Each month, National Mortgage Professional Magazine will focus on one of the industry's top players in our "Mortgage Professional of the Month" feature. Our readers are encouraged to contact us by e-mail at firstname.lastname@example.org to be considered for a future "Mortgage Professional of the Month" feature article.
This month, we had a chance to chat with Michael J. D’Alonzo, CMC, president of Creative Mortgage Group in Maple Glen, Pa. In addition to serving as president of Creative Mortgage Group, Michael is a longtime and active member of the National Association of Mortgage Brokers (NAMB), currently serving as president of the nationwide trade association. He took over as president of NAMB in December of 2010, when immediate past president William Howe was forced to step down due to health concerns. D’Alonzo was recently elected to a full term as president for the 2011-2012 calendar year in June at the NAMB Mid-Year Meeting. A 20-plus year veteran of the mortgage industry, D’Alonzo has dealt with both the commercial and residential side over his career. Creative Mortgage Group has been recognized with multiple awards for outstanding excellence and achievement by several top tier wholesale lenders in the country. D’Alonzo served two terms as president of the Pennsylvania Association of Mortgage Brokers (PAMB), the Pennsylvania state affiliate of NAMB, and has held a variety of positions on the NAMB board of directors, and is an active member on a number of NAMB committees.
How did you first get started in the mortgage industry?
I graduated from Drexel University in Philadelphia in 1983, and from there, went to work for ARAMARK, a food service business. I worked in the accounting and finance departments there for around four years, and then got started in the mortgage industry in 1987.
Is there anything that you learned while working for ARAMARK that you applied to the mortgage business today?
I dealt with a lot of financing information in my early years at ARAMARK. I learned how to read tax returns, how to look at budgets, how to crunch numbers … so that was a nice transition to the number-intensive mortgage industry. The whole corporate environment and absorbing the corporate culture of working at ARAMARK’s headquarters in Philadelphia was a good learning experience in working for a big company in corporate America.
How did you first get involved in the mortgage business and what exactly got you into the industry?
In the building I worked at with ARAMARK in Philadelphia, there was a friend of mine who owned a mortgage company that I knew from when I worked at a racquetball facility and his family were members of the club. We always hit it off pretty well. I ran into him a few times in the elevator, and he felt I should get involved in the mortgage industry. I was interested in breaking into sales with ARAMARK, but they didn’t have any sales positions available. I got in touch with my old friend in the mortgage business and began working with him in the same building that housed ARAMARK. I worked for him for about two years, and then moved on to working with PaineWebber Mortgage Finance. In 1991, I started my own company with a business associate, and in 1995, parted ways with him and formed Creative Mortgage Group in Maple Glen, Pa.
When you started your own business where were you getting business from?
Most of my business was referral-based. A lot of it was through accountants, attorneys, financial planners and real estate agents, so I just developed and cultivated those types of relationships, many of those which I still carry to this day.
Is there anything that you do different in regards to your business development today that you weren’t doing when you first started?
It’s really a lot of the same going on as far as the way I conduct business now as opposed to 20-plus years ago when I first started. It’s all about developing relationships, keeping your word, being proactive and coming through with the results you initially promised. Those are the traits that have carried me throughout my career. I have always been honest and produced what I said I was going to produce. If there's an issue, I can crunch the issue. I never overpromise, and I don't oversell and people appreciate that.
What value do you think you have being a mortgage broker over your mortgage banker counterparts?
As a broker, I have always enjoyed the advantage of the versatility and being able to use different lenders that may have different products. As a mortgage broker, I am always making myself available, whether its 10:00 p.m. or on a Sunday morning at 8:00 a.m. … its those types of things that give a mortgage broker an advantage over a mortgage banker.
What do you see for the future of the mortgage broker? I see a lot of the companies taking the mortgage broker out of the operation and merging them into mortgage bankers. A lot of them are doing it so they can have the power of a banker, but still have access to being able to broker products? How do you envision the future model of the mortgage broker business?
There’s always going to be a place for the mortgage broker in the future, the independent person or company that is going to operate as a true broker. There have been a lot of brokers who have aligned themselves with banks and still operate as brokers with the strength of a bank behind them. We’re already seeing that and that's okay because they still haven’t really changed who they are as brokers.
How do you handle operating your own business at Creative Mortgage Group and balance that with your responsibilities as nationwide president of the National Association of Mortgage Brokers (NAMB)?
I really compartmentalize a lot of stuff and make specific time for handing the affairs of NAMB. I must also provide time to not only handle business, but also make time for my family. It's a juggling act, but it's something that works for me. Personally, if I don't have a full plate, I don't feel good about myself. I always have to have a lot of things going on. It’s very important to have the support of your family. If I didn’t have an understanding family, it would be hard to juggle all the many things that I do, so I’m fortunate in that respect to have a family that understands my responsibilities.
Are there any tools that you find are essential to time management, whether it be in the day-to-day operations of Creative Mortgage Group or in your role as NAMB president?
I'm an old school kind of guy, so I make a lot of lists on yellow pads. I have a folder with a yellow tag for NAMB, a folder with yellow tag for business and a folder for my personal life. Each folder is in a briefcase and I write a list up every night and they go into each folder. Whatever doesn't get done that day, goes onto the list for the following day. These folders are my life. I don't do a lot of technical stuff, but I need to have those lists.
Physical lists allow you to be accountable every day for everything that you do. A lot of people use technical stuff and forget about other things. It goes into their Outlook Calendar and it’s out of their minds, whereas you are forcing yourself to take accountability of what you did or didn't do that day.
A lot of people make fun of me, but it’s what works for me. I always have my lists, and I always have those folders with me constantly, whether I'm on vacation or in my office, I always have my three yellow pads and folders with me.
What keeps you up at night? What do you worry about the most … your business, the affairs of NAMB and the nation’s mortgage population, or your family?
I feel what keeps me up is NAMB being a truly viable association for its membership. I think we have turned the corner. It was a tough six months to start the year, and it seems like we’ve been constantly in crisis management mode during that time span as well. We’ve come an incredibility long way since William Howe stepped down as NAMB president for health reasons in late 2010. We made a lot of big decisions of late, and I truly believe that NAMB, as an association, has turned the corner. The regulations passed by the government have been suffocating a lot of small operations, and even some big companies as well. But I'm am optimist, and I think on the industry side, we've seen the worst and there's going to be a turnaround, but it’s just going to take a little time.
The Mortgage Bankers Association (MBA) is forecasting that we're going to see nearly a 40 percent increase in purchase business from 2011 through 2012. Do you feel that number is accurate and what can mortgage professionals do to prepare themselves for that surge?
I agree with the MBA’s forecast. In my business, we've already seen 90 percent of our transactions as purchase transactions, and for the last couple of years, it's been a 50/50 split with refi purchases. Of course, you’d rather have a truly purchase-driven business, but refis are the icing on the cake. I think we're going to see a lot of purchases over the next year, and as far as first-time homebuyers are concerned, that market is growing, and sooner or later, the floodgates are going to open. To be ready for that influx of business, just keep yourself aligned with real estate agents, and develop and cultivate your relationships. The days of building leads and lists are gone. These days, you have to build relationships. If you want to survive at the end of the day, it's going to have to be a referral-driven business.
How have you dealt with the Federal Reserve Board’s loan originator compensation rules at Creative Mortgage Group?
We do a majority of our business from a lender-paid point of view, so we are adjusting to the LO compensation rules. I always say small mortgage companies can adjust better than anyone else in the industry. In our industry, we have had so many things thrown at us and we've always figured out a way to make it work and survive. It will be no different when dealing with the new LO compensation rules. LO compensation was a big pill to swallow, but in the end, we are going to work within the guidelines and do what it takes to be successful.
What are the chances we'll see some changes in the LO compensation rules?
The main thing as far as LO compensation is concerned is that we need to have the mortgage broker treated on a level playing field with the rest of the industry. At least if we get that accomplished, then we've done something. Right now, mortgage brokers have a dilemma on how they pay their LOs on borrower-paid compensation scale and that's what we need to correct at the every least. If we correct that, then I feel we're at least on a level playing field and can continue to work with the Federal Reserve Board on changes to the rule.
The Consumer Financial Protection Bureau (CFPB) has released their proposed Version A and Version B of the revised Good Faith Estimate (GFE) disclosure. Have you made a decision as to which one you like?
I really haven't made a decision as of yet on that. I haven't had a good chance to go through them both and see which one is going to be the more beneficial version of the two.
Under Elizabeth Warren’s direction as current head of the CFPB, do you think the mortgage banker and mortgage broker industries will see any improvement? Mrs. Warren seems very consumer-focused and sensitive to the complexity of the mortgage transaction. Her aims with the CFPB seem to create a competitive marketplace which is hopefully healthy in driving down the cost to the consumer. What are your thoughts on Mrs. Warren and the future of the CFPB as they establish the office?
A lot of the ideas we hear coming out of the office of the CFPB seem okay. I think that we’ll be able to work with the CFPB and develop relationships to make the mortgage industry one that is very manageable for the CFPB. It’s hard to say right now, but again, being an optimist, I think NAMB can work with just about anybody.
Do you think that as NAMB president, you are in the midst of one of the most tumultuous times in the industry? With a drop in the economy, a drop-off in membership numbers, and legislation that has sent people running from the mortgage business, do you think you have the most challenges ever faced by an NAMB president?
I think that each NAMB president is faced with a number of challenges and every one who has come before me has faced them in a different way. These are very different types of challenges we face today, and with these challenges come great opportunities. I think that’s where NAMB stands as a viable association for the mortgage community. And it will be through these challenges that NAMB will become a powerful force in the industry.
What are five things you can think of why someone should become an NAMB member right now?
I feel that everyone making their living as a mortgage professional should support the industry, and everyone should become a member of their trade association. Legislative issues and what NAMB fights for on Capitol Hill should be their primary motivation to become a member. Secondly, as previously stated, if you are making your living in this industry, you should support the industry. The third reason to join NAMB is to gain access to information that will help you conduct business in this current marketplace. The fourth reason I would say NAMB membership is vital is access to industry education. Through industry education, you can further your professional stature, such as through our certification programs. Lastly, I feel that member benefits are a great reason to join. Access to trade shows and some of the best and brightest minds through networking opportunities is yet another way to enhance your business. NAMB has been in crisis management mode in the past six months, and I think that over the next year, we can start shifting our focus toward education, member benefits, and improved communications with our membership. These are the things that will drive up our membership numbers and it’s a work in progress.
What has been the proudest moment to date in your career as a mortgage professional?
I would say that it would have to be the honor of serving as president of NAMB. I’ve been actively involved in NAMB since 1996, and have seen the good, the bad and the ugly this industry has to offer. I’m very honored and proud to serve as president of this great association, to direct the future of NAMB and help shape its future.
I am also proud of my two terms as president of the Pennsylvania Association of Mortgage Brokers from 2000-2002. We played a role in drafting stiffer licensing legislation for the industry in the state of Pennsylvania, and were also were one of the first states in the nation to require industry education for loan originators. My involvement with PAMB served as a stepping stone to my NAMB involvement and participation in affairs on the federal level.
Has there been anyone in particular you have looked up to as a mentor in the industry?
Yes, it would be my longtime friend, George Hanzimanolis. Any time I have questions or second guess myself, I call George. He’s always been the voice of reason for me, and he’s probably one of the best presidents that NAMB has ever had. He always keeps me grounded with his advice.
Do you have any regrets so far in your career? Is there something you wish you acted a little earlier on or could have handled differently?
I don’t really dwell on things that I didn’t do right. I cannot think of anything off the top of my head, but my feeling has always been that if you made a decision, you must now accept that decision and walk with it. Whether good or bad … you made the decision and must look to the future.
They say we’re most influenced by the places we go, the people we meet and the books we have read. Have any of these factors played an impact in your growth as a mortgage professional?
The person who had the biggest impact on my life would be my father. He was a very honorable person of high character and high moral fiber. I always looked up to him. He always said the right things and made everything okay. He passed away 13 years ago, but I think about him every day. He was a very good man.
I like the book Papa, My Father by Leo Buscaglia. He writes a lot of books about family and is of Italian descent like me. He discusses what its like growing up in an Italian family and makes me think a lot about growing up with my family, how my parents shaped my future and made sacrifices in their lives to make my life better. Behind every good person are parents who put everything on the line so that their kids could have a better life. I relate a lot to Buscaglia’s books.
As far as places are concerned … my place of solace is the shore. We have a place in Ocean City, N.J., and when I get to the bridge and head out to our getaway, I feel like the world is lifted off my shoulders. I can clear my thoughts and have a little peace. I unplug when I go there, but am never fully unplugged, as I always have my laptop, my three yellow pads and folders, but I do unplug to a certain extent.
What advice can you give to someone who is struggling in the business and trying to find new ways to exist? What would you say to the struggling mortgage company that is having a difficult time finding their place in the mortgage business?
I think that right now, more than ever, you really have to work hard. There is no secret, no magic bullet or no secret formula. You just need to work hard, push yourself and clear your head of all the negative thoughts to make it in this current marketplace. For those of us who have been in the industry for a long time, we get caught up in the "Woe is me" mentality. Sure, things are not what they were six years ago. We need to look at a person who may just beginning in the business … they don't know any better. We need to think like that person with a clear head and eliminate the negative thoughts. We need to get down to work and build relationships.
I think we’re already seeing smaller regional wholesalers popping up. I think you’ll continue to see that. Although there is a decrease in the mortgage broker population out there, I think it’s still going to be a viable option for the homebuying public. Think about all of the loans being written now and over the course of the last two years at least … they are all good loans. Brokers are delivering good, solid quality loans to the wholesalers, and as the statistics unfold and those loans become good loans, I think that’s going to be a good commodity for the wholesaler. Once they know that high-quality loans are being delivered, the market share will increase.