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Increasing your referral business

Jun 20, 2006

Frontline Series: Countrywide, America's Wholesale Lender: The keys to Countrywide's successGary Simpson and Ralph LoVuolo Sr., CMCCountrywide,America's Wholesale Lender Publisher's note—This is the first installment of The Mortgage Press' "Frontline Series," an in-depth profile of the pioneers and innovators of the mortgage industry. We begin with Countrywide Financial Corporation, because in many ways, they were the originators of the contemporary home financing marketplace. In addition, the company's reputation for dependability and innovation is well known within the mortgage industry. The behemoth that is Countrywide Financial Corporation began humbly in 1969 as a small two-person office, co-founded by Angelo Mozilo and the late David Loeb, with the goal of providing home loans nationwide. Starting out with an office in New York, they soon moved their headquarters to Los Angeles. After nearly four decades, this former two-man office has evolved into a diversified financial services company offering home loans, insurance, banking and other products and services to consumers and businesses. Countrywide is a member of both the S&P 500 and the Fortune 500 and has a workforce totaling more than 50,000 individuals at more than 800 locations across the United States and abroad. An important division contributing to the success of this giant company is the wholesale lending division of Countrywide Home Loans Inc., a leading wholesale lender in the U.S. Approximately 35,000 mortgage brokers work with this division through a nationwide network of seven regional processing centers and more than 50 branch offices. Known as Countrywide, America's Wholesale Lender, the division has focused on sales and fulfillment effectiveness, productivity and first-class customer service that help to ensure mortgage brokers and other third-party mortgage originators have one source for all of their prime and non-prime lending solutions. Recently, The Mortgage Press had the opportunity to speak with the senior management team of Countrywide, America's Wholesale Lender, consisting of Todd Dal Porto, Brian Robinett, Eric Spence and Debbie Rosen, about their strategies for success, the challenges presented by the current mortgage marketplace and how they plan to continue that success in the future. Todd Dal Porto, senior managing director, Countrywide Financial Corporation and the president of Countrywide, America's Wholesale Lender, outlined what he sees as the keys to Countrywide's phenomenal success. "I think what we recognize first and foremost is that our success is specifically linked to the mortgage brokers and loan officers whom we support," he said. "You may have heard our tag line, where we truly do have a 'one loan at a time' mentality. You can't make every loan, but we are in the position, through our extensive product line and some well-honed [technological] processes, to offer solutions to virtually any borrower. While we have great support from our parent company, Countrywide Financial Corporation, I think that the keys to our success are our commitment to our business partners' [mortgage brokers] success and our focus on one loan at a time." This meshes with the broker-centric mentality that Countrywide exhibits in dealings with its business partners and is part of the praise that the company has received from the mortgage broker community. Dal Porto added, "Clearly, any origination person understands the value of every single deal. It could be that a particular loan is the key to ongoing business from a business partner—a real estate professional, financial planner, what have you—or the end of that relationship. I know first-hand what it's like to originate loans for a living and to lose loans. From our perspective, we have a truly unique understanding and hunger to make deals for our business partners. We don't take loans for granted." In addition to having a broker-centric mentality, Countrywide is known for the rigorous vetting process that it requires of potential recruits to its lending team. "Certainly, we look for successful salespeople," commented Eric Spence, managing director, national sales manager for Countrywide, America's Wholesale Lender. "When we are recruiting, we are looking for the best wholesale account executives in the business. Obviously, we are very focused on recruiting top-notch professionals." Spence went on to explain that he sees a lot of opportunity in the current marketplace and that there are a tremendous number of mortgage brokers to be served from an account executive perspective. Even with approximately 1,200 account executives in the prime and specialty lending (non-prime) groups, he believes that there is still room to grow the number of account executives significantly. That sentiment resonated with Brian Robinett, managing director and chief operating officer for Countrywide, America's Wholesale Lender. He stated that he believes that there are several thousand prospective business partners out there that Countrywide would like to do business with. "There's no perfect list of mortgage brokers in the country. I can't go to the National Association of Mortgage Brokers for a list of all the brokers in the country," said Robinett. "But, I do know how many we do business with. I do believe that there are potential business partners out there, and if we don't go call on them, we can't do business with them." The brokers that Countrywide does business with are also subject to their rigorous vetting process. Debbie Rosen, managing director of the specialty lending group for Countrywide, America's Wholesale Lender, said, "We are very careful with that. It is very important to us that brokers—we call them business partners in the Countrywide family—are reputable, believe in the same things that we believe in and believe in providing the right loans to customers on an individual basis. Also, that they don't bring to the equation any past problems. We want to make sure that their records are clean and that they are focused on doing the right thing, not only within the industry, but also individually for the customer. It may seem to be onerous, but we believe that it is the right process and that it is very important that we have qualified brokers working with us. We also believe that it protects the family of business partners that we currently have on board." Countrywide also has an extensive training program that every new sales employee is required to undergo during their first 30 days of employment with the company and includes constant training throughout a person's career with Countrywide. The company has a detailed sales management training program that everyone—from the members of the first level management team up to their most senior members—is put through once a year, in addition to refresher training throughout the year that is built upon the goals stated in the initial management training program. Ethics and industry knowledge are foremost in this training program. At a time when there are many lenders that are having difficulty realizing the synergies between prime and non-prime lending—to the point where some are pulling out of the market altogether—Countrywide has been successfully positioning itself as a one-source lender for the financing needs of mortgage brokers. In fact, in 2005, Countrywide established a new record for the industry as its annual mortgage loan production volume reached $491 billion, despite a significant slowdown in the mortgage marketplace. Furthermore, the total volume in Countrywide's wholesale division exceeded $100 billion in 2005, making it the first wholesale mortgage banker to achieve this unprecedented milestone. With that impressive track record, Countrywide has no plans to pull back from their goal. "There are markets that we have not penetrated in the manner to which we aspire. We are working to better align and integrate our sales efforts, because we have business partners who choose to do prime loans with us only, and conversely, we have business partners who wish to do only non-prime business with us," Dal Porto stated. "What we've found is that the business partners who are offering our full menu are generally our best clients in terms of activity and volume. Those who understand that Countrywide can service the full credit spectrum as a one-source lender are far more productive with us, and I would guess they are far more productive and successful in the marketplace." Countrywide currently maintains separate sales forces for prime and non-prime lending services, but both are housed under the company's wholesale lending division. While this may appear to be an inefficient use of human resources, it furthers Countrywide's goal of being a one-source lender by teaming up the account executives from the prime group with the area managers of the specialty lending group. Robinett elaborated on the reasoning behind this strategy. "From a sales perspective, we can do a better job of focusing on and supporting our business partners with a more holistic sales and relationship strategy," he said. "However, because the products require special expertise—there are significant differences between prime loan products and non-prime loans; it would be difficult for a single salesperson to have a mastery of our entire product line—I think that it's important to have the two separate sales forces, but they must act in unison in terms of the way they approach the market, the services they provide and their accessibility, while maintaining that specialized expertise." Dal Porto noted that one of Countrywide's main initiatives is to make sure that their account executives (prime group salespeople) and area managers (specialty lending group salespeople) encourage their business partners to submit more of their loans across the credit spectrum to Countrywide. "I'm a big believer in specialization, especially with a product line as deep and diverse as what Countrywide offers," he said. "If you don't have specialists—people who understand their particular discipline—then people tend to specialize on their own and their focus tends to be narrower than you might prefer. Mortgage brokers want to deal with a salesperson who knows how to provide solutions for them." Regarding the reception that this blending of the sales forces has received in the mortgage industry when there are still players in the market who are defined as either prime or non-prime lenders, Rosen said, "I have the business philosophy that people ought to be allowed to deal with you the way they want to deal with you. If a business partner just wants to be in the non-prime business, we need to facilitate that by providing a very strong account executive who can help drive that business for that business partner." She noted that as the industry moves towards more of a purchase money market as opposed to the strong refi market of the past few years, more and more of Countrywide's business partners have had to offer a fuller menu of lending products in order to survive. "You see more of a gray area emerging where those brokers who were focused primarily on the prime business are reaching down the credit ladder while those brokers who specialized in the non-prime market are reaching up. It is the crossing of those two distinct circles that presents the greatest opportunity for us to lead our business partners through this changing market. Everybody has to be doing a little bit of everything to survive." Facing a market that continues to contract and with the prospect of an industry shakeout looming on the horizon, Countrywide's wholesale management team believes that they have the keys to remain successful. They believe that Countrywide's focus on providing the best service possible for their business partners and their reputation for dependability will give them the edge in attracting business in a more competitive marketplace. "We have to continue to not only perform well, but to perform better," said Dal Porto. "In any market, large or small, it is in brokers' best interests to align with stable, consistent and leading lenders such as Countrywide." Robinett added, "We look at everything from a very long-term perspective. We know that each segment of the market will ebb and flow pretty significantly over time. Whether that is from changing interest rates or whatever, we're very focused on being the one-source lender for our business partners. When they have a loan [application], regardless of credit or borrower profile, we want them to think of Countrywide first."
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