Boni Lonnsburry: How did you get started in the mortgage business?

John Bell: I was in my early 20’s and doing very poorly in the residential real estate business. My sister was a loan originator and she suggested that I enter the mortgage business. I went to work for her old manager and the rest is history.

Boni Lonnsburry: Were you an immediate success?

John Bell: I was really quite the opposite because I was so young. I started out very mediocre. I got married at 25 and my wife was my first assistant when I was 27. That’s when I began to take off.

Boni Lonnsburry: You were still quite young… what do you owe that early success to?

John Bell: Individual will and desire for improvement was the genesis as well as having my wife, Elizabeth, as my first team member.

In 1993 I attended one of Todd Duncan’s events in Tampa. One of the tape series that was available was Greg Frost and Bill Gross’ “Assistant” series. My wife and I both listened to it. She started assisting me with inbound and outbound phone calls, meeting with the clients, pre-selling before appointments, etc. That’s when I began to propel into the next level – doing double-digit units on a monthly basis.

The “Assistant” series of tapes had a big impact on our business. We’ve actually modeled the entire organization around unique ability teams. We’re trying to reinvent the paradigm of how people operate within mortgage companies in a retail environment through these unique ability teams.

I’m a member of “Strategic Coach,” and one of the most helpful items I’ve encountered is a book titled “Unique Ability.” A woman named Kathy Kolby runs a website, Kolby.com, where you can take an assessment test that will gage and measure your striving instinct. This assessment gives you an idea of what you are best suited for and what your MO is.

We began to realize that good processors have certain MO’s and certain skill sets. We started calling loans “cases,” and we created a “case partner” who is a highbred between a Mortgage Advisor and a Processor. They have the skill sets of a processor, but the desire to earn more like an advisor. We set them in between the Mortgage Planner and processing team. Each origination team has people with their unique abilities placed into proper positions according to their Kolby score and their unique abilities.

You’ll often hear people talk about teams, but we take it to the next level. We actually have everyone take the Kolby test before they’re hired. As a general rule, we want someone who is going to be a Mortgage Planner to be a minimum of six in the “Quick Start” category. A Processor or Case Partner needs to be heavy in the “Facts Finder” or “Follow Through” categories.

Boni: What mistake do you typically see new loan officers make?

John: I think the biggest one is that they don’t realize that there are cumbersome aspects to the mortgage business. It may look easy from the outside, but there are a lot of little pitfalls and landmines that you can fall into from the point of application to the point of close – particularly now with automation, stated income loans and sub prime loans.

When I first got into the business, it actually was simple. If you wanted a stated income loan, you put 25% down and got a fixed rate. But it has all changed so much. I think a lot of new originators get started with companies that don’t have good training systems in place. They are allowed to destroy lives while they are learning the business. The biggest mistake a new loan officer can make is to try to move too fast without taking the time to learn the craft and mentor with or shadow someone who is successful. It’s very important to go slow in the beginning.

Boni: Is that what you do with new loan officers?

John: I have a core team and an extended team. When the unique ability concept began to be so successful that the amount of business we were doing exceeded the current unique ability team’s makeup, we had to expand a little bit. My senior team member, Kevin, who is a vice president, actually took over all of the builder business. He had some significant unique abilities that he could bring to the team and he offered a business plan where he would adopt all of the builder business and oversee a division of the team managing the builder files. He has done so well that he now has his own Client Concierge and Case Partner like I do. So basically it’s the two of us as the primary Lead Originators along with a junior originator, which we call a Mortgage Planner, on my core team, with my Case Partner and of course my Client Concierge and Processor.

Boni: So you mentor your team as they move up through the different team positions?

John: We’ve created a system where we can have Mortgage Planners come in and get a base salary and a basis point override on key production so they have the security and comfort of being able to integrate themselves in a professional format and shadow us as we advance forward. They can learn best practices and have a period where they don’t have to originate anything but just shadow, take notes, and be available to act as an assistant as they are shadowing. They’re learning how we do what we do so that they can integrate and become a good team member.

Boni: You mentioned that you use Mortgage Coach. How do you use it?

John: I use Mortgage Coach regularly. When we do any refinance consultation, almost everything the client sees for the first 25-50 minutes is going to be driven by the “Equity Repositioning Analysis.” We use this tool to look at the value of their property and how to reposition their equity and pay off obligations. Of course we also use the “Dollar-Cost Average Tool” with every refinance candidate. We use the “Index Analyzer” heavily for clients when we want to show the Libby Treasure Average, the LIBOR, and how the adjustable rates have played out in the past in relationship to traditional fixed rate loans.

Boni: What mistake do you typically see veteran loan officers making?

John: Getting comfortable with one or two products and not staying up-to-date with what’s going on in the marketplace. It’s moving at such a fast pace that you really need to set time aside and examine all of the options that are available. Take the time to read Mortgage Originator Magazine and National Mortgage Broker Magazine. Take the time to learn Mortgage Coach and use Barry Habib’s Mortgage Market Guide (editor’s note: similar to In Touch Today’s Mortgage Matters). Loan officers need to get the fiscal literacy piece down and make creative time to see where they are in the differentiation model between themselves and their competition.

 

Boni: What do you think separates you from the average loan officer?

John: I’m a unique process advisor. Unique process advisors are the ones that can stay out of commoditization the most. I have a unique process that reduces the commoditized conversations dramatically. It creates a unique experience that you aren’t going to get from the average loan officer who doesn’t have a unique process.

Also, I’m committed to stay true to the experience economy with my clients through unique packaging systems and designs. Think about corn flakes – corn flakes are just basically corn flakes. Why can Kellogg get more for theirs then somebody else? It’s air and corn flakes in their box. But it’s the packaging and the platform they use to sell the commodity to the general public.

I think that we do that more than that than most mortgage companies. We really think about unique ways to package and sell our commodity.

Boni: And how do you do that?

John: In the Equity Advantage Advisory System, as well as in Mortgage Coach, we take every client through the “Assessment Accelerator.” This is where we put down the value of the property, the loan size in question, their existing payments for installment debts and revolving debts, their liquidity, their age and their taxable income. When we begin to fill in this information at the point of sale we have a co-creation occurring. The client is watching their profile being plugged in. Then they are seeing a metric unfold below it that outlines the various loans available that should be looked at for consideration given their profile. So we’re automatically getting out of commoditization once we begin that process as a general rule. Now some people are going to be commoditized no matter what the unique process is. But you are going to have a lot of people – particularly more right-brained creative people – who are really going to find value and be turned on by it. Some of your heavy left-brained analytical types might be hesitant to be swept away by it, but they’ll appreciate it and will respect you for having it. So it’s really win-win no matter which personality type you end up dealing with.

Next we take them through what we call the “Fiscal Focus.” This is where we begin to outline what the net effective rate is on the loan given the person’s taxable income and what their tax deduction would look like in an actual enumeration at the bottom of the page. Finally, we show how that plays into their portfolio, where the portfolio would grow with various loan designs and loan decisions.

Boni: If you had a son or daughter entering the business, what advice would you give?

John : Once again, I would advise them to study best practices and shadow what we call a “Positive Outlier.” Basically, find a person that is doing the best job that they can, that person at the top of the bell curve that is creating huge results in a sea of mediocrity. Get as close as you can to that person and examine their best practices. And then see which ones you can model using your unique and natural abilities.

Boni: What was your most successful marketing campaign?

John: We don’t really market in the traditional sense. We go into the general marketplace, primarily the financial planning marketplace, and introduce financial planners and advisors to our unique process. We have a system that we call “Fiscal Fusion.” “Fiscal Fusion” is basically just a concept, with a nice name, that we’ve trademarked. We show financial advisors how we can fuse our industry with their industry to benefit a client in an optimum way, transform their profile, and have a significant impact on their lives. We’ve really had significant success with the financial advisors.

We get to them by word of mouth and by calling into the office of an advisor and meeting with them. We make a big impression with our unique process. Then referrals will begin to flow. What usually happens is the advisors themselves will become swept away by the process and typically they will refinance or purchase with us. Then they can sell from the first person with their client base.

Boni: How did you get started in the financial planner arena?

John: We kind of fell into it over the years. I’ve done lots of study and research going to all these MOM seminars – I usually go to nine or ten a year to grab ideas. One of them is to look at your client’s financial statements and contact their financial advisor if they have one. See if there is an essence match there and if they are someone you could start working with. Then we began to do a lot of loans for advisors just out of friendship. Then we did a little bit of a study on what Strategic Coach calls “the largest check,” which is where you begin to look back at your biggest revenue transactions. You take your five biggest fees that you’ve made in the last 12 months and look for common characteristics. Financial advisors referred all five of ours. So it dawned on us that people who work with financial advisors, as a rule, have money because a financial advisor can’t work with you if you don’t have the resource they need. And if you’ve got money, there is a good possibility that you’ve got good credit, typically a larger loan, and in many cases, a bit more sophistication than the average person. Working with this type of client elevates your loan size, your fee and the experience.

Boni: How do you keep in touch with your past clients?

John: The cycle in Orlando is such that people move every four years or so. So we send out a newsletter to past clients who closed in 2003, 2004 and 2005. We try to call past clients within one to three months from their 12-month anniversary. We also use the “Lender’s Leverage” software (another proprietary system that I created) to send email to the client through the entire process of the loan. The emails keep them informed about the key events that are going on. It will also email the Realtor about what is going on. Once they’ve closed, we send them nine emails their first year to keep in touch with them. I also send Barry Habib’s e-newsletter to all the people in my database. And we recently did a client appreciation dinner that turned out really nice. We talked about equity management strategies and how to separate equity intelligently and risk reformat. We had good attendance. We targeted certain types of loans closed in ’04 and ’05.

Boni: Who or what was the biggest contributor to your success?

John: Myself really. I desired to be more and be better. I’m constantly using mentors. Early on in my career Todd Duncan was a huge mentor. Then Daniel Harkavey became another mentor. I looked up to a lot of big producers such as Steven Marshall. He was a mentor and is now a friend. People that I’ve come across, those positive outliers that I’ve used as examples along the way have helped me. Right now Dan Sullivan, who owns the Strategic Coach, is a mentor. He’s helping me get past what he calls the “ceiling of complexity” into the next layer of production.

Boni: If you had a magic wand, what would you change about your business right now?

John : I would do away with the inverted yield curve. I would also magically make my processors happy with what they do, make their environment enriching, give them incredible communication skills so they could speak with the clients and just move forward with the file without any event. My biggest challenge right now is finding high quality processors with whom I can feel comfortable to represent what I believe I am and how I want my clients to be spoken to and dealt with.

Boni: What are your current goals?

John: For ‘06 I would really like to see us grow our volume a little bit. I’d like to see us go from where we are right now, which is on track for $180 million, to $300 million in 2006. I’d like to have more stage two branches. I currently have two, which are net branches, and they are very rewarding because I’m able to coach those stage two managers and team members on how to create their own unique ability teams. And I’d like to probably take the number of stage two offices from two to six. That would be my goal for 2006.

Boni: Is there anything else you’d like to say to other originators who would like to have the kind of successful business that you’ve created?

John: Take the time to focus on your unique process, name it, go deep and have it be a reflection of who you are and the culture of your team. That, in and of itself, will pay huge dividends. Everything else will come into place. When you have a unique process, you are forced to stop and look at it and ask yourself what it is that you do that makes it unique and what your differentiation tools are.

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