Kevin Ruby, Memphis, TN
“Much of Ruby’s marketing focuses on builder support. For example, he developed a ‘quick and easy’ pre-approval form for uses in subdividsion offices and by his real estate agents”
Kevin Ruby decided that real estate wasn’t going to be his permanent vocation. After attending the University of Memphis, he obtained his real estate license and worked with his mother, a veteran agent. But after two years, he decided that it wasn’t rewarding enough. His brother-in-law was a mortgage broker and told him that business was “a good way to make a living.”
Ruby, 37, took a chance and switched careers in late 1986. He considers it a wise move. Last year, he closed $96.8 million and 828 loans at Community Mortgage Corporation in Memphis, Tennessee, and was number 31 on Mortgage Originator’s 1999 Top 200 Originators List (for dollar volume).
Ruby first went to work for a small broker in 1987. There was no formal training. “I learned by making mistakes,” he said. “I wore my brother in law’s phone out—asking him questions.”
He got his initial loan during his first month—from a former college classmate who was a real estate agent working with builders. “The application took about three hours. I can’t remember being more nervous—asking all these personal questions.” He also got to meet many of his mother’s associates.
Ruby’s primary focus was on meeting people. “I just made sales calls the first year,” he noted. “I made it a point not to take rate sheets or other information to offices. I wanted to concentrate on establishing relationships with Realtors and builders.”
He finished 1987 with about $3.5 million. “I earned about $14,000 that year,” he said.
Ruby recalled being slightly discouraged during his early days as an originator. He wasn’t being inundated with referrals. He even considered a job change—with the postal service. “I remember telling my wife that being a mailman wouldn’t be such a bad option. After all, you get to wear shorts in the summer.” But he persisted and eventually the referrals started to add up.
The Builder Network
From the beginning, Ruby decided to concentrate on builder business. “Following the 1986 refi period, many builders felt they had been ignored by their loan officers. I started calling on them.”
One of his first big breaks was working with a builder who was completing a subdivision in the Memphis area. “After we had completed 37 loans, he said, ‘one of these days you’re going to make more money than you ever thought possible; because you’re available, organized, and provide status reports.’ It was a good indicator of the future.”
Ruby later earned another significant opportunity. A “mom and pop” builder came to him with an offer. Their former lender considered them too small and was no longer able to handle their business. They asked Ruby if he was interested in taking on 40 loans. “I said ‘yes’ and the loans were transferred to me. We still work with that company.”
An early turning point in Ruby’s development occurred when he got married 10 years ago. That was when he realized that he needed to become an even more aggressive originator. “I knew that I had to work harder,” he said. “I had greater responsibilities, a family to support.”
Another key factor was the ongoing expansion of his builder base. “Several of these builders started in business about the same time I did, and we grew together,” he noted. “When company principals would split to form their own companies, I would retain their business as well. The business began to double every year.”
Of course, hiring his first assistant six years ago was also a crucial step. “I was taking 40 to 60 applications a week and working seven days. I couldn’t grow any more. So I hired an assistant, my brother Clay. I couldn’t have made it to the next level without him.”
In addition to his builder business, another primary niche is the first-time buyer group. His builders generally provide these borrowers with such incentives as a seller-paid bonus of 3 percent toward the purchase price. Ruby noted that one challenge is dealing with many unqualified borrowers. About 20 percent of the borrowers he sees don’t ultimately qualify. The Memphis and surrounding market includes many credit-impaired borrowers. “We get people with bad credit and without much income, so it’s often difficult to even obtain a subprime product for them.”
However, Ruby doesn’t ignore this potential business. He sends letters to those who aren’t qualified. He outlines the steps they can take to improve their credit and borrowing capabilities for the future. “I may send letters to 600 people this year and next year 300 could come back to me,” he said.
Much of Ruby’s marketing focuses on builder support. For example, he developed a “quick and easy” pre-approval form for use in subdivision offices and by his real estate agents. “I get up to 100 of these a week faxed back to me. It’s a great tool for the builder salespeople and also helps the Realtors reduce the time spent with unqualified prospects.”
He also provides builders with a variety of information, including spreadsheets detailing the different loan programs. “Once the borrower has this information in their hands, they’re more inclined to call me,” he said.
Ruby e-mails daily rates to the builder offices. “I was never one to distribute rate sheets,” he said. “But in this case it’s obviously important for the subdivision office to have the correct rates to share with customers.”
He also spends part of each weekend at various builder sites, which sometimes involves providing commentary for remote radio promotions. “I’ve got one builder who does a lot of radio advertising. They’ll do weekend remotes (with onsite broadcasts) during the peak season and I get a chance to introduce myself and our loan programs.”
Ruby holds monthly training sessions for select real estate offices. “I teach them ‘quick facts’ about lending, including how to qualify and the way to determine payments. It’s the kind of information they can share with their customers as they’re looking for homes.”
In addition, he places a special emphasis on supporting Realtor and builder activities. For example, he will sponsor their Christmas party or awards program. “Of course, I get invited to the event and that’s a great place to meet new people,” he said. He also sponsors soccer and little league teams. “And I support University of Memphis activities, which puts my name in front of 3,000 alumni.”
Ruby has developed a television ad, which features him taking a loan application, with a voice over discussing how he can assist borrowers obtain financing. “My ad runs between two builder ads, so I benefit from the association,” he said.
He doesn’t attend his customer’s closings. He explained that most Memphis loan originators don’t either. “I call the customer right before the closing to explain what to expect,” he said. “Then I’m just a phone call away if they need me.”
Ruby’s brother Clay is his primary assistant. “When I decided I needed help, I was worried that an assistant could eventually walk away with some of my business. Who better to hire than my brother? We work really well together.” He takes about 50 percent of the applications and provides marketing and other back up assistance.
The Kevin Ruby Group also includes three processors, an appraiser, and an assistant for Clay. “We’ve got a great staff. They’re a major reason I can do this volume in an efficient manner.” Ruby explained that they strive to do low doc loans whenever possible. They ask customers to bring in three months of bank statements, two years of W-2 forms, and a month’s worth of pay stubs as an alternative to the Verification of Employment.
“Our computerized reporting system is another big factor. If the loan isn’t done in seven days, we know something is generally wrong. For example, the report will show that a piece of documentation is missing, and we will quickly call the borrower.”
Having onsite credit checking support is also a big plus. Equifax representatives are at the office about five hours a day. “This really helps streamline the process. If there are any credit issues, we can walk to the next cubicle, rather than have to send and receive faxes.”
All of this support enables Ruby to continue generating new business and to handle his management responsibilities. In addition to overseeing his own team, he is also a senior vice president of the company.
Ruby considers a high level of confidence to be an essential ingredient for a superstar originator. “You’ve got to have confidence in yourself and your company,” he said. “There are lots of highs and lows in this business, and you have to believe that you’ll achieve your goals.”
He stresses that a positive attitude is another important quality. “You can’t let yourself get down when business is slow. I’m always upbeat.”
Ruby believes that most top producers are creative problem solvers. “You have to constantly find new products and be the first to hit the street with them. It’s important to have something a little different than what your competitors are offering.”
Investing in a support system is also critical. “Putting the right team in place allowed me to do more volume,” he said. “A great staff helps you get to the next level.”
Ruby plans to continue expanding his volume by selectively adding new builders and other partners. “We’re experiencing good growth in Memphis, and I think that will continue.”
He hopes to be doing one of his builder’s loans in another state in the near future. “I’d like to do another 400 loans a year,” he said.
He also looks forward to cutting back on his work schedule. “I want to get to the point where I’m working less and spending more time with my family.”
Meanwhile, he continues to enjoy the profession of mortgage lending. “I love my job. This is my hobby as well as my career. I intend to stay in this business.”
For Kevin Ruby, being a superstar originator is a lot more fun than selling real estate or delivering mail.
One Tough Loan
I have a desk full of difficult loans, but this one was special. A family from Bosnia that had been in the United States about a year came to see me.
The husband worked in a retail store and the wife wasn’t employed. The first challenge was the language barrier. One of their friends was a translator, so we were able to communicate. I learned that they had looked at an $85,000 home in a development that was to be completed in about six months.
They had a couple of retail credit cards, but there wasn’t enough history to obtain a credit score. Fortunately, that isn’t required by the FHA. They also didn’t have enough money for a down payment.
I explained that I thought I could help them, but that during the next few months they would need to take a few steps to enhance their overall credit situation. Meanwhile, we looked for ways to help get them funds for their down payment. As the construction completion date neared, we finally found a non-profit organization that donated them the money for the down. We got them into a 30-year fixed FHA program.
At the closing, the agent, attorneys, and customer were so excited; everyone was crying. The family couldn’t believe that they actually owned a home in America.