Total Cost Selling
Interview with Jim Ladd
Speaks Out on Creating a Blockbuster Origination Business
Jim Ladd, Ladd Financial Center, Westport, CT
Best Year's Volume: $113.8 million
Average Loan Amount: $425,000
Software: Contour, Act, LOP and DO.
Boni Lonnsburry: Jim, what would you say your referral source mix is?
Jim Ladd: It is primarily three-fold - past customers, realtors, and attorneys/related professionals i.e. financial planners but probably the main three would be past customer, realtors, and attorney's.
Boni: How did you get started in the mortgage business?
Jim: I was hired by HFA or Home Savings of America back in '88. I was in the office products business for almost 10 years and I was looking for something that was sales combing real estate and finance. Hence I found mortgages.
Boni: And were you an immediate success?
Jim: Yeah.
Boni: That's awesome.
Jim: That sounds kind of wrong but I found my little niche here. It went well from day one.
Boni: When you look at the businesses of rookie loan officers, what mistake do you most often see them make?
Jim: I am probably the wrong person to ask that question to because I don't think it is a business for rookies anymore. It used to be. But I think the business has changed so it's harder to be the new kid in town. To answer your question: I used to hire and train loan officers and I used to teach them on the business. Probably the biggest mistake I see is a lack of focus - being scattered from trying to do too many things.
Boni: And what mistake do you most often see veteran loan officers make?
Jim: I see them not focusing on the big picture, which is helping people buy homes. And then once they become customers, keeping that customer in the system and helping them manage their mortgage debt load. You can go after internet leads, you can go after newspaper leads, you can do some of that, I mean there are a million ways in a sense to try to get business to come your way, but I think quite frankly you should do fewer things better. It's similar to my comment on rookies, they just try to do too much and they lose focus on two or three primary pillars, primary philosophies on doing business.
Boni: If you had a son or a daughter who was entering the business right now, what advice would you give them?
Jim: Well I do have a son and a daughter who are 6 & 5. I would say to them, "Get a mentor. Find someone who can help you learn the business."
Boni: Did you have a mentor when you started?
Jim: I have had a couple different mentors as far as sales mentoring just to learn sales, marketing and customer care when I was with Xerox. But the primary mentor that I had in this business was actually the gentleman who was my loan manager for a while. I consider him a mentor. He taught me that the best originator is more than an originator - they are a processor and an underwriter and an originator all rolled into one.
Boni: What would you say was your most successful marketing campaign?
Jim: This goes back a while... I used to attend closings personally, that had good impact. When people applied with us we would send letters to them under the theme - relax, don't worry about it, go to the movies on us. Or - relax, we will take care of it, send you a blockbuster video certificate. We would send that out to the borrower, to both realtors, and to both attorneys. We do quite a bit marketing, fairly extensive marketing up front. We also do post closing survey's to make sure people are happy.
Boni: So a lot of your business is referral because of that upfront marketing?
Jim: We don't advertise. Our philosophy is - we are a referral based company and we rely on creating extremely satisfied customers once they close and we rely on them number one, coming back to us and two, referring other clients to us - co-workers, neighbors, cousins, uncles, etc. Plus for the realtors, we want to make sure the transaction goes through without any surprises, without any hitches so when that realtor refers a client to us and that customer is happy, the realtor or attorney as the referring source look good. We want everyone to look good and feel good.
Boni: And how do you keep in touch with the clients after they have closed and you have done the survey?
Jim: Primarily just letters and email.
Boni: So you get all their email addresses?
Jim: We are starting to do that now. We hadn't years ago but we are starting to get email immediately.
Boni: And do you send them value added emails or just updates on the market?
Jim: It is more just stay in touch stuff. Once a year we give them a "how are you doing" type of letter on their anniversary of the funding of their loan. Market changes. We may talk to them about opportunities to cut their cost of money. We may talk to them about programs available to them i.e. Construction financing type projections or renovation projects. We don't do birthday cards, and we don't do value added like explaining to them that stuff about accounting. We don't do that although some people do it, but we don't.
Boni: Do you send closing gifts?
Jim: No. Believe it or not we are not a big gift giver to either referring source or to customers. We are a sincere, from the heart, thank you type of a company. We let people know we appreciate their business. We thank them for their business. But to the referring sources, I think just a little simple, from the heart thank you is worth more than a box of chocolates.
Boni: What was your best turnkey sales or marketing idea that we can share with other loan officers?
Jim: Well I think just our approach. When we speak to our future customers we explain to them that they were obviously referred to us and that's our philosophy. We are a referral-based company. What that means to them is that we want them to be satisfied beyond their expectations at closing. So we set the stage. We explain to them how and why a customer chooses a company like Ladd Financial Center versus going directly to a lender or going directly to an investor. We explain to them that we are their travel agent for banks. Not only do we do the paper work but we shop the best rates and get them approved. So I think we set the stage I think quite frankly that is all variable. We get a kind of "wow" from a customer up front. We let them know we are a "better mousetrap" and will help get them the best financing we can find.
Boni: And so your loan officers just pick up this way to treat the customers and what to say?
Jim: We consider ourselves high-end boutique. We are senior loan people and we are all referral based. It's a philosophy. I have attracted the people to my company that share the same type of philosophy.
Boni: Who or what is the biggest contributor to your success?
Jim: Probably my original loan manager at Home Savings America. He taught me the business - how to package it properly and how to set expectations properly. A lot of loan reps take half an application and throw it against the wall and hope it sticks. Our philosophy at Ladd Financial is we never take a deal that we don't plan on closing and we don't "hope" it is going to be approved. We "know" it is going to be approved. If there are issues and concerns we address them up front. We solve them upfront.
You should never originate a loan that you don't know that you are going to close. Then closing just becomes an administrative event. It pays to take the time up front to get the loan, package it, underwrite it, and review the docs - so you know you have a deal. You know there is nothing anyone else that's wrong with the deal. It takes a little more time up front but then when you put it into your processing closing department and close the door, you're free to move on to another one.
Boni: And what happens if somebody has poor credit or a similar problem?
Jim: That's the first thing you do. You ask the question. In our lead sheet we have a list of questions we ask, credit is one of them. You got to look at credit based on LTV. If you know you have a high LTV, credit is got to be the first thing you ask and you got to pull credit immediately. Again getting a loan means nothing. Getting a loan that you can close means everything.
Boni: If you had a magic wand, what would you change about your business right now?
Jim: I am changing a number of things. I am personally trying to build a bigger team although I've already got a big team. I am trying to build my team so that I can focus more on keeping an eye on the company. I have a lot of functions, but I as an originator originate loans and run the business. I have added to my team to kind of divide and conquer so that I can do the things that I do best and enjoy most and have others do the other pieces that need to be done along the way. Like for example, we just made an offer to a woman today to join the team so that I can be less involved in the details of files so that I can spend more of my time prioritizing sales and marketing upfront to get more purchase business.
Boni: What do you look for in a loan officer?
Jim: I look for a senior person who has referral based philosophy, who is independent, who isn't looking for a company that's going to baby-sit them. I am looking for independent mortgage professionals. I am not looking for just anyone, quite frankly. I look for a style and a philosophy that fits with ours. In some cases they are looking for us more than we are looking for them because we prefer to be a smaller boutique.
Boni: And would you say that is your goals are at this point?
Jim: My primary goal is to revamp my team or to add to my team so that I can realign my work loads so that I can personally can spend less time working on a file by file basis and less time working period. I am trying to lessen the stress and increase vacations.
Boni: That is one thing that I have found really interesting about in talking to the top producers around the country is that they really do find time for their personal lives.
Jim: I take a lot of time off and I want to take more. The key is to building a foundation and to have the team in place to help you run it.
Boni: Is there anything else Jim that you would like to advise or tell originators that are striving to become the success that you have built in your own business?
Jim: I am lucky. I found the business. I love the business, I happen to be good at it. I am good at it because I love it. Someone once told me that if you love your work you never work a day in your life. If you are in it and you love it and you are not getting where you want to be then maybe you have to rethink your focus and your priorities a little bit. But if you are in the business and you are doing it and you don't love it well maybe you shouldn't be in the business. If you look at the business and say that the glass is half full and then maybe you are just in the wrong business or you are not focused properly. What can be better than helping people buy homes or refinance and save money, getting paid by a lender to do it, having people grateful to you and making a lot of money?
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