Interview with a Winner:
Michael Gilmore
Speaks Out on Taking Advantage of Boundless Opportunities
Michael Gilmore, The Mortgage Professionals
2001 Volume: $9 million +
Average Loan Amount: $128,000
Software: Calyx Point, Mortgage Coach, Quick Qualifier, and ACT
Boni Lonnsburry: What is your referral source mix?
Michael Gilmore: About 35-40% Realtor, 25% previous customers, 10% financial planners, CPAs and so forth, and the rest is just stuff linked into it.
Boni: How did you get started in the mortgage business?
Michael: I used to invest in discounted trust deeds as a private investor. I was a managing general partner of a small company that I had formed to invest in distressed real estate, foreclosed properties, fixer-uppers and such things. That was my introduction into real estate and real estate finance. Ultimately, I moved to my current location here in Fresno. I was married and had a family and I wanted to get into something a little bit more mainstream, so I became a loan officer.
Boni: Were you an immediate success?
Michael: No. I went to work initially at a fairly large real estate brokerage company that had an in-house mortgage broker. I was thrown into the fire pretty quickly. I had to learn fast. But I knew a fair amount already.
I moved here to the central valley from the bay area, and I really didn't know a whole heck of a lot about FHA financing because it is not much of an FHA market along the coast of California. Here in the central valley, they do a considerable amount of FHA financing. I had to take a crash course in government financing. That was my biggest challenge and struggle initially, just getting familiar with FHA financing after having come out of a primarily refinance market.
It was a little tough at first, but there is nothing like trial by fire. I was successful in getting the information I needed, and in becoming versatile with more product knowledge. I had to earn the respect of the Realtors in the office and I was ultimately able to do it because of the way I do business. My business is founded on timely and accurate communication. There was initially a lot of "Gee. I don't know. I'll have to get right back with you on that", as opposed to just trying to wing it at the risk of saying something that might have been misleading or inaccurate.
It was good because it gave me an opportunity to follow up with people and show that I was serious about following up with them and serious about making sure that they had the right information. That was back in the early 90's and it allowed me to establish a lot of very loyal relationships. I still have many of them today.
Boni: What mistake do you see rookie loan officers make?
Michael: I think rookies make several mistakes:
1. The number one mistake that I see young loan officers make is trying to tell clients what they want to hear rather than what they need to hear. When someone is just getting into this business, he or she is eager to please, anxious to have an opportunity, and doesn't want to blow it. So they'll tell people what they think they want to hear in order to keep them happy. Ultimately, they are just setting themselves up for problems down the road.
As a managing producer, I wear different hats and have my plate full juggling things. However, when I am recruiting, hiring, and trying to train people, I always try to impress upon them that they need to be accurate, honest, and timely in their communication and tell people what they need to hear rather than what they want to hear because ultimately that is just putting a band-aid on the problem. It is not solving the problem if you are not communicating the facts in a timely manner.
I've seen many loan officers make this mistake.
1. Newer officers are overeager to please.
2. They don't spend enough time gaining product knowledge, which is really important.
3. I don't see a lot of the newer loan officers embracing databasing. I got started in this business in the early 90's, but it wasn't until '96 or '97 that I finally woke up and said "Gosh, I need a database". By then, I had so much information from previous years that it was difficult to get caught up. Who knows how much opportunity I lost in the meantime?
The refinance market of '98 came around and I was just getting the hang of databases. Had I been proficient in that area, there would have been much easier for me to take advantage of the window of opportunity that was presented.
Boni: Do you think veteran loan officers make different mistakes than rookies?
Michael: Ironically, not necessarily. I think, human nature being what it is, people just tend to repeat the same mistakes. I think that a lot of loan officers, even the more experienced ones, tend to make some of the same mistakes that they did when they were a rookie.
A couple of things I see happening, especially in a market like we have now, is a failure to take care of the long term relationships. Our office is only doing 25-30% of our current volume as refinance. It could be as high as 50-60%, like many other offices. One might argue that we are losing some revenue opportunities by not taking full advantage of the window of opportunity on the refinances. On the other hand, we are looking at the inevitable time when rates will go back up and refinances will drop off.
I have always preached to my loan officers that they don't want to ignore their long-term bread and butter business. It is the source of their referrals, financial planners, accountants, and Realtors. In fact, we are looking at the refinance market as an opportunity to increase our purchase market share by going out and targeting Realtors who are now saying "Hey, I haven't heard from my loan officers. They used to be in here twice a week and now I see them once every other week because they are spending so much time on the refinance market."
These officers are ignoring their long-term strategic business partners. We are actually going out, taking advantage, and exploiting the opportunity to talk with Realtors who haven't seen the loan officers they usually deal with.
We want to let them know that our focus is on the purchase business. Long-term, if we are doing 65% purchase business in a refinance market, when rates do go up, we will be insulated from it.
Another mistake that I see a lot of seasoned loan officers make is that, as they get more successful and busier, they don't want to invest in themselves. They get to a certain plateau of volume and then they can't get to the next level. They don't understand or can't see the benefit of investing in their business, whether that means hiring an assistant or changing their personal marketing plan.
I've seen a lot of experienced loan officers who just don't have a CEO mentality. They view it as a job rather than their own self-employed business. I've told loan officers "Hey, if you want a raise, it is within your ability to create one."
In our industry, we have a progressive commission split, where the greater your production, the higher the percentage commission you make. I often put this question to the loan officers, "You are proposing that you do the same amount of volume but make more money? How about doing more volume to make more money? Not only will you make more money from the greater volume, but you will also be making a bigger percentage split. If you just don't have the time to do more volume, and you are already relatively successful, why not invest in your business? Why not hire your own assistant?"
I have seen a lot of loan officers who just don't grasp that they need to reinvest in their business. I think it's pretty common. It really takes an entrepreneurial mind set to take your business to the next level. I tell everybody "You are your own business."
The company is here to support them, to provide an environment and tools, but at the end of the day, it is all up to them to get out there and make the decisions that need to be made so that they continue to grow and develop their business.
Boni: If you had a son or daughter entering this business, what advice would you give them?
Michael: I have three sons and a daughter. I hope one of them will follow in my footsteps some day. I would like to hand this business off to them. My oldest is 13, and I do have him come in to the office and help me out a little bit. He hasn't really gotten too excited about it yet.
My advice to my children would be that this is a wonderful business; I don't know too many other businesses where you can make a wonderful living helping people to achieve their dreams. It is very much a relational business, a people business. You need to crunch some numbers and have some technical product knowledge, but ultimately, it is very much a people business.
The sky is the limit in terms of what you can earn. You are the master of your time, your destiny, and your income. There are boundless opportunities. I've been in this business long enough to have gone through several refinance cycles: '93, '98, and '02. I've seen rates up; I've seen rates down, and I know that there is business to be made and had regardless of what interest rates are or regardless of the economy. There are always Realtors buying homes or selling homes. There will always be needs based refinancing. There is great opportunity regardless of the market conditions.
I get the biggest thrill, quite honestly, working with first time home buyers. The loan amounts may be a little smaller, and the loans may be a little bit more difficult, but they are so emotionally invested in the process of buying their first home.
It is such a thrill and so gratifying when you close escrow and have people crying tears of joy, jumping up and down, and giggling with excitement. To know that you were a part of making that come to fruition for them, and to be acknowledged for your help and expertise, is just so gratifying. I can't think of too many other careers where you have that opportunity.
Boni: What was your most successful marketing campaign?
Michael: I don't do a lot of advertising, because I am such a believer in personal and relational selling. Given a budget of $200, rather than buying an image ad for myself, I'd take three Realtors and a couple financial planners to lunch and spend an hour of quality time, eyeball-to-eyeball, with each of them.
I do use the media for publicity, which doesn't cost me anything. I've gotten to know a number of beat writers for the local newspapers. I sometimes write editorials for the local editorial column.
I think this has enabled me to acquire recognition in the community as an expert and a knowledgeable and credible person. People often times take paid advertisements as what they are. But, if an article is written by an independent, objective journalist, I think that has a lot more credibility with consumers.
I started out with one of the local real estate trade publications, Real Estate Showcase. I had done some paid advertising without a lot of success. But I was a good customer of theirs and they approached me about writing some articles to fill space. I wrote a series of different articles that they continue to publish on a rotational basis. I got a lot of acknowledgement for doing it. People would tell me that they read them, and I realized that it wasn't costing me a dime.
I got a call one day from a newspaper reporter who was doing an article on some real estate or finance related topic. He interviewed me and I got a mention in the article. I befriended this reporter and got to know him, acknowledged him and thanked him. I let him know that I was available whenever he had a need. And I'll call him with suggestions for articles or ideas about programs that help people.
One of the interesting things about writers who are on a deadline is that they are always looking for material. They are very interested in, and open to, ideas or angles on stories. They appreciate them.
Otherwise, I do a lot of database marketing. I have a marketing coordinator who has implemented a lot of the systems and things that I have learned through people like Todd Duncan and Greg Frost. There are so many great ideas out there.
Any loan officer can sit down and read Mortgage Originator and have their head swell. They can go to In Touch Today's web site and their head will explode with all these things that can be done. But what do people do with it? They don't do anything 9 out of 10 times. You should find one or two things that you think will work well, that have worked for others, which are proven and tested, and just do them!
Boni: How do you keep in touch with your past customers?
Michael: I have a fairly sizeable database of a little over a thousand previous customers. I also have a database of strategic business partners. I keep in touch with them in different ways.
We try to treat our business like a professional practice, so we fill out an appointment card and give it to our front desk person. She records it in the appointment book. Then she calls and confirms the appointment, just to remind the potential client of what to bring and make sure that they know how to get to the office.
We've seen that just by calling to confirm the appointment the evening or day before, the incidence of fall out of our appointments has been noticeably reduced.
Once the client comes in, we do our pre-qualification. Our marketing coordinator immediately sends out a thank you card to the new client, as well as to the referral source. If we proceed to application, before it even gets to the processor, my marketing coordinator sets them up in ACT and sends out a welcome package that includes a number of pieces of information.
Then we have an "in process" marketing program for our clients who are in process. We contact them at four points during the processing of their loan application. We send out the welcome package at the beginning, then a process evaluation, then a loan approval notice. This is a little gift item and congratulations as well as information on what to expect as we approach closing. And, of course, we send out a thank you gift at closing.
Once the loan closes, they become part of our "client for life" marketing program. About a month after closing, we send them another evaluation asking how we did. During all of this we are asking for referrals. We send out a quarterly newsletter, birthday cards, and an annual mortgage review notice on their one year anniversary. We also use Rate Watch, one of the nicest programs of Mortgage Coach. I find it very effective and simple to use. I send those out about twice a year. I started using Mortgage Coach about 6 months ago, and am trying to get all my data into it to make it more effective.
Starting the second year after the closing, we still continue with the newsletter, birthday card and mortgage review. We try to make sure that we are keeping ourselves in front of our clients and bringing value to them. We want to make sure that they are getting something that won't just get thrown in the garbage.
We are very big on databases. Our marketing coordinator is really taking on the task of all the marketing efforts. The loan officers get too busy in the day-to-day of chasing down commissions, putting out fires, and working in their business rather than on their business.
Boni: How long did it take you to set up these systems?
Michael: We are still in the process. When I hired our marketing coordinator, I had a huge list of all the things we wanted to do. We started out slow and simple with four projects that we wanted to get off the ground.
When those were going, we layered in more. Over the last 5 or 6 months, we've gotten the majority of it in place. Prior to hiring the marketing coordinator, the marketing situation was really hit-and-miss. I've found, in this business, that clients can work with the same company numerous times and have very different experiences. One might say "I worked with Bob over there and it was the best experience I've ever had with a mortgage company." The next person says "I worked with Betty and it was okay." Then you talk to a third customer who says "It was the worst nightmare I've ever had in my life."
Consistency is lacking in our industry. This is because, in most companies, someone is hired, given a desk and told to go out and get loans. Some loan officers market well, others don't market well, and others don't market at all.
There is a huge variety of things going on out there and I felt, when I started this company, we were going to need to have systems. If someone is going to come to work here, they are going to do things a certain way so that we will be able to bring to the market a consistency and stability in how we do business. This way, an expectation can be created; a standard can be set that we can consistently meet.
I don't want my loan officers left to their own devices to do marketing because, like I said, some will do it and others won't. I think that anything that is done more that once needs a system. Marketing is no different.
I built my company around quality rather than quantity. The days of managing large, corporate owned and debt-laden branches burned me out. I finally decided, for a large part through the help of going to the (Todd Duncan) Mastery Events over the past couple of years, that I need to do more with less. I need to improve quality and not be so concerned with quantity.
I've built a wonderful little practice here around an incredible staff and a small group of very seasoned, experienced loan officers. We are all very like-minded. We all have a similar vision of how we want to conduct our business. We are implementing systems in all areas, including marketing, so that we have the consistency and the standards that we want to consistently meet. It has been a lot of fun putting that together. It has been a lot of work, but an incredible amount of fun, and the results have been tremendous.
Boni: Who or what would you say has been the biggest contributor to your success?
Michael: I would have to give a fair amount of credit to my wife. She puts up with me and this business, the pagers and the cell phones at all days and times. With four kids, I couldn't do what I do without her support and love.
Technically, I give a lot of credit to Todd Duncan. I was first introduced to Todd a number of years ago at a management meeting with Commonwealth United Mortgage, when he came in and did a three-hour management session. I was blown away by what he had to say.
When I went to work as a manager at a different company, they very actively encouraged people to attend the Mastery Events. I went to one a few years ago and got a full dose of about three and a half days of information. It so blew me away that I literally had to come back home and take a mental hammer to my whole paradigm of how I did business. I just smashed it.
I took the next three to four months, continuing to do business obviously, but rethinking and reshaping how I did my business, why I did things the way I did, and what I should be doing. That was very challenging and very difficult. I continued to go back to Mastery. Todd, and the people he brings to the table at events like that, is excellent.
I'm also an avid fan and reader of Mortgage Originator magazine. I look forward to it every month, spending an hour one evening reading it. I'm on the website several times a month. Mike Baker is a personal friend of mine and an inspiration to me. Those are some of the sources that I think, professionally, I have found very inspiring and good for my creative process.
Boni: If you had a magic wand, what would you change about your current business?
Michael: I would try to eliminate some stress. Sometimes the more successful you are, the more stress there is. We are a small office doing a pretty decent volume, and doing more with fewer people tends to make things a bit chaotic at times. That is such a character of our business. You've got to plan ahead. If I could change our industry, I'd try to find a way to reduce the stress that goes along with it.
Boni: Is there anything else you'd like to leave other loan officers with as we close?
Michael: Have fun with what you do. Make it fun and enjoy it. It is a great industry. There are going to be days where you are harried and stressed out, those go with the territory. But stop and laugh a little. Take time to enjoy what you do. Don't get so caught up in the day-to-day rush that you burn yourself out.
Make sure you have balance in your life. As easy as it is these days to work 60 or 70 hour weeks, don't do it. Take time to step away a little bit, keep things in perspective, and that will help to make sure that this continues to be an enjoyable and fun business for you to be in.
Mortgage Professionals Website: www.mortgagepros.info
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