Sales talent combined with strong operations that speed turn times and spur multiple referrals were among the reasons companies that contributed large numbers of highly-ranked loan officers to
“A lot of these loans don’t get done if we don’t have the feedback from the underwriters that really makes these things happen. It’s easy to bring them in. They have to close for us,” said McCarthy, who ranked No. 13 in this publication’s survey and has a few fellow LOs from his company ranked right after him. The dedicated team of assistants and processors the company provides to each originator also plays a key role, he said.
“There is no way you could do it all by yourself,” he said.
“Our culture is one that is founded in an entrepreneurial spirit and we attract first-class originators who embrace this. Coupling this spirit with a stable platform offering, we provide speed of service and innovative technology, and our producers are fully supported, which allows them the freedom to do what they do best–originate loans,” said Howard Michalski, executive managing director, W.J. Bradley Mortgage Capital LLC, said in a statement emailed to this publication. Emery Financial/ W.J. Bradley contributed the third largest number of originators to this year’s rankings.
“I absolutely could not have done it without loan assistants and my processors,” added Emery Financial/W.J. Bradley’s Josh Lemos, the No. 6 originator in this publication’s rankings. He said the company’s COO also has clear directives in dealing with larger operational challenges and deadlines such a loan limit changes.
Lemos also credits the company’s team dynamic and mentoring from other originators that rank highly.
“You have got to have quality manufacturing and…final product,” he said, noting that each origination team constantly works on improving this with players willing to step in outside their functions when needed. The company, he said, has a collaborative culture he finds unique, but is not for everyone.
Anastos said a “high level of customer service” externally and internally helps provide top originators what they need to build volumes and attractive compensation as they gain referral business.
Ciardelli said referrals are particularly important and his company has quantified these using the net promoter score metric that shows the percentage of customers that promote the company by categorizing them either as promoters, detractors or neutral.
The company provided 2011 numbers from Satmetrix/Bain Analysis showing its score is competitive across other industries at 77%, a level on par with Costco and higher than Apple’s 72%. Ciardelli said the company’s NPS score also is high compared to mortgage industry competitors. Home loan dollar volume data from ON affiliate the Quarterly Data Report show it was the eighth largest lender in the retail channel as of fourth quarter 2012.
Mortgage Master’s McCarthy also said referrals have been a key part of being able to produce volume.
“I have a client base of…maybe 2,000-3,000, maybe more, and a lot of them have been with me since ’96. As rates have gone up and down, they’ve just refinanced every time there’s a dip, and along with that I get their friends, their relatives and…their coworkers,” he said.
Lemos said, “Getting our lenders to change their policies to move faster to help us, having the capacity to close that many loans per month” and “getting referrals/asking for referrals from our clients as we process their loans” played a key role in the ability to generate volume in the past year.
“I think we got 26 new clients each month, which is a phenomenal amount of referral volume as the year progressed,” and in some cases, borrowers became repeat clients for a second time during the year, so long as they had the equity and other qualifications needed to get through underwriting.
Also a key part of customer service has been a dedication to providing promised pricing, Mortgage Master’s Anastos and McCarthy said.
“One thing that I’ve lived by that has kind of helped me, I think, is if you give your word that you will do a deal at a specific rate….We honor our word and get it done, even if it costs us money,” said McCarthy.
Guaranteed Rate’s top executive also stressed the importance of price.
“The other thing that we do that everybody else says that they do is we are the leader in price,” he said.
When asked about how the company is able to provide attractive pricing, Ciardelli said, “As I have grown the business, I have kept the focus on our cost structure. So our cost structure as a business is extremely low. We don’t have any debt at all and the building that we own, we own it free and clear.
“And obviously, with the volume that we’re doing…we get a great pricing advantage direct to Fannie and Freddie and we’re basically just taking the best price from secondary straight to the consumer….We don’t have a lot of layers,” he added.
Some competitors are larger but offsetting their economies of scale in many cases are more layers of management, Ciardelli stated.
Smaller companies can often do more with a more efficient staff than competitors’ with larger ones if they have the right people and culture, Mortgage Master’s Anastos also noted in a separate interview.
In addition, Ciardelli said the company has unique automation that allows borrowers to get custom rate quotes, pull their tri-merge credit report at no cost and effectively run the loan through Freddie Mac’s automated underwriting engine with integration into the company’s origination system.
“The customer can get an underwriting decision right there…and for the originator there is no double work,” he said. “It just reduces the time that the loan officer has to work on the loan itself.”
Ciardelli said the workflow system’s also has milestones and reports that help keep the loan moving. “It is a very detailed assembly line and as long as everybody does their job in the process it just keeps the pressure off the loan officer having to be involved in pushing the loan to get done,” he said.
When asked whether LOs’ volumes will be comparable this year, executives from companies that contributed a lot of contenders to the 2012 rankings generally said they expect a shift in the market that leads to some new challenges in 2013.
“Margin compression has already started,” Ciardelli said. “Really, it’s coming down to purchase business.”
He said nevertheless he believes purchases and jumbo volume could help boost the companies’ overall volumes in 2013 over 2012.
“I think jumbo is a real strength for us,” Ciardelli said. ”We will do co-op and condo. We have a higher loan amount as an average.” The company is active in some metropolitan markets that tend to have relatively higher loan amounts such as California and New York and is expanding in similar areas.
Mortgage Masters’ Anastos said he believes origination volumes will remain strong for at least the first half of the year.
Executives and originators from all three frequent contributors to the top LO survey also generally expect there will be a shift away from refinancing and toward purchases this year.
“We’re probably doing three to four purchase prequals a day right now,” said Lemos, who works primarily in Southern California’s Orange County, and also in the Los Angeles area. “It’s incredible how many prequalifications we’re doing. Last year there…were probably two prequals a week.”
Mortgage Masters’ McCarthy said he has seen preapprovals pick up in his East Coast market as well and Anastos noted that, with housing strengthening, more borrowers who may have had equity hurdles in the past may qualify for refinances as well as potentially purchases.
“If there were any inventory, we’d be converting to purchases left and right, but it is very difficult to find a house. There’s not a lot of inventory to buy. Everything is going over asking [price]. It is very tough for buyers to get their offers accepted,” said Lemos.
“It depends on where you go,” he added. “The beach cities...are…highly competitive.”
Housing markets in the Northeast also have become more competitive, Mortgage Master’s Anastos and McCarthy said.
Lemos said, “A little bit of it is fear of rates going higher. People want to get in before that happens.”
Although some of the purchase loans Lemos works have started go into the $700,000 or $800,000 range or even $1 million to $1.5 million range as the demand for higher end homes picks up, he said the company’s average loan amount in 2012 “wasn’t as high as you would think.”
“We do a lot…under $417,000,” he said. “We have a lot of firemen and policemen who are our clients…a lot of guys getting their first home.
“When there is a loan that is not in our wheelhouse, we pass on it,” Lemos said. “I think that is important when you have that much volume.”
He estimated that about 15% of product mix is jumbo, with more conforming than FHA or VA, “and with the upcoming changes [in FHA mortgage insurance premiums on] April 1…the benefit for doing a conventional loan for a borrower with high credit scores is going to be more pronounced.”
Lemos added that jumbo pricing has been competitive with the conventional pricing on high balance purchase loans at times.
