Episode Transcript
[00:00:00] Speaker A: And welcome to the latest edition of the Mike Depp show, A show that has started over 80 episodes ago where Mike and I decided that we wanted to challenge ourselves and see if we could do something weekly. What started as a non video podcast has turned into a video podcast due to the fact that LinkedIn, which is where we are live every Thursday at.
[00:00:23] Speaker B: 2Pm Eastern and of course 11am Pacific here in sunny San Diego.
[00:00:28] Speaker A: And we do that so the listeners can actually have a place to come talk. And if you make comments, we do show them up on the screen, I mean, if it makes sense. So we try to give you a chance to get some free personal branding in there. So if you're listening out there on YouTube, Spotify, Apple Podcasts, by the time you hear this, we appreciate you listening along and you could show our appreciation or your appreciation for us by giving a subscribe or a like or comment. You know, you never knew the power till you actually have your own show. Then you realize that that is a vanity metrics that certain people look at. But we do get a lot of impressions a lot. And most of the time our audience is mortgage executives, you know, in its live format and then in the replay on YouTube. The ultimate goal is to have those loan officers be able to listen to great leaders so they can build the footsteps or be entrepreneurial. Because that's the thing about this industry. Like it really is a very entrepreneurial industry. So there's no reason somebody can't be the next leader and one day look up. I know you're over 20 years old, the company's over 20 years now. I guess it'd be like 22 or we'll find out exactly what that is. But every time you look up, Heath Cantor and First Community Mortgage is rising in what we call the HMDA ranks, which is how the government tracks the amount of units and volume a mortgage company does. But look up and now you're in the top hundred. So we thought we would come on here. Keith, as somebody that obviously has had very humble beginnings and now is in a place with the top level, as my dad always said, you kind of go up the pyramid and it gets tougher and tougher. You're getting up there with that top triangle. So we know your time is also very valuable. We appreciate you coming on. And if you maybe just want to give a quick intro to yourself, to the company and how your company does lead with culture, so how you've been able to maintain that culture as you've gone to this high of a level now yeah.
[00:02:33] Speaker C: First, I would say I think your podcast is doing the same thing. Right. Like, because I think industry podcast experts say most podcasts die about six, seven, eight episodes in, which was the case for mine.
Well, exactly. And now you guys are on 80, so congratulations on that. That's a, that's an impressive number. And I'm sure, you know, it's just like any business you're building, you always take that progression. I was looking at the numbers for Tesla today and it's just pretty amazing just to see the steady pace that Elon and the crew have put on. But you know, it's, it's been a fun journey. As you said, we started in 2002. I had a small mortgage brokerage shop, if you want to call it that. We had 12 employees at the time. And I sold into a community bank because I wanted to get into wholesale lending and like run really like a multi channel full mortgage banking platform. And I knew I needed a balance sheet, I knew I needed a partner, so I chose a good one. Right. 22 years together and we've had our ups and downs. We've gone through the Great Depression, we've gone through a pandemic, we've gone through a lot of errors on my part, but they've stuck with me and I try not to make those errors twice. And we've just built a great team over this 22 year period. And it's been the ride of my life and I've got, I hope I've got more years in me because I'm not looking to retire anytime soon.
[00:04:08] Speaker A: Can you talk about. And I was talking with one of my adopt the brand clients, which I really even mentioned Adopt the brand clients here on the show. But you. What came up last night is the interesting dynamic of these regional lenders and they look at it from a number standpoint like regional lenders. But I looked at it as they're not just regional lenders. So the success lately and I guess post Covid and during these data like these eight months of, of margin compression, right.
The these regional lenders, but also the ones like yourself that were like number 10 in the mortgage collaborative and probably lenders one, you know, before that. It seems that close knit culture of knowing your area or knowing the people you, your roots, those there's about eight or nine that are really thriving right now. Why do you think that is? And why do you think some of us are very bullish that those are just as well positioned as some of these national ones right now?
[00:05:10] Speaker C: Yeah, that's a Good point.
We've considered ourselves a regional lender for many years and the idea now is to like take that moniker off and be more of a national lender. And you mentioned culture, but I think it has to do with access to leadership, running flat organizations. I think, you know, quite frankly the days of, I think loan officers in particular are getting frustrated with a production manager, a branch manager, an area manager, a regional manager, a co national manager and then you work your way all the way up. Right. And so I think that mortgage, that model is kind of dying out. And any one of our loan officers, while they don't reach out often, they always have access to me anytime they want to reach out and I'll have conversations with them.
We make ourselves available through monthly calls, takeoff calls, things where we're doing company wide calls with our team. So I think it's that access and what's going to be the key is, you know, I can, you know, I can say I want to do all these things, but how do we maintain that culture and how do we grow into a big company while remaining, you know, having that feel of being a smaller company? I think that's the key.
[00:06:31] Speaker A: Yeah, it's difficult. I know a story of recently a acquisition, probably just acquiring the loan officers of probably 150 to 200 IMB was acquired by a top end and they had a lot of attrition. I would say maybe 90% of the loan officers are gone. And I was speaking to one region and their leader, you know, was excited and 300 people on the call, they were having, you know, some great talks and how they were going to do it. And he actually felt a little foolish after because for some reason he thought that was like the core. And, and then two weeks later he's on a call with like 3,000 people, like people and never spoke to the owner. And then you know, that group ended up leaving because I think they felt so distant to the leadership. And I don't have the answer to how to scale the way you are. That's why we have you on the show. But I think that is a something loan officers are looking for.
[00:07:31] Speaker C: Yeah, I think everybody checks out when I say this because it's boring. It's going to be boring when I say this. But you have to process culture. Just like you run a process of your manufacturing line of doing a loan or anything that you have, you want consistent outcomes, you have to have a process. And again, I think people get really bored when I say that word. But that's what we're trying to do is implement a consistent process to where no matter the size we're in, we're going to do the same things.
Yeah, there might be more people on that company wide call, whatever it may be, but we're going to run the same place so that we don't get out of that intentionality of bringing our values down through the organization, you know, and making things real personal.
[00:08:18] Speaker B: How do you grow, Keith, vertically without growing horizontally? I mean like for example, I'm going to use Countrywide as an old model, right? They had the, they had the re. They had the, a county wide manager and then they had a regional manager, a state manager, a western regional manager and multiple vice presidents across the board. And as you begin to grow right now and you and you systematize the way that you're doing business, how do you maintain the consistency of your system growing vertically but staying horizontal in the way that you're doing business? Because everybody's going to be going in that same process. What is that look like from an operation standpoint so that you can grow horizontally as you do more volume, but yet vertically as you grow on a national basis.
[00:09:05] Speaker C: Not to be critical, but I wonder what all those people did. And I think they were buried in an organization and there was so much margin and profit that it just really didn't, you know, it didn't really manifest itself out. And I'm not, I'm, I'm saying that a little bit offhand, you know, just kind of off the cuff. But certainly we need to produce and manufacture and do loans that are compliant and within the rules and all those things. And that's, that's vitally important if you want to stay in this business long term. And again, we've, we've been fortunate to make it through all kinds of corrections and you know, things that have taken place.
But clearly with the emphasis on technology, marrying that with hiring the people that are professional and do their jobs in a way that require little to no management and in terms of corrective, always coaching and helping and providing tools. But if we have to sit down and have conversations about values or you know, you, how you represent the company or how to put a loan package together or things like that, we've made a poor hire and ultimately hiring the right people, putting them together with the right technology, providing an infrastructure where there's good role clarity on what takes place, policies and procedures are locked down and then you just go and I don't know how. We'll certainly have to add some layers of management. I'M not saying that we're going to be able to be this perfect flat organization. If we go from, we're going to do a little bit over 3 billion this year and we want to go to 10 billion. That's our goal. We want to get to 10 billion. That's rarefied air to get that, to get to that spot. And you know, if we do that, you know, we'll have some trial and error. But we're, our intentions are to grow as flat of an organization as we can because quite frankly, as technology continues to develop, it's just going to be more pressure on margin. Right. Let's not fool ourselves. And I think the people that are going to benefit that ultimately are the consumer because we're in a commodity based business and if we're not able to pass on the sharpest price, we're going to get left behind. And I think that's, that's vital. In the more layers of management you have, the less you're able to pass on that benefit to the client.
[00:11:31] Speaker A: Are you finding that's more like when people say that, not keep saying it. When you hear other leaders say it. Does your head go to operations like underwriting, closing, or does your head go to regional manager? Needed to recruit this, so I had to take on this. Another middle management layer on the sales side, probably to everything.
[00:11:52] Speaker C: Right.
Are you talking about like making hires where we're hiring proficient people so we don't have to do that, or are you talking about technology?
[00:12:00] Speaker A: I'm talking about like if you're watching a podcast and you hear a leader in our industry say we're going to excel by cutting out the middle management, do you find that they're referring to more operations or is that a universal term for more like sales?
[00:12:17] Speaker C: I think that's universal for sales.
[00:12:19] Speaker A: Okay, that's kind of what I assumed. But I think what you're saying is it can be anywhere, right?
[00:12:25] Speaker C: For sure, for sure. I mean, we wouldn't be good leaders and good representatives, our shareholders, if we didn't take a look at every aspect of our organization to try to maximize, you know, the value we're providing to our clients and our shareholders.
[00:12:40] Speaker B: There's going to be all kinds of like, you know, when non QM unexpectedly became more popular over the course of the last few years because of an increase in interest rates, you know, there had to have been some kind of growing pain for originators to grow into a new. It's not a new product. You know, we've been doing this for over 20 years. So that was the older. I don't know, I don't know what you call it. The alternative subprime. But it's not subprime. It's not IQM anymore. But yet there was a growing pain that came along with that in sales, not just for your organization, but all organizations. But yet it is something that, you know, you talk about making sure that the right implementation policies are in place. Did you have to hire so hire more or train more in order to implement that product back into your, into the sales role or because you're not hiring regional managers in that space. So how do you implement more training at the ops level or at the sales level since you're only one person and you know, you only have so many hours in the day as the leader of the organization?
[00:13:41] Speaker C: Yeah. So we did add some staff to our product development team. I think we maybe added one body there.
It really falls on product development gap markets and our marketing team, in conjunction with our branch leaders and retail leaders that we have.
And you're right, you have non qm. You have the rise of bond products everywhere. We're doing more bond lending than we've ever done in our organization.
You had alternatives to try to deliver these cash offer products that had guarantees of if the contract fell through. Just kind of rambling through. I don't know, I could. I lost count of how many products we tried to roll out. Plus it became a recruiting hot button of, you know, do you have a broad breadth of products? Because as the market, you know, tightened and everybody was looking for, where could I go to, you know, just originate one or two more deals? And that was sometimes the difference in, you know, you know, gaining a recruit or losing someone even on your team. Right. So we had to really ramp up those efforts. And, you know, we did so in the manner that I just said. But, you know, everybody out there thinks kind of, you know, struggling with those same types of things around product. It's vitally important to have a robust product mix. And we've never had a broader mix of products in our organization than we have today.
[00:15:09] Speaker B: As you talk about that, can I talk recruiting just for a moment?
[00:15:12] Speaker C: Sure.
[00:15:12] Speaker B: Okay. So when you're recruiting other originators that are out there, and for our listeners, that our originators are potentially making a maneuver in whatever state that you might be in, you know, when it comes to that product mix is there. You know, I remember I've talked to a number of leaders and they said, oh, yeah, you know, we had all originators asking for USDA and then we rolled it out, and you're like, oh, I'm in California for context. So USDA is not actually a hot button for California.
[00:15:40] Speaker A: Right.
[00:15:41] Speaker B: But when you roll out the new products, do you ever look at a product and go, you know what? Whether it's this, whether it's a bond product or, you know, or an alternative FHA that's not being utilized as frequently or something like that, how do you introduce that to the originator to say, hey, you know what? Maybe you should consider doing this? This is going to add to your purchase repertoire or to your purchase arsenal. You don't want to use that word.
How do you utilize that as part of the recruiting process so that you can say, this is how you were doing, is it was, and this was successful or is successful. But in order for you to grow even more, we want to be able to offer this to you as well, and we want you to grow with it if you want to. And this is what we're doing to prepare you for that.
[00:16:21] Speaker C: Yeah. Well, we have tools in our marketing toolkit, if you will, that, you know, have videos and how you sell the product, and we have training on. Do that, on how to do that. I would say that for a brief period, product, as I said, product was important to recruit. Now it's just assumed that you have these products or you're not even really considered in lockstep with, you know, Mike was talking about these kind of, you know, players that are, you know, doing pretty well and growing through this period.
I'm honored to be maybe included in those. But then. And then you have the, you know, the national guys, and of course they have the product because they have the money and the. The bandwidth to do it. So again, it's there, and it's something that we train on and have videos on and have the marketing pieces all together, and we will show anyone how to go sell a product. But I'll be honest with you, it's important, but it's kind of moved down to the.
Do you have a. Do you have a pos? Yes. Okay, check. And they're not too worried about which POS is, you know, do you have product? Yes. Here. Here they are. Okay, check. So it's just assumed that you have a good product set today. I think now, you know really what the. What's driving recruiting today is do you have someone in your organization that can show me how to build brand through social and social selling and you have someone that. Or do you have a way to coach me to grow my business from whatever 12 million, 15 million, 20 million, by 20%, by 30% or whatever they're wanting to achieve. If you can demonstrate those two things, that's really, I think what new recruits are looking for today, those two specific things. And guess what? We'll adjust and we'll all be there. And in a year from now it'd be like, check, we've got that. Check, we've got that. And I don't know what the next thing is, but I'm working on it.
[00:18:20] Speaker A: That is true, but I think this next summit is a little.
That's not the word I wanted, but maybe it is. Like when you go up Everest and you keep reaching those camps, this next camp of teaching social while being a great loan officer is I think going to be a little bit more difficult for some to really get versus others.
And so you'll see some separation there, I think. I think you're also going to see a lot of separation in scale. The magic number I'm seeing right now is about 350 units a month.
And if lenders are doing that, there are a couple vendors that I think are just so much better than everybody else that they're not available though for a minute below or they just don't pencil out. So why would you get in the business of harming both people with all of that vision? Talk by me. I did want to ask you a question. So you said coaching is important if we zoom in on it. When I think of Keith Cantor, I think following you on LinkedIn over the years, not just recently, but you've always had this ability to brand yourself with mentorship, whether it was you mentoring or you were building up mentors within your, your company, you've exceeded what I've seen other people be able to show what they're able to do in that category. But how do you or I guess this is a chance to talk about your company but a new group coming in. What are your foundation or building blocks on separating the mentorship between leadership, giving back to the community, waking up on Monday and being, you know, in that i10 ready to go stage or if you're not how to get there that piece. And then obviously there's the mentorship still in the industry of like how to take a great 1003 how to Break down an offer product and explain it like, you know, and which program to go. I just find when business is harder to get someone's it's, it's hard to get attracted to both. Somebody's going to take one look for one type of mentorship or the other, when really both could be put together.
[00:20:29] Speaker C: Yeah. I'll give a shout out to Brian View because he speaks a lot about this, and he. He talks about a hybrid loan officer. And.
And he even says it like, is this going to be. Can they do it? Like, can they actually grasp? Because they seem to go one way or the other.
We have a loan officer at our organization that is incredibly talented, top five, like, every month on the list, and does very little social.
And I keep challenging him that he needs to do it, and he knows he needs to do it. Like, this is a complete, like, great elo.
And I'm just waiting for him to take that next step and start a social presence in a consistent manner, because I think it will take his business to the next level. But you're right. I think we kind of gravitate to one or the other. The way you describe that, though, is. I was thinking about you asking the question. You know, I typically like to mentor people that want to grow.
You know, they want to grow holistically and more as a person. And, like, and then you were. Then you were going more to the technical side. That seems more like training. Right. Like, I could train someone to take a good 1003. I have to mentor someone into becoming a great leader or, you know, becoming an aspirational leader. And sometimes those things you have or you don't have, so, you know, that's. That's the way I see it, is like trying to identify who in the organization is even wanting or capable of that mentorship or that development in whatever way we want to develop them versus those that are just doing okay and just need technical training, and they're just going to be who they are, which is fine. They help us achieve our goal, and we love them on our team. But there's certainly those that want to aspire to more, and we want to be there in whatever way they need to help them achieve that.
[00:22:30] Speaker B: I want to ask you a question, Keith. I haven't asked another one of our guests, and it's not too taboo, but I'm going to. I'm going to see if I can broach this the right way.
[00:22:38] Speaker C: Oh, great. I get the. I get the hard questions.
[00:22:41] Speaker B: It's not a hard question, actually. It's actually related to sales.
[00:22:45] Speaker A: Okay.
[00:22:46] Speaker B: What I have found is that in talking to originators across the entire nation is that some of the top originators, incredibly smart, great at marketing, so on and so forth, but I have found them to be a little bit Scatterbrained and talking about me.
No, no, no, no, no, no. But when I say that, it's only because they're great at what they do. They're great at originating or they're great at leadership, but they're scatterbrained in some aspect of their life. And the only reason I mentioned that is because you're mentioning like, you know, because they can take a great 1003 and they know how to, and they know how to do business. But you're talking about handholding a little bit there and mentorship a little bit. So I want to be able to ask you the question of how do you take someone that's already successful and say you know what you're doing?
[00:23:34] Speaker C: Really?
[00:23:35] Speaker B: I like your top five originator right now. And he knows he needs to do social media, but he's just kind of like, ah, you know, if it's working, why do I want to fix it? How do you just gently say, I'm going to hold your hand through this as a leader?
And it's a little bit scary because you're not used to it. Maybe you don't like being on camera or you don't want or even worse, you talk about a holistic life. Maybe you don't want to take out 10 minutes a day out of your life to do this because they have kids and it might be little League or softball or some other sport that they have in their life for their own family or a holistic life. How do you hold their hand to say, we're going to help you expand, not take too much time out of your day, grow your business and as leadership, we're going to help hold your hand through this and then as a result, by leadership, by example, take others through that same process. I hope that wasn't too hard of a question.
[00:24:28] Speaker C: No, no, that was a great question. I would say. I thought we were going down a path of what do we do with our top salespeople? We, we, we make them all branch managers and take them out of where they're really good skill set. Right. Like they're just crushing it. And we just, we just, we've done so poorly as an industry. Not just supporting them and encouraging them on to just keep growing their business. But anyway, I digress.
In the case of the person that I'm talking about, the specific example, I connected him with a top LinkedIn expert. I'll give him a shout out, Darren McKee.
And he does a monthly cohort, cohort where he brings in people from all industries and Trains them and gives them his playbook. Just gives them his playbook. On how he went from basically 0 followers to 125,000 followers, and he just quit his job the other day and this is all he does now. It's just incredible to see his success. But I put this. I helped get this connection done. I'm not sure if I participated monetarily in helping, but we would consider that. Right. And then he went through the training and has since not done anything.
So to answer your question directly, we want to find resources and tools either inside the organization or outside of the organization. But there has to be this, this match of resources and willingness to do it. Right? Like you can, you can provide all this stuff. But if someone's not willing to take the steps forward, then it's ultimately their business. And we have to give our loan officers and branch leaders the autonomy to do what they want to do.
We don't want to put too many mandates, especially on the successful ones, to do something that they don't want to do. So I think it's just give them opportunity, give them resources, continue to show them paths of success.
And ultimately, the great thing about being an LO in our business is if you're a self gen lo working for a company like First Community is you get the choice. You know, we're not going to, we're not going to mandate or dictate you a specific way of success, a specific path of success. And I think that's what's beautiful about our business. Right. We have loan officers all across the country doing it in their various and unique ways. And those that have made the pivot from the pandemic and the world has definitely changed. Right. It's totally different. And we have older los that are struggling a little bit to make this pivot. And a lot of our successful LOS are the younger los, and they've just simply taken a few tools and they've applied the right discipline to go out. And they're just.
Even in these higher rates, they're doing really well. And I couldn't be prouder of their, of their results.
[00:27:25] Speaker A: That's a. I mean, that's kind of a big item in the industry, whether it's social media or a mortgage technology and rolling it out. But I think the social. We have an episode, if you scroll back on how we created this podcast for any listeners and we talk about many reasons we've been able to get here. I think accountability partner is probably the number one. And there are, there have been weeks, especially during our journey early on where I didn't want to do it, and because Mike was doing it, I showed up. And I'm sure, you know, vice versa. It's also so many similarities to like working out, because the people that will tell you it's a great mindset to work out, you'll feel great about life. Like, they can say that, but the mirror still has some vanity metrics to it. Just like this podcast is great, but put a lot of money into it and, you know, if we were ever able to try and break even though the people are going to ask about those vanity metrics. And then you get on a call and then you, all of a sudden you don't have that same positivity you had going into the call because they, they portrayed some vanity stuff on you. And I think it's the same thing you're going to run into when you start going on Instagram. You know, you might get 100 quick followers and then you plateau a lot. Just like working out and go back. Listen to the podcast, if you listen to this one after this podcast, because there are some nuggets there. But I think accountability partner, not just when you get started, when you hit those first couple is so important.
One question, just to pivot on first Community mortgage cares. Like, you've been able to brand that really well. Don't know who helped you guys with that strategy, but don't take for granted. Not many mortgage companies have a word behind it that really sticks well.
Like you've been able to do with that. Can you talk about how that cares line hits your customers at the community level, like helping loan officers get that into their community and then just at the homeowner level, you know, you always have a great story of really caring and getting somebody into a home where somebody else rejected them.
What is, what is that that's gotten you here? And now as you expand beyond your backyard, how do you see that morphing into something bigger?
[00:29:49] Speaker C: Yeah. So FCM care is. It's been awesome. It's our 501C3 employee run foundation and it is employee run. I am on the board. But gosh, we've got 14, 15 board members. And I really try to be a small voice in the room.
You know, really, we identified early on our four primary stakeholders that all have to win for us to have success. Right? Our clients, our team members, our shareholders. But also we didn't want to forget our community.
[00:30:19] Speaker A: Right.
[00:30:20] Speaker C: That's an important stakeholder.
[00:30:21] Speaker A: Right.
[00:30:22] Speaker C: Because if it wasn't for our community, we wouldn't have the resources we have to, you know, do the jobs that we have. And I think it's really important when you're trying to identify purpose across the organization. People show up for all kinds of different reasons, right. Like some people are really excited that our organization wants to go to 10 billion and some people could care less. Some people are just showing up for a paycheck and some people love the fact that we're helping first time homebuyers. Right. But a lot of people on our team really connect with FCM Cares because they want to see us give back to the community and serve the communities that do so much for us. So we were, I love United Way. We were supporting United Way, but we would be sending off money and we just didn't like, just wasn't. We didn't feel it. Right. We didn't see the impact. So I decided, hey, let's kind of do our own thing to where we have direct income impact on the communities we serve. And we'll actually feel and touch the street level of where we give. So like, you know, we get, we raise money through employee donations, like through their payroll or that we do one off donations or we do fundraisers. We just had a big golf tournament and our team, just for 11th year doing the golf tournament, two day golf tournament, we raised like close to $80,000. It's just crazy, right?
[00:31:43] Speaker A: Wow.
[00:31:43] Speaker C: Yeah.
[00:31:43] Speaker B: Wow.
[00:31:44] Speaker C: Yeah. And so what happens then is the cool stuff, right? The stories and we'll do, I think a couple make a wish, you know, grant make a wish, you know, a year. And I think one last year we did in Cincinnati and one we did in Tennessee. And so we have parties and we get to meet the recipient and everybody gets to, you know, come in and share in the story and they're touching and feeling, you know, this person that we're supporting.
I mean I could go on and on, right? And where it really helps is loan officer in North Dakota, wherever. I'm just trying to random place, you know, they want to participate in a heart walk, cancer thing, whatever's important to them, they will reach out to FCM Cares and say, hey, I'm going to do this and I have a target of raising 2000 and then the, the foundation will match it and so we'll just double that amount and you know, to have a bigger impact. So it's, it's all kinds of ways that we help and it's morphed into over, you know, seven, eight years. And I knew that it would into areas I never dreamed that we would be going. And I can't wait for another, you know, seven to 10 more years, you know, to just to see the lives that we touch through the foundation.
[00:33:06] Speaker B: When I hear and listen and even watch you talking about that, the word that comes to my mind the most, I hope it's appropriate is gratitude. And the reason I say that is it's hard for people to have so much abundance in their life and give, whether in time, money, or both, without having gratitude. And I think that one of the awards that First Community has received is like, like best place to work.
And the question I have in regarding to that is you have gratitude in giving and you have gratitude in how it's displayed. Is it okay for me to ask? The question to you in regards to gratitude is what are you grateful for during the growth process at the beginning stage and in the middle stage and its present stage? What are three things that you might have been grateful for in your growth pattern? Because as you're growing, you have to have experienced maybe some on an industry basis, there's been some loss because of interest rates or business or whatever, but what are the moments that you may be. Might be grateful for so that you can produce a better company culture that you've already produced that have caused you to say, you know what, this is what happened in the industry and this is how we're going to express gratitude as a company back to everybody else, whether in charter community or to the company itself.
[00:34:25] Speaker C: Yeah, I don't know that I could contain the list of three, but I'll try and, but I will, for sake of time and the podcast.
You know, as you were asking the question, I was really thinking about being grateful. I know this sounds weird, but the disruption in our industry and the tough things that we've gone through over the last couple of years have taught me things about myself that I never would have learned if we didn't experience what we've been going through. Like, I mean, I can pull out this, this journal right here, and you don't want to go a year ago and see the depths of the things I was learning about myself as an individual about, you know, trying to grow my character. And I learned some things where I thought I was all buttoned up, but you don't realize until you go through those difficult struggles that we all went through, like whatever business we're in, we all had to make adjustments and, and really difficult decisions, and those weren't easy. And, you know, it's hard to show up each and every month and know that you're doing the right things, but you just get in your, you know, you get your.
You're getting kicked around pretty hard with the results, and the results matter. And so I'm grateful for that. I'm grateful that I've grown as a leader, probably more in the last two or three years than I have, you know, the previous 19 or 20.
I'm grateful, extremely grateful for the team that has stuck with us and has bought into the vision and they've sacrificed. They've gone, I think, two, three years now without merit increases.
That'll get me a little emotional if I talk too much about it. But, you know, it. It's. They've had to sacrifice to. Right. Like, clearly. And you know, finally, I'd say I'm very grateful for our partner at the bank. We went to the bank, and when I say the bank, we're, we're bank owned. We're a wholly owned sub of a bank. So we operate like an imb, but we have a small community bank that owns us and they give us all kinds of autonomy to, to run the business, which is I'm really grateful for. But what I'm most grateful for is we went to them at the very beginning of this experience, you know, like april of what, 22. I think that's when it really started shooting up the rates. We say, look, there's going to be companies that fail fast. There's going to be companies that fail over time and very slowly, and there's going to be companies that come out of this and really thrive and do some great things beyond. And we want to be that third company. But that being said, it's not going to be the easiest ride as we continue to grow and expand in the face of a challenging market. Right. So they haven't blinked. They really haven't. The board has been like, behind us 100%, and they've been a great partner, and I'm very grateful. So really, I think if you, if you summed all of that up into maybe one word, it might be perseverance. I'm grateful for the perseverance of myself, of the team especially, and of our board.
[00:37:36] Speaker A: One big takeaway from what you said there is your willingness to go to the bank probably at the right time. Where others waited a month, waited three, waited six. Reminds me of a story from this past week. I was preparing for the show and the podcast with Michael Zhao. It was late, and all of a sudden bat came into my house, into my kitchen, and I was doing the. The dance with it. I all had access to was a blanket. So we were doing the Tango and the, the Foxtrot. Yeah, the Foxtrot. Just like the 10 year does, you know, with mortgage rates and was unable to capture it. That sonar was able to out it had better technology than my blanket. So it at some point disappeared for 20, 30 minutes. At that point I looked around for it for quite a while, couldn't find it anywhere. Went out to the garage, was able to get a tennis racket, some gloves. Still couldn't find it for another five or ten. At this point I had to make my wife aware, you know, we had a visitor and so went up, open the door and then went down and during this process shut Claire's door. Right on Google you turn off all the lights. This for the listeners that maybe have a bat. Turn off all the lights, open up a door and in the darkness and sure enough I sat there in my, you know, foxhole on the ground, still wanted to be able to see the door in case, you know, raccoon decided to join the party. But then you know, it went around and would come near me and I would swing and come near me and I. But eventually it went out the door, ran, shot it. Where I'm going with this is next 48 hours are very interesting because this isn't my first. About over a decade ago I ran, I had a run in with a bat. Never even knew this. You start going on Google and it's also a public service announcement. Rabies is a disease that if you don't get the vaccine within three days and or I don't know what happens but if you don't do it within seven, the mortality rate is like 100% and it's one of the most painful deaths. Had no clue. So the whole next day I am judging myself. I finally get told to go and then that whole like into that night, we still haven't taken Claire because the chances are almost zero. Then the chances of bat are like 0.05%. But the door was open just enough and the pediatrician would be like, well, it's on you, it's on you, it's on you. So one quote I read really well and we ended up taking her because the quote I ended is like as a parent it's your duty to prevent the worst case scenario if it's within your power. And it's made me think a lot about that for like the last 72 hours or 48 hours, whatever it's been is, you know, because the chances like to Put her through all this is crazy. The chances she got bit are like zero. But because the worst case scenario is death, like, could you live with it? I kind of feel like, so listening and preparing for this show. I listened to a 2022 show with you and Rich Zerbinski on the Mortgage Collaborative and he brings up and he's like, oh. And so Mike Mulcahy predicts that next year could actually be one of the worst margin compression years. And blenders should get ready. And on the show you say something like, wow, that's interesting. Hopefully it's not as bad as 2008. That was really bad.
But it was interesting to me then because we know what ends up happening. It was, I don't know if it was worse, but it was bad and has been bad probably longer. Right.
But the, I guess the information was out there, right. And so some lenders probably took it and said, well, the math says that we'll be fine. It'll come back, always does. And some lenders, kind of like parents, parents of their organization made some of those worst, like just in case, worst case decision that maybe, maybe the bank treated you a little bit differently for those six months than they would have because you had to tell them. But in hindsight, you clearly did the right decision telling them that. And so I commend you for that. I'm thinking a lot about it and I found it very relevant that right around that time you just said like April 2022, I think is when you tape this, that podcast and you said it's a good time to slow down. Good time to invest in tech.
[00:42:00] Speaker C: Good.
[00:42:00] Speaker A: Time to get lean and it'll be a good time to really evaluate who we are as a business. And sounds like you've made a lot of the right moves. And I think you're two, you have made two great hires, you've made a tech transformation on loses that we could probably do a spin off show and probably get high ratings because everybody I talk to is saying, should I move or should I not?
And I give kind of two answers on that. So with that, I don't really have a question, but I will say, do you have any thoughts or any animal experiences yourself or thoughts on worst case scenario?
[00:42:34] Speaker C: Well, I can't do that bat noise as good as you. Is that like a, is that a button you push or do you, is that really you? Can you do it again? That's really me.
[00:42:41] Speaker A: I do that.
[00:42:43] Speaker C: I also, yeah, you sound like you should be like in a movie or something, like doing the Background noises.
[00:42:49] Speaker A: I'm like a chameleon. Like, as soon as I encounter an animal, I then get its powers for a good couple of weeks.
[00:42:55] Speaker C: I would like to clarify, you know, I think we were right that there were three types of companies. Those that failed fast, those that failed, you know, slowly over time, and those that, that thrive. When I say fail, maybe I should have said made the strategic decisions to get out, because trust me, there's been days where I wish I was like, it's been like, so there's some smart people and whatever path people chose, I'm sure was the best for their organizations. I'm not at all trying to criticize. We just chose that we wanted to like when, when we were small, when we went into the Great recession back in 2007, 2008, we only had 30 employees. We were small. That was one of the reasons why we probably came through it pretty fine. And the next thing you know, we woke up, we had 300 employees. You know, we had hit a billion dollars in funding because there was so much talent on the street. And we just know going through any type of disruption, there's always opportunity if you have the right leadership, if you have enough capital and you have the right plans, you know, as you, as you go through these periods. So again, wasn't trying to be critical. We just, we just set off running free plays. We were going to try to grow and expand our market share, which means more sales people. We needed, we did need to right size the organization, which we had to do. So we had to get leaner. And then we wanted to pour a bunch of time and effort into better technology and getting more efficient in how we went about implementing and executing on technology or process. And we've run those three plays and we haven't come off of those three plays. Now as the market normalizes, I got to find maybe some different plays coming up. But the team has done an excellent job running all plays at once.
[00:44:36] Speaker A: And you were able to get off an LOS that a lot of the industry, you know, will be paying per unit and it'll. You made the right move, but did you. Were you doing it in the middle of units going down where you had to tell the bank that, like, it's still a smart decision to put the time into it, or had you already made that transition? I think moving LOS is obviously is a resource game as much as it's for those listeners that are novices or loan officers wondering, you know, how that occurs. It is like moving a cruise ship, right. And so were you moving the cruise ship in the middle of the storm or the storm just passed or was it coming?
[00:45:10] Speaker C: Yeah, we didn't want to move number one, but our cio, Andy Badstubner, he went through and I think he did his diligence really well. This was a very pragmatic and well thought out decision and we just couldn't afford to stay. And ultimately today we feel like we got a little bit of a benefit on the features and usage and what the users experience is. So. And not saying that the other company won't catch up and surpass what we have, but for our organization it was the best thing to do. And then, you know, kudos to Andy and his team and really our entire team at FCM to do it within a year period is almost unheard of. And it just, it just shows the commitment that the team has and how aligned we are as an organization to make something like that happen.
[00:46:12] Speaker B: Keith, as you say that, I want to go back to part of our beginning conversation when you talked about growing vertically but still staying horizontal. I was at, when I was at Western Secondary about a year ago, there was a panel, there's only about 20, 20 of those 20 people there. And what they were talking about during that time period a year and about a year and a half ago was like, hey, you know what, certain independent mortgage bankers, they've only got enough reserves to last maybe about two years or so. Yeah, I'm not talking about you, I'm talking about other smaller companies. But yet here you are talking about continued production in, especially over the course of the last year and a half when potentially there were losses because of buybacks or our Fannie and Freddie just saying XYZ things, which was, which has been challenging for every imb.
But as the head coach, have you been tempted at all to hire like an additional coordinator or assistant to your offensive or defensive coordinator?
[00:47:14] Speaker A: Right.
[00:47:14] Speaker B: You're talking about being offensive in making and producing more originations, but also being defensive in your technology stack and doing other things in your operational growth, have there been temptations to say, you know what we need special teams or offensive defenses and then saying, well, maybe we don't need a regional, but we kind of need a regional. Whether. And I'm not saying regional in sales, I'm saying maybe in operations in that growth pattern, because there have been a lot of layoffs in the entire industry, but as you begin to grow and have been successful doing so, what's the temptation of doing that and what is the thought pattern in growing or operational either in the vertical concept of growth or in a horizontal growth concept. What's your mindset going in that as a leader?
[00:48:02] Speaker C: Yeah, Michael mentioned we brought on a couple of leaders. We've actually brought on three to four senior level leaders that are on the exec team. And what that's done through their diversity of experience is we've been able to bring on greater risk management tools down through the organization that are extremely important, whether that's interest rate risk modeling or, you know, tools that we use in the compliance world or tools we use in technology and even increasing our depth and width when it comes to cyber, whatever that might be. I just think that the level of the leaders that we have, the diversity of their experience has allowed us to, you know, implement maybe tools that we didn't know about or bring on, you know, even relationships that we didn't know about that have helped, you know, all across the organization, you know, specifically corporate and operationally when we're talking about, we're talking about those things. So we've been able to do it while not having to add a lot of bodies, to be honest with you. But, but certainly resources that have gone to developing these tools that we use on a daily basis. And you know, while I consider ourselves to be a lot like an imb, we're regulated by the fdic. So, you know, we're about to go through a safety and soundness exam and actually it's our fair lending time. Excuse me. Safety and soundness was last, but we.
[00:49:36] Speaker A: Go through all of it.
[00:49:37] Speaker C: Right. And we're kind of a little bit of a unicorn in regards to the size of our mortgage company versus the size of the bank. So we really kind of, they take us through the wringer because the mortgage company presents a lot of risk for our bank.
So we're scrutinized pretty heavily by the regulators. And we're fortunate to have those leaders that we have in the positions. Our chief risk officer, Samantha Meyer, you know, I've already mentioned Andy Bad Stubner, Jeff Panther, who runs our capital markets, and Brian Katz, who is our cfo. Those people work as a team and they're constantly evaluating where we need to be from a risk perspective and making sure that we're doing what you say and that's running an organization that is producing high quality loans.
We're staying compliant and we're staying safe from a security standpoint.
[00:50:28] Speaker B: Wow. And throughout even that, I mean, I can't help but think that, you know, you even, you might have, you know, you cannot, you can't Always bring a Bill Belichick, you know, into the team as far as the head coach is concerned, trying to lead everybody. But then I just think about the culture that you have. And I'm going to go back to the word gratitude because in order to, you know, not only I can see in our interview process right now that it's not just about what are you bringing to the team and what. Not only is it what are you bringing to everything.
And I would tell as us to have to all of the ancillary salespeople that want to hit the other CEOs and leaders up is how does a company leader, and this isn't a question, this is more of a statement. How does a person express more gratitude when it comes to the leadership? How you bring someone aboard when you're going through that interview process. How do you express gratitude when you're talking to somebody? Because what I this is the again, this is the first time I've expressed this in talking to so many leaders is that when I hear what you're talking about in the vertical growth, it's that you have, that you've taken the lessons that you've learned from, you know, from 30 employees back in the first crisis into the growth pattern between 2012 to 2018 and thinking this is what we learned in the past and this is what, this is not only what made us successful, but we're grateful enough to have what we. What we have to grow from 2008 into to 2022, we're going to hit some growth bumps.
Is there as a leadership, as you handhold not only yourself, but also your operational staff, is there a time where you can, you've already done this by example, but you have to handhold someone to actually go deep inside of themselves and go, yeah, go ahead and write your journal. Tell me what, tell your journal what's on your mind so that you can grow. How do you handhold? I'm gonna not just before I alluded to salespeople, but now I'm gonna allude this to operations. How do you handhold operations to go? We're going through some tough times right now and I would like to be able to reflect for you personally so that you can grow. So that we can grow as we begin to grow vertically, you can grow as a professional in operations and begin the. And be the leader not only for yourself. Cause you talked about whole, a whole more holistic way of commanding yourself as a person. How do you lead them? Handhold them not only to grow professionally and grow personally and then as a result in your leadership current capacity of being one of the best places to work. How do you handhold them so that they can know this? Okay. Not just go through your operation but how do you get them to understand, know this so that they can now implement this for growth in your current growth trajectory as you go from top 100, hopefully into top 50 again.
[00:53:27] Speaker C: Remember I was talking about providing resources.
We started a first community mortgage leadership academy where we. Yeah. Where we try to take our mid level managers through core competencies that we've developed. There were six kind of MBA level, quite honestly, MBA level classes that we take them through.
What we've been running recently is summit meetings where we bring the, or we bring the leaders of the organization in twice a year and we have workshop settings but all of our senior leaders, which they can bring down to mid level leaders have access to some really incredible talent or organizational psychologists leaders in, you know, how to build, you know, build out career paths, you know, a lot of around role clarity and trying to figure out, you know, where they want to go next. So it's not a perfect science. Like it's not as easy as I'm, it's, it's a little messy. Right. Like we don't have just, we're not like bank of America or some big huge company that has just like, you know, this is the way you're going to do it and it's a straight line. But I'm really hoping that throughout the organization we're emphasizing conversations on, you know, through, through employee reviews and through conversations and through opportunities that are created that you know, there are intentional conversations taking place every day about where do you want to go, where do you see yourself and how do we help you get there. And even if that's maybe them going on and joining another organization, if it's, if it's better for them and their family, then we've done that person well and I'm sure they've done our organization well while they served here. So you know, there's not a lot of magic to it. It's just a lot of work and it's a lot of intentionality and I think we're coming up on time. We didn't even get to talk about values which like really gets me fired up. Like if we could talk mission, vision and values, maybe maybe we can do another podcast where we get into values and I think our organization approaches values an entirely different way than most and maybe I'll share that with you on the next one.
[00:55:35] Speaker A: Yeah, we appreciate it. I always pride myself. I think I'm able to see the industry different than most and I have many different reasons, data included and people in process. I believe First Community Mortgage will be top lender in growing and growing and happy to tell people why. But if you're listening, loan officer, it's always good to bet on a horse that coming around the pole position and you know is going to end up winning. Getting on them now versus after they've crossed the finish line. You don't want to do that. So thank you, Keith. If there's any, you know, final thoughts here. We, we appreciate you coming on and it's, it's meant the world to us, really.
[00:56:20] Speaker C: For sure. Yeah. I thank you both for the opportunity. I love doing things like this. I, I would say that I've already said it. I'm very grateful for our industry and the opportunities it provides.
I can't imagine my life without choosing to go into mortgage and it's been a great ride and I continue to look forward to serving for many more years.
