid, president of Mortgage Specialists of Alabama, Inc. in Birmingham, Ala.

Cindy Worrell, an originator with Orchard Mortgage in Raynham, Mass. has proven that you don’t need an expensive format to gain reader interest. She and her husband-partner, Geoff, send customers a multi-page letter printed on colored stock. “Our newsletters are not likely to be viewed as a glossy marketing piece that may be passed along as junk mail,” she said. Each newsletter features a series of tips and, loan product updates, homeowner resources, and general/industry news, along with a listing of their free reports. The newsletter also contains their “letter from our heart,” a personal greeting that further helps strengthen the bond with their “family” of customers. “Many times we try to involve younger members of the family in our newsletter by promoting contests such as a coloring contest with a U.S. Savings bond as a prize,” she said.

Schmidt has learned that e-mail newsletters can be very effective. His quarterly one- page newsletter (using a template from Constant addresses a few different items and always describes one new loan program, such as interest-only mortgages, and may feature a cartoon as well. “I try to keep it simple he said, and offer a chance for them to pass the newsletter on to others simply by clicking on a link.”

Schmidt often incorporates action items in his newsletter, as a way to encourage customer involvement. For example, he will provide a trivia question that asks readers to call with their answer, for possible participation in a raffle drawing. “This gives us a chance to talk, and I can ask how I can help them on another loan, and ask for referrals.”

Postcards- Mary Glavin, mortgage partner at Professional Mortgage Partners, Inc., Downer’s Grove, Ill., considers postcards to be the most successful mailer. “Approximately 50 percent of my business comes from past client so it’s important to keep in touch,” she stressed. “I think you have a better chance of customers at least glancing at a postcard rather than reading a letter.” She sends a steady stream of postcards, many on “minor” holidays such as Valentine’s Day, St. Patrick’s Day, and 4th of July. Glavin tries to include a photo of herself, to help personalize the mail. A St. Patrick’s Day card featured an illustration of a leprechaun with Glavin’s face superimposed on the head, along with the headline “Just wanted to keep my face in front of you.” A summertime card shows her cooking at a barbecue with the copy “Rates are hot.”

Glavin agreed with other originators that past customers often receive a card or newsletter at just the right time. “There are instances where a past customer had been talking to a friend who was interested in a purchase or refinance,” she explained. “The customer tell us ‘I was just talking to someone and now I can give them your postcard.'”

Montani sends approximately 4,500 recipe, calendar, and comedy cards every month. Eight months of the year, he sends customers two cards per month—one is a recipe card and the other is a calendar card, and the other four months they receive a holiday greeting card as well. “When I first sent the recipe cards, people laughed at me,” said Montani. “But I’ve had people say that they wait for them every month. It’s not so much a matter of what you mail, but that you’re consistent in sending something.”

He noted that the cards include brief copy that ties into a mortgage related theme. “The cards have generated tremendous results,” he said. “I can’t tell you the amount of business I’ve had from direct mail alone. It’s my most effective marketing.”

Other Mailers- Originators also have mailed a variety of other items to past customers, including calendars, smoke alarm batteries, gift certificates, and other items. For instance, Kristen Pope, an originator with Access Mortgage, Destiny, Fla. has provided her past customers with a gift certificate to a popular restaurant, in addition to a one-year subscription to the quarterly Coastal Homes & Lifestyles magazine. “Being from a second home market, my clients love to be reminded of the beach,” she said. “They like to feel as if they are part of the community and this publication keeps them up-to-date on local events. The magazine is a remembrance of the times they have spent here with their family.”

Cindy Ertman, originator and vice president at Platinum Capital Group, Manhattan, Beach, Calif. and loan originator Linda Buchanan, developed a colorful marketing piece to send to their past customers and others. The front of the flier has a picture of them accompanied by the phrase: “If you want the best on the field, Go with the Proven All-Stars.” Inside there is a full season schedule for the Los Angeles Dodgers and LosAngeles/Anaheim Angels. She’s done a similar mailing that includes football and basketball schedules. “This is something that people will keep on their refrigerator or desk at work, said Ertman. “I no longer send postcards. We’re focusing marketing on those things that add value, that customers won’t throw away.”

Certainly one of the easiest ways to maintain contact is with simple e-mail updates. Lund makes sure he obtains the e-mail addresses of all of his customers. His bi-weekly e-mails include general news updates, interest rate changes, and industry trend news, as well as birthday greetings. “We’ve found this to be very well received,” said Lund. “Where we used to fax so many things, now we’re using e-mails. People have become more tech savvy and are used to this. It’s so much easier.”

Rick Jones, president of Cal Pacific Mortgage, San Diego, Calif., uses monthly e-mails as a way to stay in front of past customers. The e-mails highlight loan information as well as more general news and advice for such topics as tax time preparation and dealing with telemarketers. He now uses an ACT! add-on program that makes it easier to e-mail to a larger groups. “This is a great way to stay in touch with customers,” he said.

Annual Mortgage Review
The annual mortgage review is yet another example of a customer-for-life technique. Laura Lasher explains her Mortgage Fitness Review in a brief letter to customers on the first anniversary of their closing. “Together we review your short- and long-term plans, to assess whether you have the most cost-effective home financing package to meet your budget and needs,” says the letter. “I’ll suggest that they may want to meet to discuss specific areas,” noted Lasher, a home mortgage consultant with Wells Fargo Home Mortgage, Omaha, Neb.

Lasher notes that this is a subtle, yet effective way to generate customer loyalty. “It puts us in front of them, offering a personal note that we are here to focus on their needs. This is one easy step to stay visible.”

Jaffe’s mortgage review process incorporates a report from Mortgage Coach to show product options that he mails to customers. “We include that (and Rate Watch report) with an introductory letter and a questionnaire asking whether or not they plan to move in the near future, if they expect changes in their income, and related areas,” he said. “Two weeks later we’ll follow up with a call to see if they’re interested, and if a new loan program product might be appropriate for them.”

Jaffe noted that the mortgage evaluation provides a value-added service for customers, as well as another chance to remind them that you want their long-term business. “It shows that we’re looking out for the best interests of our customers,” he said.

Hosting events requires an investment of time and money, but this can be an effective method of enhancing rapport with past customers. Of course, you can’t invite just referral partners to events, as that would be a RESPA violation. However, if you didn’t want to invite all of your past customers, you could limit the invitation list to recently closed customers. Worrell has held a series of events, including golf tournament/fundraiser, piñata party for children, summer barbecue picnic party, magic show, and holiday gatherings. “”Face-to-face client celebrations allow clients to interface with us in our business home,” said Worrell. “It enables us to host events and treat them as guests in our office with a non-business and casual focus, allowing the relationship to develop further and with a personal dynamic.”

She strives to include customers’ families at many of the events. “By inviting the entire family and their friends/families, it allows our families to meet and share quality time together without the direct focus of business. It helps develop an incredible bond.”

Getting it done
One of the major challenges for maintaining customer-for-life campaigns is making sure that you follow-through. Many originators have outlined successful strategies, only to get busy and stop mailing or calling after a few months. Pope knew that to execute her customer follow-up program, she needed some help, and she preferred to have an in-house resource. “Implementation is not always my strong point,” she said. “I didn’t want to outsource because I needed someone who has a personal relationship and understanding of who my clients are and what their specific needs might be. I hired a marketing coordinator to help me strategize and implement a 12-month marketing plan.”

Other originators have determined that outsourcing is a better way to accomplish their customer marketing campaign. For example, Doug Grothjan, originator and branch manager at Charter Funding, Dayton, Ohio, stated that “I tried to do it on my own,” but realized the customer follow-up took too much time. He turned to the Turning Point, customer relationship management (CRM) specialists, to coordinate his program that currently includes a gift and then greeting/other cards sent to his customers on a quarterly basis. “They’re getting something from me five times a year for a three-year period and it’s all automatic,” he said. Grothjan explained that he regularly provides a list of his customers to Turning Point, so that they can distribute the various items on his behalf, and then provide him with a management report to update him on all activity. “I don’t have to worry about customer retention; it’s all taken care of,” he said. “Of all the marketing I do, it works the best.”

A customer-for-life campaign doesn’t have to be expensive or overly complicated. It should be consistent and ideally slightly distinct from your competitors’ approach. As most successful originators will stress, the key is to do something to stay in touch with your past customers, who are usually your most valuable source of referrals.

By David Robinson

When it’s All About Them: The Hazards of Dealing With High-Maintenance People

Working with prima-donna team members.

As the football season reaches its crescendo and another production year begins, our eyes tend to be focused on superstars. If your NFL team is entering the playoffs, it probably has a few. If your origination team had a record year, you probably have a few as well. If your results left something to be desired, you probably would like to acquire a superstar or two to boost production to desired levels.

Superstars come with a price, both in the NFL and in our business. Often the price in dollars is well worth the results obtained, as the playoff-bound NFL teams can attest. More often, superstars absorb financial resources that don’t allow their teams to support other high-caliber players, and the team is unsuccessful. But sometimes the superstars come with a price that is simply too high. Not in money, but in the maintenance required to keep them functioning.

Like thoroughbred horses, top performers, particularly among salespeople, require a lot of special handling. The same qualities that make them successful often make them hard to handle: large ego, self-centeredness, hypersensitive to criticism, highly competitive nature. If you’re having issues with someone like this, don’t look to the NFL for sympathy—they deal with people like these on a daily basis. Sometimes the individual’s behavior is so far beyond acceptable limits that management has to do something for the good of the team. Sometimes they simply have to cut him loose, even if it costs millions of dollars to so.

Midway through the season, Terrell Owens became the poster child for the hazards of dealing with high-maintenance people. Undeniably talented, his ability to catch passes for the Philadelphia Eagles was eclipsed by the furor he caused in the locker room and in the press. He feuded with management, he feuded with his quarterback, and he feuded with world at large for not recognizing his 100th touchdown reception with enough fanfare. He embarrassed his team in the media when interviewed without the presence of his mouthpiece/agent to the extent that the Eagles decided they were better off without T.O. They suspended him without pay before releasing him, presumably (at this writing) to be picked up by another team that thinks he can be managed. Keeping in mind the Eagles were the NFC champions last year and that Owens had a lot to do with getting them there, one gets an appreciation for just how draconian getting rid of T.O. really was.

Just about everyone who has managed a sales force has had to deal with high-maintenance people, the worst of whom achieve the status of fully-fledged prima donnas. At what point do such people outlive their usefulness to the team and how does a manager interdict that process to salvage them? This depends on the manager, of course, and his or her tolerance for such people. For most organizations, regardless of size, there comes a time when the point of diminishing returns becomes a reality, and action must be taken.

High producers often get away with murder, particularly when they are present in numbers. A mega-mortgage bank from a decade ago (since acquired), was famous for caving into its sale force on everything from commissions to behavioral disputes. The people managing them sardonically referred to corporate’s attitude as “managing from their knees.” On one occasion, a loan officer actually threatened the life of an assistant underwriter and was never so much as reprimanded. Senior management did nothing because this person was “one of our top performers” and the injured party was begged not to report the threat to the authorities, no matter how seriously it was taken.

More typical is the realistic approach taken by a senior executive upon receiving a complaint about an AE who blew up in front of the entire office at an underwriter who was holding up a transaction. The scene caused a major morale shrinkage and the underwriter and her team were in danger of quitting. The AE was unrepentant and the manager feared a permanent rift between the AE and the rest of the production team. “Well, let me ask a question first,” the exec said. “What kind of month is she having?”

It’s a fine line between “high-maintenance” and “can’t live with ’em.” Having the right management perspective is essential to knowing which is which. John Volpe, CEO of Nova Home Loans in Tucson, Ariz., feels the analogy between business and football is entirely valid. A top loan officer in his own right, Volpe understands both the management and production sides, and believes that the head coach’s first job is communication. A good head coach can only build a championship team if he or she communicates their philosophy effectively, because otherwise, he says, “You have players going in opposite directions.”

Does a heavy team orientation leave room for a high performer to stretch his or her wings and occasionally become demanding? Yes, as long as “demanding” doesn’t get out of hand. It doesn’t mean your deals are more important than someone else’s deals when competing for company resources, it doesn’t mean you are “better” than anyone else in the organization, even if your job is higher in profile than others. “Team” means individuals striving as a unit to achieve a result; tantalizingly simple in concept if dauntingly difficult to create in reality.

“The head coach needs to instill and enforce a ‘team’ philosophy within his players,” according to Volpe. “You will occasionally come across a few prima donnas who poison the rest of the team, making it difficult to win championships,” he said. “Usually the players end up driving that prima donna off the team. If not, then the head coach must do so.”

But what about the uber-talented player like Terrell Owens, who can turn a game around with a catch? What can you do when an impact player like Owens brings in business but impacts the team negatively? Owens is a key player, Volpe observes, but if you look closely, he tends to slack off and not block for the ball carrier downfield if the ball isn’t thrown to him. In other words, he gets lazy and doesn’t help the team. “This would be the same as one of my LO assistants refusing to take a phone call from a borrower who was working with another LO assistant of mine who happened to be out of the office due to illness. The attitude of an Owens-type loan officer is, ‘Hey, this is not my deal. Why should I waste my time and energy on this phone call when I could be working on one of my own deals?'”

This is where, Volpe believes, a manager has to be creative. Not only with instilling a team ethic to prevent such things from happening, but also by modifying the compensation approach to bring about the behavior he seeks. “I don’t pay my LO assistants commissions based on their individual deals,” he says. “Instead I pay tiered bonuses on our entire team’s production. Now, if one of my LO assistants is on vacation or sick, another LO assistant will take that call and cover for his teammate.”

At some point, if the team member doesn’t come around, the manager has to act. What is that point? It happens when someone is irretrievably negative to point of adversely affecting the attitudes of other team members. It’s happened to most of us, when one person stirs up so much resentment, controversy, drama, and bitterness they simply have to go. In Volpe’s football analogy, “It’s the head coach’s job to cut that player from the team.”

Barry Habib agrees. As the nationally renowned sales trainer for CTX Mortgage and the CEO of the Mortgage Market Guide, he’s dealt with thousands of sales professionals and their managers over the years. He has also originated over $1.7 billion in personal production, so he understands the dynamics of the origination environment and the importance of teamwork.

“I’ll never be held hostage,” he says. “The graveyards are full of irreplaceable people. If you give in, you’ll never grow a team. You have to try to bring them around, but you have to cut out a cancer. You’ll build a team and send a clear message to other potential problems on the team.”

He is quick to acknowledge that high performers very often require higher maintenance and time involvement from management, but it has to be in a positive vein, not putting the manager in a defensive bind. “Some people need a little extra TLC and that’s fine,” said Habib, “but if it’s consistent and making everyone negative, it’s time to make some serious decisions.” Individual production is important, obviously; no origination company can live without it. But teamwork and holding true to the management vision of growth and success is more important, Habib believes. “When a bad attitude or a prima donna is affecting attitudes in the company and sabotaging things the leadership is trying to accomplish, it’s too much,” he said.

Every situation is different, so it’s important that managers research them fully. It is much easier to accept the first version you hear (especially if from a trusted supervisor), but those are often tainted by emotion and personal involvement. Consider these simple points:
* Filter out the “he said, she said” noise and research incidents carefully.
* Conduct a counseling session with parties involved in disputes to uncover the issues. If a recurring event, it is likely a trend. Have incidents documented so you can be specific during counseling. If a personality conflict, determine whether reassigning team members can help reduce the drama.
* Make a judgment call. If you are losing other valuable team members because of one person’s attitude or communication style, OR if they are undermining the team effort a la Terrell Owens, it’s time to take action.
* Be tolerant, but don’t tolerate. If you let things fester, a small wound can become infected.
* Don’t lose good people you can grow with; lose the ones who threaten your growth goals.
* Consider re-vamping compensation policies to weed out “us vs. them” attitudes.

The Terrell Owens’ of this world have one thing in common: it’s all about them. Owens, if you’ve seen him interviewed, speaks with great conviction that he is the victim of lesser mortals, not the root cause of the controversies that swirl around him. He may actually believe it, and that he alone speaks “the truth.” Likewise, your “problem child” might truly believe he or she is speaking “the truth” when describing the incompetence of their support teams or other persecutions they are subject to because of their innate superiority. As a manager, face such situations with great objectivity, for nothing is as it seems when someone truly believes it is all about them.

Managing a team, or “head coaching,” as Volpe might put it, would be awfully easy if it weren’t for all those pesky employees managers need to make the business work. As Habib observed, the thoroughbreds make life interesting, challenging, and fun for a manager, but there can come a time when they become overly high-maintenance.

By the time you read this, chances are pretty good that Terrell Owens will be finishing out the season someplace else, perhaps that favorite place for NFL problem children, the Oakland Raiders.

Unlike the managers in your business, Owens’ managers get a few Terrell-free months during the year. If you fail to keep your house clean and your team pulling in the same direction, you’ll never have a day off.