Interview with a Winner:
Penny Doubek
Speaks Out on Creating a Blockbuster Origination Business
Penny Doubek, National Pacific Mortgage, Morgan Hill, CA
2000 Volume: $30 Million (Having just taken three years off to have a baby.)
2001 Volume: $3.5 Million monthly
Average Loan Amount: $280,000
Software: Point, ACT and The Mortgage Coach
Boni Lonnsburry: Penny, how did you get started in the mortgage industry?
Penny Doubek: I'm from Syracuse, New York and I went to school for finance. I always wanted to work in New York City. I worked on Wall Street for three years. Then I went to the west coast to visit my brother in 1985 and he took me skiing in Tahoe and to the beach in the same weekend - I moved out here two weeks later.
He was a bond trader and he said to me, "You would make a great loan officer!" And the rest is history. I went from being a top producing loan officer, to management and then to running a business. I started having my kids and when I had the third baby I really wanted to be able to be at home with him - so I was… until about October of last year, then I stepped back into it and hooked up with everybody again.
Boni: And what is your referral source mix?
Penny: Right now it is 99% referrals from past customers. That's what's exciting. I have always built my business on creating clients for life. My goal is to break 50 million this year and 75 million in 2002.
Boni: What advice can you give loan officers out there who would love to have 99% referral business?
Penny: You have to put your client first. Making your client happy is number one. Then exceed their expectations every step of the way.
Boni: And how do you do that?
Penny: The first thing I do is to treat people the way I like to be treated. I like to feel that I do things that make a difference in peoples lives. My vision is to create constant and never-ending improvement in people's lives through financial management and personal growth. I go from that.
From the very beginning I have had my Act database completely customized for the way I like to do business. When I start with somebody, I really go deep with him or her on not only their mortgage but also on what they are looking for in life. I try to be friends with them. I try to create a common bond. And then I really find out about them - what are their kids into, what are they into. All of this goes into my database.
I spend 20 minutes with each client. I go over what their needs are. I go into points. I do the prequal with them. I find out exactly what their requirements are for the loan. How long they plan on being in the property… What they are looking for… What the most important need is with their loan, is it lowest payment, is it to get it paid off… Do we need to put them on a plan? Do they have a little bit of debt? What are their short and long term financial goals?
Do they have a financial planner, if not I have someone to refer them to. Do they have a tax person? And I look at their overall financial picture and make sure they are set up so one day they can retire.
I turned 40 in March and I have a lot of clients I have worked with for years. But 9 out of 10 people that walk in don't have a financial plan - they have a 401k but that is for their retirement. So I know that if I can help someone get to a real dream, (and everybody's dream is to really not to have to work for the rest of their life), they are always going to remember me when it comes time to refer people to me. So basically that is my goal with them.
With younger clientele, I have a different approach. I say to them, "You know, I'd like to share something with you that I wish someone would have shared with me when I was 25… the thought of retirement is not something you think about all the time but maybe you should think about it so you won't have to worry about it in the future."
At that point, we have all their info in ACT, we have their information in Point, and then we do an automatic download to Mortgage Coach and with that I show them a true financial plan and refer them to a financial planner, if that is what they need. I do that with every single client.
And I don't just give them the Total Cost Analysis (one component of The Mortgage Coach) - I do the full plan with them. Do you know that if you take an extra $200 a month and put $150 on your mortgage and $50 into a cash management account in 15 years from now - this is what the value of your home will be and this is what you will owe on your mortgage and this is what you will have in your cash management account.
I have just hired a transaction coordinator and I am turning the actual physical loan part of the application over to that person.
What I would say to someone who is just starting in the business, is don't come into the business as a loan officer. I think that is the biggest mistake people make. I'm starting to look at myself, this may sound funny, but as a doctor. I'm running my office like it is a doctor's office.
Boni: How do you run your office like a doctor's office?
Penny: When you go to see the doctor the first person you meet is the head receptionist and you have a form to fill out. Now before I set up an appointment with somebody they have a form that they fill out. Then I go over their entire history with them. And instead of a physical history, it is their financial history. At that point I then give a diagnosis to them and that is what their mortgage loan is. And then from there, instead of their blood work or whatever it is that needs to be done, they go in and they get their application taken.
Boni: That is a great analogy.
Penny: And that is how I am running my business right now. After that, the doctor does the check up. The question becomes, how do I wow the person during the process of them getting healthy, or getting their financial life in order - and that brings me to an eight-step process that we do with them to wow them every step of the way. It is nothing different from what any of the top originators are doing, but I think that the real key is that it is being done.
Boni: Could you go over those eight steps with us?
Penny: What we call it, is the in-process client for life system.
1. The first thing is to enter all their information into ACT - their financial information, do they have a financial planner, or do they have an income preparer? I am sure you have already heard of the fifth page of the loan application (I call it my doctor sheet) - there we find out who their human resource person is. We want to know everybody that would be involved, for two reasons: 1. To help with their loan and 2. To help build our business.
2. Then we send them a very positive welcoming letter, letting them know that we pledge to give them absolute superior service and that we appreciate them as a client. I think it is very important to tell people that we appreciate them.
3. The next step is, when their loan is approved, a congratulations letter goes to them with confetti. It says, "Congratulations your home loan is approved! We think it is worth a celebration. Please take this blockbuster gift certificate and enjoy a movie night on us." And we include a $10 gift certificate to blockbuster.
4. Then I personally do what I call a 72-hour check up with them. We found that it's better to do a check up with a client during the process instead of afterwards; afterwards it's too late. I call them myself; I want to make sure my clients are 110% satisfied during and after their home buying experience.
5. We then lock their loan, and send them a confirmation in writing that their loan is locked, as well as an updated good faith estimate so there are no questions in the end regarding their closing costs - we get that all straightened out ahead of time. On a purchase, we send them a moving checklist. With that moving checklist, is a little hand written note saying this might come in handy. It lets them know what to do four weeks prior to moving, three weeks prior to moving, two weeks, one week, moving out day, and moving-in day. This gets people focused with their move.
6. Then my marketing person does another survey, asking them are they pleased with the process, and if there is anything we can do. If there is any problem whatsoever, we apologize with for the problem, let them know how we will fix the problem, and then she is authorized to spend up to $50 to purchase a gift to apologize for the problem. She sends them flowers, thanking them for bringing the problem to our attention and letting them know we are excited to move forward with them, pledging to give them excellent service. The key is that she is empowered to do it. She doesn't have to come me to ask. We really try to empower our entire team to figure out different ways to solve problems.
7. The next step is thanking them for being such a great customer. We tell them, "It is our pleasure serving you, as we approach a closing it is our goal to make sure the last week is as stress free as possible, so here are some forms to help make the closing easier." I believe purchasing a home should be as pleasant and rewarding experience.
This idea is from Steven Marshall. One of the things we added to it is a map for them on how to get to the title company, nearest cross street, who their escrow officer is, what their number is, and then we send them information on their insurance because too many people go to title, all nervous signing the papers then they find out that they don't have their insurance policy yet - so we like to make sure it is done ahead of time. The real goal is to reduce the stress.
And then the last thing that we do, is send a gift delivered to their office at closing - it comes in a great big huge box, and out of the box comes a big balloon that says "congratulations", and attached to the balloon is a tin can with premium nuts. Enclosed is a card thanking them for their business, letting them know we build our business on referrals and enclosing five business cards.
They are sent another gift a year later for their first year anniversary in their home.
Boni: What happens next?
Penny: We then send them a letter thanking them very much for their business - letting them know that our goal is helping as many people as possible improve their overall financial situation, and when they get into conversations with friends and family if they are thinking of refinancing or selling, the greatest complement we can receive is a personal referral.
Then 30 days after they are in the home, they get a change of address stamp. It has my sticker on it, with their new address. People just love that. Along with that they receive a closing book with all of their pertinent information, their prelim, their appraisal, their note, their deed. It is has a space for our added-value material and Rate Watch from Mortgage Coach. So when they get these Rate Watches that we send quarterly, they have a place they can put them. On the outside of the binder is both our name and the realtor's name. Then 30 days after they get that, they get a plant form us.
Boni: A plant?
Penny: Yes. A plant saying, "We hope your settled in your home". We appreciate you as a customer and again we will ask for referrals.
Boni: And do you use a local florist for that?
Penny: Yes. And the florist also encloses five business cards - that has become a standing joke… I have had clients tell me they could build houses my business cards. At first I was afraid it might be obnoxious but people really like it. And my refi market has been huge.
From there, the clients are entered into the post-marketing system. They receive a monthly added-value piece mailer, as does everybody on my list.
Boni: What Biggest mistake do you see rookie loan officers make?
Penny: I think they haven't decided what they want to do. I think everybody should read the book "Raving Fan". That changed my life. I don't think you should decide to do a thousand things - you should do one thing at a time and become an expert at it.
When I returned to originating, I wanted to be bullet proof. What I did was build the infrastructure first. I spent a long time working on what I call "on" time. That is working "on" my business. I created a system for what I wanted to do when I brought in the business. What many originators do is they go out and get the business but then they don't know how to handle it. It's not hard to bring in a loan right now; it IS hard to do a fantastic job.
When I first started back, I hired somebody part-time, a young girl, a couple of hours a day, and had her actually implement what I created and got the in-process system going. The next step was - I needed somebody to handle the loans while they were in process. So I hired a transaction coordinator.
The problem we have is that our business is like a seesaw. One month it's up and the next it's down. You bring in the business and then you close the business. The only way to stop that is to have one consistent person closing the business.
And right now I am hiring a third person, and that third person is going to be in charge of the database. Their entire job will to be to enter everything in the beginning and close that loan out properly. We have trigger rates everyday she can lock in and pull. The rates today for example were 7 %, everybody's trigger rate that is 7%, she pulls up and let's me know who to call for refis.
Purchase market is the same thing as far as trigger rates. People who are thinking of buying in three months, we do a prequal for them, they go in a certain database, we are sending them certain information, either bi-weekly or monthly, depending on when they are planning on buying. That is the step that I would say that people need to do. But it is a mindset. You have to think of yourself as more than a loan officer.
Boni: And do you see the veteran loan officers making the same mistakes as the rookies?
Penny: Yes, but it is worse. I think the veterans think that they know it all. A veteran has to want to change, they have to dislike what they are doing enough, and not be happy with what they are doing or want more in order to change. And then they have to be willing to step out of the box.
Of the top-producers in this industry - I don't think one person would tell you that they are a loan officer. I think they would tell you that they run a business. Each one has their own way to do it. You are not stuck in here doing loans all day. You are changing people's lives; you are working with people on how to get their best financial plans. It's two different mindsets. One is an order taker and one runs a business.
Boni: With that I want to ask you what one turnkey or sales marketing idea that we can share with people out there, a script or letter. Do you have another idea that maybe we can share with people?
Penny: I think instead of one marketing idea, I think the greatest thing anybody can do, and really it is much more than a marketing idea is read the book "Raving Fans". Every thing I am talking about has come from the ideas from "Raving Fans". I don't really believe in a one turnkey thing. I think it's creating systems. I guess the one idea thing would to be to send a 30-day and a 60-day gift. Those are the two biggest things that people really love because their deal is done and you are still thinking about them. The one think I would say to people is decide want you want to do, you bring in someone and pay them $10/ hr or $8/hr or $12/hr or whatever it is, and you have them work for you for three hours a day, and you have them put into the system that you have decided to create and put it in a book Not in your head, it's in writing, it's done in a book. And do that one step at a time with every system you want to create; you will change your life.
And the other thing I would really stress is don't think of the loan you are working on as one loan. People just get caught up in just that one loan and they have to change their thought processes. One loan should be thought of as 3 to 4 loans. If you do a great job, so you made a quarter point less, but you just have three more loans. And three more loans can turn into nine more loans, three loans from each person.
Boni: Every loan is that important.
Penny: Yes and it is a snowball. And don't think of it as the money you are making on that loan. That's a huge mistake people make.
Boni: Is there anything else you want to be sure that loan officers who want to improve their own business should know?
Penny: I would tell them to pick something, this is the big thing that helped change me, pick a book up. I am normally not a big reader but I have been reading a minimum of thirty minutes a day something that will improve my business. And that has made a huge change in me. And I start out my day in a spiritual way and then I read thirty minutes every day on something improving my business. What I would suggest to start with is "Raving Fans", and then "Gung Ho" by Ken Blanchard, and then I would totally go into Mortgage Mastery system. And do that one step at a time. They must buy The Mortgage Coach; they must buy ACT or have a database system and a processing system they can all intertwine together.
Boni: Penny, if you had a magic wand, what would you change about your business now?
Penny: Funny you say that. I am changing it. I am changing the way I am marketing - switching to marketing to specific demographics of people. That's what I am in the process of changing.
Boni: And once you complete it, what will the difference be?
Penny: Constant and never ending improvement of people's lives.