Boni Lonnsburry: Mike, can you tell us how your referral sources are broke down?

Mike Alea: My referral source mix is 50% past customers, 20% Realtors, 25% builders, and the rest financial planners.

Boni: How long have you been in the mortgage business, and how did you get started?

Mike: I've been in the business 16 years. I'm from Florida, but I lived in Alaska for 9 years. I was divorced up in Alaska and came back home without knowing what I was going to do. I had a brother-in-law in the mortgage business and that's how I got into it. Like everybody else - it wasn't planned.

Boni: What mistakes do you see those who are new to the business making?

Mike: Basically I see them making the same mistakes over and over again. Simple things, like not returning phone calls. To this day after 16 years I am still amazed at the people who do not return phone calls. Someone can work so hard to get sales calls to come in and then won't return phone calls in a timely manner. Another mistake I see repeated is they try to get business the old way by dropping off rate sheets, and not doing follow up calls. They act more like the old type of LO, rather than as a counselor.

I really try to counsel my clients on what is best for them when they come in. Most loan officers are just trying to sell a loan, and don't realize they actually selling clients an investment. That loan is an investment. It's really about helping people reach their financial goals. And when you take that approach, you don't have to work as hard any more.

Boni: Did someone teach this approach or did you learn this on your own?

Mike: I went through the Todd Duncan's seminars over the years and also learned it from other people. Dave Savage (with Mortgage Coach) has created a tool that makes this approach easy.

I sat down with a customer recently who wanted a 30 year fixed rate loan and wanted to put 20% down. When they left, they were doing an 80/10/10. I showed them on Mortgage Coach how it would benefit them and help them realize their goals. I also showed them how they could pay their loan off in 16 years with a bi-weekly payment without changing their monthly outgo one iota. We suggested a financial planner to manage their escrow account - so instead of that money just sitting there, it actually makes them money - and this opens up the door for my financial planner.

Boni: Can you tell us about the system you use for your clients?

Mike: Basically when I talk to a customer I immediately send them to my web site to fill out a loan application. Once I get the application in I contact them within 72 hours with the approval. We download the app right into Point, clean it up a little bit, pull the credit, submit the loan application to Desktop or LOP. We call the customer after their loan is approved, then email them their loan documents so they never have to come in. After they sign their documents, I send a courier to pick up the documents. So basically, the customer does all the data input for me.

Boni: Do you think veteran LO's make different mistakes than new LO's make?

Mike: They make the same mistakes. In markets like these, they all get hooked on refis and they watch their purchase business go away. My purchase business stays even in the height of refi booms. Seventy five percent of my business is purchases, not refis. And it comes from referrals from our past clients. Our database is a goldmine for us - we market to them each and every month. They get an informative newsletter from me every single month.

I also send out about 500 personalized cards and letters "from the heart" about what is going on in my life. People want to deal with people they know. Once they get to know you they will deal with you. I try to send them out once a month or every six weeks. They get a big yellow card that tells them what's going on in my life right now, or my insights on something I saw that I think they might enjoy. I get a lot of positive comments on those. Sometimes its comical and sometimes its serious and sometimes it sad. But it is about what's going on with me.

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

Mike: It is a tougher business today than it was 15 years ago. I think I would advise them to identify someone in the market who they would like to emulate. And then approach that person, and offer to be a free assistant in order to learn the business. And other than that I would encourage them to identify the market they want to go after and to learn to be a consultant not a rate pusher.

I would counsel them to learn about other aspects as well - what's going on with the bond market and on Wall Street. I have a direct feed to Wall Street I know what is going on all day long. I have a large screen in my office and I subscribe to several emails services that email me through out the day to give me advice about what is happening in the market. So when I talk to a customer, I have a little bit better knowledge than the average person has. I would advise someone to learn the full scope of the business and tell them not to try and be a salesman. People don't like being sold. Try to learn to become a consultant.

Boni: Its obvious that your past customers are critical to your marketing - how did you build that up?

Mike: I started a database about 8 years ago. I wish I had started it from day one. Certain customers receive newsletters once a month... all are getting a card from me letting them know what is going on... and some are getting an email every 4 to 6 weeks. I am staying in touch with them quite a bit. We are trying to buy brain cells. When they decide they need a mortgage, hopefully we have done such a good job that they automatically think of no one else but us.

Boni: What was your most successful marketing campaign?

Mike: Well I don't do marketing campaigns per say. The most successful thing I have done that I think that has made me the most money is still making me ongoing money - is our newsletter. I wouldn't drop it. If someone told me "Mike you have three sources of business and you have to get rid of two of them. Between Realtors, builders, and the newsletter, which two would you get rid of?" I would get rid of the Realtors and builders and keep the newsletter.

Boni: Those past customers are golden aren't they?

Mike: With out a doubt. It makes my job a lot easier. I'm doing a loan right now for a guy the third time - a ½ million-dollar loan so (the newsletters are) worth it.

Boni: What are your goals now?

Mike: That's a good question. I sit here and dwell on it everyday. I have a good lifestyle where everything is fine with us. We travel a lot. We do well - its just my wife and I. So we have a nice home a lot of nice fun things so the desire for me to make a million dollars a year is just not there. I do have a desire for the company though… we want to build an organization that is a thought of as a premiere organization in the marketplace.

We have gone from organizing the company three years ago to being the 11th largest lender in the county (with over 400 lenders). I am the largest mortgage broker in the county. I am a one-man shop here. We only have 11 people. So we think we have done a fabulous job of building our business and that's I want to continue to do. We put a lot of money back into the company to try and make it the best company we can.

Boni: If you could change anything about your business what would it be?

Mike: More space. We are out of space. Other than that, I am pretty happy with what I have. I wish we had a better ability to get everybody in the office on the same page. Wish I could wave that magic wand and have everybody thinking the same way all the time. That's probably one area I would like to improve - being able to create a vision that everybody to buys into.

Boni: Is there anything else that you would like to tell other originators who want to have the kind of success that you have?

Mike: Don't be afraid to lose the deal. When I got in the business there was nobody poorer than I was. I pulled into Tampa from Alaska with everything I owned in the back seat of my car. I had a job with a company with a $1,500 hundred a month draw, but my bills were $2,200 dollars a month. It doesn't take a rocket scientist to realize the position I was in. But don't be afraid to lose the deal - so many people are afraid they are going to lose the deal and they sell themselves short.

You have to have confidence that the plan you are presenting to that customer is the best plan for them. If they decide to go somewhere else you can't take it personally. I have a couple of loan officers that get frustrated and it personally when a client doesn't buy. I learned a long time ago that they are not rejecting me - I just didn't present a good enough plan and didn't create enough value. You have to create value in the presentation so they want to do business with you.

I think a lot of people sell themselves short and immediately start cutting corners so they get the deal. They may get the deal but they are not making much on it. Once you convince yourself you are not afraid to lose, you will get more deals. Then that fear factor is no longer in your presentation. You don't sound desperate - you don't sound hungry. You sound confident.

It's not all about rates. If you get focused on rates you are done. The average customer is stupid when it comes to knowing about mortgages. I don't say that to be derogatory, but all they know are rates and points because that is all that we have ever told them. So they only ask about rates and points. We advertise in the paper and on the Internet. And it all means nothing because we are dealing with a product that changes in price constantly.

So many companies lie about what reality is. I had a customer today who saw in the paper that the rates were 6 & 8. It doesn't exist. So many times I have had customers call me up. I tell them the same story every time: I want to call that other lender that you said you got that quote from and ask them these questions: are there any points, any origination, what is your brokerage fee, what are your junk fees - ask them those fees. And then tell them you want to lock, if that is all true, you want to lock in right now for thirty days, and can you close in thirty days?

All of a sudden their story changes. I have had more customers call me back and say, "Boy you are right… they don't want to talk to me now. They said all the rates have gone up." They change their story because those rates don't exist. When you start to put the other companies on the burner, all of a sudden they can't deliver.

Customers will also call up say and say, "You know Mike, my credit's great, and I should get a better rate." You try to explain to them why they are not getting a lower rate because their credit is good. I had a customer the other day tell me, I want the best rate because my credit is good. I said let me tell you something, when you apply for a loan, when you apply for a credit card, you are supposed to be making your payments on time. You say you have great credit… that is what you are supposed to have.

People who don't make their payments on time are the people who get the higher interest rates. You shouldn't be rewarded for doing something you are supposed to be doing. My bills are paid on time but I don't get any better rate because I am supposed to pay them. Sometimes you have to tell the customer a little analogy like this to make them understand.

Boni: What last piece of advice do you have for other originators?

Mike: You have to sit down and put together a plan that you really believe in. You have to have confidence in yourself and believe in what you are doing and be in it for the long haul. I realize there are people who are starving out there and their commissions aren't coming in when they are starting out. That is when they start making mistakes.

You have to look at the long term (picture). Ask yourself, "Where am I going to be at 6 months from now? Where am I going to be at a year from now? If I can just keep this plan going then I know eventually I will figure a way to get through this short term mess I am in right now, if I can just get through that and concentrate on the long term business, it will all take care of itself." And it does.

A recent survey showed the majority of people who receive newsletters in the mail go onto contact the issuing company for more information! Newsletters We offer two new paper Newsletters each month to help you increase your business and response rate. “Clients for Life” Newsletter • Printed in full color • Your contact information is printed in black and white • Joint marketing option available • Mailed out automatically or sent to you to mail out “Professional Image” Newsletter • Content and your contact information printed in full color • Printed on glossy paper • Offers the option to include your own article • Co-marketing option available • Mailed out automatically or sent to you to mail out   Also, check out our Digital Newsletter!