Each month, National Mortgage Professional Magazine will focus on one of the industry’s top players in our “Mortgage Professional of the Month” feature. This month, we had a chance to chat with Julio de Cardenas, executive vice president of Levittown, N.Y.-based United Northern Mortgage Bankers Ltd. A 20-plus year veteran of the mortgage and real estate industry, Julio attained his real estate license at the age of 18, and sold his first home shortly after while attending St. John’s University. Success in real estate led Julio to leave the world of academia behind to pursue a career in home sales and home financing. Julio’s career has taken him from residential and commercial real estate, to mortgage banking, a four-year stint as a national sales trainer and consultant, now back into mortgage banking.
Currently, Julio serves as the executive vice president of United Northern Mortgage Bankers Ltd. Led by company president and co-founder Don Giorgio, United Northern currently averages $35-$40 million per month in closings, and as Julio stated in our conversation, the company is projecting growth of approximately $50-$75 million per month in 2010. In order to accommodate the company’s financial growth, United Northern is set to move into a larger corporate headquarters, just blocks away from its current Levittown-based operations. They are licensed in eight states and currently have six other locations, with more in the works.
How did you get started in the mortgage industry?
After graduating LaSalle Military Academy, I was primed to begin a life of hard work to achieve my goals. I attended St. John’s University, as I acquired my real estate license and sold real estate. After the sale of my first home at 18-years-old, I quickly shifted to more commercial and investment properties, mainly commercial leases, investment, specs and storefront properties. I loved real estate, but my drive sought out more.
Around 1988-1989, I opened up my own real estate brokerage, High Rise Associates. Unfortunately, around that time is when the commercial market began to crumble.
In 1990, I went to work for Home Mortgagee Corporation, as a loan officer. On my first day, training in the mortgage industry was pretty basic. I sat with the owner and another Home Mortgagee employee for about 30 min. each. I was showed how to fill out a 1003 and order a credit report. It was after that I was taken to a room with a box of pads and pens inscribed with the Home Mortgagee logo and was told those were the marketing materials I was to pass out on the road. The bookkeeper smiled as she handed me a check for $150 for expenses my first week, while someone else had given me a beeper. My training was complete. I was assigned my territory in New York, and pointed in the direction of the Bronx!
Thinking back, the smile on the bookkeeper’s face was more of an unspoken statement. “You’ll never make it, Hot Shot!” There was never a detailed explanation of what to do, but that did not deter me. I took my background in real estate, along with my ambition to succeed, headed to the Bronx and eventually made a fortune!
After a year-and-a-half with Home Mortgagee, I moved on to Mutual of North America in the beginning of 1992. My family at the time applied pressure for me to return to college. I weighed my options and realized that the amount of money I was making in real estate was more favorable compared to what I was doing in macro economics at St. John’s. Everyone in my family has at least a degree, some multiple, including my grandparents. I took the gamble, slung my calculator over my shoulder and off I was again.
Within a few months, I was the company’s top salesman, and 18 months later, I made enough to buy into the business, so I became a partner with the company’s owner. The bulk of my business was FHA loans. When I started with Home Mortgagee, their idea was to become a master in FHA … to go out there and speak about FHA, give FHA seminars, and teach the real estate brokers and attorneys about FHA loans. That is what I did, and at that time, many people thought FHA was a thing of the past, as they were doing mostly conventional and stated loans, but I stuck with FHA and it paid off in a big way. Mutual became extremely successful and I prided myself in being the “Government Loan Guru.”
In 1997, I sold my shares in Mutual of North America back to its founder and opened a mortgage bank called First Estate Funding. After five years as president of First Estate Funding and achieving a certain level of success in our industry, in 2002, I sold off my portion to my partner and walked away. At the end of that year towards the beginning of 2003, I went to work for Ron Vaimberg International (RVI) as a trainer and coach. My time with RVI was during the heart of the sub-prime boom, and I was doing consulting and training around the country. I had a riot travelling from one lender to another, motivating their staff and getting paid for it. For those four years, the only thing I considered work was the tedious chore of making airline and hotel reservations. Those years were quite rewarding and educational for me. I worked with Ron until May of 2007. As our industry disappeared before our eyes, I looked for new opportunities.
I first met Don Giorgio, president and co-founder of United Northern Mortgage Bankers, when my ex partner in Mutual of North America sold the company to him after I had left. I was immediately taken by his intelligence, integrity, experience and wisdom. I was living in Michigan at the time, and even had a lucrative offer from a company in California, but I spoke to Don and genuinely liked him. I started with United Northern in June of 2007.
How do you motivate your employees and instill in them the tools required to take the overall success of United Northern to the next level?
In this profession, you have to like what you do. It’s not work to me. I still live in Michigan and come to New York during the week for work. For me, the real work is getting up at 3:30 a.m.on a Monday, traveling to the airport to get to the office in time. The real work is done by my wife who deals with six children! The phone goes off and I’m here in New York and she’s in Michigan dealing with various issues with my kids. I will repeat the old saying, “Behind every great man, is a great woman.” By not having any home stress, I get to really enjoy my passion … banking.
Mortgage banking, at the present moment, is both challenging and exciting. I enjoy the building of a business, and this time, it’s for keeps … I have found my home. I know that family comes first, but to me this is an extended family. Many people count on me and I work hard to not let them down. I constantly preach to my children that there are consequences for your actions. One false move by me can impact the families of all 120-plus of United Northern employees and beyond. As we continue to grow, that number grows. We’ll never know how many people’s lives are impacted by what we do. Think about how many spheres were affected by the Bernie Madoff scandal … charities, non-profits, etc. … it’s all a trickle-down effect. There are serious consequences for your actions in this world. We, as a society, haven’t really held people accountable; we just give them a slap on their wrist for their ill-advised actions.
Just recently, Lend America closed its doors. Where is the accountability for the 600 employees who lost their jobs because of the misdeeds of a few … from the maintenance guys who worked for them, to the vendors, lenders, etc.? The chain reaction is colossal. There may be a few who were involved in wrongdoing, but there are 600 people affected who have families, who have car payments and bills to pay. For the selfish acts of a few, the majority has to suffer. Everything I do affects hundreds of people. There is a major ripple effect that would take place if something stupid happened within our company. I try to instill in my loan officers and my own kids that there are consequences to your actions.
I always tell loan officers when they start out to think about their job before entering the mortgage industry. I tell them to take that same work ethic they had in their previous job and now apply it to being a loan officer. The amount of money you can make in this industry is amazing. The problem is when they become complacent. In this country, if you want something bad enough, you can work hard and achieve it. My words are not empty hype, I live them and my staff sees it.
What are some of the keys that have led to the success of United Northern Mortgage Bankers?
We have grown the company through the support of our staff. We believe that our number one priority is our staff, and we are committed to creating an environment where everyone succeeds. You want to go to a place that will take care of you. We are a 30-year-old company that is not going anywhere anytime soon … we’re not a fly-by-night operation. United Northern is as stronger than it has ever been.
We are constantly recruiting and training. At United Northern, you get honesty and integrity. You may not always like the answer I may give, but you get it. There is no ego here.
Our business approach is pretty simple … we sit back, take a look at the big picture and don’t react on a dime. We don’t hire and fire on a whim or even a small boom in business.
At United Northern, we give people the customer service needed and provide a strong core. Buying a home is the single most important purchase a person will make in your life. As you climb the ladder of success those mortgages become larger and the hand holding more intense.
All of these e-lenders have failed because no matter what transpires in the loan process, how do you trust all of that information to a computer? People want human feedback. A loan officer’s job is to hold their customers’ hand through the mortgage process. There are also times when we question if we can actually close on a deal. There is no substitute for the one-on-one human element. We have, at times, had the applicant come and sit with myself, Don and the underwriter on the file. I ask them to explain why we should make this loan? Why does our loan officer feel this is a good loan? Unfortunately, nor the underwriter, Don or myself were present when a loan officer sat at their kitchen table. Face-to-face, you can read in someone’s eyes if they are being sincere.
The independent mortgage banker, like United Northern, can cater to the individual … a large bank cannot possibly do that. We receive referrals from larger banks because due to their guidelines, they need “the square” to fit into that “square.” They need everything to fit perfectly. If any terms of the deal are even slightly ill-aligned, the loan won’t go through. These large institutions cannot do the one-on-one situations. Here at United Northern, we can.
Can an independent mortgage banker like United Northern compete with the big banks of the world on pricing?
Yes, we can. First off, our overhead isn’t the same. We pride ourselves on being lean and mean. Don and I currently share an office in order to accommodate our growth. Offices that once housed one or two salespeople are now occupied by four. It wasn’t until we were absolutely bursting at the seams that we decided to acquire our new corporate space. These smart business practices are to ensure another 30 years in business. In the new facility, we have taken on the first floor, third floor and the lower level for storage.
Money comes from the same source for everyone. We have a terrific seasoned staff with a lot of experience. If you take Don, myself, our underwriters and all of our processing staff, we have about 300 years of combined industry experience. I remember one of my underwriters saying that being called “seasoned” was the nicest way she had ever been called “old.” United Northern knows where the market is at all times, we react and we don’t play games with people’s locks. We are a retail operation and our job is to give people good service. Let’s not make it too complicated … it’s not rocket science. Our personalized service, energy and experience, topped with pricing that competes with the big boys, often has me wonder how they can compete with us! At the end of the day, everyone feels good about what they have done.
Are you active in industry trade associations?
Yes, I make sure I attend all types of industry conferences. I believe in educating myself with what’s going on in our industry. I am also trying to become more active with the Mortgage Bankers Association (MBA). The small- to mid-sized mortgage banker’s needs are not always met. Through recent years, we have watched the disappearance of mom and pop hardware stores, pharmacies, grocery stores, etc. Now is the time to get involved so that we avoid becoming the next casualty of big business. We are the voice that needs to be heard.
What are United Northern’s growth goals over the next few years?
United Northern is celebrating 30 years in this industry … 30 years of helping people purchase and remain in their homes. We want to be here another 30 years. As much as the doom and gloom of the American economy surrounds us, there are a lot of companies out there that do plenty of good for people.
What we do is very well thought-out. My goal isn’t to grow overnight; this success was 30 years in the making. Even in a year from now, I just want to increase by $10-$20 million per month in production, then we increase it a bit more … it’s not about growing haphazardly. Our projections are based on five-year increments, and we know where we want to be five years from now. Truthfully, the worst thing that could happen would be if we did $2 billion worth of business next year. It sounds crazy, but that would not be a controlled growth … we may have compromised the quality and integrity of the files, we may have bypassed areas of quality control, may have missed a few steps, etc. That’s not what we are looking for and we won’t do that.
In every industry we have seen, there has been an almost mass elimination of mom and pop stores. Everything is big and very rarely can you find something on a smaller scale. We need to grow, and our target is to hit $750 million in 2010 and to be over the $1 billion mark in 2011. If we don’t get there, we could get swallowed up because the cost of maintaining our infrastructure is increasing.
With compliance and licensing issues these days and the costs involved, the little guy cannot survive. We employ someone making a full-time salary just to follow up on licensing issues for us as a company, licensing on all of our loan officers, educational requirements and compliance in marketing. He works 40-50 hours a week on making sure we maintain compliance. Every state has specific rules and requirements. When you have loan officers licensed in several states, and we, as a company, are licensed in eight going on 10 states, it’s a lot to keep track of!
Do you think the new GFE and HUD-1 will address some of the borrower confusion that exists at the closing table?
I actually think it could cause more confusion at the closing table. If I tried to explain loan programs to anyone off the street, they won’t understand them. Just as if that person were to explain their profession to me, I wouldn’t understand them. I think it will become more cumbersome.
It’s a three-page Good Faith Estimate (GFE), and you now have to compare things that other people quoted in your price. Does the consumer really understand these concepts? Look at the auto industry … whether they charge you a 14 percent interest rate or two percent, you still base your decision whether or not you purchase the car on what you can afford.
At the same time, I like the other changes in the industry concerning education and licensing requirements. I believe these initiatives are weeding out a lot of the people who have tarnished the industry. You want people you can trust doing mortgages. We have taken so much abuse in our industry, but once upon a time, if you sent in a check for $500, you received a broker’s license. If the industry is now policing itself and is creating education requirements, that brings it to a higher level and raises the bar for the industry as a whole.
Are you in favor of increased lender liabilities and net worth requirements currently proposed by the U.S. Department of Housing & Urban Development?
Yes, I am in favor of those initiatives because this will also weed out the bad in this industry. United Northern is still a small mortgage banker, but a key phrase I heard at the recent MBA Annual Conference was “skin in the game.” You want to make sure that the lenders doing your loans have “skin in the game” and are reputable. You want them to stand by what they did.
Loan officers, before they were licensed, would just travel from lender to lender. Now, with the Nationwide Mortgage Licensing System & Registry, that license follows you. You now have to meet particular licensing and education requirements. This is a career … treat it as a career. This isn’t a part-time job at a fly-by-night operation, so take it seriously. There has to be a way to take it to a certain level, and I am in favor of increased lender liabilities and stricter educational requirements.
What would you say to the mortgage professional to remain positive in today’s marketplace?
When you break it down in its most simplistic form, we hold people’s hands and help them attain the American dream. We give them that place, a home that is their shelter, where they raise their children, and where one day, when those children go to school, it may become the source of equity for college education. Upon retirement, with a reverse mortgage, it could afford them a second home or allow them to live better in their retirement years. You are doing something noble, so treat it as such.
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