Interview with a Winner:
Patrick Fairon
Speaks Out on Creating a Blockbuster Origination Business
Patrick Fairon, Loan Now Financial, Costa Mesa, CA
2001 Volume: $82 Million
Average Loan Amount: $180,000
Software: Filled Logic is our primary database software, as well as, Point and Mortgage Coach
Boni Lonnsburry: How did you get started in the mortgage business?
Patrick Fairon: A year after high school someone gave me the opportunity. I was bartending and bored with that but I wasn't quite college material. In the first 6 months a number of people told me that the mortgage industry wasn't the right business and it was going to be difficult - yet I stuck with it and open up my first net branch in 1992. I rode the wave of refinances through 1993 and kept enhancing my career every year after that.
Boni: What would you say that your referral source mix is?
Patrick: Right now, 40 percent of my business comes from consumer direct marketing, 30 percent is from past client marketing and the other 20 percent would be Realtors, financial planners and attorneys.
I have actually created some strategic partners with credit unions, and other banks that refer business. Out of that 40 percent, there might be another 10 percent that I could construe as referral-based business but I actually look at it as consumer direct - contact through 800 numbers and that type of thing.
Boni: That 30 percent, where do those come from?
Patrick: We do a series of voice broadcasting, an internal sales training program where we have new loan officers doing some direct tele-marketing and the Internet.
Boni: When you look at rookie loan officers, what mistakes do you see them typically make?
Patrick: The biggest mistake I see with newer loan officers is poor daily habits and lack of focus on what it takes to be successful. They don't put enough focus on time-watching and educating themselves.
Boni: What would those daily sales habits be?
Patrick: Time blocking is the major one. If you don't set very clear goals on a daily basis and hold yourself accountable to those goals, then your month end will never quite be what you were hoping for. For me, making a certain amount of calls and making sure that everyone who is currently in a process with me, is kept up to date, is paramount.
Follow up phone calls, half closed, funded phone calls, birthday calls - a lot of the relationship based referral phone calls need to be made. If you're not consistently time blocking to accomplish those three areas you're not going to get the influx of leads in this business that you need.
Boni: How many hours do you typically work?
Patrick: I could make the same amount of money and work 45-60 hours a week yet I probably put in 55-60 hours a week. Its what I love to do! When you build a team - I have seven, including my processor - and everyone is very clear on their responsibilities you don't have to do a lot of the clerical work and phone calls.
My daily activities are completely different from my senior loan coordinator for instance and I'm completely focused on my highest priority.
Boni: When you compare rookies to veteran loan officers and take a look at the mistakes that they might make, are they different?
Patrick: I think the rookies tend to over-promise and under-deliver and a lot of that has to do with a lack of knowledge. They haven't taken the necessary steps to really understand what is going to happen.
Boni: And you feel that veterans have the same challenge with time blocking and making good use of every minute of their day?
Patrick: Yes exactly, most entrepreneurs and top producers know when they need to let go and use their assistants. I think a critical factor in taking the business from that $30 or $40 million mark to double or triple is having good people that you pay very well and that are very excited about coming to work.
That to me is the critical success factor for being a great loan officer and to start hitting that million-dollar mark.
Boni: Tell me a little bit about the system you use and the process. You said that time blocking, following through and having that many people - you must have some pretty structured processes for that to happen?
Patrick: Actually yes, we have a specific way of doing business here. Everything from the sales stage to the loan status is tied together through our sales automation software.
A lot of our technology is based on a consistent input of notes and history. Any time I need to know exactly what is going on, I can go into the system and that second I know who the last person was to touch that file and what happened.
In addition, everything is integrated as far as processing sales. Any time there is a comment made by a client to any one of my sales team the processors know immediately. That way there isn't a lot of wasted time submitting loans that need to be suspended due to a situation with their lien disposition for instance.
Our blanket of technology is really what helps the actual system come together. I can easily run reports on any outstanding conditions or verifications and applications, phone calls that were made and so on.
I couple that with our phone reporting system so I can track what is being done on a daily or almost minute basis, as well as consistent, what I call huddles or meetings., We are always trying to improve how we do business as a team.
It's like any NFL or NBA team, we are constantly reviewing tapes, meeting, talking about the game and the program, etc. Through communication everyone is on the same page, every single day.
Knowing what the responsibilities are is a crucial part of team success, and then knowing that if one staff member isn't there, their responsibilities double for that day because nothing ever takes a step backwards.
Boni: If you had a son or daughter entering this business today, what advice would you give them to start off?
Patrick: Knowledge is power and that comes from self-education. If they know more than their manager, their processor, their underwriter and their secondary marketing position they will be a valuable asset to the team and company.
They will be able to accomplish their goals easier.
More importantly I would put my son through the same system I would put any new sales individual through - our sales training program.
I feel strongly that our process yields good habits, especially when they have no prior habits, and that is one of our critical factors.
Boni: Patrick, what was your most successful marketing campaign? It sounds like you do quite a bit of consumer direct marketing?
Patrick: Back in 1995-1996 my most successful marketing campaign was getting out and marketing the real estate agent. I have had the most success when I can sit down with a professional sales agent, whose one desire is to be successful in real estate, and interview them - find out what they are doing, add some of my success to their systems, and develop that one-on-one personal relationship.
Everything we do here is about building partnerships, building that personal relationship with a professional - getting in tune to what they're doing and what could ultimately help them close more transactions has been my best marketing tool.
Boni: So, you must have two separate strategies one for getting them to call and apply and then another for keeping in touch?
Patrick: Right, we have sophisticated software - ACD, where through voice broadcasting, and our various partners including a collection agency and small banks, my team can identify the inbound call and then answer the call appropriately from the consumer direct side of the marketing campaign.
From the referral base it's simply that old school referral, where people are calling from direct recommendations.
What we do in the initial process is supply them with ample information, without charge of course - a couple letters of recommendation and a recent survey for instance.
Boni: Do you ask for referrals from your past customers?
Patrick: We are avid newsletter mailers. Whenever there is something interesting that comes around, such as an announcement from Alan Greenspan, the market bombs, or something economically that could stimulate a lower rate for example, we email them.
In addition to that we have a fax broadcasting server to update realtors on new products. We are constantly drip marketing our clients both past and current as well as our affiliates, so they are receiving it two or three different ways.
The voice broadcasting is something exciting because when the rates dropped significantly, such as in the 4th quarter of 2001, we were able to contact over 6,500 people within two days, with a custom voice message.
We do all three forms of marketing, and it works!
Boni: Do you advertise?
Patrick: We don't do much print advertisement, I haven't really needed to, and it's quite expensive. For another team we did a direct mail campaign and the response was less than .03 percent.
I do like to be in a couple of the pre real estate publications such as Homes and Land.
Boni: Do you buy Internet leads?
Patrick: We don't get a tremendous amount of leads off of the web site - loansnow.com. We typically buy from three or four small outfits that sell it as exclusive rights in my area.
Boni: Do you have a key sales or marketing idea that we can share with people? Something that they could go out and use tomorrow and see some results?
Patrick: There are so many little different things but I would have to say voice broadcasting but there are two things about voice broadcasting that I think we do differently.
One of the scripts is a very light direct script voice message that is a little informative but doesn't insinuate anything.
I know that a couple of my competitors use a much more harsh script to increase the number of returned phone calls. Ours is more of an informative script and unfortunately with voice broadcasting you get a lot of people who don't really want to be called.
There are a lot of "take me off your list" calls. We spend a good deal of time training our team to take that call very seriously, and get them to open up, so we really focus on converting that "take me off your list" call.
When we added the consumer direct we found that our database grew quicker, and we were able to turn those consumer direct clients into new referral sources.
Boni: How were you able to establish such a large number of credit unions?
Patrick: It's simple really, it was a matter of getting out there and doing some investigating - finding out who the CFO was, who was the head of lending, and so on.
A lot of these smaller credit unions don't offer any mortgage services but their credit union members do call in and inquire.
By offering that type of relationship and support we can take it to another level. We have actually filed a DBA for a Credit Union Mortgage Service Center and that's how we answer our phones.
We're able to service a lot of different credit unions and the credit union members feel that we are part of that institution.
For some of our bigger partners, we have a local credit union, Orange County's Credit Union which has about 58,000 members and growing.
Since we can tell when their call comes in we are able to answer the phone, "Orange County, Credit Union." Then, in their monthly mailers with their credit union statements they insert a little flyer of ours, which includes that 800 number.
Boni: Did you have to cut any special deals with them?
Patrick: With the bigger credit unions we would do something in the form of a Computer Loan Origination Agreement (CLO). They can actually refer the client on line, and fill out a pre-app, and then we are able to compensate them through escrow.
We haven't had to do that in a year and a half though. A lot of the credit unions we align ourselves with are just happy to offer this additional service to their members.
With the high level of service that I feel we give and the letters of recommendations in our surveys, they know that their credit union members are in good hands. There is really no monetary compensation needed most of the time.
Boni: Who or what was the biggest contributor to your success?
Patrick: Not giving up. I have seen in this business, again with those peaks and valleys, how dynamic the business can turn within a month. I think sticking with it, learning to love it, and learning to love the challenge of each loan is key.
Boni: What are your goals now?
Patrick: I want to hit over $90 million in 2002 and $100 million in 2003. I have had to increase my team from three to seven over the past 36 months, so from this point on I want to keep the team, and just continue to control the volume.
Boni: And if you could magically change something about your business tomorrow what would it be?
Patrick: I would probably start to focus on that 40/30 and get it to closer to a 50/20 - 50 being referral 20 being consumer direct. I feel confident that as we focus on our drip marketing, getting back out there and meeting some new partners that is going to happen.
Boni: Is there anything else that you would like to say to other originators who aspire to your kind of success?
Patrick: Take care of your clients and treat them like family. Take every single situation and have the entire team focus on one thing. Deliver a benefit of value to that client. Work for that referral!
I would have to say that consistently attending Todd Duncan's Sales Mastery seminars has inspired me and educated me - in fact I go every year and bring my team. Networking and listening to other very successful loan officers who were doing it longer than I have and were already at that point of reaching incredible numbers has been an enormous asset.
A lot of it was great information and I have always believed that if there was someone out there doing something successful - just copy what they do. Put your heart and soul into it.