December 14, 2022 • 42 mins
In this episode of Batting 1,000, Dale Vermillion hosts Garth Graham, Senior Partner at STRATMOR Group, to discuss the evolving landscape of the mortgage industry. With over 30 years of experience, Garth shares his insights on strategic investments, acquisition strategies, and the significance of the digital mortgage experience. They dive into the challenges and opportunities in today’s market, highlighting the importance of empathy, building relationships, and adapting to new trends.
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In This Episode
The evolution of digital mortgages (starts at 1:06)
Garth discusses the inception of digital mortgages, recounting his pioneering work with mortgage.com and its lasting impact on the industry.
Navigating a purchase-heavy market (starts at 3:45)
Strategies for mortgage lenders to succeed in a market dominated by purchase transactions, focusing on understanding and addressing customer needs.
The importance of empathy in lending (starts at 12:49)
Garth emphasizes the role of empathy in building client relationships and enhancing customer satisfaction, particularly in a challenging market.
Future trends in the mortgage industry (starts at 20:14)
Insight into upcoming trends and the importance of staying ahead with technology and strategic thinking.
Rethinking LO compensation (starts at 28:10)
Discussion on how adjusting compensation models can better align with desired behaviors and outcomes in the mortgage industry.
Resources
Garth Graham’s article on HousingWire
Soundbites
"Purchase is about life, not about loans." — Garth Graham
"Empathy is crucial in today’s purchase-heavy market." — Garth Graham
"Focus on relationships, not transactions, to truly succeed." — Garth Graham
About Garth Graham
Garth Graham is a Senior Partner at STRATMOR Group, providing strategic advice to some of the largest independent and bank-owned mortgage lenders. With over 30 years of experience, Garth has managed two of the most successful e-commerce platforms and advised over 200 mortgage companies. He was a founder of mortgage.com, which pioneered the digital mortgage experience, and has been recognized by HousingWire as a “Tech Trendsetter.” Garth is an avid Michigan fan and a dedicated dog rescuer living in Fort Lauderdale, Florida.
Connect with Garth
Linkedin → linkedin.com/in/garthgraham
Learn more about STRATMOR → stratmorgroup.com
About Dale Vermillion
Dale Vermillion, a renowned sales strategist and industry icon, has trained over 1,000,000 lending professionals and worked with over 600 organizations. He’s a 3x HousingWire Vanguard, a member of the 2022 Global Mortgage 100, and 2021 Mortgage Professional America Housing Industry Icon. Dale is the author of Navigating the Mortgage Maze and the founder of
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:35):
You are listening to Batting 1000 withDale Vermilion, where heavy hitters from
mortgage, Real Estate and Business sharetheir secrets for lasting success with
your host industry icon, Dale Vermilion.
All right.
Well, Garth, it is great to have youon, uh, the first episode of season two.
I can't think of a person I would ratherhave than you kicking off this season.
(00:57):
And I'm gonna, I'm gonna toot your horna little bit here, if you don't mind.
Um, you know, they've given the buyalready, but I'm gonna give you a title.
You're the OG of digital mortgagein the mortgage arena, as far as I'm
concerned you're kind of the patriarch.
Uh, you know, you and I met each otherway back in the 1990s and worked together
at mortgage.com when you ran thatcompany and you took that thing and it
(01:17):
was the first internet based originatedloan ever in, in mortgage history.
So, Man, you got some serious history andyou've done amazing things since then.
You know Stratmore Group is thepremier consulting group and merger and
acquisition group and information groupin the industry, and I'm just honored
to have you here, and not only that,we're we've good friends for a long time.
(01:38):
It's just great to have a good friendand old friend and somebody that
I've worked with for a long time.
So welcome, glad to haveyou embed a thousand.
Yeah, thank you.
I appreciate that.
I'm gonna have to live upto a lot because, you know,
that was a heck of an intro.
So I'd like to, I do a lot of publicspeaking, Dale, and if you don't mind
just coming along and you could do theone minute intro, that's why people read
from a bio, it's not that interesting.
(01:59):
So you get up, say that, and then,you know, you can fly back to Florida.
We're good to go.
Anytime you want me to tagalong, you just let me know.
I'll be there.
All right, cool.
I appreciate that.
So, Here's what I want to talk about,know, we, the reason I thought it was
so vitally important to have you on,other than the fact that I just love
you to death, is you are, you justspoke at the LendingTree Summit that
you and I both spoke at, um, And youbrought in an incredible presentation
(02:25):
that I just absolutely love thattalked about where the industry's at.
We're in one of the tougher timeswe've seen in, you know, you've
been in the business over 30 years.
I've been in the businessnext year, be 40 years.
So we've done this for a while, andwe've never seen rates rise as fast.
We've never seen these kinds ofchallenges, but and I'm gonna say
it very clearly, You know, there'sa lot of talk about the bad news,
(02:46):
but there's an awful lot of goodnews in the mortgage industry too.
There's a lot of opportunity outthere if you know how to attack it and
some of the things that you covered,I thought were just so spot on.
The thing I've always liked about yourpresentation style is you just say it
like it is and, let people, you know,understand what they need to do to succeed
and I love that kind of transparencyand just forthright approach.
I just say it like it is with jokes.
(03:06):
That's right.
Usually do.
So then once, once people, theylaugh a little bit, then they
suddenly go, Hey, wait a minute.
That's not funny.
That was painful, what he just said.
So, you know, whatever you do.
It's tough.
Tough.
It's tough to do jokes through avirtual thing, but I'll do my best.
Yeah.
Well, good.
Well, let's talk about, I, Iknow there's six or seven points
that you had talked about.
(03:27):
In that session and I wanna startwith the first one, and you know, we
know this is a purchase heavy marketand we know that consumer direct
companies in particular have had a moredifficult time in the purchase market.
I know you've got some stats on that I'dlove for you to share and I'd love to
hear you gave a great analogy during thepresentation as to why, loan officers
(03:48):
are not succeeding and companies arenot succeeding in the purchase world
when they could share a little bitabout kind of sure where we're at as an
industry, where the purchase market isat, and then I want you to talk about
how it's such an episodic businessand really units are the key thing we
should be looking at, not just dollars,
cuz that was really important information.
(04:09):
Yeah, well, I mean, wealways read the headlines.
You know, the NBA Forecast Training,Fannie Mae Forecast, Freddie Mac Forecast,
Stratmore, we're in the numbers business.
Yep.
We look at all those numbers.
I think the one number that getsmissed when we talk about that we're
gonna drop from a 4 trillion dollarmarket to a 2 trillion dollar market.
I T, trillion is a big number, so it'skind of absurd how big that number
(04:29):
really is, and you think, wow, that'sa 50% drop if you actually look at
it on a unit basis, which is reallywhere the hand-to-hand combat has one
loan officer beating another to tryto help this family get into a home.
It's even more acute because ouraverage loan amount has gone up so much.
So, that's really one of 'em.
Last year there were 13 and a halfmillion transactions, first mortgage
(04:52):
transactions in our industry.
Next year there'll be maybe five.
Wow.
So we're down a lot of units and it'sway bigger than the 50% that you see in
the dollar number because the averageloan amount has gone up so much on the
purchase side and, normally, refinancetransactions are smaller than purchase.
You take the smaller refis out, you'releft with a lot of big loan amounts,
(05:13):
but that means there's really, youknow, 5 million opportunities to
compete and last year there were 13.
Wow.
So you better be very sharp.
Yep.
And able to compete.
And I think you were looting.
One of the other stats I wantedto share is last year over 50%
of refinance transactions unitswere done by consumer direct.
So, you know, first let's pause, that's abig number, when I started mortgage.com in
(05:38):
1996, Dale, that you know, it's all refi.
We were referencing, weweren't anywhere near.
Yeah, but we don't know.
We're near 50%.
That's right.
So 50% of people last year whorefinance their homes did it
through a consumer direct operation
and that's what created kind ofa windfall year for the industry.
The number on purchase is 15 percent.
And once again, this is units not dollars.
(05:59):
So, Uh, what that means is last year,in consumer direct, I'm looking on my
other screen so I nail this number,um, there were 5 million refinance
transactions last year and, um, youknow, our total transactions rather in
CD last year, this year there'll be 1.6
wow.
And that's assuming that theconsumer direct lenders keep
(06:23):
only doing 15% of the purchase.
So really the challenge for CD,you can't do the 15%, you have to
start stealing, share from retail.
Um, you have to steal sharefrom the other CD lenders.
So it is really a functionof competing at that level
and by the way, I started as a retailloan officer and then became a call
(06:43):
center guy, so I kind speak bothangles and you know, you can do it,
it can be done, but you have to havethe skills that are very similar to a
purchase lender, uh, loan originatorwhile also, you know, leveraging the
skills that the CD lenders have longperfected, you know, centralization,
lower cost, strong technology.
(07:04):
Um, but you know, a key part of itis those humans, those loan officers
have to be able to sell purchase.
So you had a quote on one of yourslides that I absolutely loved,
and the quote was, purchase isabout life, not about loans.
I love that quote.
It's a quote, but I wrote anarticle and even the article
doesn't, has a couple jokes in it.
So that was August, 2021 and one of theanalogies I put there, and I said this in
(07:28):
the speech last week, said, I appreciateyou bringing it up and you guys could
share the article if you like, but ifsomebody, if you were at a cocktail
party, you know, and somebody said to you,Hey, I'm thinking about buying a home.
If you're a human being, what'sthe first question you say?
The first question is, wow, statement.
(07:50):
Why?
And the reason is, the why is themotivation for the entire transaction.
I'm expanding my family, my family'sgetting smaller, I wanna be closer
to work, I don't care about beingclose to work cuz I now work remote.
I want a better school system,my kids are older, I don't
care about the school system.
Uh, a bigger house, smaller house,uh, later in life, early in life.
(08:12):
Move up.
Move down.
There's something going on.
Yep.
That's actually what they're pursuingand if you do not engage on that
level, You are likely to lose it toa retail guy or gal because they do.
So the natural inclination for a consumerdirect lender because of the muscle
memory from refi that we've learnedis you just jump into the transaction.
(08:37):
So you'll say, oh, terrific,you're buying a home.
How much money are you putting down?
Do you have a property yet picked out?
How much money are you putting down?
So the loan amount is okay, that's great.
Um, you know, we, I can go aheadand qualify you for blah, blah,
blah, and it's like, what are you,dude, that's way too fast, right?
And so when you do that, the customernaturally gravitates to the only thing
(09:00):
they have in common interest with you.
What's your rate?
Yep.
And the shame of it is theycan't have the rate anyhow.
They can't lock it in, they haven'tfound a house, they don't yet
have a contract normally, right.
So it's like you literally put yourselfon the least advantageous playing field
that you didn't even have to play at.
Yep.
(09:20):
Because you weren't willing to engagewith them on what really matters to them.
So now you don't have to read thearticle, but you know it's a four
pager and you probably should.
Well, that's so incredibly powerful,and it's so funny because it jives so
much with what we've taught at MortgageChampions forever, is that yeah, you've
gotta have conversation when you startthat conversation with qualifying
questions, which is the most commonthing that loan officers do, by the way.
(09:42):
What you're really saying to theborrower is, let me see if you're good
enough for me to spend time with you.
That's really the message you'rerelaying to them when you really
think about it, and that is notthe message I think we wanna relay.
I think the message we wanna relay is,man, I wanna help you with that house.
I'm honored to have theopportunity to work with you today.
Tell me why you're moving into that house.
Tell me what's going on in yourlife, and there you go, bam.
(10:02):
You're in a conversation thatabsolutely works, and you're right,
the, a lot of the retail guys that Itrained, they're very good at that.
Um, and many of the consumer directguys who are top producers, All of
those who aren't producing right now,it's because they're going back to
either they're asking those qualifyingquestions or they're talking about rate,
or here's the big one that I can't stand.
(10:23):
Let me send you a link so you can fill outyour information and I'll let you know if
you qualify, I'll get your pre-approval.
Wait a minute, hold on.
You're, you can't, you cannot solvea problem for a borrower you don't
understand, and if you don't talkto them, you don't understand them,
an application isn't gonna tell youwhat you need to know about them.
So you and I are on the samemindset about it, I think he, you
(10:43):
know, you said in your presentation,the most important question we ask
a borrower is the why question.
I think that's so true and so wise.
Yeah, and you can get, you can really,you know, obviously when they ask the
rate question, they might be concernedabout rate cause rates are really high
and, rates are high versus before, buthistorically they're not that high, and
by the way, if you figured out on anafter tax basis, they're not nearly as
(11:06):
high as people say, that's exactly right.
Now you can get to that conversation,but you need to acknowledge they
had just asked a right question andthen start to counsel them on how
to think about what the rates are.
And of course, Over the next, from Juneof last year until June of next year, if
the forecast holds the 5 million balloonsthat you're gonna have to fight for, a
(11:30):
big chunk of them are gonna be refis.
Let's say half of them are refis.
That's two and a half million refiscoming off a year, when in that same span
where there's hardly any refi at all.
So suddenly our market couldsuddenly get 50% bigger.
As soon as rates start dropping and, youknow, so as hard as you're willing to work
to establish that relationship with thatsix and a half percent borrower right now,
(11:54):
you're buying yourself that opportunityto help them at a 5% borrower next year.
So it's worth the fight.
Yep.
It's just a lot tougher.
Yep.
Well, and, you know, the thing thatI think a lot of times we forget to
talk about in today's marketplaceis the offsetting factors you just
mentioned one of those tax benefits,that's a huge offsetting factor.
You know, buy downs area huge offsetting factor.
(12:16):
Um, the fact that today, you know, youhear people talk, consumers talk today
about, well, you know, it might not be aright time to buy because rates are high.
Yeah.
But wait a minute.
Let's think about when rateswere low, you had to compete with
92 other people on that house.
Yeah, that's right.
And then you had to offer $40,000over asking price in order to get it,
so if you can get it below askingprice and you're paying a higher
(12:37):
rate at the end of the day, aren'tyou really kind of in the same boat?
And many times you are, many timesyou're even better off at the end of the
day, depending on how big that varianceis so there's plenty of opportunity
out there today if you look for it.
Yeah.
I mean, and if you can drop, youknow, your sales price, By 10, 15%
as the market softens where youcan be in a position to do that.
Yep.
By getting pre-approvedand being ready to pounce.
(12:59):
Yep.
Your monthly payment is droppingby virtue of the fact that
the sales price is going down.
So, and you should know those numbers,you know, so for every 25,000 it can
drop your monthly payment as, you know,serve $150 or whatever the number is.
You know, you know that and thenthey begin to say, oh, so run
that by me again, boom, now you'rehaving a quality conversation.
Yep.
So you made two statements and you hadtwo bullets on your PowerPoint that Levy
(13:22):
said, "pretend to be human" number oneand second was "get used to not yet".
So, talk about that for a minute causeI think that was a really important
point that you covered at the summit.
Yeah, I mean, a vast majorityof refinance, I mean a purchase
transactions, if you're buying leadsor if somebody happens to call off
your website, a vast majority of themhave not yet written a sales contract.
That's right.
(13:42):
In some cases, they may not have evenput their current house up for sale where
they may not have even gotten their downpayment together, and you don't want to
jump into the qualification questionsto figure that out, but you need to
figure out where they are in the cycle.
Yep.
So the not yet means this is reallyan opportunity to spend quality
time and develop a relationship.
(14:03):
You're not gonna close them, right?
It's an incremental close.
I mean, a refinance is a close andyou know, if you can't close them in
a week or two, probably move on toanother one, there's another opportunity
and it's a wasted opportunity totreat it that way, but it's true.
Yep.
And by the way, last week we alsohad, um, Greg Olson spoke and, right
(14:24):
before me, and by the way I just wanteveryone to understand Greg Olson is
much larger than I am, but we got thesame amount of time up there, so in
20 minutes, one of the things thathe said was, he said, you become your
worst when things are the easiest.
Yeah.
And he didn't quite understand, Idon't think, how prophetic that was
(14:49):
for a bunch of people whocome out of a refi bone.
Yeah.
I mean he was talking about how he reactedwhen, you know, he started making all pro
as a football player, that type of thing.
So, you know, go see Greg Olson.
I can't paraphrase it, but I was like,man, you just nailed what our industry is.
Yeah.
This, the soft skills have gotten soft.
They have, um, because we didn't have,you didn't have to do it as much.
(15:10):
You worked a lot of hours, so,nowhere should someone listen
to this and say, ah, this guydidn't get what I'm talking about.
I understand you worked a lot of hours.
Okay.
I understand.
It's stressful.
It's extraordinary what we accomplishedas an industry doing 13 million
transaction, but it's a different skill.
Um, by the way, I would say that pretendto be human, like if you're in a call
center in a refi, you could almostwatch, and I managed hundreds of these
(15:31):
people you could almost watch when theythought they had a good one on the line.
They'd lean forward.
Yeah, and they begin to lean forward.
They get their pen andthey start doom boom.
I think I can close it on a refi.
It's almost like in a purchase youneed to lean back because if you go
too fast, they're gonna say, You'renot hearing where I am in this cycle.
Right.
You're intimidating me with abunch of jargon and my realtor
(15:54):
kind of told me I should probablygo with her friend locally anyhow.
So you're almost creatingyour own objections.
Just lean back Yeah.
And let them tell the story becauseif you can become part of that story,
you can become part of that solution.
Slide nine that I sentyou is that pie chart.
Yep.
And that pie chart is whyare you buying a home?
So the point I would makethere is a loan officer,
(16:15):
whether they hang that in theircube or put it in front of them
or learn it, the customer they'retalking to is one piece of that pie.
They're in one of those buckets, maybemore than one, but if you don't know, you
gotta know why you don't have the W H Y.
That's exactly right and if youdon't understand why they're buying,
you can't educate them properly.
(16:36):
And that, I think that's the biggestchallenge that I see today is loan
officers just aren't educatingbecause they don't really need to
think they need to because of 2020and 2021 when it was just like people
lined up out the door for loans.
Yeah.
That's not the case when rates aresix and a half or six That's right,
or seven or whatever the rates are.
You're always gonna get resistance to therate, so what you've gotta do is be able
(16:57):
to educate that borrower on how it makessense, how they can afford to buy this
home today, that they're looking at howthey can qualify in a way that's gonna
get them the home that they want and, Whattheir motivation is behind all of that.
I mean, you and I both are from that samebackground, we've come up through the
ranks over the years where we sold in highrate markets and you couldn't do it by
quoting rates, you did it by talking aboutwhat the motivation of your buyer was.
(17:20):
When I entered the mortgage businessin 1987, straight outta college, it was
booming cause rates had fallen to 11.
Yep.
So, you know, late eighties,that crazy late eighties.
Uh, yeah.
Yeah.
When I started 1983, it was 17 and a half.
Yeah.
Well, I was refinancing several years.
I was in 87.
I'm refinancing your 17 and a half,so Dale, so that's exactly right.
(17:43):
All right, so let's talk for a few minutesyou know, you talked about units A moment
ago you talked about focus on units
or don't focus on units, but whenyou do focus on families, not units,
so think of them in family terms.
I love that mindset that insteadof thinking in units, we should be
thinking in this every time we helpsomebody with a transaction that's a
family that we're putting into a home.
(18:05):
That's a individual that we're helpingchange your life in a powerful way.
But you also talked about somethingelse that I thought was important
and that is our obsession withbasis points and how volume really
takes our focus off what matters.
Yeah.
Talk a little bit about that.
Yeah, so I mean, it'slike anything, right?
You, uh, if you pay people acertain way, it drives the behavior.
So if you pay in basis points, you aresaying the dollars more important than
(18:30):
the person because you're not payingthem to close the Jones loan, you're
paying them to close a $300,000 loan,and I don't even want to get into the
distortion and incentives that arecreated by the fact that the $200,000 loan
isn't worth as much as the $300,000 loan.
So I'll give you one very interestingstat where we actually got an article
coming out on this in 2010, Dodd Frankcame and changed our world and it changed
(18:53):
our world cause we said, Hey you needto change away from our compensation
model and you can't be paid on the termsof the loan, and the industry battled
and got the CFPB through Dodd-Frankto acknowledge and make an exception
for basis points for a loan officer.
And I'd literally come back and say,and now this is ancient history,
(19:14):
it was 12 years ago, but we almostscrewed ourselves right there because
the average loan officer in 2010 wasmaking $2,000 a loan in compensation,
and if you adjust that for inflation,it should be roughly $3,000 a loan.
Right now, the average loanofficer is making $4,000 a loan.
(19:35):
So we are literally paying more becausethe average loan amount is so high.
By the way, retail's average loanamount is significantly higher than
consumer direct, partially becauseretail, brick and mortar, etc.
, chases big loans, so they, it'sless competitive on the small loans.
So because of that, we don't, wejust do away with any pay driven
(19:57):
on quality, it's basis points.
Everything's like the bigger the loanthe better, and the more you do or
the bigger volume you do, the better.
So what I'm advocating for people, andthis is not a popular concept, or people
will say, that's really interesting,
someday we should do that and letme just go ahead and keep paying
basis points in the meantime.
But to sit there and say, look, I'm gonnapay you a thousand dollars on a refi, but
(20:21):
$2,000 on a purchase, you're saying itmatters and it's harder and I recognize
it's harder and I want to pay you.
I'm gonna pay you more,
if you do a fully verified, or I'm gonnapay you some of it up front, if you do
a fully verified pre-approval and makecontact and develop a relationship with
the realtor, I'll pay you more for that.
I'll pay you more if your lock pullthrough is higher, because, you know,
(20:43):
that helps me from a capital market,you can literally just start paying for
the activity that you're trying to drive
and instead what we do throughtraining and management is try to
drive the behavior and then pay themon something completely different.
So that was really the point I wastrying to challenge people with is
saying, now's the time, frankly, as we'recontracting, to really think through
(21:03):
what culture am I trying to create?
Focus on families, and how doI really want to pay people?
Maybe focusing on the unit part of thepay and customer satisfaction and all
the other elements that drive, you know,a better culture within your company.
Yeah.
You know, it's funny because I'm gonnago back all the way to 1983 to 1995,
(21:24):
the 12 years that I managed in thisbusiness, and, you know, I managed
up to as many as 900 loan officers atone point, and I had a common saying
that I said to my loan officers, itwas this focus on units not dollars,
yeah.
Focus on units not dollars,focus on units, not dollars.
And here's why, because units createhabits, dollars create elephant
hunters, that's what they do.
(21:44):
So I'm sure now from lenders whoare watching this podcast right now,
they're thinking, Ooh, wow that'skind of radical that we're talking
about changing compensation, butit's gonna happen at some point.
That's right.
It has to, because of thestructure of businesses today.
For the loan officers, you'reprobably like, Whoa, wait a minute.
I like my basis points.
I get it, and our advice isfocus on units, do more of those.
(22:04):
Focus on who you're helping.
You'll make a lot of money down theroad, but if you focus on the basis
point percentage, put simply, thisis a saying I use all the time,
focus on your customers, not yourcommissions, and your commissions
will be much higher, right?
It's that simple, right?
It's all focusing on the end resultof the consumer you're helping, the
family you're placing into that home,the people you're saving the money for,
(22:27):
that's what your focus has gotta be.
And the more you focus it on units,both as a lender and as a loan officer,
the more successful you're gonna be.
And I love the idea, I've alwaysadvocated this, just like you,
Garth, is compensation plan should bedesigned to reward for the activities
you're looking for, so if you'relooking for higher conversion, you
should be compensating for that.
If you're looking for higher quality,you should be compensated for that.
(22:48):
If you're looking for your surveysto come back and you want customer
satisfaction, you should be given aspiff for that because now people will
work towards those things that are paidfor, that's why incentives work so well.
Exactly.
And by the way, we see this in theretail side when we do analysis on
the retail side, we'll have banks inthe south, mortgage companies in the
southeast and their are loan officers,average six loans a month, and then
(23:09):
you talk to somebody in their, during,you know, one of the big loan amount
states like California, Washington,DC up in the northeast, they do four.
Yep.
Duh.
And make a lot more money.
Yeah.
Well, well the four is because theykind of, you know, once again, I was a
loan officer too, so I was out pedalingrate sheets and chasing realtors
but you are, you know, at four,you're making a really good living.
(23:35):
So am I gonna fight hard for five and six?
Yeah.
And whereas down, you know, down south,and by the way, and if you get down into
the southeast where they do an average ofsix, they also have higher governments.
So it ain't like they're easierloans, it's like they're probably
harder loans than anything.
Well, and it's interesting.
I'm training people in today'smarketplace in this high rate market,
(23:55):
I'm training a lot of loanofficers across the country doing
20, 25, 30 loans a month still.
Yes.
In this marketplace, because they'redoing the right things, they're a
hundred percent, they're buildingrelationships, having proper
conversations, so on and so forth.
Yep.
All right.
Let's talk aboutefficiencies for a minute.
If we can and let's talk about theimportance of creating efficiency within
your business and also talk a little bitabout the cost of having people who are
(24:20):
not productive and what that looks like.
This is fun, and I know you talkedabout on the stage that I thought
was very beneficial to lenders
and I think there's a lot of valuein here too, for any loan officers
who might be watching this tounderstand the importance of your
productivity and what that looks like.
Yep.
So I think what's really interestinghere is in 2021, there was about
350,000 loan officers, a third ofthem did less than three loans.
(24:44):
I mean, that's sopart-time, it's like, why?
Why would you do that?
Why?
How is that possibly worth it?
If you're managing a company, and Iknow that the theory is it's a variable
cost, but is it really you have tomaintain their licensing Many times,
the part-time people are the ones, whoare the least able to package a loan
together or provide the high level ofservice, they lose the muscle memory of
(25:05):
how to do the business if they're onlydoing a loan like every couple months.
So really think about whether that'sreally the right thing for you to have
some people that's small, that part-timewhen maybe the approach is put that
money towards the real producers andthe real people focused on their career.
The other is 80% of the volume in ourindustry is done by 40% of the LOs.
(25:26):
So in the, so you get the bottom,you get the bottom 30, hardly do any,
but the next 30 doesn't do very mucheither, so at some point you're do
I really want so many low producers?
And I understand it is toughwhen we're in this climate, every
single loan is worth something.
Right, but in a consumer direct operation,isn't it another one of your loan officers
(25:50):
who's used to doing maybe 35 and nowonly doing 25, who could do the 26th
loan for you if you gave them that lead?
You know, maybe that's where you shouldthink about instead of the approach that
a lot of lenders seem to be taken is,well, I'll retain all my salespeople
because they don't cost me anything,and they bring in extra business.
I just say, rethink that, are yousure they don't cost you something?
(26:11):
By the way, they're also the ones likelythat have to negotiate lower rates,
maybe cause they're not as good sellingor their locks expire, or they're a
little sloppy with the paperwork and theprocessor has to clean up behind them.
I mean, it takes real analytics to knowthe cost of this and we help lenders
do that, but, um, it ain't free.
(26:31):
Yep.
And it's interesting cuz you know, Itrained so many loan officers across
the country along with leaders andlenders and all of that, and I have this
conversation with a lot of loan officerswhere I'll see them doing these 1, 2, 3
a month and I'll ask them the question,why is it all you're doing right?
And their answer's one of twothings; well, that's all I need
to do to make what I want to make.
Yes.
Or, well, you know what?
(26:51):
There's other things that I want todo too, and if the first answer is,
that's all I need, I go, well, allright, think about this, you know, you
gotta make hay while the sun's shiningright in, in anything that you do.
And if you can close five orsix or seven instead of three
or 10, Why wouldn't you do that?
Because we have no idea what the, andwe saw this year how much the market
shifted from 2021 to 2022, right?
(27:12):
So people are now looking back, going,boy, I wish I'd have done more in
2021 when it was really availableand I wouldn't have given up so fast.
So that's a message for all loanofficers out there but on the other side
of that equation is, look, if you'redoing other things, this is an industry
where if you put a hundred percent ofyour effort in, you can be incredibly
successful and make an awful lot of money.
Why would you choose another side
(27:33):
gig, if you've got the opportunityto be successful in lending,
because this is the one industrythat's always gonna be a need.
Home ownership will always be theAmerican dream and people always need
money to refinance and money to buy home.
So I would encourage loan officers, ifanybody's listening to this as a loan
officer and they're watching this, youwant to tap out on every opportunity
you can within the marketplace.
(27:54):
And I know when people hearthings like 25 loans in this
marketplace are like, Wait a minute.
What I'm doing, two or three.
Well, it, it's a process of understandingthat is a product of your network,
your lead base, your approach, yourstyle, all these things you and I
have been talking about will determinewhat that outcome is on your results.
It's not working longer that's gonnamake you successful, it's working smarter
(28:19):
that's gonna make you successful in thismarketplace, that's really what it takes.
And I think the key part of is honingthe skills and so, you know, It's
having the right technology, sure, it'sbuying the right leads, great, but it's
also getting the training necessaryto make yourself the best you can be
with every opportunity you're given.
I mean, we get calls all the time,we do some, you know, work around,
uh, lead management and CRMs andthings like that, and we get called,
(28:40):
Hey, what's the best lead source?
I'm like, come on, it depends,and you know, it depends on what
you're buying, how you're buying it.
But by the way, That, that's the wronganswer because the, uh, the wrong question
because how good are you converting leads?
Right.
You know, and if you're not goodconverting pre-qual, um, purchase
leads right now, then it doesn'tmatter how good the lead is.
(29:02):
Because that's mostly the purchaseleads that you're gonna get right now.
Yeah.
Not last year, but right now.
That's exactly right.
So focus on the skills necessary toconvert those before you start worrying
about, you know, whether a particularlead source happens to be better or,
you know, different than the next one.
Yeah, and it's interesting, you know, oneof the, one of the strategies that I've
been employed with every single lenderI've ever worked with is you need to
(29:25):
have, uh, with every single one of yourleads or your referrals that come in,
you need to have a secondary call processin that where, you know, if that first
loan officer can't sell that deal, thereshould be a second person talking to them.
Yep.
Sometimes just a different voice,sometimes you know may, maybe just a
different personality or a differentapproach is gonna get a deal, and
(29:47):
it's always been interesting to mehow many times you'll have a loan
officer take a lead, they say, nah,there's nothing here this guy's not
gonna buy from me, won't pay our rates,
you hand it off to another loan officerand son of a gun if they don't turn
that thing in, you know, five minutesflat, they've got that customer
eating out of the palm of their handbecause of the challenge that's there.
It's a process of understandingthat if we educate properly and
(30:07):
do the right things, we're gonnaget the results we're looking for.
Absolutely no question about it.
All right.
You had a quote, and I want you tokind of embellish on this, you said,
um, "Satisfaction is measurable,But not if you don't measure it."
Yeah.
So help the audience understand that.
Yeah.
So we do customer satisfactionresearch for the industry, we surveyed
(30:28):
about 300,000 consumers last year.
We do it for, wow, many of the top lenderson their behalf, and we do it, um, and
by the way, JD Power, you know, surveyedabout 5,000 people last year, so it's
a very deep data set, um, some of thetop performing customer satisfaction
lenders use the service and really thekey is that it not only says, Hey, would
(30:49):
you give me a five star review as anexample, but it asks about the process
and how they experienced the processand what they felt about the process.
It's really the full consumer experience,and I'll give you, we break down, there's
like seven major drivers of customersatisfaction, many of which do not have
directly responsible for loan officers.
(31:12):
So the challenges, how as a loanofficer do I deal with it but the
other challenges as a company, how doI make sure customer satisfaction is
all the way through the process, notjust make love on the phone up front.
So let's say you do the great whyexperience, W H Y, and you get it and
you convert them, That's amazing, so inconsumer direct, in 2022 through October,
(31:32):
looking at my right screen, I should havethis slide with you too, 46% of consumers
in our survey say they were asked forthe same information more than once.
That's really frustrating.
So once again, pretend you're humanto stop with thinking about, well,
the problem is the tax return or thesecond bank statement, or the missing
page of the bank statement, or all thisarcane thing that we deal with in our
(31:55):
industry, the underwriter's fault, thinkabout it as a human, you're asked for
the same information, more than once.
It's frustrating.
I already gave this to you,so, what do you do about it?
Our industry is rife with, Hey, ifyou have a loan in the pipeline as
a preapproval, you are gonna have toprobably ask for another pay stub.
Or maybe the borrower didn'tunderstand, or maybe they only sent
you their bank statement for theirchecking, but not their savings.
(32:19):
The point is, you have to communicate attheir level to make sure they understand
and also you have to know that 46% ofthe time that they feel this happens,
you need to be prepared to overcomeit so they don't think it happened,
and one way to do that is to not, onceagain, act like it's a transaction.
(32:39):
And the one that I'll do, I'll justgive you the one example here, Dale,
I know we're running short on time,but if you, if somebody calls you and
says, I need a letter of explanation,or I need an additional piece of
documentation, that is already a failingconversation because nobody wants
to have to explain anything, right?
That's wife, parent, you know,that doesn't sound good, right?
(33:02):
If you have a conversation, hey,uh, wanted to touch base on a
couple things, um, you get yourpay stubs every other week, right?
Oh yeah, that's right.
I got your April here.
Yeah.
Awesome.
So your, is your pay still the sameor, you know, when do you get a raise?
It doesn't matter, I'm simplytalking about their life.
Oh, actually, I mightget a raise next year.
Oh, that's awesome.
Congratulations.
That's amazing.
You get 'em every two weeks.
(33:22):
You get 'em in your, um, youknow, like a PDF in your email.
Oh, no, there's got a, we got a website.
We download 'em.
All right.
Could you just download acouple more of those for me?
Yeah.
Okay.
I'll hang on the phone, bythe way, while you do it.
So how are things going anyhow?
I've just had a conversation andasked for two additional pay stubs.
That's right.
I didn't say I need two additionalpay stubs, and the guy's probably
(33:42):
not gonna realize you asked forthe same information more than once
because it was just pleasant.
So, you know, but credit inquiries,everything like that can be a
conversation if you think about whatis, how's the consumer gonna decode
what I'm saying and how do I get ontheir side of the table, so to speak?
So I get passionate on that one, dale.
(34:03):
So this is what I love about you the most,Garth, is you've been in this business
like I have for a long time, and youstarted as a loan officer just like I
did, and worked our, you know, we bothworked our way up through the business
and what you're really revealing topeople today is the secret to success
in today's market; it's going backto the basics of, relationship,
conversation, we've mentioned severaltimes, Be a human being, think like
(34:26):
a human being, Think about them as ahuman being, Yeah, quit thinking of it
transactionally, think of it relationally.
You know, Peter Drucker has a great quotethat I love, he said, "The biggest problem
in communication is that we don't listento understand, we listen to reply" yes.
That is such a true statement In today'sworld I watch loan officers every day
(34:46):
that are on the phone and they're thinkingabout the next question they're gonna ask,
they're looking at their computer screen,they're not even hearing what that
borrower's saying to them, and they'remissing that golden moment of conversation
and relationship and connection andtrustworthiness, it's so powerful.
Look, this business is not rocketscience, we try to make it rocket
science, but it's really people aregonna buy no matter what the rates are,
(35:08):
that's right, and they're gonna pick fromthe person they like the most and who they
think is looking out for their interests.
Yeah.
So I, I think everything that we'vetalked about really goes back to
conversational tone, treating peoplelike human beings, and understanding
that these are not transactions, theseare not even units, these are families
and people we're dealing with, and we'rechanging our life in an incredible way.
(35:28):
Yeah.
And the, and you know, the purchaseis so exciting, it's really
way more exciting than a refi.
So it might be harder, yeah.
But it's way more rewarding.
Um, you know, and of course ifyou do a great job on a purchase,
they're gonna tell people becauseyou don't go to a cocktail party and
say, damn it, I had the best refi,
I saved $187 a month, how muchdid you save on your refi?
(35:53):
But you're gonna go to a cocktailparty and say, I bought that new
home and the next human's gonna say,wow, why did you want a new home?
And if you're part of that solution,you've earned the right to be part of,
you know, getting a referral or whateverthat next piece of business might be.
Well, and the purchase is so much moreemotional of a transaction than a refi
(36:14):
is to the consumer cause this is thenew house, it's the new thing, it's
where they're gonna create their futurememories, there's a whole lot that
goes into that, it's really powerful.
Yeah.
Yep.
If you were to give one piece ofadvice to the people listening today to
succeed in, you know, the rest of thisyear in 2023, in a high rate market,
what would that piece of advice be?
(36:35):
Uh, empathy.
Um, and one is it's empathy for thepeople that you work with, some of
whom will probably need to have anopportunity to succeed elsewhere.
We're gonna go through a big contraction.
It's unfortunate.
Yeah.
Um, and I hate it when, you know, we'rehired by people, a lot of mortgage
companies to tell them how to, youknow, get more efficient and optimize
(36:56):
and I never forget that the spreadsheetof, you know, maybe you need to
reduce your expense in a department orpeople, so you need to be empathetic.
It's really, it's tough as it is forthe loan officers trying to scrap
to get from four to five to six toseven to eight loans a month, it's way
tougher for the processor, the loanofficer assistant, or the underwriter
(37:16):
who really is waiting for you to doenough business to justify their job.
It's a tough, that's tough.
That's right.
And the other empathy is it's a reallytough purchase market and the customers
will act odd because they're under stress.
I mean, it's more expensive than itwas a year ago, but let me help you
understand how much more it reallyis, and let's see if we can come
up with some solutions for you,
(37:37):
or it's more stressful for therealtor, there's a lot less deals
to go around, they're gonna act odd,you know, and frenzied about their
transaction, which might be, youknow, last month's Jaguar payment.
So it's, you just have to have empathy forhow difficult it is and be, you know, uh,
Somewhat satisfied or appreciative thatyou have an opportunity to have such a
(37:59):
meaningful role in it on an ongoing basis.
I love it.
Sage advice right there.
Yeah.
Let me close up my final question.
I'd love to ask all my guests.
I'm a firm believer that one of the keysto success for all of us is having mentors
in your life and people that you can learnfrom, can you give an example of or just
tell us in your words how important youthink mentorship is for people watching
(38:23):
this podcast, and maybe you have anexample of a mentor in your life who
made a difference that you wanna share.
Yeah, I think I've had a, I had a few,I mean, I certainly had one in the
production, um, uh, area when I came up.
I got promoted pretty quickly atChase, I was a very high producer.
I kind of went from branch to regionalmanager very quickly, and I had a lot of
bad habits, and most of it was around alevel of arrogance and a lack of humility
(38:49):
and I had a manager who beatthat outta me, and he was
right at every step of the way.
Um, he's, and if he's watching, I'll sendhim a link cuz I've told him this myself.
Um, I've also had ones, you know,where I did a lot of mergers and
acquisition and strategy work at mylatest job before we sold mortgage.com
(39:09):
and AB Amer got sold to Citi group.
I had a pretty meaningful job thereand I had two very good mentors.
One of them really at his core as aproduction guide too, so we saw eye
to eye on a lot of things, but he wasfar more strategic and analytical.
And another who was really a financeguy and he was, um, you know, taught
me a lot of things that I hadn't reallythought about at a very deep level
(39:33):
and he was a very goodmanager, tough manager.
The pattern for me, by the way, isit's the tough managers, uh, tough,
but empathetic I think is probablythe best mentors that I've had.
Awesome.
I love it.
Well, think back to ourcoaches and our teachers.
The tough ones were theones that made us the best.
There's no question about that.
That's right.
So, So, um, how canpeople reach out to you?
(39:56):
Tell us a little bit about Strat Moore.
I mean, you guys are suchan incredible organization.
Um, you know, if, do youwanna share for just a minute?
Sure.
You know, what you guys do andhow it can help the audience.
Um, we get a lot of people watchingthis podcast, so, uh, and what they,
how they would reach out to youif they wanted to get your advice.
Yeah, sure.
No problem.
Um, by the way, I'm blessed witha very, uh, Uh, not a common name.
(40:18):
So I'm like, you Dale, just go to LinkedInand type Garth Graham and you'll pop and
I'll pop up or you can even Google me.
So yeah, I'd love to engagewith people on that level.
Strat More really is a data-centricconsulting firm, so really what
we are helping is the c-suiteon how to invest and improve the
performance of their business.
We do a lot of M&A activity, wedidn't talk about that either.
(40:39):
In fact, I'm kind of buried with M&Aright now, but, um, really it's, you
know, whatever those challenges might be,we give, you know, strong insights back
by data and help people make decisionsto improve their business, so that's
really the core of what Strat Moore is.
Um, and you see our stats that come outand if anybody wants to sign up on our
(41:00):
website, we send out a monthly insightthat I think is pretty darn powerful.
Our databases, oh, 10,000 people getit in our industry, so we're welcome
to share our insights that way as well.
Well, Garth this has been great.
You've been such a great ambassadorto the business for so many years.
I love when I get tosee you at conferences.
That's generally when we get to see eachother at conferences, but we're gonna have
(41:21):
to make a habit of making it more thanthat seeing we're both down in Florida and
we're not too far apart from each other,
love to get together for lunch ordinner or one of these, uh, things
pretty soon, but thank you forbeing on, Great advice, great, um,
information as always, appreciate yougreatly and look forward to the next
time we get to see each other again.
Yep.
All right, Dale.
I appreciate the opportunity.
All right, Garth.
(41:42):
Thank you.
God bless you.
Thank you.
Bye.
You are listening to Batting 1000 withDale Vermilion, where heavy hitters from
mortgage, Real Estate and Business sharetheir secrets for lasting success with
your host industry icon, Dale Vermilion.
All right.
Well, Garth, it is great to have youon, uh, the first episode of season two.
I can't think of a person I would ratherhave than you kicking off this season.
(00:57):
And I'm gonna, I'm gonna toot your horna little bit here, if you don't mind.
Um, you know, they've given the buyalready, but I'm gonna give you a title.
You're the OG of digital mortgagein the mortgage arena, as far as I'm
concerned you're kind of the patriarch.
Uh, you know, you and I met each otherway back in the 1990s and worked together
at mortgage.com when you ran thatcompany and you took that thing and it
(01:17):
was the first internet based originatedloan ever in, in mortgage history.
So, Man, you got some serious history andyou've done amazing things since then.
You know Stratmore Group is thepremier consulting group and merger and
acquisition group and information groupin the industry, and I'm just honored
to have you here, and not only that,we're we've good friends for a long time.
(01:38):
It's just great to have a good friendand old friend and somebody that
I've worked with for a long time.
So welcome, glad to haveyou embed a thousand.
Yeah, thank you.
I appreciate that.
I'm gonna have to live upto a lot because, you know,
that was a heck of an intro.
So I'd like to, I do a lot of publicspeaking, Dale, and if you don't mind
just coming along and you could do theone minute intro, that's why people read
from a bio, it's not that interesting.
(01:59):
So you get up, say that, and then,you know, you can fly back to Florida.
We're good to go.
Anytime you want me to tagalong, you just let me know.
I'll be there.
All right, cool.
I appreciate that.
So, Here's what I want to talk about,know, we, the reason I thought it was
so vitally important to have you on,other than the fact that I just love
you to death, is you are, you justspoke at the LendingTree Summit that
you and I both spoke at, um, And youbrought in an incredible presentation
(02:25):
that I just absolutely love thattalked about where the industry's at.
We're in one of the tougher timeswe've seen in, you know, you've
been in the business over 30 years.
I've been in the businessnext year, be 40 years.
So we've done this for a while, andwe've never seen rates rise as fast.
We've never seen these kinds ofchallenges, but and I'm gonna say
it very clearly, You know, there'sa lot of talk about the bad news,
(02:46):
but there's an awful lot of goodnews in the mortgage industry too.
There's a lot of opportunity outthere if you know how to attack it and
some of the things that you covered,I thought were just so spot on.
The thing I've always liked about yourpresentation style is you just say it
like it is and, let people, you know,understand what they need to do to succeed
and I love that kind of transparencyand just forthright approach.
I just say it like it is with jokes.
(03:06):
That's right.
Usually do.
So then once, once people, theylaugh a little bit, then they
suddenly go, Hey, wait a minute.
That's not funny.
That was painful, what he just said.
So, you know, whatever you do.
It's tough.
Tough.
It's tough to do jokes through avirtual thing, but I'll do my best.
Yeah.
Well, good.
Well, let's talk about, I, Iknow there's six or seven points
that you had talked about.
(03:27):
In that session and I wanna startwith the first one, and you know, we
know this is a purchase heavy marketand we know that consumer direct
companies in particular have had a moredifficult time in the purchase market.
I know you've got some stats on that I'dlove for you to share and I'd love to
hear you gave a great analogy during thepresentation as to why, loan officers
(03:48):
are not succeeding and companies arenot succeeding in the purchase world
when they could share a little bitabout kind of sure where we're at as an
industry, where the purchase market isat, and then I want you to talk about
how it's such an episodic businessand really units are the key thing we
should be looking at, not just dollars,
cuz that was really important information.
(04:09):
Yeah, well, I mean, wealways read the headlines.
You know, the NBA Forecast Training,Fannie Mae Forecast, Freddie Mac Forecast,
Stratmore, we're in the numbers business.
Yep.
We look at all those numbers.
I think the one number that getsmissed when we talk about that we're
gonna drop from a 4 trillion dollarmarket to a 2 trillion dollar market.
I T, trillion is a big number, so it'skind of absurd how big that number
(04:29):
really is, and you think, wow, that'sa 50% drop if you actually look at
it on a unit basis, which is reallywhere the hand-to-hand combat has one
loan officer beating another to tryto help this family get into a home.
It's even more acute because ouraverage loan amount has gone up so much.
So, that's really one of 'em.
Last year there were 13 and a halfmillion transactions, first mortgage
(04:52):
transactions in our industry.
Next year there'll be maybe five.
Wow.
So we're down a lot of units and it'sway bigger than the 50% that you see in
the dollar number because the averageloan amount has gone up so much on the
purchase side and, normally, refinancetransactions are smaller than purchase.
You take the smaller refis out, you'releft with a lot of big loan amounts,
(05:13):
but that means there's really, youknow, 5 million opportunities to
compete and last year there were 13.
Wow.
So you better be very sharp.
Yep.
And able to compete.
And I think you were looting.
One of the other stats I wantedto share is last year over 50%
of refinance transactions unitswere done by consumer direct.
So, you know, first let's pause, that's abig number, when I started mortgage.com in
(05:38):
1996, Dale, that you know, it's all refi.
We were referencing, weweren't anywhere near.
Yeah, but we don't know.
We're near 50%.
That's right.
So 50% of people last year whorefinance their homes did it
through a consumer direct operation
and that's what created kind ofa windfall year for the industry.
The number on purchase is 15 percent.
And once again, this is units not dollars.
(05:59):
So, Uh, what that means is last year,in consumer direct, I'm looking on my
other screen so I nail this number,um, there were 5 million refinance
transactions last year and, um, youknow, our total transactions rather in
CD last year, this year there'll be 1.6
wow.
And that's assuming that theconsumer direct lenders keep
(06:23):
only doing 15% of the purchase.
So really the challenge for CD,you can't do the 15%, you have to
start stealing, share from retail.
Um, you have to steal sharefrom the other CD lenders.
So it is really a functionof competing at that level
and by the way, I started as a retailloan officer and then became a call
(06:43):
center guy, so I kind speak bothangles and you know, you can do it,
it can be done, but you have to havethe skills that are very similar to a
purchase lender, uh, loan originatorwhile also, you know, leveraging the
skills that the CD lenders have longperfected, you know, centralization,
lower cost, strong technology.
(07:04):
Um, but you know, a key part of itis those humans, those loan officers
have to be able to sell purchase.
So you had a quote on one of yourslides that I absolutely loved,
and the quote was, purchase isabout life, not about loans.
I love that quote.
It's a quote, but I wrote anarticle and even the article
doesn't, has a couple jokes in it.
So that was August, 2021 and one of theanalogies I put there, and I said this in
(07:28):
the speech last week, said, I appreciateyou bringing it up and you guys could
share the article if you like, but ifsomebody, if you were at a cocktail
party, you know, and somebody said to you,Hey, I'm thinking about buying a home.
If you're a human being, what'sthe first question you say?
The first question is, wow, statement.
(07:50):
Why?
And the reason is, the why is themotivation for the entire transaction.
I'm expanding my family, my family'sgetting smaller, I wanna be closer
to work, I don't care about beingclose to work cuz I now work remote.
I want a better school system,my kids are older, I don't
care about the school system.
Uh, a bigger house, smaller house,uh, later in life, early in life.
(08:12):
Move up.
Move down.
There's something going on.
Yep.
That's actually what they're pursuingand if you do not engage on that
level, You are likely to lose it toa retail guy or gal because they do.
So the natural inclination for a consumerdirect lender because of the muscle
memory from refi that we've learnedis you just jump into the transaction.
(08:37):
So you'll say, oh, terrific,you're buying a home.
How much money are you putting down?
Do you have a property yet picked out?
How much money are you putting down?
So the loan amount is okay, that's great.
Um, you know, we, I can go aheadand qualify you for blah, blah,
blah, and it's like, what are you,dude, that's way too fast, right?
And so when you do that, the customernaturally gravitates to the only thing
(09:00):
they have in common interest with you.
What's your rate?
Yep.
And the shame of it is theycan't have the rate anyhow.
They can't lock it in, they haven'tfound a house, they don't yet
have a contract normally, right.
So it's like you literally put yourselfon the least advantageous playing field
that you didn't even have to play at.
Yep.
(09:20):
Because you weren't willing to engagewith them on what really matters to them.
So now you don't have to read thearticle, but you know it's a four
pager and you probably should.
Well, that's so incredibly powerful,and it's so funny because it jives so
much with what we've taught at MortgageChampions forever, is that yeah, you've
gotta have conversation when you startthat conversation with qualifying
questions, which is the most commonthing that loan officers do, by the way.
(09:42):
What you're really saying to theborrower is, let me see if you're good
enough for me to spend time with you.
That's really the message you'rerelaying to them when you really
think about it, and that is notthe message I think we wanna relay.
I think the message we wanna relay is,man, I wanna help you with that house.
I'm honored to have theopportunity to work with you today.
Tell me why you're moving into that house.
Tell me what's going on in yourlife, and there you go, bam.
(10:02):
You're in a conversation thatabsolutely works, and you're right,
the, a lot of the retail guys that Itrained, they're very good at that.
Um, and many of the consumer directguys who are top producers, All of
those who aren't producing right now,it's because they're going back to
either they're asking those qualifyingquestions or they're talking about rate,
or here's the big one that I can't stand.
(10:23):
Let me send you a link so you can fill outyour information and I'll let you know if
you qualify, I'll get your pre-approval.
Wait a minute, hold on.
You're, you can't, you cannot solvea problem for a borrower you don't
understand, and if you don't talkto them, you don't understand them,
an application isn't gonna tell youwhat you need to know about them.
So you and I are on the samemindset about it, I think he, you
(10:43):
know, you said in your presentation,the most important question we ask
a borrower is the why question.
I think that's so true and so wise.
Yeah, and you can get, you can really,you know, obviously when they ask the
rate question, they might be concernedabout rate cause rates are really high
and, rates are high versus before, buthistorically they're not that high, and
by the way, if you figured out on anafter tax basis, they're not nearly as
(11:06):
high as people say, that's exactly right.
Now you can get to that conversation,but you need to acknowledge they
had just asked a right question andthen start to counsel them on how
to think about what the rates are.
And of course, Over the next, from Juneof last year until June of next year, if
the forecast holds the 5 million balloonsthat you're gonna have to fight for, a
(11:30):
big chunk of them are gonna be refis.
Let's say half of them are refis.
That's two and a half million refiscoming off a year, when in that same span
where there's hardly any refi at all.
So suddenly our market couldsuddenly get 50% bigger.
As soon as rates start dropping and, youknow, so as hard as you're willing to work
to establish that relationship with thatsix and a half percent borrower right now,
(11:54):
you're buying yourself that opportunityto help them at a 5% borrower next year.
So it's worth the fight.
Yep.
It's just a lot tougher.
Yep.
Well, and, you know, the thing thatI think a lot of times we forget to
talk about in today's marketplaceis the offsetting factors you just
mentioned one of those tax benefits,that's a huge offsetting factor.
You know, buy downs area huge offsetting factor.
(12:16):
Um, the fact that today, you know, youhear people talk, consumers talk today
about, well, you know, it might not be aright time to buy because rates are high.
Yeah.
But wait a minute.
Let's think about when rateswere low, you had to compete with
92 other people on that house.
Yeah, that's right.
And then you had to offer $40,000over asking price in order to get it,
so if you can get it below askingprice and you're paying a higher
(12:37):
rate at the end of the day, aren'tyou really kind of in the same boat?
And many times you are, many timesyou're even better off at the end of the
day, depending on how big that varianceis so there's plenty of opportunity
out there today if you look for it.
Yeah.
I mean, and if you can drop, youknow, your sales price, By 10, 15%
as the market softens where youcan be in a position to do that.
Yep.
By getting pre-approvedand being ready to pounce.
(12:59):
Yep.
Your monthly payment is droppingby virtue of the fact that
the sales price is going down.
So, and you should know those numbers,you know, so for every 25,000 it can
drop your monthly payment as, you know,serve $150 or whatever the number is.
You know, you know that and thenthey begin to say, oh, so run
that by me again, boom, now you'rehaving a quality conversation.
Yep.
So you made two statements and you hadtwo bullets on your PowerPoint that Levy
(13:22):
said, "pretend to be human" number oneand second was "get used to not yet".
So, talk about that for a minute causeI think that was a really important
point that you covered at the summit.
Yeah, I mean, a vast majorityof refinance, I mean a purchase
transactions, if you're buying leadsor if somebody happens to call off
your website, a vast majority of themhave not yet written a sales contract.
That's right.
(13:42):
In some cases, they may not have evenput their current house up for sale where
they may not have even gotten their downpayment together, and you don't want to
jump into the qualification questionsto figure that out, but you need to
figure out where they are in the cycle.
Yep.
So the not yet means this is reallyan opportunity to spend quality
time and develop a relationship.
(14:03):
You're not gonna close them, right?
It's an incremental close.
I mean, a refinance is a close andyou know, if you can't close them in
a week or two, probably move on toanother one, there's another opportunity
and it's a wasted opportunity totreat it that way, but it's true.
Yep.
And by the way, last week we alsohad, um, Greg Olson spoke and, right
(14:24):
before me, and by the way I just wanteveryone to understand Greg Olson is
much larger than I am, but we got thesame amount of time up there, so in
20 minutes, one of the things thathe said was, he said, you become your
worst when things are the easiest.
Yeah.
And he didn't quite understand, Idon't think, how prophetic that was
(14:49):
for a bunch of people whocome out of a refi bone.
Yeah.
I mean he was talking about how he reactedwhen, you know, he started making all pro
as a football player, that type of thing.
So, you know, go see Greg Olson.
I can't paraphrase it, but I was like,man, you just nailed what our industry is.
Yeah.
This, the soft skills have gotten soft.
They have, um, because we didn't have,you didn't have to do it as much.
(15:10):
You worked a lot of hours, so,nowhere should someone listen
to this and say, ah, this guydidn't get what I'm talking about.
I understand you worked a lot of hours.
Okay.
I understand.
It's stressful.
It's extraordinary what we accomplishedas an industry doing 13 million
transaction, but it's a different skill.
Um, by the way, I would say that pretendto be human, like if you're in a call
center in a refi, you could almostwatch, and I managed hundreds of these
(15:31):
people you could almost watch when theythought they had a good one on the line.
They'd lean forward.
Yeah, and they begin to lean forward.
They get their pen andthey start doom boom.
I think I can close it on a refi.
It's almost like in a purchase youneed to lean back because if you go
too fast, they're gonna say, You'renot hearing where I am in this cycle.
Right.
You're intimidating me with abunch of jargon and my realtor
(15:54):
kind of told me I should probablygo with her friend locally anyhow.
So you're almost creatingyour own objections.
Just lean back Yeah.
And let them tell the story becauseif you can become part of that story,
you can become part of that solution.
Slide nine that I sentyou is that pie chart.
Yep.
And that pie chart is whyare you buying a home?
So the point I would makethere is a loan officer,
(16:15):
whether they hang that in theircube or put it in front of them
or learn it, the customer they'retalking to is one piece of that pie.
They're in one of those buckets, maybemore than one, but if you don't know, you
gotta know why you don't have the W H Y.
That's exactly right and if youdon't understand why they're buying,
you can't educate them properly.
(16:36):
And that, I think that's the biggestchallenge that I see today is loan
officers just aren't educatingbecause they don't really need to
think they need to because of 2020and 2021 when it was just like people
lined up out the door for loans.
Yeah.
That's not the case when rates aresix and a half or six That's right,
or seven or whatever the rates are.
You're always gonna get resistance to therate, so what you've gotta do is be able
(16:57):
to educate that borrower on how it makessense, how they can afford to buy this
home today, that they're looking at howthey can qualify in a way that's gonna
get them the home that they want and, Whattheir motivation is behind all of that.
I mean, you and I both are from that samebackground, we've come up through the
ranks over the years where we sold in highrate markets and you couldn't do it by
quoting rates, you did it by talking aboutwhat the motivation of your buyer was.
(17:20):
When I entered the mortgage businessin 1987, straight outta college, it was
booming cause rates had fallen to 11.
Yep.
So, you know, late eighties,that crazy late eighties.
Uh, yeah.
Yeah.
When I started 1983, it was 17 and a half.
Yeah.
Well, I was refinancing several years.
I was in 87.
I'm refinancing your 17 and a half,so Dale, so that's exactly right.
(17:43):
All right, so let's talk for a few minutesyou know, you talked about units A moment
ago you talked about focus on units
or don't focus on units, but whenyou do focus on families, not units,
so think of them in family terms.
I love that mindset that insteadof thinking in units, we should be
thinking in this every time we helpsomebody with a transaction that's a
family that we're putting into a home.
(18:05):
That's a individual that we're helpingchange your life in a powerful way.
But you also talked about somethingelse that I thought was important
and that is our obsession withbasis points and how volume really
takes our focus off what matters.
Yeah.
Talk a little bit about that.
Yeah, so I mean, it'slike anything, right?
You, uh, if you pay people acertain way, it drives the behavior.
So if you pay in basis points, you aresaying the dollars more important than
(18:30):
the person because you're not payingthem to close the Jones loan, you're
paying them to close a $300,000 loan,and I don't even want to get into the
distortion and incentives that arecreated by the fact that the $200,000 loan
isn't worth as much as the $300,000 loan.
So I'll give you one very interestingstat where we actually got an article
coming out on this in 2010, Dodd Frankcame and changed our world and it changed
(18:53):
our world cause we said, Hey you needto change away from our compensation
model and you can't be paid on the termsof the loan, and the industry battled
and got the CFPB through Dodd-Frankto acknowledge and make an exception
for basis points for a loan officer.
And I'd literally come back and say,and now this is ancient history,
(19:14):
it was 12 years ago, but we almostscrewed ourselves right there because
the average loan officer in 2010 wasmaking $2,000 a loan in compensation,
and if you adjust that for inflation,it should be roughly $3,000 a loan.
Right now, the average loanofficer is making $4,000 a loan.
(19:35):
So we are literally paying more becausethe average loan amount is so high.
By the way, retail's average loanamount is significantly higher than
consumer direct, partially becauseretail, brick and mortar, etc.
, chases big loans, so they, it'sless competitive on the small loans.
So because of that, we don't, wejust do away with any pay driven
(19:57):
on quality, it's basis points.
Everything's like the bigger the loanthe better, and the more you do or
the bigger volume you do, the better.
So what I'm advocating for people, andthis is not a popular concept, or people
will say, that's really interesting,
someday we should do that and letme just go ahead and keep paying
basis points in the meantime.
But to sit there and say, look, I'm gonnapay you a thousand dollars on a refi, but
(20:21):
$2,000 on a purchase, you're saying itmatters and it's harder and I recognize
it's harder and I want to pay you.
I'm gonna pay you more,
if you do a fully verified, or I'm gonnapay you some of it up front, if you do
a fully verified pre-approval and makecontact and develop a relationship with
the realtor, I'll pay you more for that.
I'll pay you more if your lock pullthrough is higher, because, you know,
(20:43):
that helps me from a capital market,you can literally just start paying for
the activity that you're trying to drive
and instead what we do throughtraining and management is try to
drive the behavior and then pay themon something completely different.
So that was really the point I wastrying to challenge people with is
saying, now's the time, frankly, as we'recontracting, to really think through
(21:03):
what culture am I trying to create?
Focus on families, and how doI really want to pay people?
Maybe focusing on the unit part of thepay and customer satisfaction and all
the other elements that drive, you know,a better culture within your company.
Yeah.
You know, it's funny because I'm gonnago back all the way to 1983 to 1995,
(21:24):
the 12 years that I managed in thisbusiness, and, you know, I managed
up to as many as 900 loan officers atone point, and I had a common saying
that I said to my loan officers, itwas this focus on units not dollars,
yeah.
Focus on units not dollars,focus on units, not dollars.
And here's why, because units createhabits, dollars create elephant
hunters, that's what they do.
(21:44):
So I'm sure now from lenders whoare watching this podcast right now,
they're thinking, Ooh, wow that'skind of radical that we're talking
about changing compensation, butit's gonna happen at some point.
That's right.
It has to, because of thestructure of businesses today.
For the loan officers, you'reprobably like, Whoa, wait a minute.
I like my basis points.
I get it, and our advice isfocus on units, do more of those.
(22:04):
Focus on who you're helping.
You'll make a lot of money down theroad, but if you focus on the basis
point percentage, put simply, thisis a saying I use all the time,
focus on your customers, not yourcommissions, and your commissions
will be much higher, right?
It's that simple, right?
It's all focusing on the end resultof the consumer you're helping, the
family you're placing into that home,the people you're saving the money for,
(22:27):
that's what your focus has gotta be.
And the more you focus it on units,both as a lender and as a loan officer,
the more successful you're gonna be.
And I love the idea, I've alwaysadvocated this, just like you,
Garth, is compensation plan should bedesigned to reward for the activities
you're looking for, so if you'relooking for higher conversion, you
should be compensating for that.
If you're looking for higher quality,you should be compensated for that.
(22:48):
If you're looking for your surveysto come back and you want customer
satisfaction, you should be given aspiff for that because now people will
work towards those things that are paidfor, that's why incentives work so well.
Exactly.
And by the way, we see this in theretail side when we do analysis on
the retail side, we'll have banks inthe south, mortgage companies in the
southeast and their are loan officers,average six loans a month, and then
(23:09):
you talk to somebody in their, during,you know, one of the big loan amount
states like California, Washington,DC up in the northeast, they do four.
Yep.
Duh.
And make a lot more money.
Yeah.
Well, well the four is because theykind of, you know, once again, I was a
loan officer too, so I was out pedalingrate sheets and chasing realtors
but you are, you know, at four,you're making a really good living.
(23:35):
So am I gonna fight hard for five and six?
Yeah.
And whereas down, you know, down south,and by the way, and if you get down into
the southeast where they do an average ofsix, they also have higher governments.
So it ain't like they're easierloans, it's like they're probably
harder loans than anything.
Well, and it's interesting.
I'm training people in today'smarketplace in this high rate market,
(23:55):
I'm training a lot of loanofficers across the country doing
20, 25, 30 loans a month still.
Yes.
In this marketplace, because they'redoing the right things, they're a
hundred percent, they're buildingrelationships, having proper
conversations, so on and so forth.
Yep.
All right.
Let's talk aboutefficiencies for a minute.
If we can and let's talk about theimportance of creating efficiency within
your business and also talk a little bitabout the cost of having people who are
(24:20):
not productive and what that looks like.
This is fun, and I know you talkedabout on the stage that I thought
was very beneficial to lenders
and I think there's a lot of valuein here too, for any loan officers
who might be watching this tounderstand the importance of your
productivity and what that looks like.
Yep.
So I think what's really interestinghere is in 2021, there was about
350,000 loan officers, a third ofthem did less than three loans.
(24:44):
I mean, that's sopart-time, it's like, why?
Why would you do that?
Why?
How is that possibly worth it?
If you're managing a company, and Iknow that the theory is it's a variable
cost, but is it really you have tomaintain their licensing Many times,
the part-time people are the ones, whoare the least able to package a loan
together or provide the high level ofservice, they lose the muscle memory of
(25:05):
how to do the business if they're onlydoing a loan like every couple months.
So really think about whether that'sreally the right thing for you to have
some people that's small, that part-timewhen maybe the approach is put that
money towards the real producers andthe real people focused on their career.
The other is 80% of the volume in ourindustry is done by 40% of the LOs.
(25:26):
So in the, so you get the bottom,you get the bottom 30, hardly do any,
but the next 30 doesn't do very mucheither, so at some point you're do
I really want so many low producers?
And I understand it is toughwhen we're in this climate, every
single loan is worth something.
Right, but in a consumer direct operation,isn't it another one of your loan officers
(25:50):
who's used to doing maybe 35 and nowonly doing 25, who could do the 26th
loan for you if you gave them that lead?
You know, maybe that's where you shouldthink about instead of the approach that
a lot of lenders seem to be taken is,well, I'll retain all my salespeople
because they don't cost me anything,and they bring in extra business.
I just say, rethink that, are yousure they don't cost you something?
(26:11):
By the way, they're also the ones likelythat have to negotiate lower rates,
maybe cause they're not as good sellingor their locks expire, or they're a
little sloppy with the paperwork and theprocessor has to clean up behind them.
I mean, it takes real analytics to knowthe cost of this and we help lenders
do that, but, um, it ain't free.
(26:31):
Yep.
And it's interesting cuz you know, Itrained so many loan officers across
the country along with leaders andlenders and all of that, and I have this
conversation with a lot of loan officerswhere I'll see them doing these 1, 2, 3
a month and I'll ask them the question,why is it all you're doing right?
And their answer's one of twothings; well, that's all I need
to do to make what I want to make.
Yes.
Or, well, you know what?
(26:51):
There's other things that I want todo too, and if the first answer is,
that's all I need, I go, well, allright, think about this, you know, you
gotta make hay while the sun's shiningright in, in anything that you do.
And if you can close five orsix or seven instead of three
or 10, Why wouldn't you do that?
Because we have no idea what the, andwe saw this year how much the market
shifted from 2021 to 2022, right?
(27:12):
So people are now looking back, going,boy, I wish I'd have done more in
2021 when it was really availableand I wouldn't have given up so fast.
So that's a message for all loanofficers out there but on the other side
of that equation is, look, if you'redoing other things, this is an industry
where if you put a hundred percent ofyour effort in, you can be incredibly
successful and make an awful lot of money.
Why would you choose another side
(27:33):
gig, if you've got the opportunityto be successful in lending,
because this is the one industrythat's always gonna be a need.
Home ownership will always be theAmerican dream and people always need
money to refinance and money to buy home.
So I would encourage loan officers, ifanybody's listening to this as a loan
officer and they're watching this, youwant to tap out on every opportunity
you can within the marketplace.
(27:54):
And I know when people hearthings like 25 loans in this
marketplace are like, Wait a minute.
What I'm doing, two or three.
Well, it, it's a process of understandingthat is a product of your network,
your lead base, your approach, yourstyle, all these things you and I
have been talking about will determinewhat that outcome is on your results.
It's not working longer that's gonnamake you successful, it's working smarter
(28:19):
that's gonna make you successful in thismarketplace, that's really what it takes.
And I think the key part of is honingthe skills and so, you know, It's
having the right technology, sure, it'sbuying the right leads, great, but it's
also getting the training necessaryto make yourself the best you can be
with every opportunity you're given.
I mean, we get calls all the time,we do some, you know, work around,
uh, lead management and CRMs andthings like that, and we get called,
(28:40):
Hey, what's the best lead source?
I'm like, come on, it depends,and you know, it depends on what
you're buying, how you're buying it.
But by the way, That, that's the wronganswer because the, uh, the wrong question
because how good are you converting leads?
Right.
You know, and if you're not goodconverting pre-qual, um, purchase
leads right now, then it doesn'tmatter how good the lead is.
(29:02):
Because that's mostly the purchaseleads that you're gonna get right now.
Yeah.
Not last year, but right now.
That's exactly right.
So focus on the skills necessary toconvert those before you start worrying
about, you know, whether a particularlead source happens to be better or,
you know, different than the next one.
Yeah, and it's interesting, you know, oneof the, one of the strategies that I've
been employed with every single lenderI've ever worked with is you need to
(29:25):
have, uh, with every single one of yourleads or your referrals that come in,
you need to have a secondary call processin that where, you know, if that first
loan officer can't sell that deal, thereshould be a second person talking to them.
Yep.
Sometimes just a different voice,sometimes you know may, maybe just a
different personality or a differentapproach is gonna get a deal, and
(29:47):
it's always been interesting to mehow many times you'll have a loan
officer take a lead, they say, nah,there's nothing here this guy's not
gonna buy from me, won't pay our rates,
you hand it off to another loan officerand son of a gun if they don't turn
that thing in, you know, five minutesflat, they've got that customer
eating out of the palm of their handbecause of the challenge that's there.
It's a process of understandingthat if we educate properly and
(30:07):
do the right things, we're gonnaget the results we're looking for.
Absolutely no question about it.
All right.
You had a quote, and I want you tokind of embellish on this, you said,
um, "Satisfaction is measurable,But not if you don't measure it."
Yeah.
So help the audience understand that.
Yeah.
So we do customer satisfactionresearch for the industry, we surveyed
(30:28):
about 300,000 consumers last year.
We do it for, wow, many of the top lenderson their behalf, and we do it, um, and
by the way, JD Power, you know, surveyedabout 5,000 people last year, so it's
a very deep data set, um, some of thetop performing customer satisfaction
lenders use the service and really thekey is that it not only says, Hey, would
(30:49):
you give me a five star review as anexample, but it asks about the process
and how they experienced the processand what they felt about the process.
It's really the full consumer experience,and I'll give you, we break down, there's
like seven major drivers of customersatisfaction, many of which do not have
directly responsible for loan officers.
(31:12):
So the challenges, how as a loanofficer do I deal with it but the
other challenges as a company, how doI make sure customer satisfaction is
all the way through the process, notjust make love on the phone up front.
So let's say you do the great whyexperience, W H Y, and you get it and
you convert them, That's amazing, so inconsumer direct, in 2022 through October,
(31:32):
looking at my right screen, I should havethis slide with you too, 46% of consumers
in our survey say they were asked forthe same information more than once.
That's really frustrating.
So once again, pretend you're humanto stop with thinking about, well,
the problem is the tax return or thesecond bank statement, or the missing
page of the bank statement, or all thisarcane thing that we deal with in our
(31:55):
industry, the underwriter's fault, thinkabout it as a human, you're asked for
the same information, more than once.
It's frustrating.
I already gave this to you,so, what do you do about it?
Our industry is rife with, Hey, ifyou have a loan in the pipeline as
a preapproval, you are gonna have toprobably ask for another pay stub.
Or maybe the borrower didn'tunderstand, or maybe they only sent
you their bank statement for theirchecking, but not their savings.
(32:19):
The point is, you have to communicate attheir level to make sure they understand
and also you have to know that 46% ofthe time that they feel this happens,
you need to be prepared to overcomeit so they don't think it happened,
and one way to do that is to not, onceagain, act like it's a transaction.
(32:39):
And the one that I'll do, I'll justgive you the one example here, Dale,
I know we're running short on time,but if you, if somebody calls you and
says, I need a letter of explanation,or I need an additional piece of
documentation, that is already a failingconversation because nobody wants
to have to explain anything, right?
That's wife, parent, you know,that doesn't sound good, right?
(33:02):
If you have a conversation, hey,uh, wanted to touch base on a
couple things, um, you get yourpay stubs every other week, right?
Oh yeah, that's right.
I got your April here.
Yeah.
Awesome.
So your, is your pay still the sameor, you know, when do you get a raise?
It doesn't matter, I'm simplytalking about their life.
Oh, actually, I mightget a raise next year.
Oh, that's awesome.
Congratulations.
That's amazing.
You get 'em every two weeks.
(33:22):
You get 'em in your, um, youknow, like a PDF in your email.
Oh, no, there's got a, we got a website.
We download 'em.
All right.
Could you just download acouple more of those for me?
Yeah.
Okay.
I'll hang on the phone, bythe way, while you do it.
So how are things going anyhow?
I've just had a conversation andasked for two additional pay stubs.
That's right.
I didn't say I need two additionalpay stubs, and the guy's probably
(33:42):
not gonna realize you asked forthe same information more than once
because it was just pleasant.
So, you know, but credit inquiries,everything like that can be a
conversation if you think about whatis, how's the consumer gonna decode
what I'm saying and how do I get ontheir side of the table, so to speak?
So I get passionate on that one, dale.
(34:03):
So this is what I love about you the most,Garth, is you've been in this business
like I have for a long time, and youstarted as a loan officer just like I
did, and worked our, you know, we bothworked our way up through the business
and what you're really revealing topeople today is the secret to success
in today's market; it's going backto the basics of, relationship,
conversation, we've mentioned severaltimes, Be a human being, think like
(34:26):
a human being, Think about them as ahuman being, Yeah, quit thinking of it
transactionally, think of it relationally.
You know, Peter Drucker has a great quotethat I love, he said, "The biggest problem
in communication is that we don't listento understand, we listen to reply" yes.
That is such a true statement In today'sworld I watch loan officers every day
(34:46):
that are on the phone and they're thinkingabout the next question they're gonna ask,
they're looking at their computer screen,they're not even hearing what that
borrower's saying to them, and they'remissing that golden moment of conversation
and relationship and connection andtrustworthiness, it's so powerful.
Look, this business is not rocketscience, we try to make it rocket
science, but it's really people aregonna buy no matter what the rates are,
(35:08):
that's right, and they're gonna pick fromthe person they like the most and who they
think is looking out for their interests.
Yeah.
So I, I think everything that we'vetalked about really goes back to
conversational tone, treating peoplelike human beings, and understanding
that these are not transactions, theseare not even units, these are families
and people we're dealing with, and we'rechanging our life in an incredible way.
(35:28):
Yeah.
And the, and you know, the purchaseis so exciting, it's really
way more exciting than a refi.
So it might be harder, yeah.
But it's way more rewarding.
Um, you know, and of course ifyou do a great job on a purchase,
they're gonna tell people becauseyou don't go to a cocktail party and
say, damn it, I had the best refi,
I saved $187 a month, how muchdid you save on your refi?
(35:53):
But you're gonna go to a cocktailparty and say, I bought that new
home and the next human's gonna say,wow, why did you want a new home?
And if you're part of that solution,you've earned the right to be part of,
you know, getting a referral or whateverthat next piece of business might be.
Well, and the purchase is so much moreemotional of a transaction than a refi
(36:14):
is to the consumer cause this is thenew house, it's the new thing, it's
where they're gonna create their futurememories, there's a whole lot that
goes into that, it's really powerful.
Yeah.
Yep.
If you were to give one piece ofadvice to the people listening today to
succeed in, you know, the rest of thisyear in 2023, in a high rate market,
what would that piece of advice be?
(36:35):
Uh, empathy.
Um, and one is it's empathy for thepeople that you work with, some of
whom will probably need to have anopportunity to succeed elsewhere.
We're gonna go through a big contraction.
It's unfortunate.
Yeah.
Um, and I hate it when, you know, we'rehired by people, a lot of mortgage
companies to tell them how to, youknow, get more efficient and optimize
(36:56):
and I never forget that the spreadsheetof, you know, maybe you need to
reduce your expense in a department orpeople, so you need to be empathetic.
It's really, it's tough as it is forthe loan officers trying to scrap
to get from four to five to six toseven to eight loans a month, it's way
tougher for the processor, the loanofficer assistant, or the underwriter
(37:16):
who really is waiting for you to doenough business to justify their job.
It's a tough, that's tough.
That's right.
And the other empathy is it's a reallytough purchase market and the customers
will act odd because they're under stress.
I mean, it's more expensive than itwas a year ago, but let me help you
understand how much more it reallyis, and let's see if we can come
up with some solutions for you,
(37:37):
or it's more stressful for therealtor, there's a lot less deals
to go around, they're gonna act odd,you know, and frenzied about their
transaction, which might be, youknow, last month's Jaguar payment.
So it's, you just have to have empathy forhow difficult it is and be, you know, uh,
Somewhat satisfied or appreciative thatyou have an opportunity to have such a
(37:59):
meaningful role in it on an ongoing basis.
I love it.
Sage advice right there.
Yeah.
Let me close up my final question.
I'd love to ask all my guests.
I'm a firm believer that one of the keysto success for all of us is having mentors
in your life and people that you can learnfrom, can you give an example of or just
tell us in your words how important youthink mentorship is for people watching
(38:23):
this podcast, and maybe you have anexample of a mentor in your life who
made a difference that you wanna share.
Yeah, I think I've had a, I had a few,I mean, I certainly had one in the
production, um, uh, area when I came up.
I got promoted pretty quickly atChase, I was a very high producer.
I kind of went from branch to regionalmanager very quickly, and I had a lot of
bad habits, and most of it was around alevel of arrogance and a lack of humility
(38:49):
and I had a manager who beatthat outta me, and he was
right at every step of the way.
Um, he's, and if he's watching, I'll sendhim a link cuz I've told him this myself.
Um, I've also had ones, you know,where I did a lot of mergers and
acquisition and strategy work at mylatest job before we sold mortgage.com
(39:09):
and AB Amer got sold to Citi group.
I had a pretty meaningful job thereand I had two very good mentors.
One of them really at his core as aproduction guide too, so we saw eye
to eye on a lot of things, but he wasfar more strategic and analytical.
And another who was really a financeguy and he was, um, you know, taught
me a lot of things that I hadn't reallythought about at a very deep level
(39:33):
and he was a very goodmanager, tough manager.
The pattern for me, by the way, isit's the tough managers, uh, tough,
but empathetic I think is probablythe best mentors that I've had.
Awesome.
I love it.
Well, think back to ourcoaches and our teachers.
The tough ones were theones that made us the best.
There's no question about that.
That's right.
So, So, um, how canpeople reach out to you?
(39:56):
Tell us a little bit about Strat Moore.
I mean, you guys are suchan incredible organization.
Um, you know, if, do youwanna share for just a minute?
Sure.
You know, what you guys do andhow it can help the audience.
Um, we get a lot of people watchingthis podcast, so, uh, and what they,
how they would reach out to youif they wanted to get your advice.
Yeah, sure.
No problem.
Um, by the way, I'm blessed witha very, uh, Uh, not a common name.
(40:18):
So I'm like, you Dale, just go to LinkedInand type Garth Graham and you'll pop and
I'll pop up or you can even Google me.
So yeah, I'd love to engagewith people on that level.
Strat More really is a data-centricconsulting firm, so really what
we are helping is the c-suiteon how to invest and improve the
performance of their business.
We do a lot of M&A activity, wedidn't talk about that either.
(40:39):
In fact, I'm kind of buried with M&Aright now, but, um, really it's, you
know, whatever those challenges might be,we give, you know, strong insights back
by data and help people make decisionsto improve their business, so that's
really the core of what Strat Moore is.
Um, and you see our stats that come outand if anybody wants to sign up on our
(41:00):
website, we send out a monthly insightthat I think is pretty darn powerful.
Our databases, oh, 10,000 people getit in our industry, so we're welcome
to share our insights that way as well.
Well, Garth this has been great.
You've been such a great ambassadorto the business for so many years.
I love when I get tosee you at conferences.
That's generally when we get to see eachother at conferences, but we're gonna have
(41:21):
to make a habit of making it more thanthat seeing we're both down in Florida and
we're not too far apart from each other,
love to get together for lunch ordinner or one of these, uh, things
pretty soon, but thank you forbeing on, Great advice, great, um,
information as always, appreciate yougreatly and look forward to the next
time we get to see each other again.
Yep.
All right, Dale.
I appreciate the opportunity.
All right, Garth.
(41:42):
Thank you.
God bless you.
Thank you.
Bye.
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