A Peek Inside Successful Lending Shops

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cover story Not all of the successful originators are keeping their top strategies under wraps. Some have offered a look into what they're doing to keep ahead of the pack. By Sandra Lane E ver wish you could look into a crystal ball and find a success formula for your company? Look no further. Several leaders in origination have generously agreed to share some of their ideas and solutions to issues that face most lenders today. You will find the solutions are as diverse as the companies that created them. Selective Hiring Ensures Success C hoosing the right people is the key to success in origination, according to Paul Anastos, president of Mortgage Master, a Walpole, Massachusetts, company that closed $8.1 billion in loans (or 25,700 units) between July 2012 and June 2013. "I believe the secret of our success focuses on making good hiring decisions and hiring exceptional talent," he said. "You must choose people who are good at communicating the goals of the company, take direction, help customers make good decisions, and provide feedback. When you are cautious in your hiring decisions, a lot of the things you hope to achieve will take care of themselves." Anastos' hiring guidelines seem to be paying off. The average production per Mortgage Master loan officer in the first six months of 2013 was $16 million. Another factor in the company's success, Anastos believes, is its folksy, down-home approach, including personal service and courteous assistance not usually found in larger banking institutions. Mortgage Master customers are made to feel like family members, not just names on the client list. In addition, the practice of utilizing the company's own funds to initiate and close loans has significantly contributed to its success. Other issues that affect origination success are the everchanging and increasing federal compliance regulations, and Anastos said that again, choosing the right people ensures fewer problems in this category. "Although there is some technology involved in handling these regulations, you can't replace the importance of people being involved," he explained. "New software is good, but there is a human element required because there is a lot of room for interpretation. It all comes down to our evaluating and interpreting regulations correctly. As long as we can understand the rules, we are going to adhere to them." To keep up and stay informed, Anastos suggested constantly reading various publications concerning the industry, compliance issues, and anticipated changes. Mortgage Master is one of the country's largest privately-owned mortgage companies, licensed in 21 states, with offices in 46 towns and cities across the country. In 2012, the company increased its originations to a record $7.3 billion from $5.5 billion in 2011. Because of high underwriting standards and operational controls, this company has the distinction of never having to repurchase a loan sold to an investor. To Eliminate Stagnation, Create New Streams of Income S ometime in 2012, leaders at Equity Loans, Atlanta, Georgia, decided that although the company was not doing badly, some stagnation was occurring. Despite the fact the company already had offices in more than 30 states, and Stephen Carpitella, manager of the Harvey Cedars, New Jersey, office, had been recognized as a Top Originator in the Scotsman Guide 2012, it was felt there still was room for improvement. "We felt we were somewhat limited in that we only had one or two investors, and that we really needed to have eight to 10 different partners to expand our product line and stay competitive," explained David Abrahamson, SVP, operations. "Additionally, we started a wholesale channel, which provided us with an additional revenue stream." He said the management team also decided it needed to recruit new loan officers, establish new offices, and increase the overall size of the organization. "That has helped us to be more competitive in the marketplace as well as being able to offer a full-fledged product line for our marketing team," Abrahamson said. "Now we are able to purchase loans from companies who have loans they are unable to sell due to limited investor outlets and those that are hung up on warehouse lines." In addition, he said that The M Report | 17

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