The Most important thing you will do!

Career Challenge: How to know if your company is a fiduciary for both your career and your family?

Here's a simple way to find out: call the person at the very top of your organization - whether it's the CEO, LLC Managing Partner, Bank Holding Company Chairman, or someone else in that high-ranking position. Not a sales manager or someone lower in the hierarchy, but the person whose name is in the news as the head of your company.

Call their mobile phone and ask for a $2,000 personal loan that you'll pay back in 12 months.

Outcome 1: If they answer your call and give you the loan, congratulations! You can rest assured that you're in good hands with a company that values its employees.

Outcome 2: If you can't find their cell number, they don't pick up, or they brush you off with excuses, it's time to find a company that truly values you and your career.

Just like our clients and partners, we all need a fiduciary - someone who will look out for our best interests and have our back, even during tough economic times.

If you need more than an employer, call me.

www.southeastmortgage.com
Cal Haupt, Chairman and Chief Executive Officer
Mobile: 404-886-7016

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 agreement. Merger

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

www.southeastmortgage.com Phone: 770-279-0222

Discussion about Innovation & Adaptation - Cal Haupt

Technology evolution provides consumers with a choice on how they apply and partners with real & fast 15 minute approvals through innovative systems like GooRu.

Client's do business with a mortgage company the way they want, not how you want them to apply.

Realtors and Partners need to know their clients are approved prior to showing homes.  Southeast Mortgage provides the client and the Real Estate Professional with the technology they need and want.  The days of calling an Originator, waiting for a call back, waiting for the client to give the Originator the information, and then getting a pre-approval in day or two is the past. 

GooRu approves clients in 15 minutes.  Not Pre-qualify, GooRu approves right in the Partners Office or from the Client's Mobile Device by verifying with the IRS, Banks, and Credit Repositories providing a full AUS decision.

www.southeastmortgage.com Phone: 770-279-0222

Empowerment is Actions not Words

We have all seen the posts about empowerment and fairness in the workplace.  Southeast Mortgage has shared that belief and made tangible strides towards that relevant outcome since inception.  I believe a picture is worth a thousand words. 

2018 Southeast Mortgage of Georgia, Inc. Officer Group

Since 1993, we have ensured all employees have the opportunity to be a shareholder (owner of Southeast Mortgage) and a path to earn the privilege of being an Officer of our company.

Southeast Mortgage of Georgia, Inc., SEM, is not owned by a Husband and Wife, LLC with a couple of partners, nor a Family.  Our Family is the Families of our Team.  Our 32 Officers provide the leadership at SEM.  They are a talented cross section of America that creates an opportunity for all employees to become our 34th Shareholder (Owner) or an Officer whether they joined our company last year or 25 years ago.  Skill, Belief, and Creating value for our Shareholders is an equal opportunity reality for all our employees.  Ambition, Skill, and Belief is the consistent measure of progression and success at SEM.

Other than being paid on your next loan or the salary you earn in operations, is there anything more than words at your current employer?  Your Sales Leader may have an ulterior motive, but you do not share that check.   What is your next step to accomplishing your goals and preparing for retirement?

Our Officers are tasked with executing the strategy for our Owners (Shareholders).  If you want real equal opportunity and want to join a great group of talented passionate leaders.  This is it.

www.southeastmortgage.com Phone: 770-279-0222

SEM Rare Behind Scenes History Pt. 3 - Our Real Estate

This one is vary rare.  Probably 15 people have heard how the Club Drive Corporate site was found and developed.  Also I explain the decision to relocate to our newest 30,000 sqft Corporate Facility in Duluth is not what most people think.  When they get me talking about something I am passionate about, I never hold back.

www.southeastmortgage.com Phone: 770-279-0222

Plan for Life NOT the MONTH

www.southeastmortgage.com

https://southeastmortgage.com/mymortgage/

AMBA Discussion - How to Navigate Margin Compression and Best Practices

Although I rarely share our view of the Mortgage Industry in public due to the strategies we build around them.  When Shaun Graham and Rick Guerrero ask me to participate, I am happy to oblige.

Some raw footage from our discussion.

Happy to be on stage with  Fowler Williams (right) and Josh Moffitt (left).

The industry is in a perpetual expansion and compression cycle which requires certain strategies to remain in the sweet spot and grow no matter what the economic cycle suggests.

www.southeastmortgage.com 
770-279-0222

Margin Compression Solution - Mortgage Industry

I spent the past few days analyzing the past five years financials and its relationship to secondary and the required fixed costs to originate and close prudent - compliant volume in today's mortgage industry.

Cal Haupt

Chairman & CEO

Margin compression or expansion is the relationship between the yields derived from closing loans and its associated expense.

Expense and Revenue still correlate at any volume with a given profit margin and distinct point of diminishing return.  Sales Culture creates a unique break even point and a point of diminishing return for each organization.

Margins Can Remain Constant

Expenses that do not facilitate volume increase your break even point and volume for volume sake without regard to the dynamic of your P&L creates a point of diminishing return.  Volume does not pay the bills, profit does.  

As a past Commercial Analyst for Banks, I have seen more companies grow themselves out of business than any other cause.  As companies strip their balance sheet to support the diminishing and or negative return from high concentrated volumes, they turn to layoffs to reduce cash burn or use 941 tax payments as a short term funding source since a bank will see the issue and not lend to them.  This is a lesson learned after its done and tends to be a terminal path for the Company doing it.

Sales Culture Determines Margin Integrity

Growth and Margins can Coexist

Sales Culture and Leadership's focus on a Prudent Sales Strategy is the key to long term success in the Mortgage Industry.  Due to available yields in the Secondary Market and Limited Non-Production Related Expenses to cut, the path leadership chooses will dictate the outcome for those who depend on their decision.  No matter how cool the ship you are on looks, ensure it is not taking on water in the lower decks.

I thought my analysis would return some cool algorithm for success in the Mortgage Industry; however, since Dodd-Frank was signed into law, the opportunity to balance inequalities on the P&L have been constrained.  Managing the inputs and outputs associated with a Mortgage Lender in today's environment create consistency based on the sales culture and vision of its leadership.  Conclusion: Sales Culture dictates profit margins in the Mortgage Industry.

www.southeastmortgage.com
770-279-0222

You and Your Family's Destination is our Primary Focus !

www.southeastmortgage.com

Be Ready The Signs Are Here - "Know your Company"

On Saturday mornings I like to catch up on the mortgage industry and assess what paths the various participants are following. Why? I have a passion for business case studies, predicting outcomes, and finding the solutions needed to create sustainable growth and profitable enterprises. 

The mortgage industry has been a fascination for me for over 25 years and the ability to survive and prosper in a regulated and sometimes interesting competitive response environment has stimulated my academic and athletic senses.

I think we are at an inflection point and employees in this industry should assess their career plan and ensure their pilot has made it through a few recessions.  Recessions cleanse weak business plans and reward those that are positioned properly.  This is why you need to understand what type of company you work for.

Digging into the quantitative side of a company is more productive than the informal qualitative input generally delivered from biased sources.  I think people spend more time researching the purchase of a new car than researching the company they intend to work for that will support their family.  Mortgage Companies can differ as much as a SMART CAR compared to FORD F350 Truck.  Automobile such as Mortgage Company have a wide range in definition.

Smart Car

Ford F350 Truck

Just because they are technically automobiles we all know how different they can be.  Its the same issue with Mortgage Companies, many people think they are all the same; however, they are extremely different if you know what to look for.  I am going to try to point out what the primary differences are.

In the mortgage industry, you have three types of strategy and three types of organizational structures for Non-Bank Mortgage Originating Companies. I have seen the same participants pre-recession three times with only one category of type and structure making it through all recessions assuming they respected Sustainable Growth Rates (SGR). As a reminder I attached a link to the implode list.  Note how many imploded in a short period after the recession was confirmed. http://ml-implode.com/fulllist.html#lists  Some of you may have worked for a few of these.  Hopefully, this blog will help you find a safe path through the next recession.

1. Momentum Players - These are the newly formed (less than 10 years) after a recession that grow rapidly with claims of unlocking the largest family reunion ever with no growing pains. They tend to grow rapidly (Pump and Dump) focusing on paths that create an exit strategy for the few founders (Sale, Public Stock Offering, Etc.)
1. Works fine as long as the economy is growing. If the economy turns down owners of an LLC have to use their own money to save others. Owner self-preservation ensures the company goes under and employees move on. Many momentum players are LLCs. LLCs collapsed fast in the 2008-2009 downturn.
2. Sustainable growth falls apart due to production at any loss mentality. They focus on national production comparisons rather than what if something slows?
2. Regional Legacy Lenders - These are the vertically integrated no debt / low debt mortgage originators that are long term players.  They follow basic sustainable business practices that are grounded in solid Sales/Production theory and have a diverse client base without concentrations.
1. No debt and Shareholder Cash on balance sheet is the bedrock that employees future and foundation is built on. If economy turns, all shareholders are willing to use company cash to survive and take advantage of LLCs going out of business.
2. They manage Sustainable Growth and monitor financial health of the company rather than focus on volume comparisons
3. Mom & Pop - These are the brokers that lease their funding, production, facility etc. Primarily a middle man/woman that have tight margins. These are the people who want to have freedom to do what they want with no responsibility if things go south. During 1997 - 2007, this was the largest sector in Non-Bank originators. Once the regulations monitored them with their tight margins and practices most closed down. Very few exist today and generally 1-5 people shops.
1. In a downturn, brokers simply work in other industries until the market is good again.
2. No regard for Sustainable Growth, does not apply

In the three types above, you will find one of three types of organizational structure below. Each have their own relevance to employees who work for them. Every employee should know what type of company they work for.

LLC - (Limited Liability Corporation) this structure is easy to form and is governed by an operating agreement that consists of a few members that draw up how they split up the proceeds of the company. There is no employee equity and the company only has a finite life. If a member dies or is purchased the LLC in its current form dies.  The Members tend to diversify into other ventures such as Banks, Fast Food "Zaxbys" etc., just in case their mortgage operation fails or has to dissolve.  Mortgage employees want their owners to focus on their livelihood and what pays their checks not a back up plan that they are not a part of.

Common Stock Corporation - this is a company owned by the shareholders and has perpetual life. This is what is traded on stock exchanges and your 401K and mutual funds are primarily invested in.  Employees can own this type of company and benefit from the growth they create.  Employee / Shareholders can ensure their leadership only focuses on their company.

Sole Proprietor - These are rare and unless you are a kamikaze, not a good idea. Owner has unlimited liability and does not share anything with employees.

100% Our Industry is made up of the above three types and the above three organizational structures. You pick the combination and it exists.

For those that have studied Finance, Accounting, Production Management, Organizational Management, and Psychology; the issues with each will pop out. Based on the above disciplines and business theory, the probable winning combination for the MLO and Employee is the Common Stock Corporation during a recovery or recession.

Companies that operate as a Common Stock Corporation with no debt, diverse client base, diverse geographic area, focusing on client need, Great Service, and sustainable fair pricing will prevail in recessions and recoveries. They may not be on TV as much, build cities, or venture outside their core business, but, they can provide an equitable rewarding career for the 98% of the employees that do the work day in and day out.

The primary factor that takes out the volume at any cost Momentum Players is ignoring sustainable growth rates which ultimately strips cash from the balance sheet.  As a result, LLC structures secure what they can and shut down.  2 + 2 has to equal 4 and those pricing like 2 + 2 = 10 will eventually pay the difference from their cash or liquidated assets.  We all sell the same commodity.

The sustainable growth rate (SGR) is the maximum growth rate a company can achieve consistent with the firm`s established growth plan and financial policy. Basically, it is calculated as:

SGR = (pm*(1-d)*(1+L)) / (T-(pm*(1-d)*(1+L)))

▪ pm is existing profit margin ▪ d is the owner payout ratio ▪ L is total debt to equity ratio ▪ T is ratio of total assets to sales

Size is not a Safe Haven when it comes to Sustainable Growth.  SGR efficiently ends big or small companies when not managed.  In order to grow faster, a company has to invest more Equity / Partner capital, increase its financial leverage, or increase the target profit margin.  Higher margins sustain steeper growth rates.  The key is to know when you cross the point of diminishing returns.  This is what many current articles in mortgage publications are referencing when the talk about tighter margins per deal and reduced profitability.  This is the "Be Ready" in the title.

SGR can remain in check if the company's business plans is prudent. Although more sales are good, you have to ensure you do not grow beyond your base or strip your balance sheet.

At the end of the day, doing the right thing for your family, clients, partners, and your employees is the measure of your impact on this world.

I hope everyone looks under the hood before buying the next shiny new car or company. Be sure it can get you further than a few blocks before you need another new car.

https://mymortgage.southeastmortgage.com/app/signup/partner/4TG89LNU

GooRu "The future of Onsite Approvals"

GooRu Kiosk

Southeast Mortgage's Innovative GooRu Kiosks provide our Mortgage Loan Officers and Partners 24 hours - 7 days a week on-site approvals.

Having this  tool in your office provides approvals for those buyers who are ready now.  GooRu runs AUS, Verifies Bank Accounts, Employment, all on site with no more waiting for an underwriter in another state.  Approvals on site based on complete verified information.  Partners can finally take the financing stress out of selling homes.

Click the video below to see how GooRu sells more homes.

www.southeastmortgage.com
770-279-0222

Professional Loyalty vs. Friendship

Professional Loyalty is built around the common interest of two people putting both agendas in a strategic thought process.  Professional Loyalty can encompass friendship but must bridge the friend / fiduciary barrier.  All employees deserve a fiduciary.

Friendship is an emotional attachment that provides social support and in some cases a friendship of convenience.  Knowing if its a friend or acquaintance is critical when using shared information in career decisions.  Acquaintances tend to mold the information conveyed to support their best interest.  Friends convey the pros and cons without malice.

In business, the definitions can get confused usually leaving the employee left hanging after a merger, bankruptcy, or change of control.  History has shown example after example of great "friends" being left with no financial support and a broken bridge to their retirement.  The reality was Professional Loyalty was misplaced and no fiduciary was in place.

When I select a doctor, I want the best in that medical specialty with the best education possible because my health is important to me.  In my career as a banker, I always looked for the best Mentor first and then looked at the company.  Mentors teach us what we do not know and help us build a successful career for a life time.

My Mentors:  Roger White, First Atlanta Bank, - Roseanne Duran, Barnett Bank - Rick Manley, Barnett Bank, Pat Arnold, First Union Bank, and Tom Pacer, First Union Bank.  Each in their own respect, helped me see the most effective methods and principles needed to create a first class organization that can navigate markets and economic cycles successfully.

Hopefully you can list who your mentors are and who helped you build which skill set that propelled your career.  If not, today is a new day “Carpe Diem”.

www.southeastmortgage.com 

1993 - 2018 "25 Years"

With 2018, Southeast Mortgage of Georgia, Inc. celebrates its 25^th anniversary serving the Trust of its Clients and Referral Partners.

From 2 people to 200+, Southeast Mortgage of Georgia, Inc. has grown one client at a time and one certification at a time.  Today we are the largest Non-Bank Mortgage Lender in Georgia and are proudly growing our footprint in Florida, South Carolina, Alabama, North Carolina, and Mississippi. 

Southeast Mortgage of Georgia, Inc., SEM, is a Georgia Corporation owned by 32 Shareholders.  Our Shareholders along with our Fantastic Employees have grown SEM to the strong dynamic company it is today.

2018 Southeast Mortgage Officers

“I could not be more proud of what our team has accomplished and their loyalty to a common belief.  Their belief and dedication has expanded our Shareholder list with future Shareholders making a difference every day.  We have created a safe performance based workplace that provides a path to retirement, ownership, and financial security for our whole Team.  Hard to believe its been 25 years!  I have enjoyed every day of it. 

With GooRu and the innovative partner initiatives being launched, Southeast Mortgage has evolved to the Future for client experience and ability to drive buyers to our Referral Partner's projects.  I am simply in awe of our amazingly talented Team” 

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

www.southeastmortgage.com 

GooRu Video Preview "The Future of Origination"

GooRu is a Smart, Easy, and Efficient automation assistant created by Southeast Mortgage for our MLOs, Realtors, Builders, and home buyers.

Realtors, Builders, MLOs, and home buyers now have an Easy Fast way to get a Mortgage or provide a Mortgage with no uncertainty and updates all the way to a fast closing

We just changed the game.  Experience the Future.

www.southeastmortgage.com

770-279-0222

GooRu is here...

It has been 2 years in process to design and integrate the Mortgage Origination Game Changer we call GooRu.  One more roll out to our team and their families and its live for our Team, Partners, and Client's to enjoy!

Cal Haupt, Chairman & CEO

Loan Originators and Home Buyers will see what easy really means and our Clients, MLOs, and Partners will all be informed every step of the way.

If you buy your airline tickets online or book hotels online GooRu is your channel with the expertise of a Licensed Mortgage Originator to provide the trusted competent advice you need.

The future is now!

www.southeastmortgage.com

770-279-0222