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This month, we had a chance to chat with Danny Nicolo, president and chief executive officer of Meadowbrook Financial Mortgage Bankers. A 1986 graduate of Xaverian, a private college preparatory high school in Brooklyn, N.Y. and worked for his family’s catering business, A&S Italian Marketplace. Danny pursued architectural engineering after high school with two years of undergraduate work at the Pratt Institute. He became more involved with the family’s catering business, and from 1989-1997, opened up several A&S Italian Marketplace locations for his family in the Tri-State New York area and Long Island. He also began investing his savings in the real estate market.
His desire for a greater challenge and a chance to improve his quality of life, Danny was eventually led to the field of real estate and the housing finance industry. Working as a loan originator in 2001, Danny was able to build relationships with his clients similar to the relationships he built with his family-owned Italian markets. In 2004, he applied for his New York State Mortgage Brokers License and in 2008, applied for his New York State Mortgage Bankers License.
Danny is currently president and chief executive officer of New York-based Meadowbrook Financial Mortgage Bankers, a full-service mortgage bank offering an array of products, from purchase, to refinance, to construction lending. Danny is known as the man who has made the transition from “Butcher to Broker to Banker” in the mortgage industry.
From Butcher to Broker to Banker
How does one go from owning and operating a chain of successful Italian gourmet markets, A&S Italian Marketplace and being the entrusted butcher in the community, to owning a mortgage bank?
Although the food industry is a great business, you would have to spend every day of the week in the stores to become successful. After many years and countless days in the stores, watching customers loading up their coolers in the summer and spending time with their family added to my drive in changing careers. I decided to challenge myself and seek other opportunities to earn a better quality of life for me and my family.
First, I started investing all of my savings into real estate. When going through the whole process of buying properties and meeting with originators, we would discuss mortgages and it became very intriguing to me. I started understanding the origination end of the process. I started spending many hours with clients from the store who were in the mortgage industry and took courses. My wife also started pursuing a career as a title closer at the time. It was the ideal career path for her because she was doing something she wanted, and introduced the both of us to the world of real estate, and buying and selling properties.
I applied from my own broker’s license and began working out of my basement, processing and closing mortgages on my own and became very successful. I attribute much of my success to my experiences as a butcher where you establish and develop relationships with your clients and they learn to trust you due to your service and quality recommendations. If I could build up a successful Italian butcher shop, then I could use those same fundamentals in starting up my mortgage business.
How did you turn those referrals into business and maintain your mortgage business?
I began building my base of referrals by telling people that I was starting a part-time mortgage business, and if they needed anyone for their mortgage needs, I was available. I used to work 70 to 80 hours a week at A&S, and never saw my family. I wanted to make a change to see my kids grow up and see my family more often. Many of my first clients were from my Italian marketplace, and I built upon that through referrals. My first six to eight months beginning in the mortgage business part-time back in 2001, my clientele was strictly customers from my Italian market. From there, through referrals and word-of-mouth, my mortgage business grew, and in 2004, I decided to obtain my New York State Mortgage Broker’s License.
Taking the relationships I built from my store with my customers made it a good fit for me to change careers because they trusted me … it was a transfer of trust. There were other businesses up the block from A&S Italian Marketplace that would also give me their real estate and mortgage business. I would bring a change of clothes with me to A&S, and after working, I would make appointments to meet with them later in the day about mortgages, and then change again and go back to work at A&S. I did that for about six or seven months, and was only able to meet them nearby because I would always have to go back to the store. It was a hard push with a lot of sleepless nights, but it was to improve my quality of life with my family. Before this change of careers, I was never able to take vacation with my family—I had off one week a year—and it was never around holidays.
When I first got my Broker’s License, I was afraid to leave A&S because it was “secure,” something I had done my entire life. With the urging of my father, he suggested I take six months off from the Italian market, and that I work on becoming a broker to see if I could cultivate and build my business to have a better life for my family. Within my first month, I had 10 or so deals I was working on—originating, processing and meeting investors in my basement. As I started getting busier, an old friend of mine heard that I was an approved mortgage broker and asked if I wanted to become partners, so we opened up a mortgage business.
In 2005 when the economy began to take a turn for the worse, I decided to apply for my New York State Mortgage Bankers License. I realized it was a good time in the industry to make the transition from broker to banker, and changing careers was to improve my quality of life.
I believe that trust is the most important aspect of business, especially when you're dealing with someone's finances. If a person can trust you, you have them for life. With all of my customers, I always have to meet them face to face. They need to know that I'm not just a telemarketer, I meet them face to face and get to know them personally. They begin to trust me so much that they ask me to help them with other aspects of their life. I would meet with them three or four times before I even got the mortgage, but what was important to me was how I built and established their trust.
What do you find more fulfilling, being a butcher or a mortgage banker?
Being a mortgage banker is definitely more fulfilling. With my mortgage business, I wake up in the morning, put on a suit and tie and meet with clients, I feel born again. My family fully supports me. So many people come and go in this industry, and I really have to believe in myself and what I can bring to my clients. It’s not just a case where I go into the back of the store and cut someone a steak … you really have to put in a huge effort to make sure that your clients are qualified the right way in order to get the application approved. I use the same fundamentals in my mortgage business as I did when working in the pork store.
What moves are you most proud of that have allowed you to maintain your growth during the mortgage industry consolidation? What do you think the industry has done in order to properly survive over these past few years as regulations and underwriting standards have become more strict?
At first, we started as a strictly referral-type business. Then, by aligning myself bringing in others with other platforms of the business, we were able to grow. Licensing in the mortgage industry has helped us find, create and hire better sales prospects. Also, hiring a very conservative underwriting team has created a workflow complete with several compliance checks and balances in each department to make sure that we are maintaining the highest level of loan quality.
In terms of our operations at Meadowbrook Financial Mortgage Bankers, we have a full-time trainer coming on board. Education and training are the keys to making it in the mortgage business, as regulations and underwriting standards have tightened. All of our employees must take a five-day course. This business is ever-changing, as our salespeople are constantly training on new products and our investors are subjected to new regulations. In the end, open lines of communication are key.
Looking at your career, are there any milestones and accomplishments that you are really proud of?
I am very proud of the growth of Meadowbrook Financial Mortgage Bankers, both here in New York and our expansion into nine states. I am also proud of our investor involvement. Just a year ago, we had no tier investors, it took us a year or so to get approval with top investors.
At Meadowbrook Financial, we have also gone completely paperless, from buying leads to shipping loans to the secondary market, it’s all done from center to center. I am proud of the expansion of our paperless system. I believe that will be a milestone that I can look back on in the future and say, “Thank God we did that!”
Are there any regrets you have about the industry or any decisions you would have made differently?
I regret not getting involved in the mortgage industry much sooner. I knew we’d have to start small and take baby steps. I feel we took all the necessary steps to get us where we are now. Of course I would have liked for the growth process of Meadowbrook Financial Mortgage Bankers to have gone faster, but we took things slow, aligned ourselves with the right partners and did things the right way, and I am very satisfied with where we are today.
What do you feel separates a successful loan originator with a mediocre loan originator?
A successful loan originator is one who must have a strong knowledge of the industry, not someone who is just a paper-pusher or someone who is consumed by making money. Marketing and networking are two factors that separate a top LO from an average LO. Our values are crystal clear at Meadowbrook Financial Mortgage Bankers—our communication, leadership, excellence, attitude and respect—if an LO believes in those values and works really hard, they are going to be very successful with us.
How would you describe your management style, and do you feel any one person or book influenced your management style?
I am very laid-back and trusting. I get out of the way so that successful LOs can be successful, but I am here to offer my support to them whenever they need it. My father's work ethic is what I’ve modeled myself after. My whole life has consisted of work. When I was 11-years-old on Dec. 23, I was working around the clock. My father would tell me not to tell other people because it was wrong, but at the end of the day, it was all about work. I learned values and wanted to thrive and succeed. I’m not that big into reading … I'm big on “doing!”
How involved are you in your family life?
On weekends now, I'm able to take my son to basketball games. We can go on quick vacations now as well. I was never able to really spend time with them until now. In running A&S Italian Marketplace, I just couldn’t leave to do things like that. Now, I have the flexibility to do work outside of my office. Up until I was 35-years-old, I had never been to a vacation spot like Montauk, N.Y. … I'd be behind the counter at A&S all night and then go home because I had to be in early the following day. Now, I'm at a point where I feel that we are still growing the company, but I have a life too with my family.
What do you see in the future of the mortgage industry, and what are some of the big opportunities that are on the horizon?
I feel a combination of call centers and the purchase business will come back again. We look at B to B … all retail, hiring virtual LOs, branch expansion, etc. Right now, a lot of the account executives did their year-end and have captured back the business, but we are on the list to be the in-house mortgage company for large groups of organizations, whether they're union or public companies, we're expanding into all areas of origination.
We are predominately expanding in the New York Metro area, but we are becoming licensed in some areas of the South as well. In addition, we are also beginning to align ourselves with companies working with real estate-owned (REO) properties.
We are also increasing our presence in the social media space through a heavy involvement with LinkedIn, Facebook and Google … Meadowbrook Financial is expanding in all areas.
If a branch comes to work with Meadowbrook Financial Mortgage Bankers, what type of support do you offer these branches?
We are a business in a briefcase! Literally, there is a briefcase where they can originate from any computer, laptop and log-in 24 hours a day, seven days a week and pull credit reports, price a loan, run Desktop Underwriter, submit a file to underwriting, or ask for help with questions or concerns with a file guideline. Users can press a button and upload documents for review, they can download docs to a real estate agent, track the submission of their loans … we provide the ability to accurately track the entire process at the touch of a button.
All of this information is available via the Internet. Everyone needs to be computer savvy. We do have some people who are just frightened by IT. In fact, I have one person who calls me every time a rate drops and wants me to price the loan. I have to pull over in my car to tell her the current rates. We also have programs that allow LOs to remain LOs and not have to be so IT-savvy. We accommodate all types of LOs.
Do you feel that there a particular business that works best in this environment … what kind of branches work best for Meadowbrook Financial?
We don’t cater to a call center that does lead generation or not cater to a call center that just does referrals … we treat them all the same. We have the technology in place for a consumer to log into our system and check the status of a loan. We don’t treat the branch any different than the consumer … they are all treated the same. We don’t cater to any sources of a loan … we ultimately cater to the client. LOs in sales fuel our fire, as a good LO who has a bad experience with us is like losing a client. Happy LOs bring in more clients.
Where do you see yourself and the direction of Meadowbrook Financial over the course of the next five years?
Currently, we are looking to expand right away, with corporate branches up and down the East Coast. Right now, we have a total of four call centers. In three years, we plan on having 35 corporate branches, and by five years from now, have 50 corporate branches under the Meadowbrook Financial Mortgage Bankers banner. We are expanding rapidly and are looking for the right people with a proven work history and prior success.
We treat all of our corporate branches the same, offering them the same tools, we help them recruit, we help them with management and expansion as well. If they are doing business, we are here to help them.