MOadmin – Page 3 – Mortgage Originators

The Golden Rules of Sales Meetings

If the mortgage sales manager is the most critical position in terms of developing a team and growing local market share, then the mortgage sales meeting is the critical vehicle. I have facilitated my fair share of sales meetings and sat through even more as an originator. Been fortunate to have some great leaders and equally fortunate to have some pretty lousy ones too! I learned a great deal from all. Ask the average originator to give an opinion of the average sales meeting and you will get an earful. A waste of time is the typical response. Our collective challenge—sales managers have a hard time sticking to the Sales Meeting Golden Rule. Those who have mastered the Golden Rule lead sales meetings that mortgage originators want to attend.

Sales Meeting Golden Rule
The Sales Meeting Golden Rule is quite simple since it is based on the classic 80/20 ratio. Keep your meetings comprised of 80 percent sales and 20 percent or less operations and office issues. Anytime I hear “housekeeping” it makes me shiver. All those salespeople sitting through a meeting reviewing memos that were either distributed earlier in the week or could simply have gone in mailboxes or e-mailed out to the team. We continue this time-tested, time-wasted practice principally because many originators don’t read memos and training materials. However, we should set the proper expectation, starting with the interview stage, that originators are required to read all memos and e-mails sent to them from the company. Yes, some will slip through, but setting this expectation and managing to it will begin reversing this practice. Reading these in a sales meeting is not only an ineffective use of their time, but those who actually do read the memos will stop doing such if they know they will be covered during the next sales meeting. Following the sales meeting Golden Rule is respectful of your originators’ time and creates a meeting environment more conducive to honing sales skills that will grow your team’s production.

Assuming you follow the Sales Meeting Golden Rule, I strongly suggest you have weekly meetings. Sales managers who don’t run effective sales meetings probably will question the weekly time commitment; I say give it a chance for one month. See if a more structured approach to sales management might not actually help you manage your time more effectively by managing your team’s production one primary time each week, rather than one-offs all throughout the week. The additional benefit is more focus on sales, which is typically followed by greater production. Alan Greenberg, former Chairman of Bear Stearns, is renowned for his unique memorandums to his employees. A collection of these unique memos is the basis for “Memos from the Chairman,” by Alan C. Greenberg. He found a way to make the most ordinary communication tool interesting. If he could do that with the memorandum, imagine what you can do with the sales meeting.

The 80 Percent Concept
This 80 percent segment of your sales meetings is what drives your success in the market. Yes, you may have a hotshot or two that brings in great numbers and doesn’t see the value of the old sales meeting, but your reformatted meeting following the golden rule will benefit your core team and those few seasoned professionals.

Most sales meetings start with the housekeeping segment to get that out of the way, then move onto the substance of the meeting. I suggest flipping this around and commencing with the sales portion followed by the housekeeping segment. Should you run out of time, the housekeeping segment is by far the most expendable. Another suggestion to keep meetings vibrant is to hold at least one outside each month. Why do we interview candidates outside our office? Why is it better to have serious employee discussions in a room with a round table rather than sitting across the desk from one another? The same reason we need to take our team to a different environment on occasion. We have their full attention in a different and more comfortable environment.

Here are some suggestions for getting the most out of the 80 percent:

Plan your sales meetings; winging it works for birds, but not mortgage professionals.
Have an agenda and keep to your time allotment, generally two hours or less.
Hold at least one sales meeting a month outside of your office, such as in the conference room at chamber of commerce (if you are a member), back room at a local restaurant, someone’s house or hotel conference room.
Don’t try to conduct each sales meeting yourself. Rotate facilitators between you and your originators. Assign topics or let them pick their own.
Rotate who brings snacks or breakfast. For example, requiring the lowest producer from previous month to bring the refreshments provides great motivation to succeed.
Go to your community library or go online and rent motivational videos. They have great collections.
Form your own “Book of the Month” Club. Pick a different book each month and give a copy to your originators. One suggestion is “Raving Fans,” by Ken Blanchard and Sheldon Bowles. Assign a chapter to your originators to present to the group at the next sales meeting. Your originators will also appreciate your gift and the fact that you are investing in their business.
Assign a product per week to a different originator to discuss and train other LOs in depth.
Invite spouses/partners to join the meeting at an appropriate venue. Have the meeting the first two hours then invite the partners to join in at the bar, bowling lanes, or other location. Have fun and be creative. People seldom leave a company solely because of basis points.
Create a Jeopardy or Wheel of Fortune board and have a contest with categories like underwriting or products. Play the game in your sales meeting each week for a few minutes and give out a few prizes. Pick prizes that are business development related such as books, newsletter or magazine subscriptions. Make it educational and entertaining.
Invite a top producing Realtor or builder to come in and discuss what he/she looks for in a new originator.
Role-play effective sales calls and phone inquiries. This could include how to turn rate shoppers into buyers, how to sell against an option-ARM, how to sell points and other topics.
Start a file of articles and clippings that you can discuss in sales meetings. Pick a topic each week to focus on and discuss. Make it easy for you to find material for your meetings.
Zig Ziglar espouses on the value of scripting as one of the keys to selling excellence. Introduce scripts to your sales team by coming together as a group and composing scripts for objections like, “your rate is too high” or “your fees are too high.” Get all to agree and then memorize them.
Invite a CPA or divorce attorney to discuss leads and the best way to build relationships with these professionals.
Have the group come up with a sales contest and implement the contest.
If your team supports bank branches, periodically invite bank department heads to discuss their areas and how to cross sell more effectively.
Ask each originator what calls they made last week, what they have set up this week and what is on their schedule for next week. Be very specific so no one can hide. This is the best exercise in which to predict short- and long-term success.

The 20 Percent Segment
Use this time to discuss important operational issues within the office or company. Don’t review memos you recently sent out. However, if the topic deserves additional discussion this is the proper time. I realize some will say eliminate this portion all together. I have tried that but I just don’t that that is realistic with all we juggle on a weekly basis in our offices.

I once had a sales manager who would allow IRS representatives to visit our sales meetings to speak on the tax code as long as they brought bagels. Drove us crazy. Invariably, it was a closing agent or attorney no one ever would use who would feed us, talk about why we should use their company and leave after 30 minutes or so. Well, that is a big percentage of the typical sales meeting. I tried a different tactic as a sales manager when approached for time in my meetings. I asked the vendor to partner with my originators first and then I would put them on my schedule. I even coached many of them by suggesting they partner with specific new originators by setting up appointments with Realtors or builders with whom they had relationships. Nothing is more effective than a warm referral. If they proved they could help us build relationships and grow our business, I would gladly give them face time in my meetings.

By investing the time to have well planned and designed sales meetings, you will realize multiple key benefits. Your team’s production will grow. Your retention rates will increase because your people are more successful. Your quality of life will improve, as you are managing with a plan and I bet you find yourself with less management headaches. Your recruiting will be easier because increased production and retention is a powerful ally on the street and competitors will take notice and so will their originators. Plan, implement, be creative and have fun and then watch your team’s production take off.

By A. Blair Glenn

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.”

CPAs
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).”

Attorneys
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 Right Keys to Management Success

Creating an environment of success in the mortgage industry is a challenge at best because of the multiple dynamics management has to consider. From different levels of commitment to staying in the business for the long run and not for a quick buck, to the level of experience of originators, processors and underwriters, managers have a lot to contend with in any given mortgage office. On top of that, there is the ever-present need to train people on the latest technology, policy and procedures, and new products.
Even with all of these dynamics, there are a few key elements to management success. Frequently, we forget to look at the big picture of how our organization is run and focus solely on today’s or this month’s sales. We must realize that many subtle factors, including the ones below, affect sales and the long-term success of a company.

Hire right or correct bad decisions quickly. Be sure you know who you are hiring and do not simply fill a position, because if the person does not fit, it will never work. For example, a loan originator will more than likely have to handle calls on leads; therefore a call-reluctant, shy person should not be hired for this position. While the person maybe qualified on paper, the personality will not fit the requirements of the position. This might seem simple, but managers make this kind of hiring mistake every day. The time it takes to hire the right person is less than the time it takes to fire, re-interview, re-hire and re-train a replacement.

Inevitably, all good managers will make some bad hiring decisions. The vital thing to do when this happens is to take corrective action quickly. Unfortunately, managers may leave a bad hire in place far too long because they hope that the employee will get better. Sometimes improvement is possible—when the problem is a training issue, for example. But oftentimes there is a fundamental problem with the employee being a good fit for the job and when that happens, the employee often will spread low morale around the office like a bad case of the flu. And worse, the problem can become cancerous, which will require drastic disciplinary measures and sometimes multiple terminations. A good manager must make these problems disappear for the health of the rest of the organization, and like a bad disease, treatment is best performed early.

Provide proper tools for success: training and education. A good manager knows that training does not stop when a new employee closes his or her first deal. It must be an ongoing effort that is integrated into the office routine. Proper equipment and technology are also required tools for success in today’s marketplace. Be sure to continually invest in your organization to continually be competitive.

Communication is critical. Many organizations have great people who all aspire to achieve the same goals but fail miserably. Often they are all working on similar projects without knowing it, which is why clear and frequent communication is essential. In our business we sometimes find that our loan originators and processors do not communicate with each other, and an originator does not communicate well with lenders and vendors (Have you ever had a closing delayed because the appraiser said he never received an appraisal request?) Communication starts at the top of the organization and must be maintained at every level of the company, but more importantly management must be a role model of effective and timely communication.

Create variable compensation. It should be based on something of which the recipient has control. I find that management often sets commission or bonus programs for an employee based on criteria that are not in the control of that employee. A great example of this is paying a production manager based on net profit but not empowering the production manager to manage basic operating expenses. The only way for that manager to create a higher bottom line is to bring in more top line revenue and hope that whoever is spending the money does not spend anymore. Another example is paying a processor a bonus based on the number of files closed in a given month. That works when you have more files originated than is realistic to process with the number of processors available at the time. But realistically the processor has no way of controlling originations and is often precluded from obtaining a bonus when he or she is doing an outstanding job. Perhaps a better way would be to bonus processors based on achieving turnaround goals or based on what percentage of files given to the processor close within a certain time frame. Only then are you providing an incentive that is within the processor’s control. If management sets bonus programs based on goals outside of the employee’s scope of control, we set everyone up for disappointment.

Abolish the “Yes” people. Every organization needs employees who are encouraged to and are given a forum to speak their minds. Management is not the source of all good ideas. The receptionist, processor, loan originator and copy clerk have ideas that can change the way things are done for the better. But if they do not express those opinions because they are always agreeing with the boss, the company will not only miss out on great ideas, but the company will become very one dimensional with employees who feel more like factory line workers than team members who are charged with helping an organization succeed. Encourage employees to speak their mind, but be sure they also know that whenever management makes a decision, everyone should fall into place to work as a team.

Share success stories with acknowledgement. This can be accomplished by randomly recognizing outstanding achievement as well as healthy competition in which people who have reached their individual goals and encourage others to become better. Create sales contests, but also recognize support staff. The support staff in a sales organization is often passed over in recognition programs. Additionally, do not recognize only the top sales achievers. Too often the same group of individuals wins all the awards because they are always leaders in sales. Recognize the most improved, the best mentor, the highest quality files or some other achievement that is not necessarily related to sales. Remember that while sales directly affect the bottom line, many other factors go into a successful organization. Keep all recognition positive. Never ostracize—even in a joking way—those who do not win awards.

The small things count. Management should demand that offices be kept clean and neat and make sure the break room is always spic and span. Offices and cubicles should always be tidy—even in areas that are never seen by guests. The environment does not have to be fancy, but tidiness is essential. It creates a cleaner mental state in which to work and productivity is higher in an organized and clutter free office. Other small things count as well, such as bringing in lunch for the office randomly, offering free coffee and tea service, current newspapers or magazines in the lobby, monthly birthday recognitions, employment anniversary recognition, and the like. Study after study reveals that employees will stay at a lower paying job where they feel important and wanted in a good environment over jumping ship for a higher paying job where they may feel more like a number. In the late 1990’s, a dot-com executive claimed it was too expensive to compete with other dot-coms in terms of expensive benefits and stock options. He said his company’s least expensive employee benefit was by far the company’s most popular and cost approximately $12 a month. It was ranked in surveys as a high-ranking factor in job satisfaction among the company’s employees. The benefit: free sodas, juices and snacks. Small things count.

Foster teamwork. Even in a sales environment, there should be team spirit. In mortgage shops, people tend to think that teams are for companies where employees are not commission-based, or when there is a group effort in business-to-business sale situations. After all, each LO gets paid on his or her own loans, right? Wrong. When a team environment exists, one LO is happy to take a call for another to create good customer service, one LO will gladly take a loan application for another while his co-worker is out sick and one LO will gladly give up an early closing time with an afternoon closing time at the settlement agent when his teammate has an important purchase closing and his own closing is a refinance. Processors and LOs understand that they are co-dependent and work together to achieve common goals and solve common problems. Therefore, a good management team facilitates the development of relationships and gets to know employees as people with feelings, hobbies and lives outside of work. When employees feel a human connection with their colleagues, they are far more loyal than when they feel like another number. An organization that focuses on team building will always out-perform an organization of individuals.

Establish the rules. Management should have written policies and procedures. It is difficult to fault someone for not following the policies and procedures when they were never clearly defined. As the phrase “good fences create good neighbors” applies to a good living arrangement, the same applies with employees and employers. People generally want to follow the rules, but so often the rules are murky or unknown. The policies and procedures created by management should be regularly updated. A living document of this type has no page numbers but does have chapters with broad subjects and within each chapter it would be beneficial to create a policy number. So, if chapter one is “Origination Policies” and the first two topics in that chapter are “Timing of Disclosures” and “Rate Lock Policy,” they would be Policy 1.1 and 1.2, respectively. Now, within chapter one management will have the ability to create an infinite number of policies without ever repaginating the manual, thereby making it easy to maintain.

Empowerment and delegation. No matter what the role is, empower the employee to blossom within that role. Delegate the right work to the right people; teach them how to do it and then watch it happen. Sometimes employees must be given the room to fail and realize the failure so they can do a better job the next time. Unless that failure will cause the company true harm, the manager must allow it to happen.

Management in the mortgage industry can be trying and require creative approaches because of the very nature of the business. However, if a well-crafted management plan is put in place, success is inevitable. And a successful management team knows the importance of constantly making improvements to meet the changing needs of the business.

By Daniel Jacobs

Superstar of the Month-Top Processor-Shelby Seaman

Key Responsibilities: Ordering docs, clearing conditions and other processing tasks; underwriting majority of loans

Everyday Challenges: Time management, balancing work and family life

Marketing Contribution: Ongoing contact with customers provides opportunity to “wow” them.

Other Team Members: Loan officer (Linda Davidson), marketing coordinator, operations manager, mortgage planner and team assistant

Workweek: 5 days, 45 hours

Favorite Book: “The Traveler’s Gift,” By Andy Andrews

Favorite Quote: “To accomplish great things, we must dream as well as act.” –Anatole France (author)

Shelby Seaman got her first exposure to the mortgage lending industry as a college student, working as a marketing assistant on Linda Davidson’s team at Service First Mortgage, Dallas, Texas. When she graduated with a psychology degree from Southern Methodist University in 2002, Seaman carefully evaluated her career options, which also included early childhood counseling. “I loved working for the Davidson Team and learned a lot as a marketing assistant,” she said. “I had the option of training as a processor, which was appealing to me.”

Seaman determined that the mortgage industry offered good long-term opportunities and she began her full-time career at Service First. Davidson was certainly happy with the decision; Seaman handled approximately 200 loans last year and was a key reason for the team’s success. “She has been such an asset,” stressed Davidson.

Seaman’s professional development has been somewhat different than what other processors experience. She initially trained as a processor, knowing that she would most likely assume underwriting responsibilities as well. Service First encourages the dual role and provides extensive training that leads to the Direct Endorsement (DE) designation. “We start as a processor and learn various test cases with our corporate underwriter,” said Seaman. “We progress through several stages to underwrite different levels of loans, based on their complexity. I started processing in 2002 and after two years additional training, was ready to underwrite also.”

As a loan specialist/underwriter, Seaman, 27, follows the loan from contract through funding. “I handle the majority of the loans from beginning to end, without anyone else touching the file,” she said. “This includes ordering docs, clearing conditions and confirming the availability of funds. There is seldom any need for me to meet with Linda or involve her in the closing process, since the upfront systems are set to ensure that all goes smoothly and the structure of the loan has already been clearly communicated.”

Seaman and other processors follow a comprehensive checklist to ensure that all steps are carefully followed. “It’s all pretty straightforward,” she said. “It guarantees that new processors would be able to adhere to the same proven system.” A company-wide mantra is that loans “don’t close late and don’t close ugly.” The latter term refers to the problem areas they want to avoid. “Essentially, that means there are no surprises and no unforeseen problems,” she said. “We make sure that all the information is obtained up-front, that everything is thoroughly explained to customers and that the loan is as flawless as possible.”

Seaman noted that frequent status reports are a primary reason for trouble-free transactions. She sends e-mail updates to customers, agents and others. “I’ve found it’s the preferred method of communication for most borrowers and agents.”

Seaman has become increasingly comfortable with her underwriting responsibilities as well. “I underwrite and approve a majority of my loans,” she explained. “However, depending on the risk factor of the mortgager, I may need our corporate underwriter’s second signature or we may broker out the loan if it is not an in-house product. I always look at a loan from both the processor’s and underwriter’s viewpoint; the additional activity really doesn’t involve that much more time on my part.”

She also embraces what some may consider an atypical processor task—marketing. Seaman strives to make sure that Davidson Team customers receive the “wow” factor throughout the loan transaction, so that they will have a positive experience and want to share referrals. “I have ongoing phone and e-mail contact, as well as specific touch points, that gives me an opportunity to demonstrate knowledge, enthusiasm and an interest in their welfare,” she said.

“Shelby is the last person that all parties involved speak to before closing and she always leaves everyone feeling that they are important and confident that the closing will be as promised,” added Davidson. “She understands that everyone on the team is in marketing.”

Of course, Seaman makes a point to help educate everyone about the nuances of a processor’s day-to-day role. “We have weekly meetings that provide me with a chance to voice what I’m seeing and where I need help to make the process smooth. I think it’s an ongoing education. If processors and loan originators understand each other’s jobs better, it makes for easier and smoother transactions. Loan officers and processors must continually communicate to be sure we’re on the same page, to understand what’s expected from the other.”

Early on, Seaman learned that time management is an inevitable challenge. “If we have an exceptional number of loans in a week or month and I want to meet our goal of reviewing all files within 24 hours, I need to structure my day so that we get started and don’t close late,” said Seaman. “The team will pitch in and help when necessary. I get a lot of support from everyone.”

Of course, procrastination is one of the common obstacles to effective time management. “Processors have to keep the pipeline running smoothly, in part by getting through the files quickly,” she said. “There is a temptation to deal with all of the easier loans first and put off the harder ones until later. But that can create bottlenecks when you encounter major problems with such loans. While our main priority is dealing with loans as they come in, I often find it most effective to deal with some of the more difficult loans first so they don’t create challenges later on.”

Balancing work with her personal life is another crucial goal. “It is really important for me to get home to my family (husband and two young children) at a reasonable time. I try to leave the office by 5:00 p.m., and usually don’t bring work home. But while I’m at the office, I want to make certain that I have given the service that every buyer deserves.”

Last year, a special situation required extra attention to the work-family balance; Seaman took two months maternity leave after the birth of her son. “There were files waiting for me when I returned,” she said. “However, it seemed like I just picked up where we left off. I didn’t skip a beat.”

From Seaman’s perspective, successful processors share a couple of key characteristics. “They need to be focused, with good attention to detail, and not be easily distracted,” she noted. “You’ll often have customers who want to talk a little longer than usual. We have to answer their questions and be friendly, but not get caught up in extended conversations.”

Processors also must be able to maintain working relationships with a diverse group of people, including title and insurance reps, and appraisers. “We have to realize that there are team members other than the originator and processor,” she said. “We need to treat the other participants as essential members of the team. It’s not only the right thing to do, but can be beneficial later when we need their support for various requests.”

She added that as a processor-underwriter, she must also be an “out of the box” thinker. “For example, if we see loans that may not fit the normal parameters, we need to look for a more creative approach.”

Seaman is confident that she made a wise choice to make lending a career and is enthusiastic about her future. “I’m glad I decided to go into this profession,” she said. “I want to stay in the mortgage lending business. I’m more of an office-oriented person; more comfortable behind a desk and on the phone than out originating loans.”

Rookie Superstar – THOMAS FERRARA

Advice to New Originators:
“Always take care of your processing staff. Do everything you can to make their jobs easier.”

When Thomas Ferrara was pursuing his MBA (with an emphasis in finance) from Niagara University in upstate New York, he began considering what exactly he was going to do when he completed the year-long degree program. Ferrara had already gained sales experience while working in his father’s bakery supply business in upstate New York; he had an undergraduate degree in business administration, with an emphasis on marketing; and he was eager to find a career that would allow him to draw from all of these life- and university-learned experiences.

A friend of Ferrara’s suggested he look into mortgage originating—and so he did, securing a job as a part-time loan opener for Devere Capital Corporation in nearby Buffalo, N.Y., while completing his master’s degree.

Ferrara, 24, was drawn to the challenge and the opportunities the industry offered, and so he and the president developed a business plan for him. “First, I would spend a few months in loan opening, then move to processing, then go to closing, and finally end up originating,” recalled Ferrara of his career development path. “Unfortunately, that plan got shaken up when an originator in the Syracuse office suddenly left the organization.” Since that was where he eventually wanted to end up, Ferrara decided it was a chance he couldn’t pass up and made the move.

Devere Capital is the in-house lender for a local real estate company, and Ferrara’s position was to be the sole originator within the Syracuse-based office. With eight months under his belt as a loan opener, he was familiar with the intricacies of a loan file, but not entirely prepared for originating. “For one week, my boss drove to the Syracuse office with me and was there to help me get settled,” said Ferrara. “After that, it was trial by fire—and a lot of phone calls and hard work.”

To familiarize himself with products from different lenders, Ferrara researched online and called “scenario help desks” that many lenders offer to help develop his sense of a borrower profile and the appropriate loan products. “I also read some underwriting books with guidelines and constantly called the underwriters and processors in our headquarters with questions,” he said. “Since I had worked with them when I was an opener, it was easier for me to know their expectations and it was also helpful that I knew them as people, too.”

Ferrara’s first loan was a call-in from a couple who were desperate to buy a house that already had three offers on it. “I was nervous—and very thankful that the conversation was on the telephone because it bought me some time to do research,” he said. “It was a super-rush and it required a lot of hand holding. Needless to say, I was happy that it closed successfully.”

Ferrara discovered early on that being an in-house lender for a real estate company doesn’t by any means guarantee built-in business. “There had definitely been some burned bridges in the relationship,” he said. “Some agents who weren’t exactly happy with previous experiences seemed set on not using me. I realized I had to sell myself every single day; whether that was to earn business for the first time, or win it back, or simply maintain it.”

He took the approach of making no assumptions and was an available presence in the office every day. “I spent time walking around the office, getting to know people,” said Ferrara. “I discovered what people were good at, such as cold calls, and would ask them to help me. This allowed me to begin developing relationships with the agents in the office.” When it came down to earning their business, he was additionally able to rely on Devere’s “low-rate guarantee,” which allowed him to match or beat what competitors were offering.

To further show his support for the Realtors, he attended weekly broker’s tours and prepared open house packages for them, which included educational pieces or fliers listing payment options for the property. He was also available 24-hours a day by cell phone—although this is something he says sort of happened by default. “Many times I was working at least 60 hours a week in the office and my cell phone just kept extending those hours,” said Ferrara of his rookie year. “I did have to set some limits with agents finally and tell them to call before or after certain hours.”

He currently uses a contact management system to send e-mails to current, past and potential customers, and Realtors. The e-mails consist of market or rate updates, holiday greetings or reminders of important events like daylight savings time. “I plan this year to also incorporate a monthly postcard mailing program,” said Ferrara.

In his last rookie year, Ferrara closed 179 loans for a total volume of nearly $19 million. Ninety-five percent of his business was purchase-based on conventional loans, although he worked a substantial amount with FHA loans as well. “It wasn’t all smooth sailing though,” said Ferrara. “Early on it seemed there was a nightmare scenario once a month: something wasn’t fully disclosed about the house or I forgot to ask the right questions. You just have to be ready to take the punches and roll with them. I wasn’t willing to ever take no for an answer.”

Ferrara considers being an in-house lender something of a double-edged sword. On one hand (when everything is going well), there are agents who you can personally build up trust with, and on the other, if issues arise, “they are right there at your door and there is no place to go,” he said. “It forces you to do a better job because there is a higher degree of accountability.”

His main focus in his second full year of originating is to “capture every deal that comes through the office,” he said. “I also want to continue to learn how to handle myself in tough situations and be able to get every loan the first time.”

–Gretchen Lees

Selecting an IT Professional: What You Need To Know

There is only one decision in your office that is comparable in importance to selecting your lead processor, and that is the process of selecting the individual you trust with your Information Technology (IT) needs in your operation. This decision has a direct effect on your efficiency, security, and your comfort level that your system will be there when you need it.

Level of Support
This decision will vary greatly on whether you need a full-time person or team, or whether you need the services of an IT professional on an occasional basis. If you are operating a large, multi-location branch organization, and have an ongoing requirement to support several hundred individuals, then this article is probably not for you. Suffice it to say that you will need some very sophisticated talent and systems with various levels of backup. In that case, we would be talking about a small team, with specialized individuals handling different areas of enterprise support. Yet, the actual requirements would be very similar to what you would need in a smaller enterprise.

Small- to Medium-Size Office
The only mortgage professional who does not need the assistance of an IT professional is someone who is technical in their own right. In fact, for years I have advised many small mortgage offices to select someone in their midst to train themselves on the basics of their network and basic Loan Origination Software (LOS). These form the basic elements of any successful mortgage enterprise, and someone in the office should be the key person to help others with issues that relate to technical issues on a day-to-day basis.

The basic decision that must be made up-front is whether to contract occasional IT support services, or to hire a dedicated IT person to support the office. For many offices, the cutoff point for this decision is frequently when the office has approximately 30 fulltime employees and loan officers. While I have seen larger offices utilize part-time contract personnel for their needs, this seems to be a logical point at which to consider having a full time person on staff.

Hiring a Contractor
Since many of my clients are in smaller offices, most of my experience has been with dealing with contract personnel. I am happy to say that the vast majority of them have proven to be competent and capable. When you hire a contractor, remember that you are not in a position to demand instant response when you have problems, and you will need to agree on a reasonable turn around time on problem situations that may arise.

Deciding on an hourly rate is one of the more problematical questions that may arise. I have come over time to believe that it is simply impractical to expect a client to pay the same hourly rate for basic helpdesk assistance versus setting up and optimizing a firewall/VPN appliance. In the former case, the client should be paying a lower hourly rate. In any event, the rates will be heavily dependent on local market conditions. One suggestion is to seek input from an IT association for your marketplace or talk to your peers.

Another decision is whether you need to contract on a fixed minimum amount per month, or strictly on a per hour basis. I would suggest a minimal monthly amount for very small offices that may not see an IT person otherwise. This way, the system can be checked to make sure that key systems, including anti-virus and backup, are functioning correctly. Larger offices may be doing enough work that this fixed monthly contract may not make sense. For the most part, I am against fixed fee quotes if they are based on anything other than time spent based on the hourly rate, because the only fair way to compensate an IT person is to compensate them fairly for their time.

Selecting an IT Professional
Whether or not you are hiring an IT professional on a contract or employee basis, the same key set of questions and considerations will apply. For example:

Certifications and Credentials—For a time back in the late 90’s, Microsoft and Cisco certifications were key elements in establishing credibility and expertise in the IT world. Unfortunately, a glut of “paper certifications” greatly reduced the credibility of these individuals. Many of them were well schooled in the certification exams and lacking in practical experience, to the extent that today I would be very reluctant to place more than passing interest in the individual industry certifications that an individual might possess. After all, would you expect a customer to hire you as an originator because you had a recognized industry credential as an originator, or because you had a great reputation for being capable and honest? It is no different with IT personnel.

Overall IT Experience—For the most part, good IT people are self-trained, and many of them are non-degreed, or possess degrees with irrelevant specialties such as foreign languages and fine arts. Experience is clearly the most important part of the skill set of an IT person. Unlike many jobs, additional time spent with the job, particularly with regards to current technologies and products, is the best determinant of skill level attached to an individual. IT personnel are simply not in a position to “settle in” to a job and float along, because new technologies and operating system changes are always occurring. An IT person simply has to remain current to be of value to the customer.

Mortgage Industry Experience—IT people are no different from anyone else in that they develop an affinity for a particular industry or peer group. Therefore, I would always want to hire an IT person who specialized in working with mortgage companies. They will understand the mindset of the broker and the unique requirements (demands) that may be made by a loan officer or processor.

Experience with LOS—Since the LOS is clearly the dominant technology hub in any mortgage company, expertise with that product is very essential if that person is to help you. While it may not be too difficult to get help with well known systems such as Point, Genesis, and Encompass, lesser known systems will certainly require some specific knowledge that is not generally available. Always hire someone who has experience with the LOS that you are using.

Overall Attitude and Mindset—This is probably the single most important attribute in making your decision. I am fond of telling the story to my associates of how I made the switch from being a “normal” broker in the mid 90’s to a full-time computer geek, primarily because of my own frustration with the IT people that I attempted to hire to assist me. I found some of them less than communicative and responsible (somewhat like I found some originators) and lacking in the desire to communicate to me clearly what was going on with my system. I simply found it easier to learn it myself and to have my independence.

You must insist that the person you hire have the people skills to handle the individuals and demands that occur when dealing with mortgage professionals. This includes taking the time to show you how to do some tasks yourself, and not requiring the IT person for every single task that may arise in your office. Education is definitely part of the job of an IT professional.

Honesty and Integrity—IT people are no different than mortgage people. You will find mortgage professionals who are not happy unless they make “two on the front and four on the back,” and this mindset also exists in the IT world. You will need to talk with other mortgage professionals and ask their opinions before making this decision, and you will have to try a person out before making a long-term decision. But be aware—the really good ones are actually quite affordable, approachable, and therefore very busy. That is the kind of IT person that you want to try and find.

By Stephen Breden

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

Sales Management Lessons From a Possum

Let’s be honest. How hard has it been to find a few loans per month the last few years? Even our rookie originators made money and covered draws. There was so much business that it seems everyone obtained his or her mortgage license. If they didn’t, they know someone who is an originator. Today presents us with a different challenge; one we have not faced in many years. With the market slowing down, acquisition of new business is the primary strategy of most companies. If that doesn’t create the impact needed to drive operations and profitability, you will start seeing even more staffing reductions in our industry. As the engine is to the car, the mortgage sales manager is to our industry. This position significantly impacts what happens next; therefore, making the right hire is critical.

When interviewing and managing mortgage sales managers, I try to determine where they fit in my “O.H.G.P. Mortgage Sales Manager Profile.” Identifying enough examples of past behavior, one will be able to determine future behavior. Yes, I agree this is a BFO (Blinding Flash of the Obvious), as Todd Duncan likes to say. But I have seen way too many instances where sales managers will not ask probing questions to get “down and dirty” in the details or roll up their sleeves to fix a complex issue. The results can be devastating for an organization; especially in a down market when recruiting smart, sales management and expense control are the order of the day. Situational questions during the interview stage, conversations with industry insiders and former employees can help you effectively identify past behavior. So, once you learn to identify traits, you can recruit and manage for optimum results.

The O.H.G.P. Mortgage Sales Manager Profile:

Ostriches
We all know these sales managers. From pricing issues to underwriting challenges, there is rarely a day when something doesn’t come up that requires problem solving or crisis resolution skills. Maybe a complex deal is blowing up at the table. Maybe the company is tightening pricing. Whatever the challenge, it seems the ostrich is not effective in problem solving, dispute resolution, or strategic planning. They pretty much disappear when the going gets rough. We see a lot of talk, but not too much in the way of results-oriented action. It is amazing how many ostriches survive in our industry…but they do, primarily when they also report to an ostrich. The million-dollar question is: how do we manage ostriches? I have spent too many valuable hours on ostriches in the past. I realize I spent so much time because I hired the ostrich and didn’t want to admit my hiring mistake, so I kept trying to get them to perform as expected. I am learning to cut my ostriches as quickly as possible. Your best management strategy for ostriches is to avoid hiring them in the first place. Ostrich resumes are easy to spot—a lot of job-hopping is one obvious sign. They also spend more time telling you what their past companies didn’t have than what they will do during their first 60 days to perform at your company. Ostriches rarely come prepared with detailed plans.

Hyenas
These folks are the ones who complain about everything…the market, the company, pricing, products and especially their last bonus. You always hear them during breakout sessions at sales rallies, but they are smart and try to blend in during these events. But the minute a negative is thrown out, they pounce and show their teeth. Their bigger problem is they rarely have solutions and never create anything worthwhile for themselves or their team. Hyenas have possum-like tendencies as they are both scavengers at heart and have a lot of energy. I would equate a hyena to a high-maintenance, low-producing originator. Obviously those two traits together are poor. But I will take high-maintenance and high-production all day. If the hyena can transfer the negative energy into helping us fix the issues, we have a winner. Someone who is viewed as a complainer is a good person to have in your company if those complaints are followed by ways to improve upon the issue.

Managing a hyena isn’t easy, but some drivers are honesty, respect, and empowerment. First, explain how the hyena is viewed within the company. Then discuss how many of the issues brought up are valid, but lacking is the solution. Empower the hyena to run a task force to research and recommend solutions to one or two issues. Create an environment where the hyena can take stake in the solutions. If we can channel that negative energy into positive actions, we could end up with a possum.

Gators
These people know how to adapt and they will make a correction, but it will take time and their regions or offices will suffer during the transition. They know they have originators who will not make it, but they take too long to require call reports or put originators on probation. When they lose a top originator, they start recruiting the replacement. They can be successful in replacing, but the result may be three or four months of reduced volume, which could blow the quarter and possibly the year. The gator may get around to doing the things they need to do, but with closer supervision and direction, they can be pushed to do it quicker. Most gators lack the drive or strategic thinking of the possum so expecting to grow to possums may set them up for disillusionment. Understanding the weaknesses and managing to those will help a gator realize results quicker.

Possums
Being from the South, I have always admired the possum. Talk about adaptability! If a possum’s food source dries up on Monday, I guarantee they have found a new one by Tuesday. If we take down a tree a possum lives in, they quickly find a new home. The possum is a master in the art of survival. As such, the possum manager makes changes within the shop quickly and before too much harm is done. He or she also collects good market data before complaining about pricing to corporate, knows the competition well, makes decisive decisions and is always thinking about surviving. A possum is rarely swayed to gamble on weaker producers, but typically goes for the better hire even if it takes longer to get. Most importantly, the possum is a self-starter, needs little motivation or direction and is adaptable enough to change with the market or as your company needs them to change.

Mortgage sales managers are the key drivers in our organizations. Selecting the right leader for a team, or to build a team, is a critical decision that has far-reaching impact. Every company is different and unique. Some are highly political and others purely numbers driven. Being able to identify the four management profiles not only helps make better hiring decisions that fit your organization, but also allows you to use situational management skills with existing team members. You would manage a possum differently than you would manage an ostrich. An ostrich would require hands-on management with very frequent assessments and guidance. A hyena does best surrounded by positive strong-willed people and hands-on management. Don’t allow the hyena to surround himself with other hyenas—unless you have no interest in attempting a conversion to a possum. Gators represent your steady leaders, your rocks. Getting those gators to be more proactive and more aggressive will significantly impact results.

By A. Blair Glenn

Compliance Mistakes That Can Cost You

Have you heard about the steep fines brokers are paying for failing to adhere to compliance laws? Chances are, you may be putting yourself at risk and could be the next one to pay up or go to jail. With the proliferation of the mortgage regulatory environment and increased government monitoring, keeping compliant is paramount. New laws not only carry huge fines, but some brokers are doing jail time as well.

It may come as a surprise, but your current loan origination system might actually be the main culprit that’s making you vulnerable to violating compliance issues. Are you nervous yet? However, staying one step ahead of the game doesn’t require a full-time, in-house compliance department. It may just be a matter of leveraging technology that’s at your fingertips: ensuring that your system is compliance savvy.

For many years the loan origination system has moved to become the system of record, and as such, anything that goes through it should go through compliance checks and be properly safeguarded. To do so, some loan origination systems automate compliance and shield companies from fraud. Think of it as Kevlar for loan files.

In the current environment, there are certain safeguards that should be native within the origination platform, which serve to protect both originators and borrowers. Specifically, originators seeking to avoid fines and protect their borrowers should make sure their loan origination system has the following features:

Secure document delivery
Automated forms updates
Encryption
Centralized data storage
Centralized quality control
Selective data access
License checks

Secure Document Delivery
These days it seems that everything is e-mailed back and forth. E-mail is the new fax. However, most originators are unaware that e-mail is not a secure way to transfer data from one source to another. Not only is it not secure, it can also be illegal to transfer unencrypted loan data through e-mail.

The biggest culprits are loan origination systems that don’t encrypt the loan files stored on your hard drive nor provide a secure delivery system for your staff. Here’s an example. Without giving it a second thought, your loan officers or processors attach un-encrypted loan files to e-mail messages and send them to a lender or appraiser. This common practice compromises the privacy of the borrower by sending un-encrypted borrower data along the Internet. Because standard e-mail is vulnerable to hacking and misdirection and misappropriation of sensitive information, it is therefore critical to be sure that your loan origination system has the following capabilities: it has easy-to-use file encryption capability for both stored and transmitted files and it has a secure information transmission capability that avoids the security weaknesses of standard e-mail.

The best option is to use secure document delivery, which is included in some of today’s loan origination systems. This technology empowers originators to electronically send and receive loan files securely to intended recipients without using e-mail. It also prevents the possibility of borrower data being intercepted over the Internet.

Automated Forms Updates
With the increase in new loan products as well as changing product guidelines, there are new forms continually being introduced into the market. Each form is loan-product specific, so it’s important that the user have access to the most current and accurate form. How do originators do this? To ensure compliance and accuracy, mortgage professionals must use origination systems that automatically update forms. Using systems that count on updates to be manually downloaded and installed by staff can cause serious repercussions. With this method, users must know how to download these updates and must remember to do so every time an update is available. This reliance on human intervention puts companies at risk of human error and resulting compliance concerns.

In contrast, advanced loan origination systems eliminate the forms “game” completely and update forms automatically—like virus software that automatically downloads the latest virus updates. When users log in, the system automatically updates itself necessary. No need to worry about forms being compliant.

Encryption
In a speech delivered at the National Association of Mortgage Brokers 2005 Annual Convention earlier this year, Federal Bureau of Investigation officials stated that computer hacking amounts to between $65 and $70 million in lost revenue in the financial sector. That tally did not include the loss associated with any legal recourse taken as a result.

Much to the surprise of many, one of the most popular loan origination systems used by brokers stores loan files in a non-secured format. How are the files not secure? These loan files can be opened using Windows Notepad–the simple text editor that comes with Microsoft Windows. Un-encrypted borrower files sitting on laptops expose companies to all kinds of security issues.

The good news is that advanced loan origination systems encrypt almost all files. Using these systems enables originators to evade hackers, or more likely, they simply protect companies and their customers from a simple laptop theft.

Centralized Data Storage
Loan files need protection, too. When storing loan data, the user should make sure that the environment is secure. Some of the most used loan origination platforms store loan files in non-secured environments where users can easily save them on a CD-ROM and take them away. This makes it easier for disgruntled employees to steal crucial loan data, and for companies to get into costly legal trouble.

Today’s forward-looking loan origination programs have a simple solution to this vexing problem. They store all crucial loan files on a central, secured server, which can only be accessed by the company’s authorized personnel. Companies don’t have to worry about employees running off with their loan files if it they’re all centralized and only select employees have access. Companies must also be able to report on all loan files to satisfy regulatory requirements. If loans are not centrally managed, loan data must be gathered from many different sources leading to the risk of non-comprehensive regulatory reporting.

It’s also important to back up the system regularly. The FBI recommends that back-ups be done twice a day. When back-ups are done regularly, it is easier to get the mortgage institution up and running again if a hacker has found a way to infiltrate the system.

Centralized Quality Control
Companies must ensure that loans are completed correctly to meet regulatory requirements. Quality control is a key component of this process. The origination system needs to facilitate quality control, not inhibit it.

For example, there are many origination systems that don’t provide visibility into loans since they operate in decentralized environments where loans are stored locally on the desktops of different computers. A decentralized environment inhibits quality control. On the other end of the spectrum, loan origination systems that leverage a centralized database enable mortgage companies to easily ensure the quality of all loans processed.

Selective Data Access
Many loan origination systems provide users access to too much information—information that is not relevant to their job functions. For instance, a processor may be able to view the entire company pipeline. This kind of open access to data leaves companies open to illegal activities. In contrast, other systems ensure that employees only have access to the tools and data that they need in order to do their job. Systems that don’t offer varying visibility levels native within the origination system leave the company at risk.

License Checks
To meet local regulations, loan officers must be licensed in order to originate loans in a given state. However, when volume is up, it is sometimes difficult to keep a close handle on where the loan is being originated, especially if the organization has several branches nationwide. Some origination systems don’t have safeguards in place to check up on licensing, whereas other newer systems can automate the process. Intelligent triggers will come up when a loan officer is originating a loan in a state that he/she is not licensed in, and will not let the originator proceed.

Compliance should be a huge concern for mortgage originators, and technology that enables compliance is essential for those who wish to avoid fines and long-term repercussions. Your system should make it easy to legally deliver documents electronically, evade hackers, use the most current forms, and enable company-wide visibility.

By David Lewis