Success can come from taking advantage of opportunities others don't want and having the strength to do what's right even in tough times.
The advantage that Chris Murphy and his company, M2 Lending Solutions, bring to the Denver marketplace is it is willing to do those loan programs the “big box” lenders are not really good at.
“We'll try and find those niches and market to them specifically. And I have been really good over the years just finding those little niches and just trying to take advantage of those to supplement the referral business that comes in,” he said.
Referral business is what contributed to his success in 2010. He put a particular emphasis on keeping contact with his past clients.
It is “the way that we do what we do, the way we process, the way we market through there. It has allowed us to really keep in good contact with our customers so that they come back to us when a refinance made sense. They've referred people to us, their friends and family.
“That is why 2010 was a great year for us—because of having a really good system, to process, to manage, to communicate with our customers,” Murphy said.
He was ranked No. 98 on the Origination News 2010 Top 150 Producer survey, with volume of $38 million.
Murphy has been in the mortgage business since 2003. Previously he was in the telecommunications sector but had been laid off. He then opened his own business in another field, but it was tough going.
A friend owned a mortgage company and he got to see his success first hand working there. Being an entrepreneur at heart, after eight months, Murphy opened M2.
M2 utilizes LoanToolbox to help with its client database contact efforts. It also gets each client after his or her loan closes a subscription to 5280 magazine, a monthly lifestyle publication for the Denver market.
But the customer contact efforts start while the loan is in process. For example, at the approval stage, the client gets a letter, while they also get something when the loan reaches clear-to-close. Murphy said that during the whole application process the client is getting a communication from the company every few days, either via an email, a phone call or some sort of gift.
Right after making application, the customer gets movie tickets. Once the loan is approved, they get Starbucks cards. “So they get something different through the (loan) process,” things that help to keep Murphy's and M2's name in front of the client.
And all along through the originating process, he is asking the client for referrals. “We try and make the experience and different than they would get anyplace else,” he said.
All these touch points are covered automatically, with the system set up to generate a report once a milestone is reached.
This is done so “we can consistently give that level of service with a high-touch feel to it. People respond well and they refer us to other folks because it is a unique experience,” he said.
For the B2B referral, M2 also utilizes the capabilities of LoanToolbox. Murphy says he also looks to set up referring partners with other professionals.
There are even second-step B2B referrals, he said. There are real estate agents that refer Murphy's services out to other real estate agents. “I don't do any cold calling for new agents. It all just happens through word of mouth.”
These types of referrals are strong because they come from other people in the business that can attest to the service that Murphy and M2 provides.
In its marketing, M2 looks to identify those market niches it feels it has an advantage in and then sends out materials to those who fit those characteristics.
For example, there is the traditional jumbo loan market. M2, he said, is “really priced well in the jumbo market,” so that is one typical target.
Living in the same market in which he targets allows Murphy to connect with those clients.
The company has a mortgage banker/broker business model. While it has a warehouse line, it also can broker out loans, which gives it a lot of flexibility and added value for its clients.
The bigger lenders might have one product option for their customers; M2 has available multiple options, Murphy said, adding it adds value for its customers that way.
M2 has just one office and the company sticks to doing business in the Denver metropolitan area; its focus is the residential mortgage business. The conforming loan limits in this market, he said, remained at $417,000. As a result, its jumbo business remained on the nonagency side of the ledger.
Another market Murphy and M2 seeks to work with is those homebuyers who have lower credit scores.
For 2011, Murphy said there was a slow start to the year as the refinance market of 2010 shifted to the current purchase market. It took time for people to start looking at home for sale.
But the purchase market has been picking up traction over the last few months. And interest rates have been moving down, encouraging some refinance business as well.
Talking about the Denver market, Murphy said that during the boom years, prices did not go up as high as they did in other areas in the country, so as a result it didn't go down as far.
Right now things are stabilizing. It has seen its fair share of foreclosures, he noted, but it has done pretty well overall.
It is a great market for the Federal Housing Administration-insured loan. The limit for FHA is $406,250 but the average home value is in the $250,000 range.
Approximately 40% of his business in 2011 is FHA, with 60% conventional. Purchase loans are 65% of business this year versus 35% refinance.
FHA is not a new product for him. During the subprime years, while others were abandoning FHA, he kept doing them. They were harder and more difficult to originate than subprime “and not a lot of people did them, but we did them, and we did a ton of them.
“So we were real successful when the FHA switched game, because we were already experts in that space,” Murphy said.
Murphy said his own personal production is geared more towards purchases, so even in last year's heavy refi year, he did 40% purchase and 60% refi.
M2 employs three other originators, two processors and an administrative assistant. Being both the boss and an originator adds to his responsibilities, but he has been able to keep up his personal production.
Murphy likes to hire people who like to work in an autonomous situation, but still be a part of the team.
His background in the telecommunications sector has helped get M2's technology infrastructure set up right the first time, so things are not constantly needing attention, Murphy said. People can work from anywhere and access the system. Furthermore, in case of disaster, everything is updated and backed up off site.
“It allows us to be really robust, even though we only have seven people,” but if something were to happen, M2 could be up and running in a new location in a manner of hours.
His philosophy is simple: try to help everybody, every time. “Really trying to help the customer to find the best solutions for them” is the reason behind his success and what drives him. That was one of the reasons why he stayed with the FHA program during the boom years, because it was the right kind of product for people, Murphy declared.
