John Hicks had originally planned on a career as a financial analyst, but he soon concluded that he would derive more satisfaction from a profession that offered more direct contact with people. “I realized I was better suited to a job in outside sales, based on my outgoing personality and interest in selling,” he said.
Hicks, 38, turned to mortgage lending, although he did take a somewhat circuitous route to become a SuperStar loan originator. His early experience involved the financing of repossessed and foreclosed properties, but for the last 14 years Hicks has steadily developed his residential origination business. Last year, he closed 471 loans and $110 million and was number 145 on Mortgage Originator’s Top Originator list (for dollar volume).
After graduating from Arizona State University in 1987 and a brief stint as a financial analyst, Hicks joined Chase Manhattan Mortgage’s internship program, where he was responsible for financing foreclosed properties that were transferred from Chase Manhattan to the Resolution Trust Corporation (RTC). He subsequently went to work for Valley National Bank, where he handled HUD properties that had been repossessed. “Working on the government programs allowed me to become very knowledgeable about regulatory and compliance issues,” he said. “I used that experience to help me develop the residential side of my business.”
Valley National Bank also agreed to pay his tuition for MBA certification, which he thought would help distinguish him from the competition. “I had to find a way to catapult myself above other originators who had been in business for years,” he said. “I thought that by participating in the MBA program, I could expand my industry knowledge in a short time frame. That’s just what happened; I learned about systems that most companies in my market hadn’t yet implemented.”
His first year as a residential originator (1989), Hicks closed $11 million and was the company’s number one producer, a distinction he held for several years (Bank One eventually acquired Valley National Bank.) His first marketing activity was slightly unconventional–providing fax machines to area builders. “This was at a time when technology wasn’t as advanced and e-mail wasn’t as prevalent as it is today,” he said. “I selected a few top builders and Realtors and placed fax machines in 30 subdivision offices throughout the area. This enabled me to send rate sheets and commitment letters in a timely fashion. Of course, this wasn’t considered a RESPA conflict then and the Realtors and subdivision sales agents really liked having the fax machines. I subsequently removed them and tried something else.”
Hicks then offered builders a different incentive. “I told builders that I wanted to create extra value for their clients by paying $1,000 of the closing costs for their new home,” he said. “Builders saw this as a great way to provide a bonus to their customers, and at the same time, it was an opportunity for us to form a mutually beneficial referral relationship.”
Hicks continued to make builder/construction business a valuable niche. Several years ago, he began to develop a base of customers interested in building homes in high-end country club communities. He has established long-term relationships using a three- phase process: providing customers with their initial lot loan, arranging their construction loan financing, and helping them roll that into a permanent mortgage. “Over a two-year period, this has become a core part of my total production.”
Hicks also developed strong ties to the Realtor community. When he started originating, he researched which real estate offices focused primarily on buyer-based transactions. He then met with key agents to discuss ways that they could build each other’s business. “I told them that we would provide their customers a commitment letter within 48 hours,” he noted. “Then I made sure that our underwriters were able to help us deliver on this promise.”
He also began conducting educational seminars. “I went to the local real estate school and took a class on the use and applications of the HP 12C financial calculator,” he said. “Then I developed a simple training session for real estate offices. I taught agents how to calculate payments and amortization schedules. This basic program helped me gain access to other real estate offices. I also got their respect as a financial advisor.”
When he joined National City Mortgage as a producing manager in 1998, Hicks had access to a number of other marketing tools, including “Agent Update,” a newsletter he sends to his list of 30 key agents. “This is yet another way to maintain a presence in their offices,” he noted.
In addition, Hicks began to cultivate other affinity groups, including CPAs, financial planners, and attorneys. “For instance, I made an effort to develop a solid referral relationship with major accounting and financial services firms. I finally found one that would be willing to communicate the importance of being an advisor to their clients. I suggested that during their annual client evaluations they should ask a series of mortgage-related questions.” As a result, Hicks is now working with American Express’ Phoenix office “I had the opportunity to coach their group regarding mortgage rates and related areas and it sometimes seems as if they’re working for me. During the last 10 years, 30 percent of my business has come from AE referrals.”
Of course, Hicks doesn’t neglect his loyal customer base. His pre-closing activity includes an introduction letter, approval letter, loan-in-process postcard, copy of appraisal e-mailed, fax of final approval, and HUD-1 Settlement Statement. “This proactive approach helps limit the number of calls we receive during the transaction. We prefer to receive no more than two calls from customers; once when they call to inquire about a loan and then again when they thank us when the loan has closed.”
Hicks emphasized that real estate agents see the ongoing communications as a value-added benefit for them as well. “Rather than bringing agents cookies or bagels, we’re providing something of value that benefits their customers.”
In addition, Hicks’ “customer for life” campaign features 18 different steps during the five years after closing, including:
- Thank-you package, which includes a restaurant or spa gift certificate (30 days after closing)
- Customer satisfaction survey (60 days)
- Greeting card with customer response card (5th and 11th month)
- Postcard (17th month)
- Thanksgiving card (second year)
- July 4th postcard (third year)
- Quarterly newsletters
Hicks also distributes a special series of popular postcards, which he considers to be his most effective marketing. He selects a specific loan program that will generate interest from a specific borrower group. The front of the card features a photo of a well-known Scottsdale golf course; the back summarizes the designated loan program and includes a photo of Hicks and his contact information. “The postcards are aimed at helping customers realize a major benefit in their existing or new mortgage,” he said.
He usually sends about 500 of each card and averages a 10 percent return rate. “For example, if we send 400 cards, we usually end up closing about 40 of the borrowers during the next six months,” he said.
Hicks also developed a customer call campaign, whereby he personally calls five past customers each week. “I’m usually calling to advise them of something specific, such as their HUD-1 or appraisal. However, I’ll even call to ask their advice on a marketing piece that we’re developing. I’m not only getting some good feedback, but also helping to build tremendous client loyalty.”
Hicks has advertised in several publications, including local community newsletters. However, he prefers to place ads where they can help contribute to a greater cause. For instance, he is involved in a charity called ECHO, which helps raise funds for the Scottsdale school district. As part of his volunteer commitment, he advertises in the school directory. “The main reason I do this is to highlight the need for school funding,” he said. “Of course, it can’t help but give me some additional visibility. I’ve had people fax a copy of the school directory ad with a note asking me to handle their loan.”
During the last five years, Hicks’ Web site (www.nationalcitymortgage.com/jhicks) has become a major part of his overall marketing. He initially offered his Realtors’ customers a $250 closing cost discount as an incentive to apply online. “We did this for the first year as a way to educate ourselves regarding borrowers’ potential use of the site,” he explained. “Now it’s our most effective way to generate business. When customers are given the option of spending 30 minutes on the phone or going to our site, the choice is fairly easy.”
Hicks is in the process of developing a CD that will highlight the various steps involved in obtaining a loan. “This will be a great information source for borrowers,” he said. “It will help make the borrower comfortable with the process, showing them the steps that will occur throughout the transaction. It will also familiarize them with our office.”
Hicks emphasized that his team plays a major role in ensuring that his production remains at a SuperStar level. “I obviously couldn’t do this without them,” he said. “There’s no question that having this support allows me to be the rainmaker.” The team includes Miles York, assistant/transaction coordinator; Gina Caraballo, marketing/administrative assistant; and Jennifer Bair and Wendy Carlson, processors. York is involved throughout the loan application and follow-up process, while Caraballo’s many duties include handling incoming calls and e-mails, and coordinating the various marketing activities. “They’re both responsible for ensuring that customers have a ‘raving fan’ experience with us,” Hicks said.
In addition, Hicks refers some business (not included in his production volume) to two loan officer assitants: Wendy Myers and Shelly Stewart.
He noted that daily reports and their ACT! software system help ensure that they have a trouble-free pipeline. “I have an updated report on my desk every morning. In addition, we have an advanced e-mail communication system (via ACT!) that enables us to constantly know the status of every loan throughout the process.”
Hicks is involved in taking all the applications himself, although York helps with appropriate follow-up. “While I do spend time with the application phase, I regularly evaluate my own activity to make sure that I’m devoting at least 75 percent of my time to high impact selling.”
Hicks also observes the work habits of other top producers. He believes that SuperStars share several critical characteristics. “Most important is that top producers have a formal plan for the next five years,” he stressed. “From my experience, a majority of originators don’t have business and personal plans. It’s a key difference between moderately successful originators and the high-volume producers.”
He added that a passion for the lending business is also essential. “I’m convinced that top producers have a real love for what they do, a desire to be the very best.”
Hicks is adamant that SuperStars must maintain a balance in their lives. For example, his 4½ day, 40-hour week allows him time to play golf every Friday afternoon and enjoy weekends and vacation time with his family. “Many originators look at this as just a job, with money being their primary objective. My main goal is to be able to spend more time with my family, and I work hard to accomplish that. I know that as a result, the money will come.”
Although some originators have been concerned about a slowdown in business, Hicks looks forward to the year ahead. “As the refi boom slows down, everyone is trying to find new ways of doing business,” he noted. “We’ll be creating more aggressive ways to originate, including more volume for our lot financing niche. In addition, based on the final outcome of HUD’s RESPA proposal, we anticipate being able to offer customers a guaranteed mortgage package with reduced fees. I’m very optimistic about the opportunities for another strong year.”