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 at [email protected] to be considered for a future “Mortgage Professional of the Month” feature article. This month, we had a chance to chat with Tom Hurst, president of StreetLinks Lender Solutions. Tom joined Superior Appraisal Services in 2002 as senior operating officer after leaving the aviation industry. Tom was instrumental in the rapid growth of Superior with his involvement in strategic planning, marketing and sales. Upon the formation of PipeFire Lender Services, his focus shifted to creating the operational support and infrastructure needed to implement the appraisal fulfillment services. Tom was responsible for securing PipeFire's first AFS customer and continues to focus on sales growth at StreetLinks. Tell me about your background and how you chose the mortgage industry? It is definitely a unique path. I didn’t choose it—it chose me. My background in going to college and right out of college is in aviation. I was a double-major in business and aerospace administration and was also a professional pilot. I came out of college and was a flight instructor. I flew traffic watch over Indianapolis for about six months building up my hours to move to a career in the airlines. In June of 2001, I got married and bought a house. I was ready to move on and start pushing my resumes to the airlines when the September 11th tragedy happened. Certainly, the effect that day had on my life was nowhere near what it was on thousands upon thousands of people, but I quickly realized that I have a new wife, a new house and responsibilities. By about November of 2001, it became apparent that the likelihood of me moving to the airlines any time soon was dwindling. Tony Ebeyer was the owner of Superior Appraisal Services in Indianapolis. We had become good friends. I had actually sold him an airplane. He said, “Hey, I have never had anybody market and sell my local appraisal company; would you want to come over any do that?” I said, “Sure”, thinking with 100 percent certainty that that was going to be a temporary gig. So, I took a crash course on appraisals and mortgages. I was the guy who, in the middle of buying a home a few months earlier, bought a car. I knew nothing. I opened up the phone book and started calling people. How did the company evolve into StreetLinks? We grew Superior Appraisal Services at our peak to 28-29 appraisers that worked just for us in central Indiana. We prided ourselves on delivering service and quality. The technology platform we were using was proprietary—back then, there wasn’t anything you could go out and buy that allowed people to order online and track online. Today, someone would laugh if they couldn’t do these things! We had orders coming in from all over the country for our central Indiana appraisal company. We started getting questions like, “Your service is great … Your technology is great … Would you consider handling our orders in all these other areas?” You only have to hear that a few times, particularly as uniquely positioned as we were. We had worked for 12 of the appraisal management companies (AMCs) that existed at that time. We knew many of the major faults, we had this technology and we had a belief that we could create a better product. We built PipeFire d/b/a StreetLinks on the foundation that still exists today, not knowing how revolutionary it was at the time. For us, it was simple: Treat appraisers with respect and loyalty, don’t set their fees, assign on the right criteria — not fees, have the right people on staff to give great service, and perform a quality control review every file. We took our first order for StreetLinks in June of 2006 from Oak Street Mortgage. They ended up being purchased by NovaStar Home Mortgage. In 2008, NovaStar came in and said, “Are you guys interested in capital and some infusion of leadership?” Their idea was, “Put some capital, leadership and experience behind this phenomenal idea you guys had and see if we can create what everybody believes can be created.” That’s exactly what happened, and we started growing like gangbusters. We did 385, give or take, appraisals in January of 2009, and last month, through both our LenderPlus and LenderX divisions, we completed just shy of 53,000 appraisals. It’s definitely a great story of everybody committing to doing things the right way and really succeeding. What are your business philosophies? Where can you bring value, and where can you develop long-standing partnerships and relationships? That’s the philosophy that works for us. It drives our entire culture. We work hard to make a difference. I feel like we led a revolution, even before regulation pushed for it, in the AMC industry. We focused on quality and service rather than price and speed. I think singular focus on profitability is a road to failure in service-oriented businesses. Most others have moved toward a settlement services concept. People say, “You do 50,000 appraisals a month, do you realize the money you could make if you just got 10 percent of that in title?” But for us, the philosophy is to do one thing and do it better than anyone else. What marketing strategies do you employ? When it boils down to what really makes a difference in marketing, I believe it’s our people. The best marketing we have is the people that we have on the phones in our operations. They “market” our company every day. In this industry, you are only as good as your reputation — word of mouth and referrals are the absolute strongest marketing tools you have. Bring value and differentiation to fulfill what your employees need, so in turn, they can fulfill what your clients need, so they’ll fulfill what the consumer or customer needs, and they’ll tell other customers. How important is technology to what you do? First and foremost, technology put us on the map … it was our enabler. If it wasn’t for the idea to create this proprietary technology to manage our business, I wouldn’t be sitting here today. We are a very technology-driven organization, but the way we state it is that we are technology-driven and human enhanced. The other area where technology is going to continue to drive us is with our new StreetLinks Automated Examination and Valuation Division. For years, we have looked to resell somebody else’s AVM or someone else’s rules engine. But when we started peeling back the layers to get a look at what was actually there, “astonished” is the only way to describe our reaction. We want to really enhance and drive an underwriter, an appraiser reviewer, maybe even an appraiser themselves to focus their expertise, via this technology, on the areas of risk where they should be focusing. Many underwriters spend 25, 35, even 45 minutes reviewing an appraisal, looking at the address, looking at the legal and looking at all these things. Meanwhile, most business owners want to pay an $80,000 underwriter to tell them, “Are the comps the best?” “Is the value there?” “Tell me about the construct?” But unfortunately, due to the volume in the industry, underwriters are trying to do that with a blindfold and one hand tied behind their back. There are just not products on the market today that focus on meeting that need. Was the industry behind in its development of resources that allowed underwriters to focus on the appropriate areas of risk? We are really focused on providing the right tools to lenders to help them and enhance their ability to review collateral. This is the most subjective, yet important of any information within a loan file. Many underwriters today are using tools, such as a very generic rules engine, that are very linear, that provide no depth or logic in the analysis of the appraisal. The AVMs that they are using put massive amounts of data through regression models to drill down to a value on a property. An example … an AVM may use tens or hundreds of properties in a single evaluation, ranging in value from $50,000, $90,000, $100,000 all the way up to well over $500,000 in their advanced regression analyses. They believe that they can reconcile all of the differences among all of these properties to say that your property is worth, say $167,000. When we really got in deep and started understanding what was happening, we called foul because underwriters are trying to compare appraisals to AVMs. If an appraisal ever provided comps in a $400,000 range of valuation to tell you a property was worth $167,000, the appraiser would be kicked off the lenders approved list so fast they couldn’t see straight. To us, that was astonishing and offensive. This new technology is infused by lenders and by appraisers with appraiser-based logic to drill down to value. Our goal is to provide products and services that assist the process and allow underwriters to focus on areas of risk in an appraisal. We want not only to show them, but also to provide directives, with the data to back them up. What should be done to mitigate the risks? Many products on the market today just say, “Well you have risk here and you have risk there.” But if you have 80 underwriters in an organization, each one of them is going to look at that situation differently and is going to make different decisions on a per file basis. As a business leader, you can’t stomach that. You need consistency, you need transparency and you need accuracy. I think we are going to revolutionize and redefine that industry for the first time in many, many years. What sort of industry-related issues keep you up at night? Nothing keeps me up at night. It would be very easy to get caught up in all the emotion of the roller-coaster that is the mortgage industry today, but I am grounded in my faith and it helps me get through those twists and turns. I truly believe that if we do all we can do, every day, on every file, the right way, we will succeed and will accomplish our mission and goals. That belief and the faith foundation of that belief allows me to sleep at night. The only thing that keeps me up right now is my four-week old baby! It’s certainly not the mortgage industry! What would you consider is your greatest accomplishment of your career? My greatest accomplishment is when I had this realization, this enlightenment of understanding that people are business. It would be very easy to get caught up in the success of StreetLinks, of going from no appraisals to 50,000 per month, from no clients to 500 clients, from zero employees to over 600 employees. But when I really think about it, the bottom line is that our success is tied to people. Whiz-bang technology or great marketing will never take the place of a group of people who care about a mission or a goal. At this point in my life, I’ve learned that the same formula for success exists in all facets of life, whether its business or marriage or friendships … it’s caring. Are there any mentors you would point to as influencing your management style? A mentor of mine would be would be Steve Haslam, the former president and COO of StreetLinks. He is currently the COO of Novation, our parent company. Steve really took me under his wing and mentored me without me knowing I was being mentored. Through a unique and unobtrusive way, he taught me the aspects of being a great person and through that, a great leader. He believed in me and he pushed me. He didn’t dictate. I owe a great deal of my personal success and certainly of StreetLinks’ success to Steve’s mentorship, guidance and caring. The other role model for me has been the one who identified right and wrong from the very beginning. Faith is the belief in the unseen. My belief in the Lord is the center point for me. Even though I fail every day in my efforts to mimic the kind of example He has set, He has always been there for me to lay out a path for me and give me guidance. What changes do you see coming for the industry? I think you are going to see the need for more efficiency. I think politics will play a big role in what the industry looks like in the next few years. What happens to the government-sponsored enterprises (GSEs) will define the industry. I still think that we are on the precipice of having private money coming back into the mortgage market. Given the lessons that were learned previously, I think that will drive the need for quality and service, which bodes very well for StreetLinks. Any final thoughts? I am very blessed to be where I am personally and to be surrounded by the people who surround me at StreetLinks. We have a magic inside our organization. Our folks want to make a difference, and that’s what keeps my engine lit every day. David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or e-mail [email protected].