Interview with a Winner:
Scott Cummings
Cummings Financial, Albuquerque, New Mexico
2005 Origination Volume: $40 million, 250 loans
Average Loan Amount: $180,000
Software: Calyx Point, ACT and Mortgage Coach
Referral Source Mix:Clients for life (past clients) and referrals 50%, Realtor 30%, Home Builders 10%, CPA/Financial Planner 10%
In Touch Today : How did you get started in the mortgage business?
Scott Cummings: My step father became a licensed real estate agent. Over a period of time he started buying several small real estate companies. I became a licensed Realtor after I graduated from high school. We also had a home building company and a property management company - small, family-owned businesses. My step father decided to go back to school and get his MBA and law degree, so he sold the businesses. I transitioned from real estate into financing at that time. I started in the mortgage business in 1983.
In Touch Today: Were you an immediate success in the mortgage business?
Scott Cummings: When I started in the business, no one would hire me because I was only in my early 20’s and I didn’t have any real financial experience. I ended up working for a small savings and loan. Within six months I was doing a vast majority of the business in the community that I lived in. I moved to Albuquerque and started working at a larger savings and loan. I became very successful, originating up to 500 loans a year. Later in my career, I was the Regional Vice President at one of the largest mortgage banking companies in America and oversaw branches in the southwest.
In 1994, the market started contracting and consolidating and I resumed management of the Albuquerque branch. In 1998, I co-founded the “Strategic Mortgage Alliance,” a group of top producing owner/originators from around the country. The group was focused on bringing together other like-minded top producers in the business to share ideas and help each other improve their businesses. As a result of my participation in the group, I decided to start my own company. So in 2000, I bought a commercial building and started Cummings Financial with my wife.
Now I am the President and CEO. I act as the mortgage planner for the company as well. My role is to educate and empower clients to make informed decisions about their mortgages and money. My wife, Lisa Cummings, is the CFO/COO of the company. She oversees operations and investor relations. She also acts as an originator and meets with a variety of clients. Nancy Zink is our transaction coordinator. She interacts with our clients on a daily basis, processes their loan request, draws closing docs and handles the pre-closing calls and fundings. My executive assistant, Denise Lucero, has been with me for some time. She acts as our Client Liaison. She takes the loan applications, requests documents, manages tasks, handles my calendar and e-mails, coordinates seminar dates and assists with marketing. We have all worked together for a long time. We are very close and everyone does a great job.
I’m a certified mortgage planning specialist. Our company operates very similar to the way a financial planning company operates. I create a plan to help the client integrate the mortgage they select into their overall long and short term financial goals and objectives in order to enhance their net worth, improve their cash flow and minimize taxes. This requires a different conversation about money and a different way of looking at their mortgage within a deeper, broader respect to their financial objectives.
In Touch Today: What mistakes have you seen rookie loan officers make?
Scott: The biggest mistake new loan officers make is to enter the business without a plan or strategy. Many mortgage companies just hand their new recruits a business card, a rate sheet and a HP calculator – then send them out to open houses in search of business. In the last few years, these loan officers may have actually found business, especially through the refinance market. But without a plan, their business is controlled by the market.
The great thing about being a commissioned loan officer is the freedom. We have the freedom to do things outside of an eight-to-five environment. But that freedom can also be your downfall if you aren’t committed to creating a compelling vision and plan for your business.
The most successful people in the business have a compelling vision that they can work to achieve. The most successful people are also those who implement their visions. They create a plan and take action. New loan officers need to focus on what they can do to ensure their success. The market we’re in today is a much different market than any of the LOs have been in the last three to five years. Housing markets are contracting. Business is slowing down. The refinances have gone away. Now, more than ever, you need a plan.
In Touch Today: What mistakes do you think veteran loan officers make?
Scott: Rookie loan officers are filled with unlimited possibilities, unlimited ideas and unlimited energy. Most are totally enthusiastic about their new opportunity, and they go forth to conquer the world with no measurement against the past. You will never hear a rookie say “the good old days” or “I remember when” or “haven’t things changed?” The danger for the veteran producer is that they often start conversations with statements like “I’ve already tried that” or “I know that won’t work.” Their minds are full of limiting road blocks which limit their success. The experienced loan officer must also be committed to creating new possibilities and taking action in their business as well.
In Touch Today: What differentiates you from the average loan officer?
Scott: We have a business plan that we’ve committed to in writing, and we track all of our numbers. My assistant also tracks all incoming phone calls and the sources of all leads. We hold a monthly business plan review meeting to go over how many leads we received, what business pillars were represented, how many pre-qualifications we did, how many loan applications were completed, and how many loans were funded.
On average over 90% of the clients I speak with use our company. This is much higher than the average loan officer because, we are having a different conversation about money with our clients. We aren’t talking solely about rates and fees, but also about the need for the consumer to work with someone who is educated beyond a rate sheet, someone who really understands money, financial implications, taxes, and many other aspects of someone’s financial life.
We ask them if they’ve considered the impact their mortgage will have on their overall financial plan, their ability to save, to plan for retirement, to fund their children’s educations and other in-depth financial questions. So within the first couple of minutes of meeting us, whether by phone or in person, their perspective has begun to shift from getting a mortgage to planning for their future. This is why so many clients select our company.
We are also committed to providing our clients exceptional customer service. From the initial pre-qualification to funding, the client should have an exceptional customer service experience. Back in the 90’s, I decided to create a “Raving Fan” system which would provide every client with the same great experience regardless of how busy we were at the time. We started looking for the touch points and ways to impact the client in a special way each time we contacted them. We send cards and handwritten notes during the processing of the transaction to the client to keep them informed and show our appreciation. We get our greeting cards from In Touch Today.
One of the most powerful and impactful things that we do is send really nice gift baskets during the processing of the mortgage to our borrowers. We send it to their place of employment because that’s the easiest place to deliver during the day. It also creates a wonderful opportunity for referrals when their co-workers see their gift basket and ask who sent it to them. The best time to ask for referrals is during the process, not after the process. That’s when it’s on people’s minds.
Our flawless service also differentiates us in the marketplace. My staff does an incredible job and ensures everyone closes on time with no surprises. We use ACT and CALYX Point to make sure nothing ever falls through the cracks. Between two and four days prior to a closing, my staff gets on the phone with the client to review every detail of the closing: the rate, the terms, the payments, the cash to close and each individual closing cost item.
As a result of our commitment to flawless service and a great experience for every client I have hundreds of cards, letters and thank you notes. I usually get several thank you notes per week from our clients. I have three-ring binders overflowing with thank you notes, cards and letters from clients.
In Touch Today: What types of marketing or advertising do you use to grow your business?
Scott: We have recently started a media campaign presenting me as an expert in mortgage planning. I have been used by the media as a resource for topics related to real estate and mortgage financing. I also teach wealth creation seminars on real estate. The seminar really helps to educate and enlighten people on how they can improve their finances. We discuss second homes and vacation homes, as well as how to offset the costs of their purchase. We talk about funding children’s college education. We talk about purchasing and building their own homes. We talk about the capital gains tax exemptions. We talk about home equity and asset optimization.
These seminars have touched and impacted a great number of our clients, and have been another wonderful source of business for us.
In Touch Today: What is your best turn-key sales or marketing idea?
Scott: I always used Mortgage Coach in my interactions with my clients. I create a total cost analysis and equity repositioning analysis to show them their financial goals and objectives. The reports help me clearly convey the financial ideas and objectives we are discussing.
We also run quarterly Rate Watch Reports for all our clients and mail it to them. We show them five different options and compare them to their current mortgage payment. This has been very impactful. One mailing might generate 10 - 20 loans because everyone is in a different place financially in their lives than when they first financed their home.
My business is more about my commitment to my clients than a marketing campaign. It’s all about being trustworthy. Here’s the perfect example. In 1983 I wrote this 3X5 card which reads, “Am I more concerned with trying to get what I want? Or am I really helping other people get what they want?” It’s a simple thing, written on a 3X5 card 23 years ago. But it’s really at the core of who I am and what our business is committed to. Are we really helping other people get what they want? If we’re doing that, we don’t have to get the latest marketing gizmo or gadget. If we are committed to touching and impacting our clients lives, our clients will always share our name with their friends and families as a trusted advisor.
In Touch Today: If you had a son or a daughter entering this business, what advice would you give them?
Scott: Start with the question “Why?” and “What will it give me?” Many people get into the business because they want to make a quick buck. But at the core, our career choice should be aligned with our goals and dreams for our lives. If the mortgage business was part of their vision for their life and they enjoyed working with people, then they should be in the mortgage business.
In Touch Today: Who or what has been the biggest contributor to your success?
Scott: My faith. I’m a Christian. I go to church. I try and follow those principles in my business and in my life. I am very committed to my family. As a result of my commitment to my family, I’m working three to five hours a day, and taking ten to fourteen weeks of vacation a year, I’ve made work a part of my life – but it is not my life and it’s not who I am. Five or six years ago I wrote out a very detailed life plan and a mission statement. And I’ve stuck to them.
In Touch Today: If you had a magic wand, what do you think you would change about your current business?
Scott: I am at a great place with our business. It is a blessing. My staff is awesome. They’ve been with me for many years and we have fun and laugh and joke. Our clients have really become our friends. I love seeing our clients. After 23 years in the business people are beginning to bring in their children or grandchildren. And I’ve truly helped people. One client started in a $98,000 house and I recently helped him finance a $1.5 million house. So there’s a legacy.
I have a plan for my life and business. It is all about living a balanced and fulfilled life. If we’re intentional, we can have a great business and a great life all together simultaneously. It’s the definition of success!
In Touch Today: What are your current goals?
Scott: Our goal is to not be consumed by the changing market. The market has always been cyclical. The benefit of being in the business for a long time is seeing the ups and downs. So we’re looking for new opportunities.
One of the great opportunities that is out there now is the adjustable rate mortgage. There are over 10 million families, with over $2 trillion in adjustable rate mortgages scheduled to adjust within the next 24 months. Many of the families took on an adjustable rate mortgage because it was the only way they could afford the home they wanted – but they didn’t change their lifestyle. When I meet with clients, we talk about adjustable rate mortgages, about the savings and how to invest the savings or pay off debt so we’re improving their finances.
People are starting to get notices in the mail. “Hi, your rate was 4% and it’s going to be 6%.” With some loans it can adjust as high as 5% in the first adjustment after it has been fixed for a five year period! Home equity loans have gone up 4.25% matching the fed funds increase. This is creating an excellent opportunity to discuss refinancing options with clients across the country and say “Let’s look at how can we can change this to more appropriate financing?
In Touch Today: Is there anything you’d like to say to other originators who aspire to the kind of success you’ve created?
Scott: Success is about a plan for success. Success starts with the question, “What must I do to be successful?” Even before that you need to answer, “Who must I be to be successful.” What are your commitments to yourself and your clients?
Stay focused on your vision and not the outcome, that’s what propels people forward. We see it in stories of sports athletes and music celebrities. They didn’t lead this magical life where success just fell in their lap. They had difficulties and set backs throughout their careers, but their commitment to the vision of being successful and what that would give them is what propelled them.