Sunday, February 17, 2019

Outcomes are derived from choice, Choose You.

Have you ever heard the phrase, "change your zip code"?  This means if your current actions create the same outcome time and time again, you have to change your zip code to get a different outcome.

I learned many lessons from my mentors during my Banking Career.  One of the most valuable lessons was the Bank always does what is in the best interest of its Shareholders.  It is the fundamental responsibility of a Corporation.  Early in my Bank career my mentor granted me stock based on performance and I quickly understood the generous recognition to be a Shareholder.  The wealth created by the sale of that stock was life changing and an experience and dynamic I wanted at the core of Southeast Mortgage of Georgia, Inc.

One person cannot build a company, it takes a Village.  The Village should benefit.  This belief is part of your culture or not.  If its not, what is your longer term outcome?

Banks can sell many products if mortgage origination is determined not to be in the Shareholders best interest.  Read the News, its the trend.  Southeast Mortgage sells one product and evolves with media and technology.  We originate mortgages only and are all in and have been for 25 years.  Your career deserves a company that is all in on what your income is dependent on.

Over the past 25 years, I have seen a lot of Mortgage Operations go out of business and a few sell.  Poor judgment, poorly conceived plans, and unsustainable strategies were the cause and cost good employees their jobs and the valuable time they spent away from their family growing the company.  When it comes to taking care of your family or planning for retirement, you need proven leadership that can help you accomplish your goals long term and provide equality.  Change your zip code for a path to retirement.

When your Bank or Non-Bank sells and asks you to stay with the company they sold, who's best interest is it?  Yours or the New Shareholders?  You basically accept a new job (sometimes with pay cuts) without an interview and without comparing other opportunities.  The company being bought and the reasons you worked there ended with the purchase.  The new Bank or Non-Bank will do what is in their Shareholder's best interest in the manner they believe maximizes their Shareholder's value.  Its important to understand your new leadership works for their Shareholders not as your fiduciary.  Change your zip code and take a chance on a path to be a Shareholder.

When a Bank or Non-Bank sells you only hear about a few people that got a big check.  Search Google, Search Google2, Search Google3, SEC filings are public knowledge and show how many shares and how much each made on the sale and where the expense cuts come from to create efficiencies.  Mergers rely on expense cuts to leverage combined revenue into a higher net income for Shareholders.  IMO the Hundreds of Millions of Dollars from the sale should also benefit the employees that created the value.  The reality? The employees who created the Hundreds of Millions of Dollars in value do not share equitably in the sale.  After the close of the sale, employees at the company being bought have to find a new job or hope the new company they were sold to continues in a manner that allows them to make the same income.  No Bank operates the same nor has the same strategy.  There is a reason one Bank buys another and it is usually about Deposits and cutting non-interest expense to create a higher net income.  Expense is always cut from the company being bought.  Bank sales are SEC regulated and public knowledge.  Read the agreementMerger

Loyalty is a two-way street.  If you are loyal, you should be rewarded when good things happen.  If your leader just moves you from company to company 2 - 3 times

with the same outcome, turn the page (Change your zip code) and try a better path.  You only have a few opportunities in life to make a better path.  Change your zip code to a path that makes you the owner.

What do your Shareholder's look like?  Do they represent you?  Do you have a path to become an owner?  Have you ever met your Shareholders or Board Members?

We work side by side daily.  At Southeast Mortgage of Georgia, Inc., our shareholders are our Processors, Underwriters, Closers, Originators, and Administration.  Four of our Shareholders have retired comfortably.

This is what our SEM shareholders looks like.  Every year we add those that help us grow.  From 2 shareholders to 41 is equitable distribution of our success.

They all changed their zip code at some point in their career to make a better path for themselves and their family.

With change comes an opportunity for a better outcome.

#truth #respect #history Phone: 770-279-0222

Wednesday, December 26, 2018

Shaun Graham Promoted to Executive Vice President

Shaun Graham has been promoted to Executive Vice President and added to Executive Management at Southeast Mortgage of Georgia, Inc., SEM.  

Our last EVP is now our COO.  Since inception in 1993, SEM has had 6 Executives in this group with two retired.  Shaun joined SEM on 10/10/2005.  After a football career and graduating from the University of South Carolina, Shaun entered the Mortgage Industry as a Loan Officer in our call center and eventually worked his way through the ranks to Office Manager and then Senior Vice President.  With a fundamental understanding of our business and the respect from those around him, he took on our newest strategies with passion and commitment.  Shaun now works directly with Cal Haupt, Chairman and CEO on SEM’s Social and Media Strategies including various projects with future innovation implications for our industry.

“Shaun is a testament to passion, smart work, and commitment to a common belief.  With SEM, Shaun has accomplished more than most in a 30-year career.  Instead of moving around like many in our industry, Shaun focused on learning and his skill set.  As a result, he made himself invaluable and a trustworthy teammate / large shareholder.  I look forward to sharing what I know so he can successfully take on more responsibility in the future.   Shaun is not just a smart charismatic guy, he is a good friend and a role model of how to evolve a fantastic career.” Cal Haupt, Chairman and CEO, Southeast Mortgage of Georgia, Inc. Phone: 770-279-0222

Monday, November 26, 2018

Inflation: Your $1 matters, treat it wisely.

The equivalent of $1 in 1963 is $7.79 in 2018.  If you saved your $100 in cash under your mattress in 1963, you would $12.84 of relative cash left. 

If you invested $1 a day every day since 1963, you would have $842,416.

Owning a home is an inflation friendly activity.  Unlike cash that deteriorates due to inflation, home values rise.  With QE1, QE2, QE3 monetary policy since the last financial crisis, inflation should be in the forefront of your personal financial plan.

In today's economic environment, holding cash is no longer king.  A large cushion for the unexpected is always prudent; however, the QE waves heading our way has created an interesting portfolio consideration. 
Phone: 770-279-0222

Note: This is my opinion based on the current economic data and my experience.  Any investment decisions should be discussed with your financial advisor.

Wednesday, November 21, 2018

Economic Downturn: Safe Path for Client's and Companies

As everyone is starting to realize, the economy is slowing due to the Federal Reserve tightening (raising rates), Tariff battles, and inflation creeping into our daily lives.  

What should not be a surprise is we are 10+ years past the last recession.  The historical average recovery period is 7 years. 

In the mortgage industry we all basically get money from the same place to lend to clients.  The
competence and service we provide is the differentiator for clients.  Unlicensed Bank Originators and Licensed Non-Bank Originators, spend 6-8 hours working with a client.  The client spends 15 – 30 years with their advice.  Based on the automated underwriting systems (AUS aka LP / DU), the final rate is realized after application.  Clients are better served not to worry about an 1/8  or a 1/4 percent up or down.  Get the best product for your needs and choose a Loan Originator that is licensed by your state and that focuses on need and not rate.  Rate will be what it is based on the verified data in the mortgage application.

Mortgage companies generally compete on the basis of Competence, Service, or Rate.  There is a prudent balance for new home buyers.  Rates are set by secondary markets and the risk / financial dynamics of the company offering them.  Unfortunately many companies are not aware of their risk profile nor the data that impacts their net margins.  I call that driving with a blacked out front windshield and no speedometer.

The relationship between the rate a client gets and the rate prior to risk premium and allocation of costs to close generally has a fixed “spread” or margin.  There is no special in the mortgage rate market.  If you reduce rates past what natural spreads state without cutting costs or lending to higher FICO, LTV, DTI borrowers, there is a consequence down the road.  Most Mortgage Originators do not care; however, their consequence is finding a new employer down the road.

In reality, as the economy slows borrowers have higher interest payments on credit cards, their job may fall prey to downsizing, etc.  As a result, the risk premium required in pricing mortgage loans should go up not down.  Best case, the margin stays the same but the rates will rise proportionately with the market or ignoring sustainable growth will claim its first recessionary mortgage company victim.  366 Mortgage Companies failed starting in 2006 (6 years after the recovery) with the capitulation in 2008.  Many of you have some of these companies on your resume.  Learn from their mistakes.

At the end of every economic cycle I see groups of mortgage companies panic and artificially reduce rates to create a short-term increase in volume.  If they did the analysis, they would find this does not change the trajectory of an economic cycle’s impact on mortgage volume.  It’s sort of like flapping your arms while falling off a mountain.  Flapping may make you feel better but gravity has its own plan that you will not alter the outcome.

Cal Haupt, Chairman & CEO
Southeast Mortgage of Georgia, Inc.
Celebrating 25 years
My advice based on my learnings from three successful recession crossings, focus on client need and remember origination volume does not pay the bills.  Revenue and Competence is the safe bridge to cross uncertain waters. 

The product you put your client in is not just another closed loan, it’s the foundation for your client’s family and future. Phone: 770-279-0222