In This Chapter

This chapter puts you in the seat of various mortgage broker professionals. It gives you an insider’s look at each one’s day. You’ll see how they spend their time, share in their successes, empathize with their disappointments, and understand what makes them choose this career.

Esther, Max, and Melanie are fictional composites of people I’ve worked with over the 15 years I’ve been in the business. The description of a day in the life of a mortgage broker company owner (Dan) is my own story.

By the time you complete this chapter, you’ll have a better idea of what it takes to make it as a mortgage broker. For those of you already in the business, it’s an opportunity to see how other companies work and poach some ideas to improve your own practice.

The day starts early and ends late for experienced mortgage brokers. They could be professional jugglers because they have to be adept at keeping lots of balls in the air. But the rewards of all this hard work are both financial and personal.

Esther is our professional mortgage broker. She’s been in the business for 8 years, really hitting her stride after year two. Esther started out in retail. She has a degree in marketing and worked her way up to women’s wear buyer for a major national department store. She liked the work, but was frustrated with the financial rewards. By the time she left her retail job, she was earning about $75,000 a year, a combination of salary and bonus, and was working more than 60 hours a week for a boss she didn’t respect.

She finally decided she wanted two things: to be her own boss and to earn an income that reflected her efforts. She toyed with the idea of opening her own store, but was hesitant about investing that much capital. She’d worked in sales before moving into management and had enjoyed the challenges. Here’s Esther’s story.

About 10 years ago Esther was tired of paying rent and was considering buying. She checked the Sunday papers, saw a couple of open houses for properties that were for sale, and headed out. At the second place she visited, she met a mortgage broker who was co-sponsoring the open house with the real estate agency. He was in the kitchen, putting out some cookies and cold drinks. They started chatting over the refreshments and he asked if Esther had been pre-qualified for a mortgage. Since she didn’t even know what that was, he explained the process of getting all her financing set up before she found the house of her dreams. They chatted a little more, exchanged cards, and she made an appointment to see him the following day. After talking it over, she decided to get pre-approved for a mortgage. His help made her realize she could not only buy a house, but buy one that she hadn’t realized she’d be able to afford.

Fast-forward to two years after she bought her house. Esther was ready to make a career change. She was frustrated with her job, knew she was unhappy with the hierarchy of a big corporation, and was considering opening her own store. But she was afraid of making that kind of financial commitment. Esther wanted to be her own boss, but still wanted some structure. She knew she was good at sales, and considered going into real estate. But when she remembered her own experience, she called her mortgage broker and set up a lunch to talk about the career.

Esther did some research, talked to a couple of other brokers, checked her finances, and decided to make the career switch. What’s funny is that she didn’t end up joining her original broker’s firm. She wanted a smaller shop where she felt the mentoring would be better.

The firm Esther joined has five brokers, two loan processors, plus the owner, a man who’s been in the business for 20 years. Even in just the time since she started out, the business has changed a lot. She’s pretty good with math, but frankly now it’s more important to be computer savvy than able to do long division. The software available today does all the calculations on a loan application.

But she quickly learned that coming up with the right answer for the front end ratio or back end ratio (see Chapter 13) was the easiest part of the job. Having people skills, marketing savvy, and an inordinate amount of patience and organization were the key ingredients to success in this field.

Esther always has about 75 loans in the pipeline: some just in the beginning stages of the application, some waiting for document verification, some close to or at closing. She does about 25 loans a month and it takes about one to three months from application to closing. It takes a lot of organization and attention to detail to make sure that nothing gets lost or overlooked.

She doesn’t get into the office until 10 most mornings. But by then, she’s already read the Wall Street Journal, looked at the real estate section in her local paper for any “sale by owner” ads, scanned the lender rate sheets online, and checked her e-mail messages and voice mail, returning any that require immediate attention. The best “can’t live without it” piece of technology she owns is her Blackberry. With it, she can surf the web, answer e-mail, make and receive phone calls, keep her calendar and address book, all in a four-ounce gadget. If it could cook dinner, it’d be perfect.

Once she gets to the office, she spends a huge amount of time on the phone and online. She’s got to review pending loans and check their status with the loan processors in the office, talk to closing attorneys to set up those appointments, follow up with banks on any applications that are running into trouble, and do some hand-holding—you know, reassure current clients that their mortgages are going to go through.

A couple of times a week she goes to closings, especially for first-time buyers. Not all mortgage brokers show up, and you don’t have to be there by law, but she finds it makes a difference to her clients that she’s there in case there are any problems or paperwork snafus. They know her; they usually don’t know the attorneys. She’s the familiar face in a complicated situation. She’s discovered it pays off in customer satisfaction, which translates to more referrals.

Then there is the networking and marketing component of her day. She schedules lunch at least twice a week with the various realtors and builders in her community. It’s an opportunity to talk about current trends in the market, coordinate sponsoring open houses, and ensuring that her name is in the front of their Rolodex when they meet new clients. More than 90 percent of her business is based on referrals or is repeat business from satisfied clients.

Esther does get some customers from being in the office when a cold call comes in. It’s a subtle dance when she’s talking to a potential client on the phone. She’s got to answer their questions without giving away the store. They tell her that all they want are the current rates, and she knows that any given loan has a dozen different possible rates. So she’s got to interest them enough to stay on the line while she gets the information she needs to give them a realistic answer.

When she’s working with a customer, she also has to avoid overwhelming them with choices. There may be 40 different loan options, but she’ll go through them in her head and offer six. She can always offer more, but too much information can paralyze a customer. They trust her to understand their circumstances and suggest what makes sense.

Once a month, sometimes more, she sponsors realtor open houses, sometimes for the public, sometimes for other real estate agents. She brings refreshments and it’s an opportunity to meet people who are shopping for a home—just like when she met her mortgage broker. It’s a way of pre-qualifying clients so they can set up their financing before they buy. The realtor meetings are an opportunity to educate them about the new loan products available.

Esther likes being her own boss. She also likes the idea that her income is limited only by her own efforts. When she worked for a corporation, they decided how much she was worth. Being on commission, she sees the results of her hard work. She also enjoys meeting new people and figuring out what works best for each applicant.

Here are Esther’s insights into a career as a mortgage broker:

The days are long for entry-level brokers. They have to spend a lot of time learning the business and building up a client base. The financial rewards are slow at first, but as they become more experienced, they should see a payoff.

Max joined a small mortgage broker firm about six months ago. He finished college with a degree in psychology. He worked his way through school in the restaurant business, starting out as a waiter, eventually serving as the night manager for a successful local restaurant. Here’s his story ….

Max likes people and thinks he understands them. His college degree didn’t prepare him for this career exactly, but it did give him an insight into what makes people tick. And that’s a big part of what makes a good salesman.

When he finally finished college, he decided that he wanted to leave the restaurant business. Unless he was going to open his own place, the income was always going to be limited. He liked the idea of being his own boss so he started looking around for a career that was based on commission. Max saw an online ad for a mortgage broker and had to look up what they did. It sounded interesting, especially since it didn’t require previous experience in the field.

The owner insisted he take a weeklong course at a local community college to learn the basics of the business. It cost $600 and he had to pay for it himself. For the first month, his boss had Max work with an experienced broker. Max received advances on the commissions he was earning—actually, they were a percent of the commissions since he was just assisting the broker. Essentially, he did the paperwork for the mortgages instead of giving them to the loan processors. It actually was a good way to learn the business since he had to take an application every step of the way.

Max didn’t handle any clients on his own until he’d been at the job for a month. If he hadn’t had some savings and wasn’t living at home, it would have been a tough time financially. During the next couple of months he made more money and finally started to get his own clients. Projecting out for the rest of the year, he should make about $35,000, but he definitely thinks that within a year or two he can at least double that.

Max gets to the office early, usually before 8 A.M. That’s his time, before the phones start ringing off the hook, to do his research. He reads the newspapers and trade journals. He’s started preparing a memo each morning and sending it to the brokers in the office, summarizing the latest reports. It makes him focus, and they seem to like it.

He spends his afternoons doing paperwork and contacting the banks to work out any problems.

He spends about an hour a day doing cold calls, usually in the early evening. He’s looked into buying lists of names of homeowners, but isn’t sure it would be worth the investment. He also did a mailing to all the residents of a local apartment complex. He got a couple of calls from that and may try more.

Max has had good luck contacting homeowners who are selling their houses without a real estate agent. They like the idea of him being there for an open house. He offers to work up handouts about their home that they can give to people who are browsing. He’s connected with several customers that way and gotten a few other referrals.

He works most weekends since he’s more than happy to sit in realtor open houses. Again, he’s picked up some customers that way.

Max has been trying to network like crazy. He did a huge mailing when he joined the firm and sent out a postcard to everyone he could think of, including his parents’ entire holiday card list. He actually got a couple of customers from that mailing. And, of course, he follows up with every person he meets at the open houses.

Here are Max’s insights into a career as a mortgage broker:

The owner wears at least two hats: mortgage broker and manager of a small business. He also acts as team leader, human resources manager, educator, coach, supervisor … how many hats is that?

In one way or another, I grew up in this business. My father, who’s also my best friend and racing partner (but that’s another book), owned a real estate agency. He quickly discovered the convenience of one-stop shopping and added on an insurance agency, appraisal company, and mortgage broker firm.

I went to college and earned a business administration degree with a major in management and entrepreneurship, but spent every summer working in the business. I started out as an appraiser, which really gave me a feel for the housing market. But I wanted more interaction with people, so I shifted over to the mortgage broker company.

In the first couple of years, I developed a referral network of realtors, developed and promoted an advertising campaign to increase our customer base, formulated the operating budget, established new lender relationships, and eventually became responsible for the company’s bookkeeping and payroll—all while becoming the top producer in the company.

Ten years ago, I bought out the company. My dad kept the real estate agency and sold the other businesses. Now, in addition to all the other responsibilities I had before, I’m also in charge of the development and monitoring of all phases of the business, as well as managing and training all employees.

I became a mortgage broker for all the reasons that others have listed: the independence, the earnings potential, the variety of the work, the people factor. But I decided to open my own company because I wanted the opportunity to run something bigger. I like the challenge of making all the various parts of the company work together seamlessly.

My day is long, but the variety of what I do keeps me interested. I continue to meet with clients, sometimes in person, but often I communicate by e-mail or the phone. I also have to keep up my relationships with realtors, builders, and lenders, but also reach out to any new professionals in the area. I read as much as I can on local, national, and international economic trends and the state of the housing market.

As the president of the company, I’m always looking at new software that will make our jobs simpler. I have to develop new advertising campaigns, find creative ways to keep in touch with former clients, as well as discover new clients.

And there is the nitty-gritty of running a business: paying the bills, hiring the right employees, finding good office space, fixing the computer system when it goes on the fritz, and so on.

I’m tired when I go home, but I love it.

Here are my insights into a career as a mortgage broker company owner:

I still like working with clients and making sure that they get the right loan for them. But I also enjoy the business side of the company. I like training new brokers and seeing them succeed. I like forging new relationships with realtors, builders, and lenders. I like the idea of building a company that offers quality service, good products, and has the respect of the business community.

The loan processor is a key member of the mortgage broker company. She is responsible for gathering all the documentation and ordering any of the steps necessary to process a loan. This is a detail-intensive job.

Melanie has been with her mortgage broker company for 15 years. She was hired right out of high school, but thinks new employees would benefit from more education, especially computer training. Her boss has been good about paying for her to take whatever training programs will help to do her job better.

When she first joined the firm, she thought the work sounded interesting, the pay was good, and the hours reasonable. Fifteen years later, she still thinks that the work is interesting, although demanding, and the pay is excellent. Of course, there’s always somebody who needs something done immediately, if not sooner. But she doesn’t get rattled easily and has developed a good system for knowing where everything is and what needs to be done, when. It used to be a series of color-coded files on her desk, but of course now she uses a file system on her computer that generates ticklers when something is due.

Melanie’s workday is from 9 A.M. to 5 P.M., with an hour for lunch, although that’s often eaten at her desk. She’s responsible for making sure that each application has all the necessary documentation for the lender. That means she’s got to work with the clients to make sure they send in documentation of their income and assets, and try to anticipate if they will need to provide additional information if she can see there’s going to be a question about some issue. She schedules appraisals and makes sure they get the report, pulls the credit report and attaches it to the application, forwards it all to the lender, and then fields any questions they may have.

Usually she’s working on about 90 different applications at a time, but of course they’re at various stages.

Here are Melanie’s insights into a career as a loan processor:

The Least You Need to Know