Interview With a Winner
Dennis Duncan
Boni Lonnsburry: How did you get started in the mortgage business Dennis?
Dennis Duncan: I wanted to get into banking when I was in college but couldn't. I had a pretty good grade average in college because I worked very hard but I didn't do that in high school - in fact I didn't "find" myself as a student until the last semester of my senior year in high school.
The economy was fairly weak when I came out of college in 1975 so I worked for a retail chain, like a Wal-Mart or Kmart. One of the people interviewing me for a banking job told me, "Your grades are so good that I don't think you could relate well with people."
I decided to take that as constructive criticism and thought I should get into sales, so I sold pharmaceuticals for a couple years. I learned sales skills.
Then when I finally got into banking I realized that bankers did very little selling anyhow. Most of the bankers back then were order takers. My first six or seven years in the business I didn't go right into mortgages, I started off as a loan interviewer instead.
Then I did real estate loans, car loans, commercial loans and construction loans for a 50 million dollar branch. I knew that was a function that would be centralized pretty quickly and I just went to them, and said, "I want to specialize and you don't have a mortgage specialist in the area. This field is so complicated you can't just throw somebody in a loan desk and have a person at each bank branch, because they're not going to get any exposure to be an expert." I said, "I want to be that expert!" It took about three years, but they finally gave me the go ahead. I was on a salary back then and I was worried because they wanted me to be on straight commission. To wean me into it, they let me keep a measly little salary, which I still have today - after 15 years I still haven't gotten a raise!
Then they gave me some basis points override and my first year in the business, well my first four years in the business as a mortgage banker, I was with a company called "Dominion Bancshares" and I was the top unit producer my first year at that company.
It was pre-computer. We used computers to process loans but not to originate. I guess I did 250 units for the first year.
Boni: Are you with the same company?
Dennis: That company was bought out and "Dominion Bank" became "First Union" in 1983. Basically, all the people in the mortgage division told First Union, "Listen, if you don't leave us alone, and let us continue to run as a separate entity, we are all going to take a hike!" Then First Union came back and said, "You have 30 days to decide where you are going."
So we put together a deal, and got a broker company from California to buy us. We stayed together for a couple of years but that company didn't have the resources to compete on the east coast so we started to scatter. Out of 14 branches, I was the 9th or 10th branch to leave. Some of my colleagues had gone to "Chemical" and were telling me good things about them so I ended up going there and then "Chemical" became "Chase," and finally "JP Morgan."
Boni: What mistakes do you see rookie loan officers make most often?
Dennis: I think a lot of companies hire people who have sales ability but they don't have the nuts and bolts knowledge of the product. I've always felt that was the most important thing. I think originating takes a lot of analytical skills. When I approach a case for instance, I think, "Okay I want to do the case this way because it's the preferred way and if that doesn't work I already have a plan B and plan C in mind."
A lot of loan officers go into it but don't have the in-depth product knowledge they need to succeed. I just had a processor transfer from my office to another branch and she told me, "These loan officers are coming to me and asking me what to do! I was the one who would always come and say 'this is what has happened on this loan, what are you going to do to fix it?' Now the loan officers are expecting me to fix it! And they are the ones being paid to produce."
So I think product knowledge is essential. That, combined with the ability to break a loan down, figure out how to go about making it work, how to get somebody qualified for a higher price and finally, what other people are looking at. It was important when I got into business and I think it still is. Now however, the person who can combine that skill with technology is ahead of the rest.
The technology is going to make it possible for a lot of people to become loan officers but there is not going to be a middle of the road loan officer. There are going to be a lot of loan officers with low volume and then there are going to be the loan officers who grasp the product knowledge, sales skills and the technology. Those people are going to become what I would call "mega-producers."
Boni: When you look at more seasoned loan officers compared to new ones, do they seem to make the same mistakes in your point of view?
Dennis: Not really. I think a lot of the older ones are better versed in product knowledge. I have a segment of the older loan officers that really don't grasp the new technology and I have a lot of people that won't have anything to do with a laptop. They will take an application the "old fashioned" way and then give it to someone else to input it. I like having the ability to place an application in the computer because it allows me to break down multiple options, to try something different and if that doesn't work quickly reload it a different way and try yet another approach.
Boni: Do you set aside time every week to go and learn about the different products? How do you approach gaining that knowledge?
Dennis: I try to filter everything I am looking at instead of detailing everything. I learn from other people just by talking with them. I actually learned to do loans in this business over the telephone. The first loan I ever processed and sold in the secondary market, I had somebody in another bank branch, 20 miles away, that I would call once a day, and ask, "Here is what happened on this loan up until today so what happens next?" I kind of jumped in and learned by doing. I use slow periods to go back and just read manuals and look for new ideas.
Boni: If you had a son or daughter entering this business, what advice would you give them?
Dennis: Have a lot of dedication. Somebody once asked my son, "Do you want to do what your dad does when you grow up?" My son was 7 or 8 at the time and answered, "No I don't want to work that hard."
You are going to have to be persistent and not soft-skinned. You are going to be knocked on your back or your face more than once. You just have to pick yourself up and go on because there are so many more loan officers out there and so many more Realtors.
I think it is a lot more cutthroat than it used to be. The first true mortgage banker of any kind in the market was a lady - Mary - who I could call up and she would explain things to me. I don't think you would see that going on from a competitor in your market these days.
Boni: What would you say your most successful marketing campaign has been?
Dennis: I would say the technique called "People Farming." Every time I have a new customer I probe them for prospects and I subtly suggest that they refer people to me. I have had people with whom I worked on a pre-qualified basis and before they actually applied for a loan they've referred 3 people to me!
As soon as I get the case in I thank them for coming in, and if somebody else referred them I thank the referral source. After they process and close they get a customer service survey - I have done this not only with "Chase" but "Dominion" as well. We send out a customer service survey and one of the questions on the survey is, "Would you recommend the loan officer to your friends and family?"
If they write "yes" they get a letter saying, "Thank you for agreeing to recommend me, here are some cards and I appreciate it." Then I try and stay in touch with them after the closing.
I will go back and sort loans - I can do this chronologically in Lotus, and figure out people that have over an 80 percent loan and probably have PMI. After 3 or 4 years I've been known to send them all a letter and say, "Your initial loan was x percent and you need to look at getting out of PMI." So it is really customer service after they get the loan.
Some loan officers use this thing called "Mortgage Loan Officer For Life" concept. They go back and offer to do a mortgage loan checkup to look at the client's situation to see how their current mortgage or a new mortgage could play a role in their finances.
Boni: Do you ask for referrals along the way?
Dennis: I look at where they are working and start probing around, "Do you know anybody there?" The way I look at it, I base my business on what kind of job I do and I'm not afraid to let people know.
I had a Realtor who was trying to influence a customer to use their lender of choice. The customer got on the phone with me and said, "I am torn between you and the Realtor's lender." I asked, "Who referred you to me?" He said, "A coworker." I told him, "A Realtor works for the seller, and your friend, your colleague is someone you work with every day. He knows you and has the utmost respect for you and he is telling you to go here. So which one are you going to pick?" Price wasn't an issue. We closed the loan. I think that referral relationship has a lot of power.
Boni: Do you contact your past customers on a monthly basis for instance?
Dennis: One of the things I do is I take email addresses when they come in. I will do a mass mailing saying, "Hey, the market looks like it is getting ready to turn and we are going to see some massive decreases in rates. You need to check out your current loan, and see what your rate is." I go by those interest rates in my database and if that the person has a 6 percent rate and rates are 61/2 they don't need to be bothered.
I don't like to load them up with mailings. I am not like a "Capital One" credit card company, where I must be getting a "Capital One" credit card offer 2 or 3 times a week! When I get in touch with them, I want to have something that is valuable to offer them.
That was a rule at work when I sold pharmaceuticals. The best pharmaceutical salesmen were the ones who gave the doctor things of value - like information that he could use in his practice.
Boni: Who or what was the biggest contributor to your success?
Dennis: I would say two people (not in the business) who took me under their wings when I was growing up. One was in high school from this organization, that was kind of like Junior Masons . The "Chapter Dad" kind of took me in and nurtured me. He motivated me and encouraged me. I got a lot from him that I never got from my own father. It was kind of ironic because this guy had 8 kids of his own! I think he basically got me interested in trying to make something out of myself.
Later in high school and in college, the pharmacist that I worked for was pretty much self-made. He came from a very poor family in Southern West Virginia, and worked his way through West Virginia University of Pharmaceuticals. I think he taught me what a strong work ethic would do. You find something you're good at, apply yourself and work extremely hard, then you can make anything happen!
In this business it's been a guy by the name of Larry Hamilton who is the head of retail lending with South Crest Bank. He was head of a mortgage corporation until a few years ago. He has never produced a loan in his life but he knows secondary mortgage extremely well. And he thinks like a producer!
He is somebody that I really like to talk to when I am frustrated because I don't like trends I see happening sometimes in the industry. He kind of puts things in perspective for me.
Boni: Dennis, if you had a magic wand, what would you change about your current business?
Dennis: I want to automate more of my business so that I have more time off. I have a web site that Chase is on the verge of enhancing. But some customers don't like to use the web site.
This is something I am doing on my own. I am trying to automate the data collection process from customers. There are a lot of times when loan officers pre-qualify people and get all of their information but that borrower may be calling 5 or 6 lenders. It is like playing the lottery, your chances are one in six.
Everything is going to be dropped right into my "Loan Soft" software. If somebody doesn't want to use the Internet then basically I am close to having software in some type of product called "Omni Form" or maybe in "Adobe." But it is going to be in a file where customers can input their information.
In other words I would have a secure file that I would have on a floppy disc and I would hand those out like business cards to my customers or Realtors. Then the Realtor can say, "Oh, I want you to be pre-qualified, fill the information out on this disc, and then give it to Dennis Duncan."
It will be something they can open on their computer, fill in the information, save it and then get it to me. All I have to do is extract it and put it into my "Loan Soft" software.
If you call and interview somebody it takes 45 minutes and if you could just get all the data in the computer it would only take 15 or 20 minutes. The other thing I like about this is being able to automate the data entry part of the process. Right now I can only interview one customer at a time but if I have those discs out there and I've got the website out there then I can do 5 at once
When I'm with a client I don't like to be interrupted and I don't like my train of thought to be broken. Now I can say, "Go to www.dennisduncan.com" and click on the pre-qualifying icon, download your data, and I will call you back with the information." That is what the receptionist is trained to tell them anyway. That way I can actually get the application started without even directly talking to them.
Boni: You mentioned something about the loan officer being a franchisee?
Dennis: Yes, that is one thing that I never really realized I did, but my friend Larry Hamilton made that comment. He said, "The big difference in what I do and what a lot of other loan officers do is I look at this mortgage office that I run for Chase and I realize I am a franchisee. I own the Chase franchise in Black Spruce Virginia - Southwest Virginia. Even though, no, I don't get a 1099 and I don't get that much of the profit I still view it as my franchise to run. Yes, Chase puts a lot of restrictions on it - I think any company would. But, what I do with that franchise, once Chase gives it to me, is in large part up to me. Even though I like being with a big strong company I still look at it as though I am part owner, I take ownership in my branch and in my production, and in my market."
A lot of loan officers sit around, wanting to know OK, why can't you do this for me? A lot of the things that I have done technology wise, I didn't wait for somebody to lay it on the table for me.
Boni: What are your goals now, Dennis?
Dennis: I would like to eventually get out of production. I really would like to get involved in sales training or sales automation and try and develop some of the ideas, and do things that would help other loan officers be more productive. There are a lot of good loan officers out there! The difference with me is that I am able to carry the volume that I do because of the technology I use.
|
