Interview with a Winner:
David Baca
SunTrust Mortgage, Millersville, MD
2005 Origination Volume: $92,520,000
2005 Average Loan Amount: $358,000 (a bit over $400,000 so far 2006)
Software: Calyx Point (for origination), ACT (for customer management) and Mortgage Coach (for presentations).
Referral Source Mix:40% Realtors, 30% clients, 20% bank, 10% direct marketing and prospecting.
In Touch Today: How did you get started in the mortgage business?
David Baca: I started my career after college in the management-training program of a local bank. I stayed with this bank for five years starting with management training, then retail banking, then moving into a commercial lending role (1979 to 1984). In 1982, I started buying property. After buying several rental properties, I started to learn what mortgage banking was, what mortgage loan originators do, and I realized that it might be an interesting job to have. In August of 1984, I switched from being a commercial lender to a mortgage lender.
The retail and commercial banking experience gave me a very good background in finance and loan structure. I have an undergraduate degree in business administration and a graduate degree in finance. So I was number-oriented and financial transactions-oriented already.
In Touch Today: Were you an immediate success in the business?
David: I guess the question really is, “What is a success?” Looking back, I’d have to say that it was truly a successful transition. I was an immediate success because I really enjoyed my new field. It was also an economic success because of where I was coming from. I wasn’t making a whole lot of money where I was before. Within a year I was closing over $1 million a month which was a good standard to have hit back in 1985, considering that in 1984 rates were around 9 to 9.5 for the starting rate for an adjustable rate mortgage.
An event that turned out quite good for me was meeting a very influential Realtor in the area. He gave me a transaction that somebody else had failed to handle properly. I turned it around, got it done very quickly and he spread my name throughout his office of about 120 agents.
In Touch Today: What mistake do you frequently see rookie loan officers make?
David: I think the big problem for them is that they don’t fully understand the whole aspect of what it takes to create an ongoing business. They may have figured out how to get one loan, but I don’t think they’ve given enough credence to the idea that it takes an awful lot of different activities to develop effective marketing, grow business development strategies, keep taking good applications, keep making sure they get through processing, keep making sure that they close, and then following up with clients and referral sources to generate new business from the good work that you did. There are a lot of balls to juggle. If you’re focused on one of those areas, and you’re not paying attention to another area, it stops doing what it’s supposed to do and it slows down your production. So I don’t think they quite realize just how hard it is to do it all, and because of that, how long it’s going to take to get consistent results.
Hopefully you can survive the mistakes you’re inevitably going to make, and you can end up coming out with enough relationships in place that you can actually grow from there.
In Touch Today: What mistake do you think veteran loan officers typically make?
David: I think the biggest one is that they forget about the basics. They forget about the simple steps that they took in the beginning to make themselves a success. They forget to be consistent. I think that if you surveyed originators in the industry, you’d find out that they don’t really have a marketing plan. They don’t really have a business plan. Even if they do, they sure don’t have it in writing. They really don’t think about how to take the next step to effectively grow their business to the next level and the beyond.
For example, the Realtors who were referring business to me five or ten years ago are not necessarily the Realtors who are referring business to me today. Some of them are retired. Some of them are out of the business. And some of them are in positions where they can’t send me loans anymore. So over time, had I not continued to think about how I was going to grow my business and analyzed the issues surrounding how to grow, I would have suffered from the pieces that were diminishing through no fault of my own.
In Touch Today: So you’re basically saying that you feel a lot of veterans don’t have a plan, they just work?
David: I think in the beginning they worked really hard at some very basic strategies that made them successful – then they stopped thinking about how to grow. As a result, they’ve lost some of their energy.
In Touch Today: What do you think separates you from the average loan officer?
David: I’m persistent. I work hard and I’m very systematic. I’ve learned to really enjoy the accomplishment of creating a business plan, successfully implementing action, and then seeing positive results and saying, “Wow! I really like that! I’m going to do that again!” I have several parts of my business plan that I enjoy doing, that I think are creative, that produce results, and this keeps fueling my desire to obtain more results.
In Touch Today: How do you get the kind of results you are looking for?
David: I spend a fair amount of time thinking about exactly what I want to achieve. Then I work really hard to make sure that I take action to do so. I’ve created an extensive marketing plan to consistently stay in touch with my clients and my referral sources. I have also developed a very systematic approach to my response when someone calls me.
Everything I do is very basic and very inexpensive. Immediately after I hang up with a potential client, I send them an email that says “Thank you for considering SunTrust Mortgage.” The purpose of this action is to create contact with them, thank them for considering me and let them know who they might interact with from my office. Immediately after that, I send them a card (from In Touch Today) with my business card and a magnet inside. The card reads “Thanks for taking the time to talk” on the outside. Inside it reads “I appreciate you taking time out of your busy day to speak with me today. I look forward to the possibility of working with you.” (Editor's Note: To view this greeting card, click here). If they’ve asked me for a pre-approval letter, I make sure that we have it to them within four business hours if not sooner, and make sure they have an application package by the next business day.
Throughout the loan process, I set up my “thank you” email as a signature in Microsoft Outlook. All I have to do is type in the email address and subject line, then click on insert and choose the signature that fills in the verbiage that I want. I use about two dozen of these pre-fab email signatures. They’re a quick way to stay in contact with the client while the loan is in process and to communicate with all parties in the transaction.
In Touch Today: What are your current goals?
David: In 2001, I sat down and said, “I need a long term goal.” I determined that I wanted to grow my closed dollar volume 20% a year, every year, based off what I did in 1998. In 1998 I did $33 million, so I calculated that successfully attaining this goal would get me to closed volume of $300,000,000 by 2010. Every year I know what I’m aiming for, and I have to consider marketing plans, action steps and staffing needs that will allow me to pursue that goal. In the planning process I know how much I want from each category and each referral source.
This overall goal is something worthwhile for which to strive to achieve. It is a bold and difficult goal. Fully achieving this goal would be perfection. I have not been able to reach the desired level in 2005 and now 2006. This provides the opportunity to analyze performance and determine what needs to be improved. I am better for the endeavor of having a worthwhile goal.
The long term goal is there as a framework and each year (and each month) I can work with it and relate it to the market and the environment. Intermittent goals may have to change based upon performance. In 2005, for example, I changed my goal to just above $90 million even though the long term goal was $118 million. In 2004, I had done $74 million so it was a reasonable jump to figure out how to get there even though these do not keep pace with the long term goal.
For all of 2005 I focused a little more intently on the target Realtors that I wanted to go after. I made sure that my marketing to my closed-loan clients was effective and consistent, and I picked up some products that were unique or effective. I increased the marketing I did surrounding those products. One of the products that I picked up was a bridge loan. My marketing was kind of out in front of the market demand for the product, so it was well timed. Bridge loans made up about $10 million worth of business for me in 2005, and I hadn’t done those $10 million in bridge loans the year before.
The key was taking on a unique product that was service-oriented. This gives you something to talk about in your marketing. For example, take construction loans. A lot of companies offer construction loans, so while our construction loan is efficient and competitive, it’s not necessarily unique. I was aiming for something that was unique, attention grabbing, and at the same time solution oriented. I thought through the marketing I was doing and looked at pieces that I could add which would get people’s attention.
In Touch Today: If you had a son or a daughter entering this business, what advice would you give them?
David: I would advise them that whatever they chose to do as a vocation or a career should be something that they can enjoy. Then I would advise them to learn as much about their field as they can, and to be sure to learn from others in the business as well. I’m a branch manager, and I have six originators that report to me. I have one or two who have done a great job over the last two or three years looking at my ideas, as well as others ideas from the industry, and taking advantage of them, working at them, and short-cutting the timeframe it’s taking them to be successful. In three years they’ve gone from closing $15 million to closing $30 million to $40 million in a much shorter time frame than I did.
I’d basically advise anyone entering this business to think about what you want to achieve and identify the actions you need to take to reach your goal. Focus on one or two business development strategies. Once these are mastered and producing the desired results, add the next area to be developed. Be patient, proactive and persistent. Learn from other successful originators to reduce the time needed to attain success. Learn to appreciate the value of creating relationships. Take responsibility, never offer excuses and make it happen.
In Touch Today: What was your most successful marketing campaign?
David: Marketing is really important to me because I’m not the world’s most natural sales person. I’m more technical. I’m good at figuring out loan structure but I’m not great at sales, and I’m not great at building relationships. I’m not a people person. I needed marketing to impact people with the positive things that I can achieve so they’ll be inclined to want to work with me even if I am boring.
One of my favorite marketing items is the use of a pop-up Christmas card. It’s one of those cards that pop into a three-dimensional object when you pull it out of the envelope. That’s been a huge success. Even though it is coming at a time when many cards are received, it is unique and does get their attention. The other thing that I do that’s worked out to be a success is to send out a copy of the HUD 1 at the end of the year. What I do to make it different and a little bit more interesting, is to include a candy bar that says, “Take a bite out of the IRS.”
I get the candy bars from a company called “Totally Chocolate.” The message is on the wrapper. It’s a great little piece to make a difference in something everybody else does anyway. Realtors do it; lenders do it. But not everyone sticks a candy bar in it. It goes to the borrower and the Realtors in the transaction, and then I’ll mail out a separate letter to accountants around that same time introducing myself and I’ll include the candy bar just to get their attention also.
In Touch Today: What is your best turnkey sales or marketing idea?
David: I send out Mortgage Matters (from In Touch Today) to about 130 Realtors each week (Editor's Note: To view Mortgage Matters, click here). It’s just an email, so they can chose to do what they want to do with it. They can delete it, or they can read it. But they’re seeing my name come across their e-mail every week regardless.
I also stand by my “Quality Service Commitment.” These days, you have to sell more than just loan products – you have to sell service. To be different, I put this in writing to give to prospects and referral sources (an idea from Doug Smith). The written commitment is easy to create. All you do is put in writing what you would have been doing to get a loan done anyway. You become unique by virtue of handing potential clients your commitment to service in writing. I include our commitment to service in every application package that goes out as well as in any documents sent to a Realtor.
In Touch Today: You mentioned earlier that you stay in contact with your clients by email throughout the loan process. How many emails do you send and what is the basis for each of them?
David: The first email is sent when the loan application goes into process. It explains to the applicants who they’re going to be dealing with on my team so they’ll know who is contacting them and why they are being contacted. Each email is copied to my team members, the Realtors who are involved, and the title company.
The second email goes out when the appraisal comes in. It gives information about the appraisal and advises them to work on their homeowner’s insurance
The third email is the approval letter. It explains what we’re doing at that point and how we’re working with the title company. At that time we mail the loan approval with a candy bar. It’s actually made to look like an application form.
The fourth e-mail is the settlement sheet, to make sure they’re getting the settlement sheet in their possession at least two business days before closing and that we’re having a chance to talk about it and make sure they go through the numbers before they go into settlement.
Most of our transactions take two to three weeks before they go to settlement. We can certainly close a loan much faster if we’re asked to, and some of them still schedule their settlements for longer than 30 or 45 days.
We do give them a phone call at the beginning of the process to let them know we’ll be keeping in touch and to make sure they have email. If they don’t, we’d of course call them at all four points rather than email.
One of the ways we stay in touch with clients after their settlement is through birthday cards. I made up a single-sided card and we stick it in an envelope with some birthday confetti and mail it to them. It’s super simple and it’s inexpensive. It’s easy to do and the confetti gets their attention. That’s the unique part. The part that I really love is that I’ll email or phone the Realtor who referred the client to me and remind them that this customer that they referred to me has a birthday coming up. It allows me to interact with the Realtor, get their attention, and put my name in front of them without begging for a loan today. If their marketing system isn’t complete, or it isn’t something that they’re already doing, then it’s helpful to them.
In Touch Today: What else do you do to build relationships with referral sources such as Realtors?
David: I took all the stuff that I do for each client and put it into a presentation booklet to hand out to Realtors. I include copies of the cards I send out so that they can see what we do. There are also pages in the brochure that show the marketing pieces that are going out so that they can see what I’m doing to keep my relationship with the client. This benefits the Realtor because some of the pieces actually reference their name. And then other pieces that don’t reference their name at least get the client back to me so that if they’re thinking about doing something I can remind them about the Realtor that they worked with before. It allows me to essentially offer the Realtor a system that doubles their marketing because I’m reminding those customers about the Realtor that referred them to me. In the last year, I have turned that same brochure into a PowerPoint presentation.
In Touch Today: Who has been the biggest contributor to your success?
David: My family has been incredibly supportive because it’s taken a lot of time and a lot of effort, and I have been obsessive at points. They’ve been there from the beginning and they’re still there.
I’ve been very fortunate along the way to have had some great partners. I’ve worked with my current operations manager for a long time. She has been very helpful and supportive. I’ve had good processors and analysts to work with along the way and that has also been a big part of my success.
My current regional manager, with whom I started working in 1997, is a very special person. He’s still an originator at heart, and when you’re talking about something that’s origination oriented the conversation starts at a much higher level than it would with somebody who doesn’t remember what life on the street is like.
I’ve had a ton of support. After every settlement I make sure I walk up to the processor, my operations manager and my closer and let them know that everything went well and we did a really good job. I tell them that the client was happy and they were appreciative of what we did for them. If I get a phone call from a client that says I did a great job, I’ll make sure that I send that voicemail to everybody else so that they get to hear it. Saying thank you to the people that choose you for a loan, saying thank you to the people that referred you a loan, and saying thank you to the team that helped you put that thing together has been an incredibly important part of how I’ve built my career.
In Touch Today: If you had a magic wand, what would you change about your current business?
David: I’d like to figure out how to get to a certain minimum production level and have it operate efficiently regardless of which team member is here today or not here today. So I’m trying to build in redundancies so that if I go on vacation, the loans are still going to come in. If my operations manager goes on vacation, and she is also the underwriter, then somebody else can help me put the packages together and respond just as quickly to the customer as if the normal person who does that function was there anyway.
We’ve become much better at this over the years, but it’s still not where it needs to be. I had a lot of vacation in June and July and my production numbers for July and August were down just because I wasn’t here to make it happen at the level that we wanted to make it happen. The success in it was it happened on a level that I could’ve never imagined happening anyway. My closings in July and August were still $5 and $6 million, which years ago would’ve been astounding. But really July and August now is supposed to be closer to $10 million. But because I was on vacation it dropped from that. That’s a piece of it that I want to get fixed.
In Touch Today: Is there anything else you’d like to say to other originators who aspire to the kind of success you’ve created.
David: When I get a phone call and somebody’s on the other line and says, “So and so told me to call you,” I’m just as thrilled today as I was in 1984. Actually, I wasn’t that thrilled in 1984 because I think I was a little clueless. By 1985 I kind of understood what it meant. But I still find it really exciting to meet a new customer, get a referral from a referral source, work through somebody’s mortgage and get everybody to the end goal. I still find it to be creative and enjoyable. I treat this like the sport that you loved when you were younger and could play it better. It’s a great career. It’s very rewarding and it’s quite enjoyable. You just have to think about what you want and figure out how you’re going to make it happen.