TMP Frontline Series Profile: First Magnus Financial CorporationGary Simpsonmeet the entrepreneurial needs of their clients and the marketplace, technological development
Part II: Successfully reinventing the
wheel
First Magnus Financial
Corporation reinvents the wheel on an ongoing basis to meet the
entrepreneurial needs of their clients and the marketplace. The
company began its life in a small apartment in Tucson, Ariz. Since
then, founding members CEO G.S. Jaggi, COO Karl F.W. Young, CFO
Gary K. Malis and CTO Dominick E. Marchetti have led First Magnus
Financial Corporation to become one of the largest privately held
mortgage companies in the United States, with more than 300 offices
and more than 5,400 employees in 38 states. The company came off an
astonishing 65 percent growth rate in 2005 and set another company
record for 2006, handling more than 160,000 transactions and $30
billion in mortgages. In this continuation of "The Mortgage Press
Frontline Series Profile: First Magnus Financial Corporation," The
Mortgage Press discusses the company's use of technology and its
involvement in the mortgage broker community with First Magnus'
executive team.
According to COO Karl Young, "We've done a very good job under
Gary Malis' supervision of wrapping our arms around an
ever-expanding product environment over the last several years." He
added, "Dominick [Marchetti] has been able to take our technology
and wrap it around our product offerings, thereby creating a
platform that makes it very easy for our broker partners to
navigate through that increased product offering. It can be pretty
overwhelming; a broker may have to go through several different
wholesalers to hone in on who has got the best combination of
product and price for a particular scenario and have to go to
another wholesaler for another scenario."
Marchetti pointed out that this had a lot to do with how First
Magnus chose to focus on mortgage brokers from the beginning. The
company started in 1996, at a time when many of its competitors
were focusing on using technology to bypass mortgage brokers and go
after consumers directly. "If you look at the eLoans and Mortgage.coms, they were
invested very heavily in that direction," said Marchetti. "First
Magnus took a very different approach. We tried to focus on
building in some of the efficiencies and scale of automation."
After eight years, this has allowed the company to open up the veil
on the mortgage process. Marchetti added, "If you look at our
competitors, they don't really expose how a loan is moving through
the process - what forms are required, deadlines, loan status and
what fees are needed along the way. We've done a really good job of
exposing the mortgage process."
First Magnus emphasizes ongoing technological development as
opposed to focusing on day to day operational technology. Marchetti
feels that it's imperative to always be looking at their current
state of technology and ensuring that it is state-of-the-art. "If
you just look at technology generally, if you buy an iPod, three
weeks later it's outdated and just to keep up, you have to buy
another iPod. Well, it works exactly the same in the mortgage
business," said Marchetti. He noted that many of First Magnus'
competitors either purchase off-the-shelf applications or have
legacy systems that, in some cases, are more than 30 years old.
They are then forced to rely on outside vendors or consultants to
solve problems or add new features that the marketplace is
demanding.
According to Marchetti, "There is really a night and day
difference in what we are doing. We don't have any legacy
applications; everything that we have, we built from the ground up
and have continued to make modifications to the point where our
software is indistinguishable from our business process. We've
built into our software features that the brokers have been
demanding." Marchetti continued, stating that there is constant
development going on and, at any given time, the company has about
50 simultaneous projects in the pipeline.
Young added, "Our technology platform is a living, breathing
organism, and there are teams of people working on it all day every
day. And they have good working relationships with our sales
personnel and have become mortgage professionals who know more
about what it takes to get a loan in and out the door than I
do."
Marchetti said that First Magnus puts a lot of effort into
training brokers, including having a group of online help personnel
who also go out in the field to do training for mortgage brokers,
Webex training, 24-hour e-mail chat and a one-minute response time
for brokers who call First Magnus' phone support line for help. The
company's training teams do technology demonstrations and make
themselves available to help brokers with their questions. All of
this is done with an eye toward keeping their technology
user-friendly and making their broker customers as comfortable as
possible.
"We get a lot of accolades from the broker community. It
definitely helps us to grow our customer base. You can have great
tools, but if you can't find your way through them, then it makes
it very difficult," Marchetti said. "We have made a huge commitment
to making sure things are very simple. And it takes a lot of
energy, a lot of resources and significant capital to make
something so complex very simple."
This commitment to a broker-centric business philosophy
translates to First Magnus' relationship with the National Association of Mortgage
Brokers and its state affiliates. In 2006, the company won the
NAMB Affiliate of the Year Award for the second time in three
years. First Magnus has also won accolades from NAMB's state
affiliates, such as the California Association of Mortgage Brokers,
which named the company as its Affiliate Company of the Year for
the fourth year in a row. Gary Baraff, First Magnus' director of
business development, sits on the board of directors of NAMB and
serves on several of its committees.
"The partnership between First Magnus and NAMB is a good one,"
said Young. "With as active as he [Baraff] is, when you combine
that with a lender like First Magnus who has the interest and the
ability to effect change in the industry, I think many in the
industry see First Magnus as being in a very good position to help
drive the future of the industry. We've had the benefit of a lot of
the people who are involved at NAMB working with a number of the
state [association] presidents. In several markets, First Magnus
has come in during the past few years, rolled up our sleeves and
got involved at the state level. Many branches and regional people
are very passionate about getting involved." He noted that from the
company's perspective, too few of First Magnus' Broker Partners are
members of NAMB and that Baraff is putting a lot of effort into
changing that.
