Teachers & Coaches Are Ripe For The Picking

Great originators and business leaders come from classrooms and sidelines

Ripe for the picking
Staff Writer

Steven Milner, CEO, founder, and president of US Mortgage Corporation, was once a teacher who wanted to become a principal. In 1981, he began originating mortgages as a side hustle, but discovered he was quite good at it. Five years later, he decided to become an originator full time and started a brokerage firm in Bayside, N.Y. By 1990, the company had become one of the fastest growing brokerage firms in the Empire State. Later, Milner made the decision to start his own independent mortgage bank and, in the past 12 months, his company originated nearly $500 million in loans.

Milner is able to develop a close connection with borrowers, referral partners, and prospective employees by getting their whole story, not just the mortgage and rate they want. Every time he asks where they have been, where they are now, and where they are going.

Watch it on The Interest: Ripe For The Picking

“I’m very much focused on what I can do to help them get to where they want to go,” Milner said. “To help them feel comfortable about telling me their story, I tell them my story first.”

Better Earning Potential

Milner’s story begins in Long Island, N.Y., in a community called Brentwood. In the 1970s, he began teaching at his former elementary school. After earning his Master’s degree in mathematics, he went on to teach math in grades seven through twelve.

“I really loved it,” Milner said. “I started teaching math from grade seven through twelve. That included consumer math, algebra, geometry, trigonometry, advanced calculus, and so on. But I was making maybe ($6,000) or $7,000 a year.”

Despite having a passion for teaching, Milner could not tolerate the meager teacher’s salary.

Steven Milner
Steven Milner, founder and president of US Mortgage Corporation

Studies show that the same frustration is felt by many educators today. A nationwide survey from the National Center for Education Statistics shows that 55% of public school teachers are unsatisfied with their salary.

There aren’t many ways teachers can increase their salary unless they change school districts or obtain a higher degree. One projection from Pepperdine Graduate School of Education and Psychology is that teachers with Master’s degrees can expect a 10% to 15% average increase in earnings compared to those with only a Bachelor’s degree. But this varies depending on the subject being taught, the amount of teaching experience the person has, the location of the school, and the school district’s policies.

But while Milner was teaching and pursuing higher degrees, he also met the love of his life, got married, bought a house, and started a family. His wife, Andrea, needed to stay home and take care of their newborn, so their $30,000 household income was cut in half to $15,000.

Making Up Lost Income

Milner learned he could apply to be principal of the Brentwood High School if he obtained a doctorate, so he continued his education to get a PhD in mathematics.

“So I did anything I could to make up the income we had lost,” Milner said. “I coached all the different sports in high school. And the school district gave me tutoring jobs … I would teach from house to house for $1.25 an hour.”

Steven Milner, founder and president of US Mortgage Corporation

Milner also got involved with some multi-level marketing companies like Amway and Shaklee, which he referred to as pyramid schemes. Milner bought a bunch of cleaning products from Amway and vitamins from Shaklee, hoping to sell them all off and make a small profit. But Milner wasn’t a salesman, and soon every closet in his house was filled with his unsold inventory.

“We were building up a lot of credit card debt, just trying to survive,” Milner said. “Then I went to refinance my house to consolidate my credit card debt. And that’s when my life changed.”

The loan officer took out a 1003 and interviewed him on his income, assets, and credit history. The arithmetic she did to thoroughly comb through Milner’s financial situation was nothing he couldn’t do himself. So he began asking questions: how do you earn money at this? How much do you get paid? What’s a basis point?

Then he went to speak with her sales manager who handed him a four-inch thick book called the Fannie Mae and the Freddie Mac Seller Servicer Guidelines, and began explaining what being an originator really means.

“He explained to me that you want to try to develop relationships with people that have their own circle of influence — their own client base — such as Realtors, attorneys, financial advisors, accountants, contractors, and so on. And if those people ask where they can go for a mortgage loan, they would possibly refer business to you,” Milner said.

But what really made Milner’s eyes twinkle was the commission he could earn. He learned, at the time, the average purchase price in Long Island was about $125,000 to $150,000, and the average loan size was $100,000. After being told he would make 12 and a half basis points on each loan, the PhD math wiz did a quick calculation and figured he would make $125 off each loan he closed. So if he could close eight loans per month, he’d make $12,000 to $15,000 in a year, which would allow him to pay off his family’s debt.

Getting Creative

Plocica views new challenges as new opportunities. So when the principal of English Estate Elementary recognized Plocica’s ability to connect with the kids in his P.E. classes and said he’d be perfect for filling the position of behavior specialist, Plocica readily accepted it.

Except, he had no idea what a behavior specialist was or would entail.

Christian Plocica
Christian Plocica, co-owner of VIP Mortgage Group

Plocica learned quickly, though, because on his first day he got a call from a teacher who said her student was acting very disruptive, “rearranging” her classroom. So Plocica had to bring him to his office, but the troubled student went ballistic again, swinging a keyboard around, knocking things to the ground, including Plocica’s “Teacher of the Year” awards.

At that moment, Plocica thought to himself, ‘I didn’t know this is what I was getting into.’ Eventually, he found that the key to getting through to those kids was by getting to know them and their home situation. It required lots of time, effort, energy, but most importantly, love, he said.

“A lot of the kids that I was teaching [their] parents were in jail, were drug addicts, were living with their much older grandmother that just couldn’t be there, or were living in and out of a hotel … that was really, really challenging,” Plocica said.

Unfortunately, there was nothing Plocica could do to remedy the students’ family situations. Although he was expected to get those troubled kids in order, his only tools were behavioral charts and positive reinforcement. Nonetheless, it was rewarding for him to see some of those students make progress.

“Every industry has its challenges,” Plocica said. “You can only control the controllables.”

He drew a comparison to what mortgage companies deal with in this industry, like not being able to control mortgage rates or the market in general. Similarly, teachers may lack funding or resources, which causes Plocica to say, “Make the best of what you have, [and] get creative.”

Problem Solving

In 2012, Plocica was offered a new opportunity by a parent of one of the boys he coached for the high school basketball team. Brett Linquist, formerly the CEO of The Mortgage Firm in central Florida, offered Plocica a job.

Similar to Milner, Plocica and his wife were building a family at the time, and he saw it as an opportunity to bring in more income.

Christian Plocica, co-owner of VIP Mortgage Group

Same as before, Plocica had no idea what to expect in this new position. He was told he’d work as a dialer, calling up hundreds of people a day and setting up appointments for his boss. Instead, he found a stack of papers on his assigned desk and was told that he needed to help get a few loans closed.

Linquist asked Plocica to source some deposits from a borrower. After asking a processor for some help and sorting through bank statements to find the difference of a few thousand cents, he presented it to his boss two hours later.

Impressed with his timeliness, Linquist asked, “How’d you put it together?” To which Plocica responded, “You asked me to do something. I did it.” He was promoted to loan partner on the spot.

That’s when Plocica began taking on more of a leadership role where he would train the other two loan partners and assist with any difficult tasks. Soon enough he became known as the go-to guy for answering questions and offering guidance.

Plocica graduated quickly from that position as well and became a loan originator. At first, the idea of transitioning from his comfy salary to a position that was 100% commission scared him, but it ended up being the right decision.

“My income doubled, tripled, quadrupled, because I was now able to do everything,” Plocica said. “It was the greatest thing to happen to me.”

Being a natural problem solver, Plocica quickly became one of the top producers in the company, entering an exclusive group within the company deemed “circle of champions.”

Leadership

Milner’s primary goal is to keep the company solvent and profitable, which often means having to make hard decisions.

“One of the hard decisions I made was not to do any of those subprime loans as a banker,” Milner said. “At that time, when you did a subprime loan as a direct lender, the company made revenue equal to 6% to 8% of the loan amount.”

For one $300,000 loan, a direct lender would make $18,000 to $24,000 in revenue, Milner explained. Before LO Comp was established in 2011, loan originators would get paid based on the gross revenue of the loan. So if the company had gross revenue of $18,000, the loan originator would make $9,000 on the loan.

Yet, Milner could foresee some issues with the subprime loan.

“I always feel that if it doesn’t make sense, it doesn’t make dollars,” Milner said. “They were given to borrowers who did not demonstrate the ability to repay the loan or the willingness to repay the loan. I just felt that [it] was going to create the demise of my company.”

Instead of banking the subprime loans, US Mortgage Corp. would broker those loans out. However, an originator only makes two basis points for brokered loans. On a $300,000 loan, the brokerage would get $6,000 in revenue, and the originator would only get $3,000 in commission.

When asked why he didn’t disregard subprime altogether, Milner said his originators needed subprime products because they were in demand by so many borrowers. By brokering them out, the company incurred less liability rather than if they were banked.

That is why many left his company to join brokerages on Long Island; some even went to their competitor just down the block that was paying originators $12,000 on every loan.

Leading up to the market crash in 2007, brokers were raking in cash while many mortgage bankers were going out of business. In 2006, Milner nearly decided to close his company and move to a different occupation, but then decided on recapitalizing instead.

“I wrote out a check for $3 million so that I could keep everybody employed and to develop a new business plan for the company,” Milner said.

The new plan was to expand the company’s footprint throughout the country, since it was only doing business in New York as a banker and New Jersey as a broker.

Holding onto the company ended up being a wise decision for Milner, since the housing market crashed in 2007. As evidenced by the implode meter that was posted online every morning, many of those mortgage bankers did eventually go out of business because of their subprime loans.

As part of the new regulations put in place by the Dodd Frank Act, the Safe Act required loan officers to become licensed federally and for each state they plan on doing business in. This challenged Milner’s plans for expansion, but he muscled through. He elected himself as the licensed designee for US Mortgage Corporation, taking the 20 hour federal licensing education and national exam, as well as the one to eight hour state pre-licensing education and each state specific exam. It took Milner two years before he was licensed as an originator in every state, and the District of Columbia.

Finding The Ripe Ones

When Plocica is interviewing prospective employees at VIP Mortgage, he doesn’t care what kind of background they have as long as it demonstrates skills that are important to being an originator.

He explained how former coaches and athletes demonstrate great potential as originators and leaders because they are competitive and resilient.

“You work harder. When your back is up against the wall, you puff your chest down and say, ‘Hey, I got this.’ You don’t, you don’t whittle down,” Plocica said. “It’s not always gonna work just because you informed people or were the greatest at laying things out. You felt like you had this great rapport and then all of a sudden they went somewhere else. Get over it, because that’s gonna happen.”

Adaptability is another vital skill for leaders to have. Whether it’s employees or students, Plocica believes a leader must adapt to different learning styles to achieve the best results.

Considering that Milner has been able to sustain his company through thick and thin, he knows a lot about being adaptable to changing circumstances. The best safeguard to shielding his company against losses when the market changes is reinvesting in the company when the market is doing well.

“I always say a tree doesn’t grow straight to the sun,” Milner said. “ I’ve been through every cycle, probably more so than anybody in the business. And I think that my philosophy has always been that I have to be prepared. And I have been able to give some of that money back. And I think that’s how we’ll get through this cycle.”

“Do you know how to educate? Do you have this determination, this competitiveness to want to just achieve great things? And that is what I would look for in LOs and help unleash that greatness that they have.”

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And what do former teachers and coaches get out of it? A second chance at applying their skills and passion towards a career that could potentially be much more rewarding to them.

“This industry has given me opportunities that I thought I would never, ever be able to achieve. I tell people, I’m just a kid from Brooklyn, [had a] single mom, had a tough life … I’m a survivor,” Plocica said. “I’ve been through it. But I’m here.” 

This article was originally published in the NMP Magazine December 2023 issue.
About the author
Staff Writer
Katie Jensen is a staff writer at NMP.
Published on
Dec 01, 2023
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