Friday, May 19, 2017

Fake News is a Path Best Avoided

In my opinion, the truth is always the righteous path to good works.  History has proven that "green eyed monsters" orchestrate stratagems but the smoke always clears uncovering their true intent before it has any tangible effect.

Recruiters probably have one of the toughest occupations in our industry.  They are on the phone all day talking to hundreds of people trying to differentiate one company from the others.  In our business if you exist after 2009, you are probably doing a few things right.

Very few good Originators leave because of a company, they leave to fill a void or a need not being met.  The void could be a breach of trust, health care coverage, pay, an argument, the list is long.  The need not being met by their current company is what recruiters should focus on and like a good originator they just have to uncover the need not being met to close the deal.
Text to an MLO at SEM
The problem with “Fake News” is it eventually makes the person creating it unbelievable and their ability to recruit tougher.  I am sure everyone knows some of the characters in our industry that make outrageous fake statements.  As the target of many “fake statements” over the past 24 years, I learned that “fake statement” purveyors always attack your strengths.

If someone says you are running out of money and you will be out of business next week, you probably bank mid-8 figures in reserves.  If someone says you are a crook, you are probably a trusted fiduciary.  If someone says you are a bully, you probably care deeply about your team’s welfare and protect their livelihood and families from deceptive practices.
History has proven it is always good to be talked about whether good or bad.  If it’s good and truthful the world is working the way it should and good deeds are appreciated, if it’s bad assume the reverse.

I encourage everyone in our small industry to take the high ground and recruit based on need.  Need based selling is more effective with clients and recruits.  It is the righteous sustainable way to effectively accomplish your goals.

Tuesday, May 9, 2017

ART in Mortgage Industy - by Cal Haupt

Have you ever seen an ART Class where all the participants paint a subject from the same perspective and look over at each other to see how others are doing? 

Over the weekend, I was
reminded how important organically adapting a company to the market yields a major advantage and return. 

ART is a diverse range of executive activities creating a tangible expression of the executive’s technical skill intended to be appreciated by the shareholders and community analyst. 

Being able to see the beauty in the Mortgage Industry and its opportunity is a unique skill needed to see a path to incremental success over varying market conditions.  Most in the Mortgage Industry listens to the same paid service view of the market and act upon that data.  As a result, everyone is following the same path and by definition, if you are all doing the same thing an average result is the certain outcome.

The client and secondary market is a zero-sum game.  The client will always get a market rate and the secondary market will hedge and arbitrage that rate to an acceptable return without impact to the client.  How a company functions and the perspective they have of this known universe is what quantifies the rewards.

When I meet someone who follows Southeast Mortgage they always want to quantify us by volume.  I always respond that we track Revenue which is your ability “ART” to convert volume to revenue.  Revenue to Net Income is easy with a grasp on GOGS and Operating Expense.  I have combined 14 companies into Southeast Mortgage over the years and the net margins I observed left a lot of opportunity on the table.  Southeast Mortgage shared a unique perspective with the owners that yielded a significantly greater return for them from the same volume.  Given any volume of production has a theoretical maximum rate of return most only capture ¼ of what is available because that is all they see is available on others canvases.  I call it wasting opportunity.
If I could offer one suggestion to those that participate in the Mortgage Industry, it would be to keep an open mind to a better path.  If you can accomplish your goal 3x faster, don’t discount the opportunity just because the other canvases have the same picture resulting from pack mediocrity and shared expectation.  Traveling the same path always yields the same result.  Take a new educated perspective and create beautiful ART.

Cal Haupt
Chairman and Chief Executive Officer
Southeast Mortgage of Georgia, Inc.

Thursday, March 23, 2017

Recent Retiree List (The Ultimate Career Done Well)

Jason Hultgren gave me a copy of the MBAG Gold Award List that SEM participated in for the first time in our history thanks to J. D. Crowe's support.  A great group of mortgage professionals with huge volumes that consistently earn this recognition year after year.  Other than a wonderful MBAG award, are these talented Originators awarded stock in their company or made a Member of their Company's LLC Operating agreement? 

I always ask myself, do they share in the wealth they build for their owners? 
Ask yourself these questions:

1. Do you have a path to retire that includes equity in the company you help create?  If you can only rely on what you save from your 30 - 120 bps per deal, you need to re-think how you will retire.

2. Have you worked hard only to start over again when your company sold or left your market?  Did they cut you a check when they sold?

3. If you do not act now to explore a path to retire, what will you do if mortgage delivery channels change before you have saved enough?  The company will benefit but will technology reduce your compensation?

I admire loyalty and friendship (SEM has the longest tenure and tenure of key people in the industry thanks to a Village view of loyalty); however, it is a two way street.  Solidify your family's future longer than a month out. 

Do your Career Right
I would love to see a section in the MBAG Gold Award Brochure that lists the latest retirees and celebrate Careers Done Well....  Everyone has a finite time and a finite market to originate.  Need to plan today!

Call 770-279-0222 ask for Shaun Graham or Kim Thompson or Jason Hultgren

Saturday, February 11, 2017

(Transcript) Does anyone in the Georgia Mortgage Industry Retire?

Does anyone in the Georgia Mortgage Industry Retire?

I have been active in the Georgia Mortgage Industry since 1993 and responsible for the acquisition and combination of 14 mortgage companies in Georgia.   I have seen a lot during my due diligence and research.  To me it seems nobody retires in the mortgage industry?  I have seen a few companies sell at market tops that benefit one or two people, but most of what I see are sales professionals that cycle around from company to company with no plan for their own exit strategy or retirement.  One trend that REALLY baffles me is why people follow a sales leader that has a record of failure due to poor judgement and or strategy.  You can always stay friends with sales leaders that cant get it right, but your career is your business and has a finite life.  You have to align with a company that will help you achieve your long term goals and retirement.  

This is a great wealth building industry and people who devote their lives to working in it should have the opportunity to retire comfortably at a reasonable age as a reward for their dedication and work serving clients.  

Market tops are opportunities for mortgage companies to expand through acquisition.  Growth is much easier and more efficient when they can buy a mortgage lender that has a great reputation and a secure market share. Unfortunately for the masses in the Georgia mortgage industry, most companies are organized as LLCs.  An LLC has an Operating Agreement that defines who gets paid.  There is no equity like a Southeast Mortgage and the sale is an asset sale not the purchase of employee or owner shares.  The rank and file employees do not benefit in an asset sale, and to date, I have not seen an LLC member cut a big check or any check for that matter to those employees that got them paid.  Why they don't or did not is beyond me and not right.  Employees and the team that create the value should share in the monetization of that value when sold.

Limited liability company (LLC) An LLCs has a number of disadvantages, especially in relation to the structure of a corporation. An LLC has to be dissolved upon the death or bankruptcy of a member, unlike a corporation, which can exist in perpetuity. Also, a LLC may not be a suitable option when the objective of the founder is to eventually become a publicly listed company. An LLC is not a corporation; it is a legal form of a company that provides limited liability to its owners in many jurisdictions. LLCs do not need to be organized for profit.

I truly believe if people would listen to their logic and believe in themselves, they would be in a position to get their fair share of what this great industry has to offer.  

Are you loyal to a company or a person that continues to move or benefits from changing companies.  Did they share the big upfront draws with you that your originations will pay for?  Are you expecting that behavior to change?  Hoping it will is not a plan for success.  A zebra does not change its stripes.

Most owners who who evolved from being great sales people never obtain the skills to manage the growth of a company which is the foundation of your career.  Sustainable growth rates, the dangers of stripping a balance sheet, cash flow, and organization structure design are foreign to most leaders and owners.  The majority of the owners that tend to be flashy and make deals that are not equitable or not financially viable in the hope they can buy business rather than earn it from service.  They also tend to be unsophisticated with respect to financial analysis and believe origination volume is profit?  I cannot tell you show many of them ask me "what is your volume". My response is always revenue pays the bills not origination volume.  Source and mix are critical post 2009.  Understanding why - is the key to converting volume to revenue.  The other disturbing trend is they tend to buy business rather than focus on service delivery and their employees’ futures. 

With respect to loan originators, I see two types at the various organizations I have frequented over the years.  The first is the employee who is loyal to an owner who either sold without sharing the gain or loyal to a sales leader that moves from one company to the next, to the next – either for a flashy, new out-of-state name or promises that have no merit or substance.

The second type of loan originator basically moves to a point of least resistance to avoid licensing which requires them to work for a significantly lower commission structure.  If it were me, I would license myself since it is my profession and adapt to a best in class methodology that earns me 3 times more.  We all have to follow the same rules and the golden key goes to those who adapt and execute the best under those rules.  Those that choose to bend the rules eventually fall into the failed company "poor judgement" example above.  Strangely enough loan originators tend to follow the same leaders that make the repetitive judgement errors rather than seeking a company that has a proven track record and shares equity with its employees.  At the end of the day (or the end of a career), you have to pay your own bills and you should put you and your family first.

Everyone should view their career like an investment.  You deserve a return on your career investment.

Ask yourself?

Is your career in the hands of someone that has a proven track record of success?

Is my company in my market for the long term or are they here for the low hanging fruit and then back to CA, VA, NJ, etc?

Does my company have a generous 401K match?

Does my company share ownership with its employees?

Would my company help me if I were sick and cut a check to help me through a tough time?  Loyalty is a two way street.

I would honestly like to see more people retire comfortably from our industry rather than seeing the same aging faces punching 8 to pay their bills.

As the Chairman and CEO of Southeast Mortgage of Georgia, Inc. (Georgia Corporation since 1993) I know how hard my team works to support their families and me and my Executive Leadership take our fiduciary responsibility seriously to ensure we reciprocate loyalty and trust.  Since 1993 we have added 37 employees to our shareholder list and will add 10 top performing Loan Originators to our shareholder list each year going forward.   

To my knowledge Southeast Mortgage is the only non-bank mortgage company to have retirees that enjoy a substantial monthly income while continuing to own part of our great company they earned during their years of service and contribution to our success.

Cal Haupt
Chairman and Chief Executive Officer
Southeast Mortgage of Georgia, Inc.