In This Chapter

Finding the right firm to begin your career as a mortgage broker is critical. Of course, the company must want to hire you, but it really is a two-way street. You want to be picky about where you work. On a very practical level, you will be giving the company almost half of whatever you earn. You want to be sure that you are getting the support and service you need in return.

Perhaps more important, you want to choose a well-regarded company that expects all its brokers to adhere to a strict code of ethics. The corporate reputation becomes your professional reputation.

When you first begin your career as a mortgage broker, hopefully you’ll have some choice as to which firm you join. There are advantages to jumping into a large company, with ten or more mortgage brokers already on staff; and there are pluses to signing on with a small firm where there are only two, maybe three brokers, including you.

You should, if possible, interview at a variety of firms. Don’t assume that you want one kind or the other. It’s hard to know what you like until you actually go in and meet the staff, see the setup, and understand how their system works and where you would fit in.

Part of what you’re looking for is a mentor. It’s one thing to be supervised when you first start working. That makes sense on a practical and legal basis. But a mentor is broader than that. You’ll learn more than how to process a loan application. A mentor will give you an insider’s pass to the industry, guide your career, and help you move up the ladder to greater success. A good mentor helps you grow as a professional.

This chapter talks about all these things: large firms, small firms, and working with a mentor.

We’re going to come back to this concept of trusting your first instinct about companies. I can trot out the clichés to support both arguments. On the one hand, you can’t judge a book by its cover, so you shouldn’t jump to conclusions about a company. On the other hand, in fact, part of what will make you a good mortgage broker is that you can size up a situation, read between the lines, and judge people so well.

But much to my surprise, when I was researching whether in fact our first instincts are almost always right, I discovered that there is a fair amount of evidence to say that our first instinct isn’t always the best choice. According to researchers at the University of Illinois, Northern Arizona University, and Stanford University, people accept the myth that our first instincts are correct because it feels worse to change a correct answer to an incorrect one than to stick with an original incorrect answer. Furthermore, that feeling makes changing right answers to wrong ones more memorable than a wrong-to-right change, and seemingly more probable. You remember when you’ve changed from a right to a wrong answer because it feels worse to have done so.

This is a lesson to be learned in the mortgage broker business. On the one hand you need to trust your instincts; at the same time, be willing to reexamine a premise or assumption because you could be wrong.

That said, as you interview at firms, take the time immediately after you leave, while it’s still fresh in your mind, to write down your reaction and impressions. You should review it later when you’ve had time to process the experience. That gives you the first, gut reaction, coupled with the necessary perspective to view a company clearly.

While some might decry the impersonal nature of a large firm, that’s a generalization that can only be proven after you’ve visited the company and seen for yourself how the business works. Don’t make assumptions about any company until you’ve done your homework and checked it out.

A large firm offers certain advantages:

The pressure to succeed and the competition for clients, however, may be more intense at a larger firm. You’re competing for your share of the business and there are more sharks in the water.

On the other hand, working for a smaller company may offer you a greater range of opportunities:

While the competition for business is always intense, in a smaller firm, it may not be as cutthroat.

An important part of what you’re trying to assess is the environment in which you’ll be working. You’ll be giving a lot of your time—and money—to this business.

Drive by the company’s headquarters and check it out. Then consider the following:

Inside the company offices, you want to know:

Another suggestion is to study the company’s website. Under the link “About Us,” you can learn about the corporate history and the owner(s). If they list the staff, check out their experience and focus.

Finding someone to help guide you as you start your career is invaluable. I know I’m lucky that my father was able to play that role in my life. He’s been in real estate-related businesses for over 40 years. He’s given me insight into what works and what doesn’t when running a company, and he’s also given me the room to develop my own methods and style. He’s listened a lot, advised a little, and always had my best interests at heart. He is a fabulous dad, but he is also what I would define as a good business mentor. You don’t have to be related to your mentor—that was just a bonus. But part of what you hope to find in your first mortgage broker job is someone who can help guide your career.

Not only at the beginning of your career, but even after you are well established, you will benefit from a relationship with an experienced mortgage broker and if you choose to open your own company, with other business owners. It’s always helpful to have a sounding board to help you focus on the heart of an issue. It’s also a relief to have emotional support as you weather business crises. Being able to talk to an experienced mortgage broker who’s “been there, done that” when the housing market slows, interest rates skyrocket, clients complain, and so on is invaluable. You need someone with a long-term perspective, someone who is not being judgmental, someone who is supportive, helpful, and without a self-serving agenda. They may not be able to solve the problem, but they can help you figure out what you need to do or, just as valuable, reinforce your own self-confidence that you can figure out the solution.

The added benefit of a good mentor is that it expands your network. His years in the business means his Rolodex is significantly bigger than yours. He also probably has access to the senior decision makers in companies. Don’t expect your mentor to photocopy his address book, but you can rely on him for suggestions on who to contact to resolve a problem.

The first, obvious characteristic of a good mentor is a willingness to fill that role. You can’t force someone to help develop you professionally. You will undoubtedly work with another mortgage broker when you first begin, but that’s not what I mean when I talk about a mentor. That person is to train you in the mechanics of the business. You want someone who will offer you more than a step-by-step guide through the loan application process. You want someone who will teach you the insider tricks to becoming successful.

Here’s an easy example. Anyone can teach you which websites to check for the current interest rates available, but a good mentor will teach you how to field a phone inquiry about rates.

The initial phone call with a new client is like a blind date. Since you don’t know each other, the conversation should be friendly and informative, but at the same time, you want to hold back a little. Don’t give away all your secrets … yet.

Frequently, the first question, even before the caller gives you his name is: what’s your best rate? While it sounds straightforward enough, it’s really a trick question and you’ve got to be careful how you answer, otherwise you’ve lost before you even begin.

First of all, you know that there isn’t one rate that fits all. The best mortgage rate for a young couple with limited resources is probably not the same rate that is available to a homeowner who has a big income, has built up significant equity, and is looking to trade up to a more expensive house. The best deal is tailored to meet a client’s financial circumstances, short- and long-term needs, and goals.

Second, let’s suppose you quote him the lowest rate currently available, without even knowing if he qualifies for it. As far as the client is concerned, you’ve just locked in at that number even if it’s not realistic. You can’t meet it and it will come back to bite you. You’ll lose the client and maybe even ding your reputation.

But quite often the caller will take the number you’ve given and call your competition to see if he can get a bidding war started. Sounds smart, except you know that it doesn’t work that way. It’s in your interest to get the client the best deal available, but you can’t do that unless you have basic information about his income, debt load, and available cash. Anyone who quotes a mortgage rate without that info is grabbing numbers out of the air. They’re meaningless.

But let’s say your competition hears your quote and decides to lowball his offer. Game over. The client hops in his car and heads straight for your competition’s office. It’s doubtful that the rate quoted will hold up, but once a broker gets one-on-one face time with the customer, he can get the information he needs, run the numbers, and then justify the higher mortgage rate. The customer may not be happy, but he’ll probably take the deal so he doesn’t have to start all over.

In that first phone call, you’ve got to be vague enough to cover yourself no matter what the customer’s finances turn out to be, while offering enough specifics to grab the caller’s attention and then get the information you need. You might say, “I’ve got 30 different mortgage packages. Right now fixed rates are in the ’sixes, but I’ve also got some lower adjustable mortgage rates that might be right for you. Or if you’re willing to pay some points, we can probably get a lower fixed interest rate. Let me get some information from you and work up some possibilities.”

The next important step is to make sure that the person who is the decision maker in the family will be at the meeting when you start the application process. Don’t assume it will be the man. Just as frequently, it’s the woman who handles the finances in the relationship. But whoever it is, that’s the person who needs to be at the client meeting. Otherwise, you’re just spinning your wheels.

See the difference between a mechanical repetition of how to handle a phone call—and one that will reel in a customer? You need much more than that to become successful, and if you can find someone who will help you learn the tricks of the trade, you can spend your time more efficiently.

One of the questions you want to ask when you interview for the job is who will be training you. Can you meet that person? If so, did you feel that the individual was happy to take on the responsibility of training a newcomer or burdened and resentful of the extra work? Do you think he could be your mentor as well as training supervisor?

There are professional and personal characteristics that make an individual a good mentor. It’s someone who …

While you want someone who is empathic and nonjudgmental, you also want someone who motivates you, challenges you, and demands that you do your best.

Talk about mentoring in your job interview. You want to judge if the company owner understands and values the role a mentor can play in developing you as a professional mortgage broker. When you meet the individual who will be training you, you’ll quickly determine whether this is someone who can walk you through the mechanics of the business or give you the insight you need to succeed. If not, look around the company to see if you can develop an informal relationship with one of the other experienced brokers in the firm.

A good mentoring relationship is one of mutual respect. It’s not a one-way street.

We started this chapter talking about whether or not you should second-guess your first reaction to a company. Certainly, you can—and should—figure out the commission potential at a firm. You can add in the bonuses promised, the contributions to your 401(k) retirement fund, and any other perks offered. But a lot of what makes a firm the right place to work is based on your instinct. The initial commission splits may not be as good at one company as at another, but if your gut is telling you that you feel more comfortable one place over the other—trust yourself.

You have to spend a lot of time working to succeed as a mortgage broker. Make sure that you like the team you join and the environment in which you will spend your days. Make sure that they share your code of ethics.

The Least You Need to Know