As part of the 19th Annual Regional Conference of Mortgage Bankers Associations, held in March at the Trump Taj Mahal Casino Resort in Atlantic City, N.J., seven of the industry’s top originators were assembled to share what’s making them a success today to discuss the latest industry happenings. The panel, consisting of mortgage professionals of varying degrees of experience under their respective belts, all agreed that making it in today’s industry is not about pushing as many apps through their offices as possible. They agreed that, in order to make it in today’s mortgage landscape, mortgage professionals must properly plan, exercise patience and be proactive. In this discussion, these originators share their secret habits that make them a success.
Meet the sponsors …
Christopher Delisle Esq.—Equity Settlement Services Inc.
Christopher Delisle Esq. has been with Equity Settlement Services Inc. since 1986. He graduated Touro Law School in 1998 with high honors. During his tenure with Equity Settlement Services, he has gained extensive experience in all aspects of bank closings including, but not limited to, residential and commercial transactions.
Steven A. Milner—US Mortgage Corporation
Steven A. Milner, founder and chief executive officer of US Mortgage Corporation, has nearly 30 years of experience in the mortgage industry, having started his career as a loan officer in 1981. Steven spent the first 18 years of his professional career as a math teacher on Long Island. It was not until 1981 that he first took an interest in the mortgage industry when doing a refinance on his home.
Meet the originators …
Barbara Gallagher (McDonald)—Welcome Mortgage
Barbara Gallagher (McDonald) began her career in the mortgage industry in 1987. After working as president of Welcome Mortgage Corporation, she purchased the company in 2000 with her business partner, Mark DiLeo. She has been a special guest on 89.7 WGLS radio, as well as CN8's "Real Life" and has appeared on a number of news broadcasts, including NPR.
Anthony J. Gatto, CRMP, CSA—Morgan Hill Funding LLC and Reverse Choice
Anthony J. Gatto, CRMP, CSA is the founder of Morgan Hill Funding LLC and Reverse Choice, Morgan Hill Funding’s reverse mortgage division. Anthony began his career in the mortgage industry in 1997, and was introduced to reverse mortgages in 2000. He opened Morgan Hill Funding LLC/Reverse Choice in 2010 in order to follow his passion for reverse mortgages and his dedication to serving the senior community. He was previously a branch manager for Allied Home Mortgage Capital Corporation from 2000-2010, and Allied Home Mortgage’s state manager for New Jersey from 2007-2010, and also served as their qualifier in New York from 2009-2010. Anthony is currently a board member of the New Jersey Association of Mortgage Brokers (NJAMB).
Ed Kenmure—PrimeSource
Ed Kenmure has been in the mortgage business since 1984. Ed was president and chief executive officer of United Community Mortgage Corporation. He orchestrated an acquisition merger with PrimeSource, a publicly-traded company, a little over one year ago.
Edward O’Connor—Generation Mortgage
Edward O’Connor is the eastern regional manager of retail sales with Generation Mortgage Company and a Certified Reverse Mortgage Professional (CRMP). Previously, he was the president of Advanced Funding Solutions Inc., a reverse mortgage broker licensed in three states. He has been involved in the financial services industry for more than 25 years, having started as a loan officer and then product manager for Chase Bank. Ed owned his own accounting and tax practice for 16 years prior to being in the mortgage industry and is a licensed Enrolled Agent by the IRS. He is also the co-founder and chairman of the Long Island chapter of the National Aging in Place Council, and is a retired Nassau County Police Detective.
Steven Porter—Qwest Mortgage Inc.
Steven Porter of Qwest Mortgage Inc. has been originating mortgages for more than 32 years. Previously a Platinum Club Loan Officer for Bank of America, Steven has been president of Qwest Mortgage Inc. since August of 2000. Steven was the very first mortgage originator licensed by the Pennsylvania Department of Banking.
Dave Pressel—West Town Savings Bank
Dave Pressel is managing partner of the New Jersey Retail Division of West Town Savings Bank in Manalapan, N.J., a conventional and FHA/VA lender originating in all 50 states. Dave is in his 23rd year in the mortgage industry, and has been ranked in the top tier of producing loan officers in the country, averaging $75 million in personal closed loan production per year.
Jeff Van Note—Jersey Mortgage
With 10-plus years of industry experience, Jeff Van Note of Jersey Mortgage has emerged as an industry leader. Recognized for top-level performance, superior customer service and expertise in the industry, Jeff has successfully helped clients from all walks of life achieve their financial goals and objectives.
Moderator: What are some of the industry issues that keep you up at night?
Dave Pressel: Other than the kids … I think I’m very fortunate that not too much keeps me up at night. After 22 years, I am still in love with this industry. I love what I do. I’m good at it, and I enjoy it. I get as much out of it as it gives back to me. I think that can be said for any industry that you have a passion for. I think there’s a difference between work stress and not enjoying your job, and I tell all my loan officers the same thing … look at this as a career and not as a job. If you look at this as a career, there could be a love affair for years and years. You know the thing that keeps me up at night is not having this industry tomorrow.
Barbara Gallagher (McDonald): Everybody played a part in the downturn of the housing market in my opinion. The borrower played a part, real estate agents played a part, mortgage bankers played a part and the securities market also played a part. Everybody who thought they knew what they were doing knew the writing was on the wall. And the big deal, what keeps me up at night, is that those option ARMs have not come yet. What is negative has come from everything else, we have not seen the fallout yet from the option ARMs … they are still in the twos. I think we still have that to worry about.
Anthony J. Gatto: I don’t think the option ARMs are as bad as we perceive them to be. I think if there had to be a villain in this whole crisis, I would say it was the big banks. They were the ones who went to Capitol Hill, they got in the bus, they drove over us back and forth, because somebody had to go down for this and brokers were the weakest link. The brokers were the weakest target and they really took the brunt of it. Most of those option ARMs that I see come across to try to refinance, I can’t refinance them.
Barbara Gallagher (McDonald): Because they are still in the twos.
Anthony J. Gatto: Yeah, who wants to refinance a deal that you’re in the twos and threes?
Barbara Gallagher (McDonald): But that doesn’t mean that there’s not a consequence for that or that it’s …
Anthony J. Gatto: No, you’re perceiving a future consequence. I think a bigger consequence that we had in our industry was that it was overbuilt. There was more product available at any given time that really brought down the entire industry. It wasn’t necessarily the financing, it was that the market was saturated with inventory.
Steven Porter: It was the cause and effect.
Anthony J. Gatto: Yeah. The builders just continued to build and build.
Steven A. Milner: I find that a big challenge is keeping up with continuing education requirements. I have background in education. I was a school teacher for 18 years before I got into the business part-time to make a few extra bucks. I try to set the example for all of my salespeople. If I can do it, they too can do it. We all know the challenges associated with licensing. It’s a challenge we face in all of our organizations.
Barbara Gallagher (McDonald): Another thing that worries me is when you are licensed in 50 states and must keep up with continuing education. I think that’s difficult, but what panicked me was the audit. Getting audited by 50 states because we just went through two audits and it was so time-consuming it was unbelievable. I’m in a 10-person shop, so it’s a huge thing and the bills haven’t come in for them yet. But what keeps me up at night is what the future holds as far as mounting business. I think that what we’re not saying is that we have had rates below the four percent mark for so long, that the housing market is eventually going to start creeping up again. Eventually, it might not be right away, but eventually. I’m not an expert, but it seems to me that after 25 years of doing this, I’m thinking of an equilibrium in the market at about six or seven percent. Don’t you think that’s where rates probably should be?
Ed Kenmure: With all the sour inventory, foreclosures and short sales coming off the market, the prices are going to stay down, the rates will creep up, it’s cyclical. It always happens. It’s a purchase market. I’m probably doing half your business, but it’s more profitable because the loan officers are on commission, I’m not spending all this money on leads. People look at production and companies looking to go from $40 million a month to $70 million, but at what cost?
Steven Porter of Qwest Mortgage and Barbara Gallagher (McDonald) of Welcome Mortgage
Moderator: What trends do you see in the current mortgage marketplace?
Anthony J. Gatto: There are definitely a lot less of us in the industry these days. I remember when I first took a position with Allied, there were 44,000 loan officers in the state of New Jersey alone.
Ed Kenmure: What year was that? There were 60,000 loan officers in New Jersey in 2006. I wonder what that number is today?
Anthony J. Gatto: I think today, it sits at only 4,500 to 5,000 in New Jersey.
Ed Kenmure: And that’s a recent increase … it had been sitting at around 2,800.
Anthony J. Gatto: I see, even with my own children and their friends, that there’s a little bit of a mind shift, a change in thinking as to what this generation expects out of life. I think our generation was a lot more driven.
Ed Kenmure: We’ve made it easy for them.
Anthony J. Gatto: Well, it’s more a quality of life issue to them than it is to us. To us, we’re tied to our job in more than one way. It’s more than just a place to go to make a living, it represents our identity, our ego and so many other things because I think that’s the environment we grew up in. They grew up in an easier environment because we made it easier for them, we sent them all to school and they got great educations. I went to a community college, I paid my own tuition … we didn’t have that. Not that I’m complaining because I think that provided me with the motivation to go out and want to succeed, but college may not be for everybody.
Jeff Van Note: It’s not for everybody.
Anthony J. Gatto: We don’t have enough engineers in this country as everybody has already seen, but we have more art history majors than there are museums in the world.
Jeff Van Note: And too many accountants.
Anthony J. Gatto: Right … so not everybody needs to go to college and spend that kind of money, but I think the mindset of that younger generation is really going to change a lot of things in our society. People are not looking at it like “I don’t need that big house.” And I think the days of the McMansions are gone. Nobody wants to spend the money on property taxes especially in a state like New Jersey … they’re crazy. I just see that as a phase that we’re through and how this business is going to evolve is going to depend a lot on your generation like Jeff [Van Note] and how they perceive they want to live their life.
Jeff Van Note: In my opinion, I see more of minority buyers coming out into the market. I am seeing more Dominican, Puerto Rican and African-American families who are coming out to buy homes. In areas like the Throggs Neck section near the Bronx, and it’s more like a blue collar society where you have your Con Ed guys, sanitation guys and members of the New York Police Department … they’re the ones who are buying there. They are the ones who started in sanitation because their parents said, “Listen, you are going to start in a New York City job when you’re 18-years-old and you’ll be out in 22-25 years.” I see that market buying as well. Like everyone else, I’ve done loans for people who are my age. They’re saying, “You know what, I don’t want to work for 30 to 40 years, and want to get out in 25 years with a full pension.”
Barbara Gallagher (McDonald): There was a point a few years ago when I wanted to get out of this business because I was sick of competing against the liars and the rates and everybody’s pricing. I never thought of myself in sales, and I ended up just completely crazy, but I thought I would be in banking … I never thought of it as sales and a commission, I think of it as …
Ed Kenmure: The deal and providing the service for someone …
Barbara Gallagher (McDonald): Exactly. I mean, to me, it never seemed like I was a salesperson and the first time the person who hired me called me a salesperson I was almost insulted. It’s a different mentality because that’s what I felt for a long time. I can honestly tell you that I have never lost a loan in a year on price because people don’t price you when they are a repeat customer. The most loyal person is a repeat customer and I know they say you have to ask them for business, but I’ve never asked a repeat customer for business. I tell them in the beginning that I work on referrals. Even my office walls are covered with thank you notes and it puts it in their mind.
Christopher Delisle Esq. of Equity Settlement Services Inc. with Steven A. Milner of US Mortgage Corporation and Edward O’Connor of Generation Mortgage
Moderator: Can you discuss your business model and what it takes to make it in today’s marketplace?
Jeff Van Note: I have been around the business my entire life. My family has been in it since the late 70s/early 80s, so I’ve seen everything from the booms to the collapses. The way I was told to do business literally was get dressed up, put on a suit and a tie and get out there. I don’t care who owns a real estate office, where it is, what part of the neighborhood it’s in … I just walk in there, drop off business cards and stay visible, go to open houses and work on the weekends. What separates me from everyone else is that I got in when everyone else was getting out. When people experienced downturns and a slowing of business, it hurt them big time. I was getting in with the family, I was in the right place right time. The biggest thing that was said to me was if you don’t work on Saturdays and Sundays, you’re not going to make it in this business because 99 percent of your competition doesn’t work the weekends. So above and beyond, give out the service, but don’t over-promise … under-promise and over-deliver. And that’s pretty much the foundation of doing any business—properly do it, do it the right way, don’t pay kickbacks, don’t pay referral fees, go out there and create value for yourself and people will appreciate that. That’s how I’d build my business.
Ed Kenmure: I’m going through an acquisition and a merger, and prior to that, I was a full-time mortgage banker. We were talking about this before … the dumbing down of America … I don’t really want to call it the dumbing down of America, but I believe there are people who should be working in assembly plants and out in the field and farming and whatever, and then they are thrown into a service business. I’m finding that, across the country, when I used to control it and being on the East Coast and most of my business is in five states on the East Coast, I can control it and can determine what the regulations are and what the rules are and how to underwrite them. Now that I’m part of a larger organization, underwriting is being done in either Oklahoma, the Midwest … I can’t get underwriters to read tax returns … every day it’s something new.
Moderator: Have you noted any particular trends in the hiring of loan officers?
Edward O’Connor: That is one of things I’m concerned about … how do you attract now and keep competent loan officers? If you want to come and work for me, you are coming because you are looking for a career in this industry. If you just want a job and a payday, you probably will do better at a being broker because they will pay you more, but you’re not going to get all the other benefits and support and everything else I can possibly offer. I want people who I can bring on now in a comfortable market that I know are going to be competent enough to stick around when it gets different. I won’t say “bad,” but it’s going be different … a year or two from now it’s going to be very different. The question is how do you find and attract people who understand some of these things, for this to be a career, not just a payday?
Steven A. Milner: We know the characteristics that go into a good salesperson so you just have to evaluate, as quickly as possible, whether or not that a candidate has the ability to make it. You may have to go through 10 candidates through your training program, your education program, your motivation program, which is important, to end up with someone who may excel. I think there should be more emphasis on the newbies. What we try to do is really try to show them the income potential and break it down and get very granular about it. We ask them how much they want to make at the end of the year? Want to make $50,000 … want to make $100,000? Well, how many loans do you have to close? How many applications do they have to take? How many credit reports do you have to take?
Edward O’Connor: I have found, in the last four years attending various conventions, I said to my associates, “Look around, what’s different?” They’d agree that there were a lot less vendors. “That’s obvious … what’s next? Tell me what you don’t see?, I’d ask. There are no more big company outings and parties, not many flashy gimmicks, etc. … we’re back to the guys like us. We started 20 years ago. Most of the people at this convention now [the 29th Annual MBA Regional Conference of MBAs], in my opinion, haven’t been on the floor yet today because they have yet to set up their own booth … they are the owners and managers. This is the way it used to be when I first got into the industry in the 1980s. We went through that period of craziness and it’s actually back to that point where I can sit with someone and they can show me what they have and how it works.
Christopher Delisle Esq.: From our approach, we are recognizing also what Edward [O’Connor] just mentioned, when we see a much more quality loan officer in the industry today. We have found that customer satisfaction has increased tremendously, and we are beginning to see the evolution of a better and brighter loan originator. We’re seeing that the quality of the product and the service offered is vastly improving.
Jeff Van Note: I think we should focus on attracting new employees with value, not with dollar amount. Anyone could pay somebody, anyone could buy somebody, but if you upgrade the value then they stay loyal to you, because I’ve seen it at Jersey Mortgage.
Dave Pressel: If I’m up against 10 people, I go into it thinking... and I have the same rate and similar costs, I think I get the loan 70 percent of the time. That’s not conceit, that’s not ego, it’s confidence. And that’s bred from many, many years of doing business. Have I lost deals? Absolutely. Look, me personally, over the last three years, I’ve probably closed close $275 million dollars myself. No other loan officers, just my business. It does not make me any better a loan officer than any person in this room. It just means that I do a lot of business. There are plenty of people, it’s like any other industry, there are plenty of people out there who do a lot of business that have the intelligence of a brick. And there are people out there who are incredibly intelligent and don’t do a lot of business. It’s basically a matter of drive, it’s a matter of application, ethics, integrity, and learning your craft and knowing your trade.
Dave Pressel of West Town Savings Bank with Steven A. Milner of US Mortgage Corporation
Moderator: Where do you see the future of the industry headed?
Jeff Van Note: If you look at a mortgage bank that has been in business for 20 years, you’ve been through ups and downs and are still here … that’s pretty solid. If you’ve been around for three to five years, you really haven’t seen anything yet.
Edward O’Connor: There were people who got into this industry in the middle of the boom and could barely know how to fold a napkin, but they made money in the industry. And now, the rules and the NMLS [Nationwide Mortgage Licensing System] has probably gotten rid of about half those people and there are still some left. They are the ones who still want to make four points on every deal.
Edward Kenmure: Can’t do it. The new blood can’t do it because it doesn’t even make sense as they’re never going to write lower loans. I found people when they got to a point to renegotiate the agreement, they always did less. Why? Because they made more. Well, I only have to do this many loans and they got that big check. I had guys who I wouldn’t see for 30 days after they closed three loans in a month.
Edward O’Connor: I call them “Big Watch Guys” because the first thing they did was they got this big check and they went out and got this fancy watch and a boat, they had the car with the $700 a month payment.
Jeff Van Note: You would see people in this business where it’s almost insulting. You see somebody and you’re doing great at $100,000 a year and you saw the used car salesman and the used shoe salesman who comes in are making $200,000 and you think to yourself, “I know more than him, I do things better than him, I’ve been around longer than him, he’s just overcharging people, he’s making more money than me.”
Steven A. Milner: I believe that when people perceive that rates are going up, they make a decision to purchase, which is the opposite of what most people think. They get off the fence. Supply and demand will increase values. That’s Economics 101.
Anthony J. Gatto: It’s a different world today, and I jumped on the technology express a long time ago and I’m a firm believer in it. I think what I’ve seen come from it has really been leaps and bounds over suit and tie. I mean there is a place and time for that, but I think to open a market you really have to go in from the technological standpoint and start developing what you think is going to bring in business. I don’t rely as much on personal relationships with Realtors and I see they tend to, over time, unless you develop a deep personal relationship with them, that Realtors are not very loyal in my opinion, and you know loyalty is a hard thing to find.
Anthony J. Gatto of Morgan Hill Funding LLC and Reverse Choice and Edward O’Connor of Generation Mortgage
