The activities that Stephen Tetzner undertakes as part of his pursuit of the mortgage banking trade have a purpose: to help strengthen the image of the industry and his business.
Tetzner is currently president of the Rhode Island Mortgage Bankers Association. As chairman of the organization's legislative committee, he helped to draft the state's predatory lending and loan officer licensing laws. The main benefit of the weekly radio program he does is to enhance his standing with the real estate community. He will be appearing on a television show as well. And he is the founding partner of Homestar Mortgage in Providence.
Even with all that is going on, Tetzner is also a top producer, finishing 29th on the Origination News 2010 Top 150 Producer list, with volume of $98 million.
Through July, he has closed $35.5 million and is on pace to close between $60 million and $75 million for the full year. Approximately 70% of this year's production is purchase.
He said what he thinks sets top producers apart is “not just being a good originator, but taking the application to the next level, and looking at a file the way an underwriter would look at a file before an underwriter sees it.”
He said don't just throw the papers into a file. Recognize potential problems with the application and get them resolved before it goes to underwriting.
“By taking a little extra time upfront to take a good application and do your job right the first time, it allows you to do a lot more business because you're not running around putting out fires all the time,” Tetzner said.
Tetzner has been in the mortgage business for 16 years, starting at Fleet Bank, where he worked for nearly year. The business, he said, is in his blood. His father Carl “was a guru in the mortgage industry, president of several different mortgage companies.” Among the firms Carl Tetzner headed up were Mariner Mortgage and Plymouth Mortgage.
The two of them started Homestar 15 years ago. Stephen Tetzner said he had become a top producer at the Fleet branch where he worked, while his father's expertise is on the compliance and operations side of the business.
Carl Tetzner is still involved with the business on a part-time basis and remains Stephen's partner in the company. “His reputation and his knowledge has really helped grow our company,” Stephen Tetzner said.
The company's beginnings are when the pair became aware of a new program from Flagstar Bank called SNAP, which stood for Secure Network Approval Process. It was a video conferencing system, where the underwriter was connected with the borrower at the end of the application process. This enabled the underwriter to approve the borrower on the spot, Stephen Tetzner said.
“We thought that was a real niche and that is how we started the company, bringing the SNAP product to Rhode Island,” he continued.
The customer service mantra has remained and resonated with Tetzner and Homestar from the start. Approximately 90% of its business is Realtor-generated, and the company has always emphasized the purchase money business. It has never done a telemarketing or direct-mail campaign.
“Getting a loan in and getting it through the system quickly and efficiently is what drives the Realtor business,” he said.
When rates go down, its refinance business picks up, he notes. But Homestar has never been heavy into the nonconforming business. Rather, it originates loans supported by government lending programs. Tetzner notes it is the No. 1 partner of its home state's housing finance agency.
Homestar has other referral sources as well, including financial planners, accountants, lawyers and its past clients. It does not do a lot of advertising nor does it look for Web-driven business. Homestar is also a member of all the local real estate boards, he said.
The company has 20 loan originators working for it from three offices, two in Rhode Island and one in Massachusetts.
It is also licensed in Connecticut and Florida.
Getting licensed in Florida nine years ago is an example of the concentration on the customer; a lot of its clients were acquiring second or retirement homes in the state. The license allows Homestar to continue to serve and maintain its relationships with those customers, Tetzner said.
Homestar's niche on the product side, he continued, is that it is full service. “I believe very strongly in diversity of products. One of the things that has made us so successful is I still originate. I am the top originator in the state (Rhode Island).
“And we are able to do that because we do everything.” The state housing finance agency product meets the needs of low- to moderate-income borrowers. These loans can be for as little as between $80,000 and $100,000.
But Homestar also does Rural Housing, conventional, Veterans Affairs and Federal Housing Administration loans. It has a full Eagle and a full-time FHA underwriter on staff.
It even has a great mix of traditional jumbo products. It has relationships with local banks and credit unions to broker those jumbo originations to. Approximately 85% of its business is as a banker; the jumbos are the only product it brokers out.
“So we have all the products. When a customer comes to and says, 'Hey, I need a loan,' we offer everything. So that client knows that they are getting the best possible product available in the market,” said Tetzner.
The advantage to being a full-service originator: its Realtor referral sources can send them a client without having to ask if Homestar offers a particular product.
“They know that we have the diversity of product and we're going to be able to service their client for them,” he said.
While it does not market for new clients, Homestar and Tetzner do make it a point to keep in front of the referral base.
“We are big on promotional items,” he said, starting with the basics like sticky note pads, pens, letter openers, cozies and the like. But each year, there is a large ticket item such as a cooler with the company logo; this past year, he said, there was a leather portfolio embossed with the company logo. It also works on some cross-promotional events with real estate agents.
The company hosts its own big fundraiser at the end of year for Toys for Tots, where it invites its Realtors and other referral sources and have them bring a toy to donate. It usually generates a donation of between 200 and 300 toys for the charity.
Homestar does two newsletters monthly, one which is emailed out to its past client database and the other to its Realtor referral database. It also works with two marketing companies, one which focuses on constant contact. The customer database is kept abreast of things happening in the market place, Tetzner said. Its Realtors are kept apprised on product guideline changes and new products that are being offered.
Recently, Homestar put up a page on Facebook. Its loan officers also have their own pages there as well. Tetzner said some of the younger loan officers are heavily involved. “I do very little through social media personally. Most of my contact is personal contact with clients from my database over the past 15 or 16 years in the business,” he said.
On Sundays, Tetzner does a one-hour radio show on real estate and finance. The show, called “Real Estate Insight,” airs on 920 AM, WHJJ, and he has been doing the show as a co-host with Sally Lapides, who owns one of the largest real estate companies in the state.
More recently Lapides and Tetzner have been asked to sit on the panel of a new television show called “Money Pros,” a 30-minute loan show on the local Fox affiliate. There are eight pros and Tetzner is their mortgage expert.
The radio show he believes helps his credibility with the real estate community. Realtors tell him that they enjoy the show and that it is informative.
He is only 42, and says he has a long time to go working in the mortgage business.
That long-term view is one of the reasons he is involved with the Rhode Island Mortgage Bankers Association.
His father is a past president of the organization and was a board member for many years.
When his father stepped down, Stephen Tetzner was asked to come aboard.
His involvement with the Rhode Island MBA takes between eight to 10 hours each week on average. “I think it is important for people to be involved in their industry. I don't look at this as my job, I look at it as my career.
“I think that if people like myself and some I work with at Rhode Island MBA, if we weren't involved and we weren't paying attention to things, things would be a lot worse off for us right now from a regulatory and legislative standpoint,” Tetzner added.
The business environment in Rhode Island is pretty good right now, he pointed out, with the majority of it having been declassified as a declining market. It means 95% financing using jumbo products and 97% financing on condominiums with conventional financing are available.
Originators are seeing easing in private mortgage insurance guidelines in the state, which affects product availability, because the market in Rhode Island has stabilized.
To get a house to sell, it is about staging it correctly and having the seller put the right price on it.
“The purchase market has still got a ways to go, but at this point, after so many years of a heavy run and a couple of bad years, we're not sure what normal is yet,” he said.
