Interview with a Winner:
Barry Habib
Speaks Out on Creating a Blockbuster Origination Business
Barry Habib, Manhattan Mortgage, Marlboro, NJ
2000 Volume: $70 Million (transitioning to a new company)
1999 Volume: $100 Million
1998 Volume: $100 Million
AVERAGE LOAN AMOUNT: $400,000
SOFTWARE: Calyx, Mortgage Coach and Q&A (contact management system)
Boni Lonnsburry: Barry, how did you get started in the mortgage industry?
Barry Habib: Nobody grows up wanting to be a mortgage broker or a banker. That is the really neat thing about our business, it is serendipity how people fall into the mortgage business - nobody really plans it.
I had my own business at a very young age of 21. I wasn't ready for the suit and tie right after college so I opened an audio business. I turned it into a pretty successful business and with the money that I was making - I decided the smart things to do was to buy real estate.
At 23 years old I owned 30 pieces of real estate. As a result of buying that property, I started to understand the mortgage end of it. Then, when my twins were born, (I was 26 at the time) I decided maybe it is time to grow up. I took a leap of faith and got into the mortgage business because I liked to help people by providing financial advice. I thought I was young enough to backtrack if I had to. It was a fortunate choice.
Boni: As it turns out it was a VERY fortunate choice. At this point, Barry, what is your referral source mix?
Barry: My business is 100% referral driven. I don't do any advertising whatsoever. Previous customers make up a lot of it - the remainder consists of a select group of builders, real estate agents, financial planners and accountants, and a select group of attorneys. These are groups of people that we deal with in highly concentrated levels.
Previous customers refer tremendous amount of transactions over. I am fortunate enough to have some media exposure and that media exposure does generate some business as well although it is more inquiry rather than business. It does occasionally bring transactions over, where it really helps is closing a transaction. Having a customer that is shopping, is speaking to several different companies, come to understand that I have a column on CNBC, I am often quoted in the newspaper, and I'm on many different networks, a lot of times has a customer feeling that they are probably dealing with someone who is not going to do them any harm and will probably give them the right financial advice.
Boni: From your perspective, what mistake do you see rookie loan officers most often make?
Barry: Well there are a lot of mistakes rookie loan officers are going to make. Rookies in any business or profession, people just starting out are going to make tons of mistakes. I wouldn't be afraid to make mistakes, but try and learn from them, because there are people who tell you that they are in the mortgage business for 10 years but it could be that they are in the business ONE year ten times.
When people start out in the business it can be over whelming. You really have to try to find a company that you feel really confident in, that is going to provide you with the support and knowledge you need. You have to learn, learn, learn, and don't just learn how to qualify somebody. Have a little broader view - understand what is going on in the market place.
Value added is often used as a term that people always talk about - "oh it's value added". Value added isn't giving somebody a discount coupon to a store, value added is being able to impact people in their lives financially - helping them do things like put their kids through college or reach their financial freedom goals. Value added is seeing people's financial picture change positively because of your advice. That's a very, very rewarding part of our business and everybody has the ability to do that.
I think that some of the rookie loan officers concentrate so much on the sales side and on understanding guidelines that they miss the big picture of what the education is all about - how to help people and how to give financial advice. That is what they really need to focus on.
Boni: And what mistake do you see veteran loan officers making?
Barry: Oddly enough I think it is the same. I think veteran loan officers sometimes make the mistake of thinking they are in the mortgage business when they are not. Veteran loan officers and anyone who is successful knows that the real business that we are in is the money business.
In order to be successful in the money business you have to understand every aspect of that business, and that means you need to know what causes and affects the interest rates. You need to have access to being able to follow that for your customers closely. You need to be able have some understanding of how to get a feel for the direction that interest rates are going.
You also need to be able to sit down with someone or speak to them on the phone and quickly analyze their financial situation and let them utilize the mortgage choices. The mortgage is probably the centerpiece of any financial plan - whether it is a tax plan, retirement planning or a college education plan.
The mistake many loan officers make, regardless of how long they are in the industry, is they don't look at the mortgage as a wonderful tool that could help change people's lives for the better financially. What's worse is that some see that, but they don't go through the bother or the training or the education to be able to accomplish that for their customer. I think when you do that is when you really make a quantum leap. That's when the competition becomes "no one" (because so few people in our industry do it). When you do that, rate is taken out of the picture, competition is taken out of the picture, and it's just you and the customer and your customer will never leave you.
Boni: Were you immediately successful in this industry?
Barry: I had some success when I first started out. I think whatever I accomplished then was more out of fear. Remember I told you that it was after the birth of my twins? They were two months old and during the day I would beat the pavement and hand out rate sheets to realtors and in the evenings I went out knocking on doors looking for refinances. It is a true story.
Boni: You really knocked on doors?
Barry: Knocking on doors - I did it for months. My third week in the business I wrote 16 transactions. I had no clue to what I was doing, but I did write 16 loans my third week of business.
I asked everyone. In New Jersey we have tollbooths, you pay tolls on the parkway. I would never go to the automated machines; I would always stop where there would be a toll taker. And even if I had exact change, I would always stop and ask if they wanted to refinance and hand them my card. I was a maniac. Even to this day.
Loan officers have so many opportunities. You go to your local restaurant, you go to your haircutter, and you go to your dry cleaner. Everyone should know what you do. Everyone should know the business that you are in. Your marketing doesn't stop when you leave at 5 or 6 o'clock or whenever you walk out the door. I'm not saying you should be flooding people with information and pushing yourself on people. But it wouldn't hurt for you to converse with these individuals and pass them your business card outside of what you would consider your normal workday.
Boni: If one of your children decided to enter the mortgage business, what advice would you give them?
Barry: I have four wonderful children. The twins are fifteen now. And I have two little ones - my little boy Jake is 3 and my little boy Jared is 7 months old. Dan is my oldest boy, and we have often spoken about him coming and working with me. I make him read a lot of the things that I think he needs to be successful in any business - books like "Richest Man in Babylon". I made my daughter Nicole read it as well because I think these are important principals they need to have.
I started them investing in a very young age with their own money. I made them get a feel and an understanding for it. And now they really do. They are able to converse pretty well about how the financial markets work and how money can grow and how you can build money. At this point in time, Dan and Nicole have both come in the summers and worked in the office so they now know how to analyze credit and they understand how to qualify somebody. So we are kind of bringing them along slowly. If it were their desire to have a career in the mortgage business it would be great. I would never push it on them but if it were to happen I would enjoy every minute of it.
Boni: What was your most successful marketing campaign?
Barry: The "no closing cost mortgage". It was a program that I created. I am sure a lot wholesale lenders don't like me for it but it was a program I created in 1991 and 1992. We started campaigning for it in 1992 in the media and it just took off like wildfire. People around the country started doing it and newspapers all picked up on it and TV went crazy with it. That's product that is out there now and I am very proud to say that I jumped started it.
Boni: So you came up with an incredible concept…
Barry: I came up with a very good concept, started doing it and went right to the media. I had some media contacts back then and went right to the media with it and they just went nuts with it.
Boni: Do you use any broadcast messaging in your marketing?
Barry: I do broadcasting for the newsletter I do which is for the mortgage industry. But I don't to customers. I think that it definitely would help at times where people could take advantage of refinancing. But we would not be able to handle the volume of calls that would come in at one shot. If we were to send out a broadcast to 10,000 people to call in right now to refinance, we wouldn't be able to handle it.
I am a huge advocate of voice broadcasting though. I use it for my newsletter "Mortgage Market Guide" and people in our industry are alerted before lenders reprice. We just did one today and shortly after that an alert went out and lenders started repricing so people were able to benefit from getting it. It is a tremendous tool and it is a wonderful way to communicate but for the way my mortgage business is set up, it is a very high touch sort of business and because the database is so large, voice broadcasting doesn't fit in.
Boni: What kind of marketing do you do for a database that large?
Barry: We send out tax tips different times of the year. Because again we are involved in financial planning we try and help people throughout the year. I write a lot of articles that can help people and those articles are sent by mail and preferable by email too. The portion of our database email addresses for we send via email and then the rest are done by mail. These articles may be posted on CNBC as well, but they are general articles that can help with different financial situations - should I have a second mortgage, should I take out a home equity loan, things of that nature, decisions people make over time.
Boni: Do you send Christmas cards, birthday cards, anything else?
Barry: I don't do the Christmas and birthday cards. I think that it is a great idea. I do unusual holidays. I do Mother's Day where I will do something very special on Mother's day for referral sources and important clients. Then women call all day crying saying things like, "my own son didn't remember" and "I can't believe what you did". Things like that blow people away.
On their birthday they are getting a hundred cards and I don't want to be one of the hundred. I want to be the one that stands out because I don't get a chance to see everyone or communicate with them as much as I would like to (thank goodness) because volume levels are good. I try to pick my spots and I try to make those spots have the greatest impact.
Boni: Who or what was the greatest contributor to your success Barry?
Barry: The first I would have to say is my mom. A lot of the values that I have she had given me. She taught me at a very young age ways to work with people to be a very giving individual and not expect things in return. If you do things the right way it will come back to you. She had a pretty tough time. My parents were immigrants. I was the first generation here and I was actually a mistake. I was a surprise child. My dad was 57 when I was born, my mom was 40. So it was a little bit of a surprise for them. My dad passed away when I was a pretty young age, I was 11. My mom had it pretty tough. But she also showed me that you could make it through some adversity and have fun along the way, so I would say she had the greatest impact on me.
Boni: And if you had a magic wand and you could change anything in this business, what would it be?
Barry: How many wishes do I get? I am trying to think of what would have the most impact. The only thing I would wish for is for the entire team here to have the health and patience to continue to serve our clients better. That is the only thing I would ask for because we can figure everything else out.
Boni: That is a lovely gift. Where do you go from here? What are your goals at this point?
Barry: You know I've been fortunate in achieving some success here and there but I push myself pretty hard. I really would like to have an impact on the mortgage industry as a whole. I'm trying to do that by doing more and more seminars. I do about 30 to 35 seminars throughout the country and I get a chance to talk with people and share my ideas and have some fun. I really enjoy that.
My new newsletter "Mortgage Market Guide" is going out to about 15,000 originators and I believe that it is making a difference. I think that the people that have been receiving it have been helped as far as understanding what is going on in the marketplace. It has given them a tool to help get their customers into application and off the fence. It has helped them explain what's happening to their customers they can even use it as their own.
That is something I just really enjoy it. I like helping people. At this point money is not the main factor. I guess if I were to admit it I guess recognition and appreciation probably do a lot for me than money.
Boni: Is your newsletter delivered physically or by email?
Barry: Email. Three time per week.
Boni: And where can loan officers subscribe?
Barry: Just go to our website - www.mortgagemarketguide.com.
Boni: That is easy enough. Do you have a vision statement? A personal mission statement?
Barry: You know I don't have a personal mission statement. I know that that is very important for a lot of corporations to have and a lot of times it is very important for people to have. I don't have a specific mission statement but I have a set of values and I have a set of ideals. I try to keep those pretty close to me because those are my first priority. As long as you don't lose track of that, it helps you make all your decisions.
Boni: And is there anything you would like to say to other loan officers that you haven't already touched upon?
Barry: I think that they really need to appreciate the fact that we are lucky to be in this business. We get to help people and that is a really wonderful thing. It still means more to me to hear people appreciative that they get to live in a home that is a home of their dreams and I helped make that happen for them. That to me means more than dollars. I have been doing this for a long time and I still get high on that.
It is a very special thing we do. Yeah sure there are some lows but there are other professions do where the lows are devastating. People in the medical profession have to deal with life or death; those lows can be pretty rough to deal with. Our lows are not that terrible.
But our highs are pretty sensational and so long as you can keep focused on what we are trying to do is we are trying to help people first, the money just comes. If you are out there trying to help people and understand that we are pretty fortunate to be doing what we are doing, you can't help but make tons of money.
Boni: Great advice!
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