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

The Benefits of a Mentor Relationship - Saporta Report - Thought Leadership

The Benefits of a Mentor Relationship

Posted on June 17, 2013 by admin

At the onset of my career and in positions following that led me to be President and CEO of Southeast Mortgage, I’ve had a number of influential people in my life that mentored me and helped me develop the skills I needed to succeed. I remember each of them and still hold them in high regard.

Cal Haupt, President and CEO of Southeast Mortgage
 

The role a mentor can play in a young professional’s life is unparalleled by any knowledge that can be gained from online forums or self-help books in a bookstore. In an industry that is by nature constantly fluctuating, the mentor role becomes increasingly important to success.

A good mentor not only provides knowledge and experience, but also invests in the success of the mentee. We’ve written before about the various programs Southeast Mortgage has created to harness the mentor relationship, with our MLO Associates Program. We’ve personally experienced the benefits of a good mentor and seek to emulate those experiences in a clearly set-forth and measurable way.

Our team takes pride in paying forward the mentor experience. We assess young professionals’ strengths and weaknesses and create personalized training paths that will leverage skills and feed ambitions. However, a successful mentorship takes effort on both parts.

One has to be willing to learn from and heed the advice of the mentor in order to fully reap benefits of the relationship. To do well in the mortgage industry specifically, one has to truly invest the time it takes to understand the industry basics and take advantage of the advice from seasoned professionals that have seen the various cycles of the fluctuating industry.

To watch that young professional take advice and learn the industry quickly is incredibly rewarding as a mentor. The way of the world today means sometimes mentors see their budding young professionals make career changes, but the way a person navigates the transition can maintain that mentor relationship.

As a mentor, it is disheartening when a mentee fails to live up to his or her promise or fails to be appreciative. But despite the bad seeds that don’t flower, the success and appreciation of those that do flourish allow a mentor to continue believing in others and creating opportunity.

To build a successful business, one needs not only loyal and dedicated employees to pass on their knowledge, but an appreciation of those who provided leadership and insight that paved the way for the business’ success in the first place.

In appreciation for my various mentors throughout the years – Roger, Roseanne, Rick, Robert, Pat, Tom and David – here is the culmination of the best advice they taught me that I hope to pass on: Build a layered real skill set over many years that is diverse and deep and you will exceed your expectations for your career and ego – because it’s not how you start, it’s how you finish.

Original Writing: http://southeastmortgage.blogspot.com/2013/06/respectful-presence-mentors.html

770-279-0222
www.southeastmortgage.com