“Top originators don’t wait for their company to provide for them, they plow their own trail. They move full steam ahead with their ideas.”
Michael Bischof didn’t waste any time preparing for his future origination career. Upon graduation from Indiana University in 1990, Bischof joined Grubb and Ellis as a commercial real estate analyst.
But after a couple of years, he wanted more and began exploring the mortgage lending business. “I learned about the career of a loan officer from my best friend,” he said. “What attracted me was the freedom, the entrepreneurial challenge, and the unlimited earnings potential. I knew it was time to take the plunge into an all-commission business.”
He went to work for a small mortgage broker in Arlington Heights, Illinois in March 1992. “I had better offers,” he said. “This company had no draw or salary, but it was committed to training, even during the busy periods.”
Bischof, 32, started training during a “refinance craze when the phones were ringing off the hook.” He followed originators, read the industry guidelines, and sat in on loan applications. He actually did his first loan during the first month of training. In May 1992 he became a full-time originator. “I did $2 million in my first month and by July was the company’s top producer (from then on),” he said. “I could not believe the money that was to be made in this business.” He finished his first year (nine months) with $18 million. Bischof later worked for another small firm, eventually leaving to start Biltmore Financial Bancorp in 1997.
Bischof’s initial focus was primarily taking incoming calls. “I wanted to take as many calls as I could to build up my client base,” he said. “Then I began to introduce myself to all the parties involved in a deal, including the selling and listing agents. I was able to quickly develop a sizable client base as a result of these calls. I also worked feverishly to develop solid, long-term relationships with each client.”
Since then his marketing has significantly expanded. It begins during the loan transaction process. He sends clients three letters-one at opening, another to remind them of any necessary materials and other details, and a thank you and congratulations message at closing. “When the loan file is opened, our database automatically prepares the letters. They are signed by the originators and kept in a file until they’re ready to be sent.” Once the loan has closed, Bischof communicates with past customers 12 to 15 times a year. This includes a quarterly newsletter (outsourced to the Gooder Group) which has general trend and finance-related information and has a place for their name, logo, and photo.
He also sends customers a quarterly update (prepared on Excel) which includes details about their specific loan-such as the current payment, balance, and interest rate-and compares it to different loan options. “The quarterly update has been my most successful marketing to date,” he said. “It shows them that we are interested in their long-term welfare. This helps build trust and generate referrals.”
Other mailings include postcards, anniversary cards, and the HUD-1 closing statement sent at the end of the year.
On a quarterly basis, they will target groups of past customers with e-mail messages about their current loan and other opportunities. In addition, several times a year they use the Eppoffect program to leave voice mail messages. “This allows for quick, effective target marketing,” he stressed.
All of his customer communications emphasize the importance of referrals. “We stress the need for referrals and our appreciation for them sending us customers,” he noted. “I think some originators miss in this area. They don’t articulate how they get business, and customers may think they have enough business…that they don’t need any more.” Bischof explained that he begins early to communicate his “vision” to customers. “I let clients know up-front that I want to be known as their finance expert. They know that we have to do a good job to go further in the relationship-to earn their referrals. This motivates them.”
Bischof has learned that he has to continue to try even harder to establish relationships with past clients. “Occasionally I will get some mailers returned due to an address change,” he explained. “The first thought is disappointment, because I realize that they didn’t go through me for their new mortgage. However, after further review, I ask whether or not we had a relationship and the answer is almost always no. I didn’t do enough to create or preserve a relationship over the years and make them obligated to call me. Thus, I can’t blame them.”
He stays in touch with real estate agents, financial planners, and other business partners via quarterly mailings. “I did more marketing with Realtors and others in the beginning. But now that I’ve established their trust, they know I will represent them well with their clients.”
He is also planning his first annual golf outing for his top professional contacts and past customers.
Bischof’s expanded marketing presence has helped him grow from a first year volume of $18 million, to $37 million in 1995, $69 million in 1997, and $100 million in 1998. Last year, he closed $55.7 million and 286 loans and was number 104 on Mortgage Originator’s Top 200 Originators list.
Bischof’s average loan is $195,000, higher than the Chicago market’s $135,000. His primary niche is the “successful business executive” who will make Biltmore Financial part of his consulting team. “We want the professional business person to consider us their mortgage finance advisor, the same way they view their attorney or CPA.” Most of this business is generated via referrals. Bischoff completes a loan for one executive and that person spreads the word.
“I’ll explain to them that my goal is to get to know everyone within their organization who has home financing needs.”
Bischof considers 1994 to be a pivotal period in his development as a top producing originator. That was the year he attended Todd Duncan’s Masters coaching program. “The seminar consisted of approximately 100 mortgage superstars trapped on an island (Hawaii) together,” he said. “The program had a profound influence on me. Now I had to raise the baseline, to measure my success against the best of the best from throughout the country.”\
Bischof noted that on his return he challenged himself to raise his business to a higher level. He concentrated on customer-focused strategies aimed at expanding his referral base.
In addition, he made another major step by hiring his own assistant in 1997. “It allowed me to focus on the highest pay-off activities, those that keep me in touch with clients,” he said.
Bischof’s support team includes a client relations coordinator (assistant), and an office coordinator who also serves as his marketing assistant. “There’s no way I could do the volume I have without an assistant,” he said.
He takes all of his applications; 55 percent on the phone and the rest in the office. “We cover such a broad market that it is more convenient to do many of them on the phone. Of course, I give them the option. I don’t want to give the impression that I am a telemarketer or an order-taker.”
After spending about 20 minutes with the client, he will e-mail or fax the authorization form to proceed with a preapproval. The loan is then sent via Loan Prospector or Desktop Originator for an approval. “We use Adobe Acrobat to e-mail the documents to the client and this results in instant gratification, as they get to see the docs right away.” They maintain close contact with their customers, which includes weekly status calls. “Upfront we emphasize that they will get a call from us every Friday, even if there is no news. If there is nothing new to report, we explain that we want to make sure they are comfortable with the process and see if we are doing everything we should to earn their trust and their referrals.”
He added that another benefit of their proactive calling is that it eliminates incoming calls throughout the week.
Bischof considers an entrepreneurial spirit to be one of the primary characteristics of a superstar originator. “Loan originators must treat their position as a business underneath the roof of someone else’s business. Top originators don’t wait for their company to provide for them, they plow their own trail. They move full steam ahead with their ideas.” He stresses that self-evaluation of strengths and weaknesses is another critical requirement. “A loan officer who takes their business to the superstar level must be their own toughest critic. For example, you have to ask, ‘Am I organized, or do I find myself lacking systems.’ If so, you may need to consider hiring a coach and taking organizational or management classes.”
Also important is investing in your business. “A top producer is not afraid of reinvesting profits into business. One must be so confident in their plan, and have a vision for where they want to go, that they allow for capital reinvestment, and taking well-thought out, calculated risks.”
Bischof pointed out that it has been a challenge to both originate and manage Biltmore Financial’s six originators and five support staff. “For example, I’ve asked myself whether my own focus on production is good for the company-whether it distracts me from other areas,” he said.
However, he has been able to juggle both areas by following a series of guidelines. For example, he depends on systems to “break down tough tasks into simpler ones” and uses time block processes for added efficiency.
Unlike some overly competitive firms where each originator has a different approach, Biltmore encourages originators to use common strategies. “I wanted to make sure that I was helping other originators become superstars. Whatever was successful for me I encouraged them to follow.”
He makes it a point to provide ongoing direction. “The best thing I can to is lead by example. I want to take risks and pave the way….to be an in-house coach for my originators.”
Bischof plans on significant more growth at Biltmore Financial. “We want to expand our client relationships and, of course, withstand the competition from online originators,” he said.
Bischof sees no need to add more branches. Instead, he will concentrate on adding loan originators who match their system. “It has to be the right kind of person, someone who has his or her own client base when they arrive,” he said.
He also plans on spending more time enjoying the rewards of his hard work. Bischof tries to spend at least one day every two weeks working from his home office. He also takes about three weeks of annual vacation with his wife and son.
“You can have a successful career and enjoy your personal life,” he said. Bischof is obviously one of those superstars who has achieved balance in his life.
One Tough Loan
A borrower relocating here from Boston was seeking a $220,000 loan for a condo. He wanted to put 5 percent down. He was the director of human resources for a major company which I have a relationship with and have received a good amount of business from. In addition, he was referred to one of my best real estate agents. This deal’s closing was essential to two other deals closing (all with the same agent)-as they were both contingent on this sale. This loan, the reputation I had with the borrower’s employer, and the agent’s other two deals closing were all at stake.
The buyer had gotten into a dual offer on the property without having first talked to me. He had waived his financing contingency. Meanwhile, he had no idea how poor his credit was, largely due to a divorce. His FICO scores were in the upper 500s. After exhausting the efforts of about 30 conforming and non-conforming lenders, we couldn’t find one to do the loan (initially on a prime basis). Finally, after the agent decided he would apply his commission to be used as a five percent 2nd on the client’s purchase (as a temporary loan), a non-conforming lender came through with an approval, based on the 10 percent down. We got the borrower into a two-year ARM. Obviously, we were all relieved at the successful conclusion to this loan.”