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End over end in freefall, 120-mile-an-hour gusts like icy daggers plucking at your clothing, your ears full of rush and roar. Stepping out of an airplane 15,000 feet above Earth isn’t for the weak willed. For Shashank Shekhar, it’s an escape, it’s an adventure, but perhaps most importantly, it’s a metaphor. Because where some see certain doom, he sees the thrill of victory – the same triumph over adversity that’s helped him become one of the most successful loan originators in the mortgage industry.
Or maybe Shekhar’s story is even simpler than that. To quote a shared line in the revolutionary Broadway musical “Hamilton” between Alexander Hamilton and the Marquis de Lafayette: “Immigrants. We get the job done.”
When you see Shekhar, you see a fit, well-spoken man who looks comfortable in the way that business casual tech execs or Los Angeles entertainment VPs look comfortable: nice suit, open collar dress shirt, well groomed. He portrays the image of a successful, but approachable, pro. For an immigrant from New Delhi, India, it’s the image of the American Dream.
And that’s what Shekhar is trying to nail down. From nothing, he built a personal origination portfolio of nearly $200 million a year. Now he’s trying to build something much, much more. As the founder of San Jose, Calif.-based Arcus Lending, Shekhar’s attempting to create a company where he’s the least successful originator. He is recruiting raw talent and teaching them what’s worked for him. He’s looking at national expansion. And he’s on a tear on the speaking circuit to get the word out.
Debra Donahue, a regional account executive at Cardinal Financial in San Jose, California, not far from Shekhar’s office, says she has worked with him for several years over a few different companies.
“We all know he’s a large producer,” she added. “He has a very good business model and he runs his business very professionally. He’s got a great team of processors that support him. He’s very thorough and his loans are very well put together. He runs a great business.”
Regarding the recent seemingly overnight growth in Arcus’s plans, Donahue in unfazed. “Growing the model is just a natural progression in his business,” she shrugs.
Of course, Shekhar’s now trying to do all of this in a coronavirus economy – kind of like jumping out of a plane, confident you’ll live even without the safety of the aircraft and reveling in adrenaline-fueled challenge to win. But then, he’s faced odds like this before.
Learning In, And Leaning Into, A Recession
Clearly, Shekhar must love a challenge. In 2008, he was only two years out from leaving his native India. With less than $2,000 in savings and no contacts, he started as a mortgage broker, just as the U.S. residential real estate market was collapsing.
That first year he made only seven loans, but he persevered. Learning how better to connect with clients, how to market better. And each year, his production increased – often in seismic spikes. In 2019, practically single-handedly, he originated nearly $200 million of volume at Arcus Lending.
“It was crazy for sure to want to get into mortgages in 2008, but as Warren Buffett said, you buy when everyone is selling and sell when everyone is buying,” says Shekhar, who was 32 at the time.
“I saw an industry where 65% of the people left in those years, and I was coming in. But if you believe this is a long-term industry, from that perspective you feel good and that you will end up with a bigger market share. So, looking back, 2008 and part of 2009 were bad for me, but I wouldn’t do anything else different.”
That attitude helps explain his confidence in the midst of the coronavirus pandemic, as he stands by his plan to double the number of employees working for him. It’s an expansion that started halfway through 2019, but it got off to a quick start. In just a year, his company now numbers 50, including over 30 brokers and 15 in operations, just about all of them hired since last June. Arcus is currently licensed in 14 states, with a physical footprint in 10.
Always On The Fast Track
My first job after business school was with GE Consumer Finance in New Delhi, India. I was fast tracked to a manager position there within two years. I joined a small startup after that and was transferred to Mountain View, California, as director of product management reporting to the president. I barely worked there for two years before they shut down due to the financial crisis in 2008,” Shekhar recalled.
His first mortgage job was First Priority Financial, a broker turned banker in California. But he wanted the freedom to work the market the way he wanted. He took a leap of faith and launched Arcus in April 2008.
What he saw then, he sees again now. “When things get difficult, you have a lot of people who leave the industry because they are used to easy business. They’re not used to the unemployment and foreclosure rates rising to record levels and lending guidelines much stricter than they used to be. That leaves the betterquality professionals, which I think is the way it should be. For people like us, I see it as an opportunity to gain an even bigger market share. I’m very confident.”
In mid-2019, it was easy to be confident about the economy getting better. The conditions helped fuel the decision it was time to make Arcus Lending beyond a one-man band. While Arcus was doing fine based on his own performance, Shekhar wanted something more.
“When you produce on your own, you’re not really creating a legacy or anything that has any value because if you stop originating tomorrow, the company has no value,” says the married father of two daughters who lives in Saratoga, California.
“I wanted to create value for the company itself and not just me as an originator.”
He waited more than a decade to expand because “I wanted to get to the point where I could add value to people who join my team in terms of training them and helping them get better and produce more. Until I reached a point where I considered myself one of the top 10 or 15 loan officers in the country or I knew enough to teach them, I should not hire them. I couldn’t add value until I was good enough myself.”
Sell, Sell, Sell!
Just over a year ago, Arcus Lending had two loan originators: now there are nearly three dozen.“I simply looked at recruiting loan originators the same way I look at getting borrowers. You need to assess enough value and offer the right solution to their needs,” Shekhar asserts.
Take, for example, the ability to build leads via social media. That’s what appealed to Blake Bogese of Blake’s RVA Loans in Richmond, Virginia. He was a retail mortgage originator before he reached out to Shekhar last year. “I was drawn by his reputation and the way he operates and creates leads for himself through social media and his educational approach. That’s really what you’re signing up for.”
How does Shekhar get people to jump ship? “I think when the loan originators are thinking of changing companies, their top three requirements are: competitive rates along with wide product range; processing and technology that can make their life easier and help them grow; and, finally, leadership that is sales focused and can mentor them to take their business to the next level. I made sure Arcus checked off all those boxes.”
“I thought last year I was at a point where I felt comfortable to hire people and add value to their business and help them grow, which I have seen in the past 12 months. Most of my loan officers who have come on board have had their best months in years.”
Despite such a massive hiring effort in such a short period of time, while originating for himself, Shekhar still has time for young brokers like Bogese, 33.
“He’s not just the CEO of the company, he’s also a personal mentor,” Bogese says. “I wanted to be on the broker side but not be a oneman team. He’s extremely available and he has a great team behind him. Instead of 20 or 30 people [on the processing side], he’s got two or three rock stars who are really good processors and closers. He hires the right people and delegates to them and allows them to take ownership, which allows him to take care of his own production.”
While Shekhar’s business philosophy is highly focused, so are the methods he has used to achieve his success. Not for him are the traditional ways mortgage brokers typically get loans.
“Very early in my career, I figured out that most of the things loan officers traditionally do, like networking and trying to schmooze Realtors, did not work for me,” he says. “Either I wasn’t cut out for it, or I didn’t feel comfortable doing it. So, I made a promise to myself that I would make sure the business comes to me.”
I am having more conversations with retail lenders than ever before, and we are recruiting at a much faster pace than I have in the past 12 months.
The Brand Builder
He started working on his personal branding platform, which he says not many other loan officers were doing at the time, and few are doing even now. He started what he says was one of the mortgage industry’s first blogs in 2009. He followed that with three books, plus countless speaking engagements at webinars, seminars, radio shows, TV shows, and videos, “really every online and offline medium you can think of.”
So far, he’s authored hundreds of blog posts, most of which are available on Arcus’s website. “I write all the blogs myself,” he says. “It is very time consuming, but I have averaged one blog post a week for 11 years. I am very proud of the fact that there is consistency there. The good thing about a blog is that the more you write, the more authoritative you are, and the more business you get.”
Cardinal Financial’s Donahue agrees. “He has a great reputation, which is well deserved,” she said, adding that his methods continue to bring him visibility. “I am on the board of the local chapter of the California Association of Mortgage Professionals and Shashank has always been extremely giving of his time and industry knowledge to our chapter and speaking at our events.”
Most of Shekhar’s message is targeted at first-time homebuyers, mainly high-income professionals in the technology industry. Many are immigrants unfamiliar with buying a home and getting a mortgage. Arcus is located in the heart of Silicon Valley.
“They need the most amount of education and are looking to find out how the process works,” he says. “If you are refinancing or buying your second or third home, you probably already know how most of the process works, so you’re just shopping for the best rate. But if you’re buying your first home, there is a lot of education that’s required. The education platform I created has stood the test of time. I still get leads on a daily basis.”
By the end of 2019, Shekhar was still doing about 75% of Arcus’s production by himself. But today he only accounts for about 25%, with a goal to eventually get that figure down to 10-15% by next year as he adds more people and increases total production to $1 billion. But that doesn’t mean his personal production will suffer; he still expects to originate about $150 million himself this year.
“I want to keep my personal production consistent and increase my company’s production,” he says. While the coronavirus pandemic has crimped mortgage production, mainly for purchase loans, Shekhar says the current market is ideally suited for mortgage brokers.
Ideal Market For Brokers
It’s been extremely beneficial being on the broker side because we are not just tied to one lender,” he says. “If I were a loan officer at a bank, I would not be able to originate anything except loans with high credit scores. And a lot of non-bank lenders raised their rates and are completely out of the market. But because I am a broker, I deal with more than 60 lenders and have the option of moving from one lender to another. Having that option has been a lifesaver for us.”
That has also helped him recruit new loan officers to Arcus. “The fact that there are more options in the broker channel is going to work to our advantage,” he says. “I am having more conversations with retail lenders than ever before, and we are recruiting at a much faster pace than I have in the past 12 months.”
Shekhar’s ability to survive the 2008-2009 real estate crash makes him confident that he will survive – and even thrive – this time around, too, even if the mortgage business remains in the doldrums for more than a couple of months. It’s not hard to see the allure of overcoming such challenges for a man who enjoys sky diving from 15,000 feet, confident he’s going to stick the landing.
“If you are in this for the long run, 12 months is really not that big a deal,” he says. “Interest rates will continue to remain low, which means there will be enough refinance opportunities. Then, once this passes, whether it takes 12 or 18 months, there will be a lot of pent-up demand, which means the purchase market will come back.”
Arcus Lending, he says, will be there. Standing firmly on the ground.