July 2014 will be my “Bar Mitzvah Anniversary” of an article I wrote in The Mortgage Press called “This Is My Story and I Am Sticking to It.” In the Jewish tradition, the age of 13 is where a Jewish male child (Bat Mitzvah, in the case of a female) is said to have become all grown up and an official member of the congregation. It is fitting because in this piece, I admit to myself that I have finally grown up.
The original July 2001 article, commonly known as the “Where’s Betsy” story, was a huge success when it was published. Carteret Mortgage Corporation was just starting to be well known, and I basically explained how it happened and why. Back then, it was unheard of for a mortgage company to allow their loan officers to work from home, much less, pay them an override on employees they hired. Being the first, I had my share of regulators trying to put me out of business because, as they would say, “It’s just not done.” Now, federal banks are doing it. If you are a loan officer working out of your house, taking care of your kids as you make a lot of money, you can thank me. At the time the article was written in 2001, we were the 18th largest mortgage broker in the country. In 2003, we were the largest.
If you want a copy of the original article or were in elementary school when it was originally published, just e-mail me at [email protected].
I recently just turned 55. I have been feeling kind of tired lately. I noticed a lot of advertising on TV for something called “Low T.” That sounded just like me. I figured I would check it out. So, I went to the doctor who took a blood test, but he said that wasn’t it. With a straight face he tells me, “You are old, overweight, smoke, have diabetes and don’t exercise. What do you expect?” At that point, I gave up being young and embraced being old.
All that us old people have left are just memories …
Back when I first started in the mortgage industry in 1991, there were something called pagers. The cellphone was not yet invented. If you had an emergency in the office, they would put in their phone number then * (which translated into a dash on the pager) and then 911. If I was just a question it would be *411.
Without cellphones, I put my office, fax, car phone, pager and home number on my cards. It got a bit crowded. Thank goodness there were no NMLS numbers back then. I was just starting out and my home number was my main business line. With four small kids, the rule to them was “NEVER pick up the home phone.” It might be a real estate agent calling for daddy. One day when I was in the bathroom, my 11-year-old daughter thought she would help. I heard the phone ring, she picked it up, there was a pause and then I hear her say, “No, I am sorry, my father is in the bathroom taking a poo-poo right now.” I raced out of the bathroom with toilet paper trailing, but not in time. I never did find out who called.
After that episode, as she got older, I told her that if she had to answer the phone, to at least get a return phone number. One day, she came up to me proud and told me someone had called for me. She didn’t get a name, but she took a number. On the paper was the message “234 Cottage.” I never did find out who that was or what it meant either.
When I first got into the mortgage industry, I read several books on how to sell. I think my favorite was Zig Ziglar’s Secrets of Closing the Sale. One thing he teaches when selling is to just say your spiel and then shut up. The next person who talks loses. Very true. I remember one of my first applications just starting out was for a drill salesman who worked at Mobil. We were at the kitchen table with his wife. I gave my spiel and then just shut up. And then, he didn’t speak. And I didn’t speak. We must have sat their two minutes saying nothing. Finally, his wife spoke up and said, “Will somebody please say something.” I said, “Zig Ziglar?” and he said “Secrets of Closing the Sale?” And then we both laughed. I never did get that deal.
One of my most embarrassing memories in the mortgage industry was a Peruvian couple buying their first home. I took the loan application at their small apartment kitchen table. I had a very upset stomach that day. I politely excused myself, calmly walked to their bathroom, and had a horrible case of diarrhea. When I was done, I went to the mirror, arranged myself and coolly walked out of the bathroom like nothing had happen. Just then, I spied their 16-year-old daughter. She must have been in her bedroom. Unsuspectingly, she walks into the bathroom, goes in, and then immediately walks out. To her credit, she never said anything and just went back into her bedroom.
The great thing about this job is that you meet all sorts of people. From CEOs of major companies, to immigrants right off the boat, I have seen them all. One elderly “high-class lady” complained to her referring real estate agent that I did not wear a tie to the application (and that remains the ONLY time anyone ever complained about that).
Another time, I was trying to explain about the 3.5 percent downpayment required on an FHA loan to someone whose native language was not English. Exasperated, I finally said, “No you don’t understand, the government wants 3.5 percent equity in the deal.” He said loudly, “No … I don’t want the government to own any part of my house.”
Aside from the language barrier, I love helping people from third world countries buying their first home. In many countries, like Peru for example, there is no FHA, Fannie Mae or Freddie Mac. If you want a home, it is 50 percent down, or purchase it in cash. Only RICH people can buy real estate. Coming from a country like that, for a normal person to buy a house one day is just a far off miracle.
Once I took a loan application for a young lady in her home. She met me at the door in a bikini. She said she was sunbathing in the back and forgot all about the appointment. I asked if she wanted me to come back or wait for her to get dressed. She said, “That’s okay.” We did the entire application with her in a bikini. When I got home, my wife asked how the application went. “The usual,” I replied. That is where I got the uncouth line, “Scantily clad women get HIGH interest at our company.”
Once, I got a call from someone who wanted to meet me at a beauty salon. As I drove there, I soon realized that this was in a very scary part of town. When I walked in, I noticed all the “hairdressers” were wearing lingerie and sexy outfits. Everyone wanted to do a loan. Unfortunate, all their downpayments and earnings were in cash. This was the exception that disproved my uncouth line.
When I first started my company, I had to hire some clerical help. I found this one lady who was perfect for the job. But her last name was the same as a bully who tormented me to no end when I was in school. I asked her if there was any relation. “That’s my husband,” she said with a long face. I am sure she figured that was it, but I hired her anyway. She was just the best qualified person for the job. That’s all that counts.
When I started Carteret Mortgage, I was working from my home. As we hired people, we licensed their house and they worked from home just like me. We were doing $1 billion in loans and we were one of Countrywide’s biggest customers. One day, a big senior vice president came for an unexpected visit. As usual, I open the door in my bathrobe. He apologizes for it being so early and asks if I want to meet him at my office. “No, this is the office,” I tell him, and we conduct the interview in the living room. Twenty years later, I just recently spoke to him on the phone. He said he was so impressed at the time, he gave us great marks. With our low overhead, he said, he knew we were poised for greatness. He said he loved the part where we had to sit on the porch steps because my wife would not let us smoke in the house.
After a while, Carteret just got too big for the house and my wife kicked us out. I guess after doing $1 billion in loans annually, the rule is you have to move into an office. I would have five people scurrying around the house filing, doing faxes, answering calls, etc. My kids were all in school, so my wife would sit and watch soap operas until they got home. She said the final straw was when everyone was so busy and she just sat on the couch like the Queen of Egypt. It made her feel horrible.
When I first moved into the office, I had five middle aged women on staff whose job function was “Do whatever Eric tells you to do.” The first order of business, the women decided with themselves was to have a dress code. They asked me if that was okay. I said, “Yes, as long as it does not apply to me.” The next day, I come in wearing a torn t-shirt. Robin, pulls me aside and says, “I know the dress code does not apply to you, but at least put on a pair of pants!”
When I hired my first few loan officers, my way of keeping track of them was by their initials. John Pappas was JP. Peggy Sullivan was PS, etc. As the company grew, I had a problem. We hired Paul Skeens, but PS was already taken. What do we do, not hire him? So I came up with a system, if PS was taken, take the second letter of their first name and put it between his initials. So Paul became PAS. This way, we would always know that the first and last letters of the employee initials corresponded to their actual initials. When we hired another person with the initials PS, the third letter of his first name would be substituted. The new “Paul” would be PUS. Then, the fourth and so on. When those were used up, we took the second letter of their last name. After those were used up, we took the second and third letters of the first name, and so it went. Who would have thought the company would grow so much.
I have a good friend who is a dentist and loves Jimmy Buffet. One day at a concert, he and his wife start talking to another Parrothead couple. It turns out he is a loan officer at the mortgage company I own. My friend doesn’t tell him he knows me. Soon, the loan officer’s inebriated wife starts going on about the place where her husband works. “The owner is so naïve and dumb, I am going to apply for a job there and I will own that guy when I am done.” The next week I got her resume. “Sorry, we just filled that vacancy, thank you for applying.”
I used to think I could read a person’s character just by meeting them or talking to them. Turns out you can’t. People can put on a good face, people can change. How well can you really know anyone? You think you do, but you don’t. It turns out one of my top managers hired a state manager who hired a lady in North Carolina. We got a borrower complaint about her for religious discrimination! I could not imagine that in this day and age. The customer said she told her that “The only way you are going to get this loan is if you come with me to church and pray.” I felt for sure the client must have misunderstood. I called the loan officer to get the full story. This, after all, was a serious complaint and grounds for termination. So I called her and asked to what happened. She explained she didn’t mean it like that, the borrower was confused, but she had to go because there was a monkey on her back and Satan was at the door. I just looked at the phone. We ended up firing her and doing that loan for free.
For anyone thinking of owning a big company, here is a lesson I learned. As we got bigger, I got tired of doing all of the accounting, and figured I could afford to hire some high-powered CPA to work for me. Who better to hire than my CPA’s auditor who came to review the books every year? She knew the systems, was highly intelligent, very competent, a hard worker, and unfortunately, very beautiful. We, of course, because good friends who joked around and people just ASSUMED we were having an affair (just for the record, we never did … I was happily married at the time). One day, we were out for a smoke break and she was telling me how her legs were bothering her. As we talked, she squatted down to exercise them. Just then, my wife drives up. I never heard the end of that one from my wife.
As my company expanded, naturally we had to hire some top end managers. It was a pretty eclectic group. I am Jewish. My chief compliance officer, Al, was the former Commissioner of Banking for the District of Columbia and an African-American. Michele, my chief financial officer, was a CPA and an attractive woman. Matt was a highly intelligent IT guy who used to work for a defense contractor. When we were getting real big, actually the second largest mortgage broker in the country at the time, I had someone from our top rival come interview for a job. I will not say the name of the company, but they were the number one mortgage broker by volume, were out of Texas and were later sued for discrimination by the federal government. After I showed him around, he was amazed. He said his current boss would never have a Jewish person and a woman who was black in top management running his company. Of course, I have censored out what he really called us. “Sorry, we just filled that vacancy, thank you for applying.”
In 2001, I was awarded the Freddie Mac Service Award. They paid for my trip to Hawaii, hotel stay and a one in 10 chance to win a Chrysler PT Cruiser as they drew our names out of a hat. As financially well as Freddie Mac did that year, the flight was economy class and the hotel was a three-star hotel. I gave my ticket and hotel to my top producing branch manager as a reward. I bought a first-class ticket, stayed at a five-star hotel and later bought myself a PT Cruiser because I lost. The best part of the trip was talking to Paul Skeens, the branch manager. Most of my other branches had several loan officers and the manager got an override on their business. Paul was different. He did all of the loans and had his staff help him. They called him “The Head.” Basically, he was on the phone all day with his headset, making deals. Once arranged, he would have a junior loan officer take the application and the ladies in the office would set up the loan, process and close it. He could literally have no actual body and just be a head in a jar like Futurama and still make a good living.
I gave him, what came to be known as, “The Good Enough” speech. As great as his model was, it was limited. After all, there are only so many hours in a day, so many weeks in the year. At some point, he would reach the maximum earnings he could make, as big as that was. “But,” he replied, “I have a certain level of excellence my customers expect of my operation. No one will ever be as good as me.”
“That is true, “I said, “If you train someone to be another ‘Head’ and they train someone to be another ‘Head,’ they will never be as good as the original ‘Head.’ BUT, you will make a hellva lot more money. And that might just be GOOD ENOUGH.”
After that, he DID start hiring top loan officers and made a hellva lot more money. After Carteret closed, he opened up his own shop, and I ended up working for him and still do.
At Carteret, we would say, “The tent is big enough for all different types of models.” At the other end of the extreme were the two guys who ran our Lending Tree Division. They would buy leads from Lending Tree, give them to new junior, low paid loan officers and have them dialing for dollars. Of all the branches, this one got the most complaints. I would visit their operation and tell them they had the lowest percentage of repeat business. In effect, by paying so low, they got unskilled labor and had to reinvent every lead again by buying it rather than developing a following. By saving money, they were actually losing money. Eventually, they quit, started their own mortgage company and were out of business within a year.
In 2003, I bought a farm in the Shenandoah Valley as a second home. My next door neighbor was James Carville and his wife, Mary Matalin. He ran the Bill Clinton Presidential campaign and she was the Press Secretary for Vice President Dick Chaney. His kids would come over and play in our pool. He would jog on my bottom land because the ground was firmer and better for his back. Once, my family and I saw his jeep stuck in the mud. We tried to use my tractor to get it out. Then my tractor got stuck and we needed a neighbor’s tractor to tow all of us out. We got all muddy and had a great time. He told my daughter, “You are a good American citizen.” Even in real life, he talks in sound bites. It was that year that Carteret Mortgage Corporation became the largest mortgage broker in the country. Thompson Financial sponsored a black tie event in our honor. They told us there would be a special celebrity guest. “Come on Britney Spears,” I thought. When I get there, the “Special Celebrity” turned out to be James Carville. They had no idea we knew each other. We talked all night about the neighbor kid ramming his fence at “The Farm.” People just looked at us and said, “I guess it’s true, all rich people know each other.”
The next night, I was invited to a private dinner with Sig Anderman, the founder of Ellie Mae and Dan Jacobs, the CEO of First Metropolitan Mortgage, third biggest mortgage broker at that time. Among other things, we started talking about our mutual Jewish heritage. I said, “Wow, this Jewish Conspiracy thing is really working out.” We laughed because there is no Jewish Conspiracy thing. Except for every third Thursday of the month when every Jewish person in the country comes to my house and we “just talk.”
One of the best and worst things Carteret gave me was the money. My wife and I could finally afford that divorce we were saving for. Seriously, I do blame the money for tearing us apart. It just gave us too many options. When we were poor, we had to work together to pay the bills, now we didn’t. Separating was one of the worst things in my life. I call it the “John Belushi Syndrome.” Google him or just substitute any of the young rich celebrities who get famous or make money really fast and then their life just spirals down or they overdose on heroin. People prop you up, start telling you are great and you start believing it. Pride is one of the seven deadly sins for a reason. On the other hand, being really, really rich is that bad. After the divorce, somehow a 46-year-old, overweight Jewish guy became attractive. One night, I went out for sushi and sat alone at the bar. After the meal, I paid with my American Express Black Card. You may not know what that is, but every 25-30 year old knows. That is the card Madonna or Jennifer Lopez uses. It has an unlimited credit limit, costs $12,000 a year to hold and comes with your own concierge. There are only about 1,000 total in the world. So when I paid for my meal, this 25-year-old girl starts talking to me. We dated for a while and whenever people asked how we met, I tell them the truth, “I don’t know. I was just reaching for my wallet and there she was!”
Carteret went out of business in 2008, and I retired. Then I got bored to death. Now I am back to where I was in 1991, 23 years ago, doing loans. I really do love it. It was a wild ride. Some of them magic, some of them tragic, but I had a good life all the way.
One thing I have learned from all this is: A day without laughter is a day wasted.
Eric Weinstein worked in banking, on the commercial real estate side until 1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 505-8692 or e-mail [email protected].
