Jordy Castillo, one of the few young originators in today’s market, plans to be a top producer.
If there has been one lament from mortgage industry participants over the downsizing in terms of employment as a result of the housing crisis, it is that many of those who left were the younger generation. But there still is a place for the young up-and-coming originator, according to Jordy Castillo of Sterling National Mortgage Co., New York. His goal is to among the best of the best.
Given his youth, one might be surprised that Castillo is using the old-fashioned way to build his business, relying on a repeat and referral model. He seeks to have lasting relationships with his clients, many of who treat him as a member of their family.
Castillo, just 27 years old, started out as a stockbroker, when a friend back in 2002 that was in the mortgage business told him to consider making the switch.
“I just wanted to get into a position where I was helping people,” which is something he did not feel as a stockbroker. But in the mortgage business, Castillo said he knows he is helping his clients accomplish their goals.
He was able to build his personal brand because he created a reputation of treating his clients fairly.
He started with Mortgage Line Financial, where he was until 2005, when he and his team to First Fidelity Mortgage Group. But that company was a mortgage broker firm and in 2009, the environment led to it shutting its doors.
At that point, Castillo made the transition to Sterling.
Enhancing his sales capabilities is the fact that he is fluent in both English and Spanish. That gives those who primarily communicate in Spanish a level of comfort with him, Castillo said.
A strong portion of his business, between 40% and 50% over the past year, came from divorce attorneys. Before then, he worked with the more traditional referral sources such as Realtors and accountants.
But the clients who come to him from the divorce attorneys are a different type of borrower.
They have been put into a situation where a refinance is necessary to help settle the terms of the divorce decree.
Castillo said he was helping out a client who was getting a divorce; there was a lot of equity in the property. As the process continued, and the loan got the clear to close, Castillo said a light bulb went off in his head and asked the client to allow him speak to the attorney. He realized there are plenty of similarly situated people out there.
The client, happy with the service Castillo provided, gave him the information. Castillo went and met with the attorney and a relationship was created.
Furthermore, that attorney recommended Castillo’s services to two other matrimonial attorneys. Just those three are his main sources for these borrowers.
The best part of doing business with these clients: the relationship does not start with a cold call, but from a trusted source, their attorney, he said.
Castillo usually hears from the attorney first, who gives him the details, including how much the house is worth and how much money needs to go to the ex-spouse. Most of the time the attorney forwards him a copy of the divorce decree which has the information.
“It is crazy that I didn’t put my finger on this sooner. It all goes back to the mindset of somebody calling you as opposed to you pushing your services on to them,” he said.
These borrowers for the most part are “A” credit quality; but for those situations where there is not enough equity available, there are alternatives, Castillo explained. Furthermore, because of their situation, these borrowers are not rate conscious. Thus it is a refinance business in a nonrefinance market. Given the current market environment, this nonrate-sensitive business is great to have, Castillo said, especially as industry economist predict the refinance market to dry up this year because of rising interest rates.
“That’s what I love about it, is the fact that it doesn’t matter what the rate is,” he said, adding the borrower has a certain amount of time to get the deal done and needs a certain amount of money.
The bulk of these transactions involve consolidating all of the outstanding mortgages and giving the borrower a first-lien position so they can get the most aggressive rate possible. Most of these loans are done through the conforming channel because of the borrower’s high credit score and large amounts of equity.
On top of which, after the divorce situation is worked out, these clients, like all of his past clients, are seen as long-term customers.
“That is one thing I am very, very serious about, is when somebody does a loan with me, they’re my client for life. Even if they hear the word mortgage, they are thinking of me,” Castillo said.
In many of these divorce cases, even after the refinance, because of the decree the borrower is selling the primary residence (where he looks to pull out as much cash as possible) and they need to buy a new property. Thus he has a client for a second origination as well.
“They trust me, they see how I work the first time around, they are not going to go and risk doing their purchase with anyone else besides me,” he said.
After the initial transaction, Castillo makes the effort to keep in touch with his past clients. This includes sending birthday and holiday cards.
He uses a customer relationship management system called Mortgage Returns. With a huge past client database, it would be impossible for Castillo to maintain contact without a CRM system.
It sends him reminders about upcoming events. It also sends an e-mail to the customer, to which Castillo follows up with a handwritten note.
“That system is huge because it tells me everything about the client,” where it pops up on his computer screen with notes like a client can save money by refinancing and contacts. The “hot list” tells him who needs to be called, where follow up is needed, whose birthday is coming up and more.
He’s been using the program for almost a year and it saves him “a ton of time.”
For some clients, he becomes “a part of their family,” being invited to their homes for dinner and for family gatherings.
This goes back to a business philosophy he adopted when he first got into the mortgage business.
“I closed 40 loans my first year in the business. I said to myself, 'Look, I have 40 clients in my database. From here on out, even if I just get one referral from every other client, I should have an extra 20 loans next year.’
“And that’s how it has worked. I’ve been able to build my client database to a point where my phone rings inbound. Because of the way I’ve conducted myself and treated my clients, they’re happy to refer me to somebody,” Castillo said.
So he is aggressively looking to partner with accountants and Realtors as part of his business plan. He also works with real estate attorneys. He feels that those sources are the ones he needs to build up.
The mortgage business will be heavily slanted towards the purchase side in the near future and if one does not have the contacts that deal with homebuyers, “you are going be extinct.”
Sterling is a subsidiary of a nationally-chartered bank. The bulk of his originations come from New York, New Jersey and Connecticut.
Among the reasons being part of a bank comes in handy is because a large part of his client base is the higher net worth borrower, someone who can afford to purchase a second home or investment properties. Sterling has some very aggressive portfolio products where it can do those loans at a lower downpayment.
Castillo has a processor who works solely on his files as well an underwriter for his branch.
He is a firm believer in action being more important than words. Anyone can say something; you need to prove it to the client through your actions is his philosophy.
If he can’t do something, he tells the client right away and that is something Castillo’s referral partners respect.
He will call the seller’s attorney and his real estate broker on a purchase transaction. It is an opportunity to help his client as well as get three more referral sources (the third being his client’s real estate agent).
Therefore, Castillo’s mantra is, “Every loan that I do, I see it as an opportunity for future business.”
Too many in the mortgage business concentrated on the now, the easy refinance business they got, and trying to get rich on a single loan.
“They don’t think about building something that is going to last and be there years from now. Not just next month, but years and years from now,” Castillo declared.
