Origination Superstars: The New Breed

Mortgage originators who aspire to Superstardom have learned … to keep pace with the changing environment in which they make their loans, using available technologies and — most importantly — staying open to new concepts and ideas as they go about their business.”

“Seeing much, suffering much, and studying much, are the three pillars of learning.” – Benjamin Disraeli

How do we mark the eras in mortgage lending? They certainly exist, though often less measurable by time than by other metrics. Interest rates are certainly an example, as low-rate markets have historically given rise to refinance booms, eras unto themselves. As one era ends and another begins, another indicator tends to become evident: a change in the characteristics of high achievers, the superstars. Certainly some characteristics are pretty much evergreen, but there are others that are caused by the times, the prevailing technologies, or by attitudes. Superstars of any era, in any activity, tend to reflect the better ideas of the day.

Among the evergreen characteristics are perseverance, long hours, hard work, and the willingness to pay the price of success. But in several ways, the new generation has put a modern spin on things that were less evident during the last era, the refinance boom that ran through 1998. At that time, the name of the game was customer acquisition: everyone needed to refinance at some point, and the hard part was being in the right place at the right time with the capacity to give immediate service. The big banks’ refinance efforts were largely a joke – they were lumbering behemoths that were unable to make decisions, much less implement change. And as the commercial says, it’s tougher to run with the squirrels, with all their speed and nimbleness, than it is to compete with lumbering, beast-like opponents.

Today’s refinance customer is more sophisticated and has more options, thanks to the Internet. Likewise, the big lenders are not as slow and sluggish as they used to be, having learned many lessons through last time’s portfolio runoff. You can’t simply target borrowers who have loans with big banks anymore; today they are more able to compete for service with the independents. The name of the game today is customer retention and customized small-scale customer relationship management (CRM). Superstars are using systems and low-cost technology to keep the borrowers they won in the last boom, many before they were superstars. And using word-of-mouth technology (yes, there is such a thing) to help build business, along with untraditional marketing concepts.

Superstars commit the time to learn. If you refuse to a) recognize you don’t know it all, and b) find collections of people who do, you will not become a Superstar. Finito.

Before you can learn from the masters, you have to find them. Fortunately, that has never been easier to do, thanks to the power of tools like the Internet and other resources (like Mortgage Originators Magazine, for example.) Because of the parochial nature of loan origination, many Superstars will share their ideas and secrets, generally at very modest cost. They are more than reasonably confident their own methods will not be deployed against them with any degree of success, since 99 percent of the aspiring originators they are teaching don’t operate in their back yard. With seminars, tapes, books, and kits more available now than ever before, there is no excuse for being uninformed regarding techniques that have worked for others. So much for item b), above. If you suffer from item a), that’s a different story.

Odd that the trait of being unwilling to seek wisdom or learn anything new is most often associated with the elderly, and with teenagers. The sophomoric attitude of believing you can’t learn anything new about a given subject is like a death sentence for careers in the sales of just about anything, including mortgage products.

Superstars use systems. The last refinance boom presented most originators with a simple math problem: taking care of the refinance calls while trying not to ignore their core business of Realtor-referred purchase business. Most could not do both, much as they desperately wanted to. Enter the modern database marketing program.

Systems are available today that allow originators to communicate regularly with their existing borrower base, answering frequently asked questions and repeatedly asking for their business – without ever picking up the phone or making a personal visit. They involve letters and faxes and broadcast voice mail systems that have become astonishingly good at relatively low cost. These systems allow Superstars to stay close to core clients and treat new borrowers with the care they deserve, turning them into long-term customers who are like money in the bank when another refinance trend begins. Superstars use systems, and use them well, particularly if they operate in a market of any size. Without systems, originators are faced with that same math problem with no solution in sight.

Readers may be familiar with written communication systems, but less so with broadcast voice mail offerings. The amazing power of the spoken word is at work here, providing a technology for word-of-mouth. Broadcast voice allows you to record a message one time, which is then automatically called to the phone numbers you specify, usually your existing client base, at times of day when people are most often away from home. If the software detects a live voice on the line, it hangs up. But if the call is answered by a machine, it leaves your message: “Hi, this is Jim Hennessy. You probably heard about the Fed’s lowering rates by a half point recently, and it occurred to me that you may want to know how that’s going to affect the interest rate on the home loan we put together for you not long ago. If you’d like to know whether it’s time to refinance to lower your rate and your payment, just give me a call at this number . . .”

There are several services offering this capability, and the messages can be powerful in the extreme. Users of Epocall, for example, report very high success rates.

Superstars are organized. Many of the database marketing systems include organization assistance as well. For example, phone and address books in the system are the source for the data used in targeted mailings, and they generally include scheduling capabilities. With additional business, of course, comes additional pesky details, like the processes required to take loans through to funding. Depending on the company you work for, you may be responsible for paying for assistance, and are therefore reluctant to bite the bullet – even when volume justifies it. Consider another Superstar tactic of justifying an assistant as a shared resource with one or more of your contemporaries. If your company has several loan officers who are spending too much time in the office handling details that could be better performed by someone else, the situation may be ripe for proposing you go in together to pay for administrative assistance.

This does not mean you are passing off tasks you may not like but are better off doing yourself, and it does not mean that you should go out of pocket now, betting on production later. These are pitfalls that will run your cost basis up before your production levels can justify them. Superstars use their available funds wisely, but they do use them.

Superstars establish a “Brand of One.” You may have noticed a company in the United Kingdom that seems to be getting into virtually every aspect of life over there, and more of them here. Sir Richard Branson’s Virgin brand is by no means merely music. His company is into air travel, train travel, soft drinks, wireless communications, banking; even gas and electricity. And all of them have been entered into on the strength of his name: Virgin is essentially the brand of one man whom consumers believe will give them good value for their money. Branson takes established industries and puts his own special mark on them, generally prompting innovation and response from those industries’ “establishments.” In banking, Virgin was an early provider of the Current Account Mortgage, a consumer-friendly financing instrument that may never fly over here. Before long, many of the UK lenders were providing it, sensitive to the public’s reception to Branson’s name value. In fact, among consumers, this mortgage is better known as the “Virgin One Loan.”

Superstars establish themselves as a “brand of one” in much the same way: their borrowers and Realtor clients do business with them because of the impression of value they have been able to impart. In Albuquerque, New Mexico, for example, ask any Realtor what name is most associated with mortgage lending, and they will probably mention Greg Frost. Through effective use of systems, organization, creativity and dues-paying, Frost has established himself as a brand of one. Future Superstars can do much the same thing, even if in a much smaller area.

Superstars get the word out. Depending on their target market area, they use the appropriate media to get the word out about their services. That media may well be word-of-mouth, involving clever incentives to make it happen. One example is a loan officer who provides a discount card with merchants in her area. Her logo and name are the central part of the card, with participating merchants listed on the back. The cards are good for a year or so, and she constantly receives calls for new ones when they expire. The cost? Only the cost of printing, and the time involved with enlisting the merchants.

There are as many ways to get the word out as there are people to dream them up. Each one, of course, does not have to be a reinvention. There are techniques used successfully by Superstars from various parts of the country to get the word out that are readily available by doing some homework. See “Superstars commit the time to learn,” above.

Superstars work smarter, not harder. The corollary to this one is, “Superstars have lives, too.” In the old days, Superstars were often workaholics who sacrificed everything for the numbers, money, and accolades that came with Superstardom. And most of them burned out, marriages and health sacrificed in the process. Today’s new generation of Superstars are learning to work smarter, not harder, and to take the time they save and invest it in caring for themselves and their families. Studies reliably demonstrate that well-rounded people who live balanced lives are more likely to be productive and happier over the long-term. “Balance” refers to the essential spokes on life’s wheel, such as self, family, work, health, learning, and love. If any of them get out of balance, the wheel starts to shimmy, then wobble, and ultimately may shake apart. Superstars take time to smell the roses, as well as exercise or find other ways to stay in good physical shape. They develop and maintain a good support network of people who care about them, living the concept that “the love you take is equal to the love you make.”

All that balance requires an investment of time that comes at the expense of time available for chasing loans. So how do the Superstars do it? The answer lies above: systems, organization and resources. In the Mortgage Originator Superstars Seminar Series last summer, many of the Superstars were asked how many hours a week they worked. Almost invariably, they replied that when starting out, they regularly worked 80 or more hours per week. As they began to use systems and automation to do much of the work for them, they were down to an average of 40 or fewer hours a week. Having a life is important to having success in the business – any business – for an extended period of time.

As Disraeli said, seeing much, suffering much and studying much are the best ways to learn things. We learn as young children that suffering through the learning process, bloodying a knee learning to skate, for example, is overwhelmed by joy as the learning process blossoms into empowerment. The skater performing perfect pirouettes probably dwells little on the bloody knees earned along the way.

Mortgage originators who aspire to Superstardom have learned much along the way, too. They have learned to keep pace with the changing environment in which they make their loans, using available technologies and — most importantly — staying open to new concepts and ideas as they go about their business.

by James Hennessy