PERSON OF THE WEEK: In 1988, Leif Thomsen founded Mortgage Master in the basement of his home in Walpole, Mass. The company is still headquartered in Walpole, but it sort of outgrew the basement beginnings: with more than 550 employees working out of 40 locations and funding more than $5 billion per year in mortgage volume, Mortgage Master is one of the nation's largest nonbank lenders. To understand how the company has achieved its success, MortgageOrb spoke with Patricia ‘Patty’ Raymo, vice president and chief operating officer.
Q: Is there a hidden secret to maintaining a successful mortgage banking operation? Or is there a combination of somewhat obvious considerations that most people tend to overlook?
Raymo: There is no hidden secret: It is quite simple – stay true to your beliefs, use common sense and surround yourself with people that have integrity and share the same passion that has afforded Mortgage Master its success over the past 25 years. Our shared passion is to improve the lives of people through homeownership by delivering the perfect mortgage solution and the ultimate customer experience.
For 25 years, Mortgage Master has operated with the highest underwriting standards and operational controls to mitigate risk, even during the subprime era. We made the conscious decision to uphold Mortgage Master's underwriting standards and not pursue sub-prime opportunities, even while it became the trend with most mortgage lenders. This strategy has delivered many tangible results, including significant organic growth and the rare outcome for a mortgage lender – never having to buy back a loan Mortgage Master originated.
Q: Your company never had to buy back a loan that it originated. How did you achieve such a remarkable feat? And is this a feat that other companies can emulate?Â
Raymo: We did not get caught up in the lax underwriting standards that were allowed in the industry. We continued to originate and underwrite loans that made sense throughout those so-called boom times. People would say, ‘Everyone else is doing it,’ and our response would be, ‘Good for them, we will still be in business when all is said and done.’
Also, the hiring decisions we've made in both sales and operations throughout the years are a major reason we have not had to buy back a loan. We have to make every effort to stay committed to our team, because they are truly the secret behind our operation's success.
Q: How does your company deal with originators who are either underperforming or not meeting your standards of corporate excellence?Â
Raymo: If a loan officer is not performing to our expectations, we isolate the issue and address it. If it is a training issue, we work to offer the individual whatever it takes to make them better at what they do. However, if it is a philosophy issue, then we may agree that Mortgage Master may not be the place for them at this time in his or her career.
Mortgage Master has numerous educational programs available for our loan officers to expand their knowledge base. We are in the process of building additional resources online. We are a high performing group of people who demonstrate a ‘can-do’ attitude and never settle for less than the best.
One final point on this topic I would like to make is that we do not confront this issue of underperformance often. Our loan officers' compensation is significantly above industry averages. This helps us to attract the best loan officers in the industry with unsurpassed experience in meeting the ever-changing financing needs of our customers.
Q: Do you believe that the onslaught of regulations and guidelines that were enacted after the 2008 crash improved the quality of loan underwriting? Or would the industry have been able to correct itself without government oversight?Â
Raymo: I believe regulatory changes needed to occur as a result of the 2008 crash. The industry is back to what I call ‘old-school underwriting,’ and sound underwriting standards are critical to mitigate all risks in this industry. While I do not agree with all the changes made from a regulatory perspective, I do believe the changes have resulted in good, solid and responsible lending.
Q: Your company is also noted for its efforts in fundraising for nonprofits, schools and police departments. How important is the concept of corporate social responsibility in today's mortgage banking industry?Â
Raymo: Mortgage Master truly believes it is extremely important to give back to the community and families we have worked with for what is now multiple generations. The mortgage industry has gotten a severe black eye as a result of the crash in 2008.Â However, there have always been a lot of positives in this industry. Giving back to charities, schools and non-profits shows that we truly care about people and our local communities.