Episode Transcript
[00:00:00] Speaker A: I was trying to get some lighting up here because this is a mic'd up show. It is season four where every mortgage has a story.
And we are here to talk to people out there, our listeners who want to come to the ultimate hub. We have hidden stories behind the mortgage industry. We're going to watch them come to life. So I'm Michael Kelleher.
[00:00:22] Speaker B: And I'm Michael Zao.
[00:00:23] Speaker A: And together in every episode, we both dive deep into the entrepreneurial spirit, the strategic insights and the breakthrough innovations that built the world's greatest mortgage companies. So if you're advancing your career scouting for industry leaders, we found them, you're going to hear from them today.
And we're also always available to explore opportunities in fintech and prop tech. If that interests you, you're in the right spot. So get ready to unlock the story behind every mortgage.
Let's dive in.
Our guest today, Cash and I have gone back quite a while. I've admired always what he's done. He's always willing to take a call and he's on those calls, very blunt about what he thinks about. We often talk mortgage technology, but it could be landscape, could be direction. And I've learned a lot of lessons from him and I really admire the way he does business. And what stands out to me is one of our past guests. Highly recommend you listen to our episode with Stan Middleman. But we both, Michael and I dove into his book to get an understanding and I couldn't believe how he really built his empire from his ability to write scripts, hire people that can read those scripts, refine those scripts and go out there and sell more than referral partners out there in the field. And it makes you wonder. There's not enough of those in our industry and it's a hyper focused world. So you need a great leader, Cash. You are that leader. Do you want to just quickly introduce yourself?
[00:01:57] Speaker C: My name is Hash Sagafi. So I, I got into the mortgage industry in October of 1999 and I work at Liberty Home Mortgage. I guess you could say I own it, I suppose, but I'm a loan officer. I've been a loan officer for 26 years.
And the biggest thing I tell people is I'm just a problem solver. Give me a problem and I'll solve it. Like in the building we're in. I've owned this building for four years. We still don't know where the hell the water main's at to shut the damn water off to the building. Because I went to change out one of the Toilets and freaking. Holy shit. I shouldn't curse. I apologize. I didn't know how to turn the water off in the building. So I've owned the building for four years. We don't know where the main's at. So I said, call the water department in the fire department, because the city building department will know where the main's at in case the building's on fire.
So as dumb as that sounds, I solve problems. What I do all day long. It's all I do.
[00:02:49] Speaker A: You do it with a positive attitude. Listen to you. This has been the worst market in, in forever. Like it's never lasted this long, right? And I guess optimistically, everything since that's closed, anybody that's bought a home since 2022 is in the money. But when's that? When's that day going to come? And yet every day you have this positive outlook. Obviously, people feed on it. Can you just tell us why it's a great day today?
[00:03:15] Speaker C: I'll tell you two quick things. One is this market makes 2007 look like a picnic. Like, I'm this market, man. This is. I. I've done this 26 years. Naturally, I was born in 1973, not 1927 or 1932. So I, I didn't experience the Great Depression, so I guess that had to be worse. But outside of that, man, this market is brutal. So to, to the people right now in my company, I tell them this all the time. I tell the watchers who are in the industry, if you've survived this, I don't know how it gets worse than this in the next 20 years. So, I mean, God bless you. Congratulations. You could withstand anything. So this one's. This is tough. So if you're surviving, I think kudos to you. You're doing amazing things. As far as my outlook goes, it's really easy.
I was almost murdered June 19, 1997.
I was total random act of violence. When people say, hush. What happened?
Nothing. I was walking back to my car and five people just ran. Just came up to me and my friend and one of them stuck a knife in my chest right here, dead center, my chest. And I almost bled to death. So, I mean, I almost died. I'll never forget laying on the dirty floor at BW3 in downtown Cleveland.
I passed out because the amount of blood I lost, I. I passed out from the blood loss. But I was lucky that Metro Hospital is right there. And I got picked up quick. I got to the hospital and they cut me wide open and I survived. So I Mean, that experience. I just got done telling this to a customer before I came on your guys show.
She was telling me that she's having a panic attack.
She just went into contract yesterday. She just went to contract yesterday. We haven't even started the loan, for God's sakes. I just sent her the application this morning and she's like, hush, I'm having a panic attack. And I told her, I said, listen, this, like, let's, let's ease up our expectations. I went through this whole thing with her of like, this is not the. I mean, it's not cancer. You didn't get diagnosed with cancer, for God's sakes. That's a tragedy. You know, if we run into some bumps and bruises and I get delayed by closing, I miss my closing date or the house doesn't appraise for value.
That's not a tragedy, that's an inconvenience. So if something happens that this house falls out, it's an inconvenience. It's not a tragedy. I just went through that story with her 20 minutes ago. I hung up with her like 156 to jump into here, whatever. So, I mean, so I was almost murdered. 1997, baseline for everything.
So when you tell me, hash, this market's horrible. I mean, we've been losing money for three years.
We've been getting killed. I mean, three years ago I had 300 employees. Today I have 100 employees. 70% of my, my head count's gone. We're doing probably 15 million a month in production right now we're doing 60 million, which. There's companies out there that do more than that in a day and a half. I get it, but there's a lot of companies that don't either. And I started the company by myself in November 14th. And like I say, I'm just a loan officer. I started by myself in November of 14.
We, I built the company up to 300 people. We're a mortgage banker. We underwrite everything in house.
I'm telling you, this is the greatest opportunity in the world too. Michael. For Michael. Michael. I'm so excited right now because so much that I'm reading on LinkedIn, especially live on LinkedIn, I read so much, all of these consolidations, you know, Bayview, Watt Guild Mortgage and, and Rocket and Zillow might come together. I love it. I love it because the bigger those companies get, the, the less user friendly they become.
And when you become a giant, there comes a point when even the owner of the company cannot overcome you Know their size and their size begins working against them. So for square companies like me, they're looking to become the next big thing. This is a huge opportunity. We went like 400,000 loan officers as an industry three years ago down to 100,000 right now. How can you not say this is a huge opportunity for those who have stuck in the game? I love it.
[00:07:08] Speaker B: Does it make a difference on location? I mean real estate's mantra is location, location, location. And so you're out in. In Ohio. I was just there last and so does it matter? As far as I know volume is going to make a difference. You know, I live in California, so my. Our average loan size, median loan size is probably going to be a lot larger than the ones in Cleveland or Cincinnati. But in units wise for the. On a nationwide basis, how. How do we reframe the narrative to say, oh, the market is bad, but yet in the lower price, in lower priced housing, it looks like that there are actually more units being sold. So can we re. How do we reframe the narrative to our originators at that are out there to go to. To just think differently than everybody else at the.
[00:07:53] Speaker C: That's a great question, Michael. At the end of the day, here's the bottom line. Like I. I'm here. I got my Brees wrestling T shirt and everything I do is associated with sport of wrestling. My friend Lee Kemp. Lee was a three time world champion. He was on the 1980 Olympic wrestling team. But Jimmy Carter boycotted it. They didn't go that year. Whatever.
Lee wrestled for a high school with like nine kids on the team in northeastern Ohio. In the middle of nowhere, there's there. Darrell Burley was a national champion. I think his. I think he was the only wrestler on the team in college. There are guys. Mark Branch, my friend, he's the head coach of Wyoming wrestling. We were teammates in college. Mark had an 8 and 9 record and won the national tournament. What the hell does have anything to do with mortgage. Has everything to do with mortgages because at the end of the day, it doesn't matter where you are. Market wise, I'm in Cleveland. Our average loan is $202,000. As a company or 202, you give me a purchase of 400,000, I'm freaking running circles in the office. Looks like I'm here, like I won the lottery or something. People think, I mean I'm like 400 grand. This is unbelievable. If Michael, somebody called you and said there's a $400,000 person in California and say where the hell is that? That thing doesn't even freaking exist. Not even half of that number. But the bottom line is if you go in and do the right, you execute the tasks, the success oriented actions that you should be executing on a daily basis and you stay consistent and you're positive with what you do. I don't care if you're the only wrestler on that wrestling team. If you do the right things and live the right lifestyle, you might win a damn national title. You don't have to wrestle for the number one college in the country and be on this gigantic team with all of this and that and the other. You don't go in and do the right things and live the right lifestyle. And I don't care. You could be on the tip of Alaska. That's what's so great about our business. Back in 1999 or 2000, when I first started, I used to drive to people's houses. I remember going to pick up a. I'd call customers, hey, I got to pick up a pay stub. And they'd say, hush, I'll leave it in my mailbox. And I drive to their house the next day. And the damn pay stub wasn't there. And I couldn't call them in the afternoon because nobody had cell phones. So I'd wait until the evening and I call them at 8 o' clock at night. Hey, it's Hesh. I at your house. Oh, Hesh, I forgot to put the pay stub in. I'll put it in now. And I'm thinking, you freaking on and on and on and on. And I got back to their house the next day. Pick up today. It's just, hey, shoot me a text with your cell phone. And I'm calling them at one in the afternoon. This used to be a job in the evening because everybody worked and they couldn't today because of COVID the greatest damn thing happened. Nobody was working remotely. This, that, the other. I get my job done by four. When I'm done off of this podcast, my day's done. I might go do the mulch. We got to mulch a couple more places in the building. Like, I might go do some mulch. I'm dead serious. It's like, how can't you find opportunity? I don't care where you live, what market you're in, there's opportunity all over the place.
[00:10:38] Speaker A: So to take advantage and build this opportunity, what do you see as some of the stepping stones to, to grow? Like, can you talk about. I think some people often on Our show talk at a really high level. But what's it like hiring your first underwriter or hiring your first processor or h. Hiring your first brand branch manage or some loan officer that's actually in charge of other loan officers.
[00:11:05] Speaker C: I mean, here's. I remember when with Liberty, November 14, I opened the company, I went to fund my first loan. Okay, we had no idea how to fund. We had no idea how to sell a damn loan. We had no idea, like, my processor was me and my processor and I worked at a bank previously.
So I mean, it was a bank.
To this day, I don't know if they had a website. They were called Proficio Mortgage. I could barely pronounce them. And God bless them, I work there. That's wonderful. Customers would say, hush, what's your website? I couldn't even spell the name of the place. And I'd be like, don't worry about it. Who needs a website hash Sagafi. Just you call me. I got you. They'd be like, what's the company website?
I don't get no that technology. I'm a child in the 70s. You don't need it. The truth was, I didn't know what the hell if they had a website. If they did. I couldn't even spell the name of the deal. I told my buddy while we went. I was in his bridge. I was like, where the hell did you.
I can't even pronounce this place.
But anyways, so we went to fund our first loan at Liberty. We had no idea about anything. I was like, screw it. Fund the damn thing. I said, the worst thing they do is like, I don't know what the hell they could do to me. They can't kill me. So that's just what we did. My biggest thing I tell people is this is eat humble pie. You don't know anything. Humble yourself. Have a servant mentality. And my friends always tell me hashtags like religious or that's like, whatever it is. I've never been to church. The only time I've been to church is weddings and funerals.
Everybody has their thing. I've never read the Bible. It's not my thing. I'm sure it's a wonderful book, but servant mentality. Help others and know your strengths and know your weaknesses in the sport of wrestling. I suck on on bottom. I'm not good on bottom. I do not want to get on bottom. I got to stay on my feet. I got to rest on my feet. I'm good on my feet. I know my strengths. I Know my weaknesses. My college coach won two Olympic gold medals. He knew his strengths, he knew his weaknesses. He, he stayed away from his weaknesses. So when you're scaling and building, be humble enough to identify where you are not good and fill that gap. You hire somebody to take care of that for you. And that's how I went from just myself and my loan process. I, it was just me and my processor. When I opened Liberty, I was at Proficio mortgage and I told my processor at the time, I said, listen, I opened up my own place. I got my letter from HUD for my to do my test cases for fha.
I never told ride, I never said what I was doing. I keep down the down low. And then I said, look, you can come with me and be my processor or you could stay here, I got no problem. But I'm going off my own, I'm taking this thing out. So, so that's how I started with just me and my processor. So if you're like a one man shop, I was a one man shop.
And you just delegate slow and easy, slow and easy. You stay patient, you stay humble, delegate out your weaknesses, attack your strengths and just have a servant mentality to help other people.
[00:13:58] Speaker B: At what point do you decide, did you decide to say, I'm going from one man show and I'm going to create my big hairy audacious goal. I'm just going to start hiring people, we're going to do more, we're going to be good and it's going to be awesome.
When did you decide to make that decision to go big?
[00:14:16] Speaker C: February of 2002. I don't even have to think about your questions. February 2002, my girlfriend and I at that time, we go over my buddy's house, my friend's house, John, and he owned, he was a mortgage broker, he owned a mortgage company. So we go over his house. I have your vote. You'll never forget it.
He shows me he's got a car collection in his garage and he had like two Dodge Vipers. And I remember they had like, they got like a Volt, a Volkswagen of some kind. And, and the, the car had these shocks that went up and you push a button, the car lowers and it raises. And I was like, oh my God, this is unbelievable.
And like I'll never. He was like, hush. I made $1 million last year. I'll never. It was February of 02. So he's saying in 01 he made a million dollars.
And we walked out of there. I told my girlfriend, I said I love the dude. He's a great guy. But if that dude can make a million dollars, I can make a million dollars blindfolded. I'm not being disrespectful. I, like, that's when I was. I knew I was going to make a. I knew I'm going to hit seven figures. I was like, I'm going to like, I got this. And my, my college wrestling coach, John Smith, he won six world titles and two Olympic gold medals. His going there was such an impact to me because he always talked about being the best in the world. So, like, there's no limits. There's no ceilings. There's just. There's not like, like, gilt mortgage. They had like 2,000 loan officers. I think that's a privately held company. I don't think they're public. Right.
So, I mean, were they public?
[00:15:40] Speaker B: They were public. Going after private.
[00:15:44] Speaker C: Oh, they're going back to private. Okay, fair enough. But Countrywide home loans. Angelo Mozilla started it in 1968 with one other person working out of his freaking bedroom and built it up to 62,000 employees by two. So here, my college wrestling coach won two Olympic gold medals. I learned right there that he was a normal dude. He put his pants on the same way. It sounds so cliche that these people.
Dan Gilbert puts his pants like, you can't. Like, why can't you be Dan Gilbert? Why can't somebody be Rocket Mortgage? Tell me why. Why can't I be Dan Gilbert someday? Why can't I have 20,000 los and do 50? Why can't I? I want to know the reason why. I'm willing to put in the time. I saw a Tom Brady video this morning, and he said, everybody wants to win, but not everybody is willing to make the sacrifices it takes to win. Whatever. So outside of that, I'm willing to. If you literally told me right now, hash, you got to go shovel manure bare handed, bare feet, and stand in it for the next 10 years to be a billionaire. I'm like, let's tell me where the piles at. I'm out. Like, let's go. I'll do it. Like, so if I'm willing to make the sacrifices, then why can't I? Like, I don't know. No, it could be. Hush. You're not smart enough. You're too stupid. You hit your head on the wrestling mat too many times.
I get all that. But. But that's fine. If that's the way my story ends, then so be it. But, like, anybody can truly achieve Anything. You have to have a positive attitude. You have to be willing to put in the work and you have to understand that it takes sacrifices. Are you willing to make the sacrifices it takes? That's the million dollar question.
[00:17:20] Speaker A: Yeah, I think timing is important. A little bit of luck on timing in. To me, my view of a loan officer getting to that level, you probably need to go one of two routes. One is find some sort of channel partner that allows you to scale a model, you know, all of a sudden. And that might be connections, like maybe your neighbors with the owner of Walmart. Right. And lenders have been in Walmart and it's never worked. So I'm not saying that that's the answer, but some sort of way that they can scale you or it seems to me today, social media and you have a, a great YouTube station. And everybody I've ever talked to about YouTube stations are like, it was 20 views a show. And then one day I woke up and it just popped and all of them went like, so something like that. And then you become the YouTube guru and everybody goes to you. And I'm sure there's other ways, but to me those are the two ways that you can at least do it without. I don't know what the other secret would be. Just there's not enough time in the day.
[00:18:21] Speaker C: I don't think I agree with you a thousand. I mean, here, having Sam Walton as your next door neighbor or your dad is Sam Walton, that doesn't hurt, for God's sakes. I mean, I'll take that too, you know, but at the end of the day, if you keep pounding the. What are your choices? I, I have these talks with a lot of my employees and loan officers all the time. Especially over the last three years. The market's been where it is. I have a lot of these talks just all the time. So I always say to my employees, like when they start asking me, hush, like I don't know about this, I said, well, what's your alternative choice? Tell me what your alternative is.
You can get out of the industry.
That's one choice. The other choice is you're in the industry. So if you're stuck here doing this, why not make the best of it? If I'm stuck coming into work today, why not make the damn best of it that I can make? Now I get frustrated, I get angry. I, I've thrown things, I've thrown a lot of things into walls and stuff like that. I'm not going to say I didn't or I don't I lose my temper all the time. My goal is perfection. Period. It just is. My goal is perfection. I read a lot of friends are like, people say, you can't be perfect. I get it. Perfection's impossible. I get it. It doesn't mean that cannot be my goal.
And that's it. So, I mean, I get angry. I don't hop and skip through the tulips every single day. But I will tell you, I wake up every day. Thank. The first three words in my mind every morning I open my eyes is thank you, God, I'm here. I'm not even religious, but I say thank you, God, because I was stabbed. June 19th. There was another guy in a separate incident same summer he died. He bled to death in the parks lot. I lived. I got lucky. I had people there who called the ambulance immediately. Had they not called the ambulance, I'd have been dead. So I thank God I'm alive. I don't wake up and spring out of bed and scream on top of my lungs, thank you, God, I'm here. I just think it in my head and then I think, thank you, God. Thank you, and I'm ready to go. Like, let's go. Like, time to make the most of this day.
[00:20:06] Speaker A: Wow.
[00:20:08] Speaker B: If we can just go back a few more minutes. At what point in the over course of the last few years did you decide to say, okay, this was a bad market, it's going to be a great market. When do you look at expansion now? I mean, if we're looking at a potentially low interest rate and with your attitude, there's a lot of stuff that's going on, you can motivate your people.
How do you say I'm going to go into expansion mode? Either either more marketing, more networking, or purchasing more leads. What do you tell your originators out there to go for expansion, to go big for themselves?
[00:20:45] Speaker C: That's a great question right now, today, my vision is narrow. My vision is small. I'm in survival mode, period. End of story. I'm not trying to expand right now. I'm not what almost put me into. I've gone bankrupt almost twice. In December of 2009, I had a 492 credit score. So if I could get give you this quick story in December of oh, five, I'm a mortgage broker. I own my little brokerage. I've got like 20 employees.
My house is paid off. I've got no credit card debt. I've got 600,000 cash in the bank, 200 grand in my 401k that's December of OH5. Fast forward March of OH9. I've got 600,000 in credit card debt. I liquidated my 401k. I ripped out 550,000 from the equity of my house. That was everything I had on my equity. And I had no money in checking savings. The 600 grand cash was gone, period. Chase bank calls me. They raised the interest rate on my credit card to 30% 29. Whatever it was, I broke. I made the decision in March of 09 stop making credit card payments in May of 09. I stopped payments in May of 09 for the first time my life on my bills. By December of 09, I had a 492 credit score. I was is dead broke. As you get. My brothers were like, get out of this garbage job. Quit doing this job. It's ruined. You quit, quit, quit, quit, quit. That's all people kept telling me is quit doing what you're doing.
The reason I got into that position is because I tried to expand in a shrinking market. In 2006, 7, 8, 9, when the market was contracting, I was like, this is when you gain market share. I'm going to go through everything and I'm going to take over everything. And I learned a valuable lesson back then. Two valuable lessons. One was don't try to overcome the market. The market is bigger than you are. I learned I'm smaller than the market is. The second thing was pay off your debt when you've got money. When I came into a lot of money in 0405, because those were the big years at the time, I didn't pay off my debt. I reinvested it into my business. I should have paid off my debt.
Fast forward to today. When I made money in 2015, 16, 17, 18, 19, 20, I took all that money. I paid off all my debt. I was debt free. And then when the market contracted in 20, the back end of 21, 22, and then into these years, one, I had no debt. The second thing was my mindset was I'm staying small. I tell my managers all the time for the last three years, you guys, we don't have to do nothing. All we got do is show up and come to work every day and do the actions we know to do and that's it. So my advice in markets like this is stay small.
Stay small, man. You don't have to try to grow right now. It's survival. I'm growing just by existing. We're down to 95,000 loan officers in the United States. That means me individually, I own a larger share of the market without even trying to own a larger share of the market because there's less competition. So 20 years ago I was like, I don't care, let's grow, let's hire. I need 20 people by January 1st. I'll never forget tell my manager the one time back then, I don't care who we hire, we need to fill those seats. I bought these cubicles, I swear I remember this like it was yesterday. I bought these cubicles, like 20 cubicles and I was like, we need to put asses in the chair and I don't care who we hire, just put them in there. Today. I'm like, get the hell out of here. Go read the book by Jim Collins. Good to great. You gotta hire the right people and put the right people in the right seats on the bus. That's it. So now I'm like, hey man, if we don't hire anybody, we don't, so what? I don't have to grow right now. My attitude's completely the opposite. And because of that, that's what has gotten me through this.
[00:24:19] Speaker A: That's a fantastic answer. And I think the and if you're out there, it has never been a better opportunity because it is three years of pent up good days ahead. Don't try to time the market and don't underestimate AI. You don't need AI raw in your business. Just look at some of the software out there that has leveraged AI that just allows you to scale. And that's why we have some great sponsors here. We're always looking for sponsors. So if Proficio bank wants to give us a call or anybody else. But let's take a quick break here from some of the sponsors that are helping companies grow.
And on the other side, we'll get to hear more about this positive app attitude from Cash.
Want to take your business to the next level?
As a longtime trusted mortgage service provider, Mortgage Connect works with some of the largest lenders, servicers and institutional investors providing cutting edge solutions for everything from title closing, escrow and default to capital markets and risk solutions.
Mortgage Connect brings it all to the table.
Redefining mortgage lending with innovative digital solutions that can elevate your bottom line.
It's time to use AI to revolutionize the way you do marketing in 2025. With ADM Intelligence, we have access to 5,000 consumer data points and proprietary AI technology that helps you understand who is in your database. What's the likelihood of people to do a real estate Transaction also who they are. So for example, someone who's 50% likely to transact the next six months, who's a first time home buyer, should receive very different content than someone who is let's say not as likely to transact, that already owns a home. And of course our content team will provide you with all of that turnkey out of the box to market to everyone in your database. So to learn more, come find us at ICE if you're there. We're booth number three to seven or go to our website thinkadium.com, love to walk you through a custom demo of how AI can supercharge your marketing this.
[00:26:20] Speaker C: Year where the company can do the configurability. So we have no code on this. So they can go in their settings, they can set it up all the way down to loan officer if they want to. We also have a customer support team that's assigned to each account if they want. They can overhaul everything if they wanted to. They have a new product, especially dynamic apps. With dynamic apps we can fit multiple, we can fit the Fannie Freddie loans, we can new construction, one time clothes, HELOCs, you know, whatever those workflows are, they can design that workflow for each individual app. So it's not a static app. And plus too is as they're answering those questions, it'll ask them specifically what they need. So the borrower has everything at their fingertips right then and there. You know, when a question gets answered, certain documents are required and we have that engine that handles that. So if it uploads directly into flow FI pushes it automatically into the los. If the loan officer they are able to set it up where it looks like if the processor needs something they can communicate as a team. So it looks like it's coming directly from the loan officer that they're already used and have that relationship with. So it's not somebody that they never talk to. Now what's going to take it to the next level is the AI and the OCR piece.
[00:27:33] Speaker A: I'm a big quote guy and I, I've noticed you already have Tom Brady and a couple others this show.
I.
You remind me of Ted Lasso. You have this positive attitude one of. And then you just seemed, I think you're, your employees are very lucky to work with you, especially in these times. One of my favorite Ted Lasso scenes is the dart scene where he's throwing the darts and he's quoting how his dad always had the quote Walt Whitman be curious, not judgmental, talking about why he was always underestimated because no one ever asked him. They often judged.
Can you just talk about how you bring that be curious, not judgmental attitude to your workforce every day and then get them on the phones like call reluctance and all that.
[00:28:17] Speaker C: I will tell you what, that 20 years ago I tried to be everything to ever. I tried to be everything. I was the manager, the owner, payroll, and now when you're small and it's just you and four other people, you have to be everything but you want. I'll. I'll never forget this, that the first person you need to hire is your manager. Your first hire is your manager.
So the mistake I made 20 years ago was that so in managing people, you need a man. If you're the owner, you've got to hire and you don't have to own the company.
I think we all own our own business. Our business is called us. Our parents gave us our name when we were born.
So you could be a branch manager, but there's five people in the branch. The answer to you, yes, you have the corporate rules, but the answer to you, you're the owner then.
So 20 years ago, I'll never forget my one buddy, he told me he is a police officer and I started hiring more people and he's like, hash, you need to hire a manager. And I was like, why would I pay a manager? And I'll never forget this, he was a police officer, he said, you don't need to pay a manager. Just give somebody the job title of manager. Let all these other people go to them. And that person comes to you. He's a police officer now. He's retiring in two years at this point.
But when I opened Liberty, I made my processor my manager. It was just her and I. And I literally said to her, you're going to be the manager. I'm people, I'm going to tell you who we're hiring, they're going to come and interview with you and I will tell you whether we hire them. But you're not going to tell them it's my decision. We're going to tell them it's your decision, I swear to God. And so that's how it was my, me and my processor and her, her job title was manager. And, and that's how, that's where I manage people. The best is by allowing my managers to manage. Now if you're watching, you say, well, yeah, he has a hundred people. Um, I only have two people, I hate to tell you this, make one of them the manager so that the Other person goes to that person. And that's how you really scale up big. Because the problem 20 years ago when I had 20 people working for me, I'm telling you, they used to come to me and say, hash, the toilet's clogged. And I'd be like, what the hell you want me to do? Like, go unclog it. But Hesh, you're the owner, like, okay, like, it just is too much. It's too much for one person. People came to me with marital issues, other issues, and this and this and this and this. It's too much for a human being to try to be all things for everybody. And I thought, I cannot afford to pay a manager. When I was a small business, if I could go back in time, I'd say, hey, ding dong, you don't have to pay them, just give them the title.
But that's why Good to great Jim Collins, the book, which I highly recommend.
Your first person in the door needs to be a very important person. Your processor needs to be it. My processor ended up being my vice president of the company because she was there when I started the company. Like, she knew the roots of the company. She knew why I was a nut and why was this and why I was that. Like that. Like your first people that you hire in the door are important people, man. And if they're there at ground level, they're going to appreciate it that much more when you grow the business. That's why they deserve quote unquote manager positions as the company grows and stuff like that. So how do I manage other people? The truth is I don't. I don't. I, I let my other. I let my managers manage.
[00:31:33] Speaker B: I have two part question and follow up to, to your, to your story for yourself there. The first question is, are you a people pleaser? And then the second question as a follow up to that is, when did you decide I can't save the world?
[00:31:49] Speaker C: Those are two great questions. Number one, I'm not a people pleaser. I'm the most anti.
The problem is my whole life has been negative reinforcement. So I'm a very big believer in negative reinforcement. O.
I learned from my first mortgage company that I own my brokerage that negative reinforcement in a work environment doesn't have a place. It just doesn't. Which is like, it makes me want to puke even saying that, but it just doesn't. But my whole life was. I'm Middle Eastern, my parents are from the Middle East. I'm a first generation American. My dad would always Say, I'm going to go to work and if I come home in the grasses and cut, I'm going to beat the hell out of you. There was never any physical violence, but the specter of it was there. So it was always like, oh my God. Like I got, it was negative. If you don't do this, something bad's gonna happen. Then I got the Kyle aggressive, for God's sakes and wrestle for Olympic, two time Olympic medalist. And it was, if you guys don't do this, I'm gonna run you 20 miles on Route 50, Highway 51. So was, if you don't do this, something bad happens. It's just my DNA. So when I opened my first mortgage company, it was if you guys don't do this, then I'm gonna do that to you. And that's how it was. I learned you, you people don't react good in a working environment to that. So there's no place for that positive reinforcement. The philosophy that I've now hug my hat on, honestly is the, our core philosophy as a company is the employee experience. I believe in Richard Branson saying, I don't put the customer first, I put my employee first. And if you put your employee first and take care of them, they will take care of the customer.
I pung my hat on that for the last 11 years of business. I gambled that if I don't worry about my customers and I put my employees first, I'm going to win and it's worked out dramatically better. And I apologize that I forgot the second part of your question, but that was answering the first part.
[00:33:32] Speaker B: The second part was when did you decide that you can't save, you can't save the world? You can't like, you can't please everybody. So when did you make that decision for yourself in business?
[00:33:40] Speaker C: In my first round of business.
In my first round of business with, with my first mortgage brokerage when I had 20 employees, like I was trying to do everything to make them happy. You asked me if I was a people pleaser and I would everything I could and I'd be like, well, I did everything they asked me to do and they still whatever. So that's why I just learned I can't make everybody happy. Piss on it. It's just that simple. I'm going to be the best I could be. I'm going to be me and I'm do the best job I can do. I'm not going to make everybody happy. We serve food, we have a full time chef here in the Building, I mean this building is a two story. So I point to the second floor of the building. We have a full time chef. He was the head chef of the US Olympic team in 04. He's cooked all over the place. He's an incredible chef. He cooks lunch every day for our employees. It's free, doesn't cost anything. It is a damn good lunch.
We still get people that complained that'll say that the sauce was too spicy. I mean, if you want to know the truth, in my brain I'm thinking, I got a crazy idea. Don't eat it.
Don't eat it. Go down. We're on Rockside Road downtown. We're in the center of Cleveland over here. Like there's 800 restaurants here. Go pick. You don't need to eat this. I didn't tell you part of your employment agreement was to eat the food, don't eat it. But I don't do that. I, I, I'm just. No problem. I get it. It, I, I'll talk to him about it.
So I gave that up. You can't please everybody. Can't even.
[00:34:56] Speaker A: You don't have a food manager that they go to instead?
[00:34:59] Speaker C: No, we used to have somebody to stock the food, but that was one of the first positions that we got rid of and that was our, her job was to see what everybody felt and thought. But we got rid of her first when the market started condensing, which I, Sorry.
[00:35:11] Speaker A: I'm curious how long some of these IMBs have held on and not caught, at least in operations.
And I know you keep referencing good to great. So one of the themes in Good to Great is the flywheel effect where greatness isn't a single leap. It's the accumulation of small consistent wins that builds momentum.
Some of these companies, it doesn't seem like they have the culture of any small consistent wins. And so where in a market like this outside of closed loans, where do you find those small wins?
[00:35:50] Speaker C: I truly think the IMBs made so much money that the truth of the matter is money.
I always tell people this money doesn't buy happiness.
But whoever invented that saying never had money because it doesn't make you happy. But man, does it resolve a lot of problems. I could tell you this from personal experience.
We've been getting beaten up badly for 36 straight months. I haven't taken a paycheck out of this place in three years. Go look my numbers up on MMI. I personally reaching around 150 loans a year just over the last three years. And I don't have an loa ing assistant. All this other garbage, I take them start to finish.
Um, it's been brutal. But do you want to know how I survived? We made a lot of money, and I saved it 20 years ago. Why didn't I survive? I made a lot. Yes, But I didn't pay off my debt. And when the market hit and I couldn't take a paycheck, I. I didn't have enough to pay the bills. So I think the IMBs, I think we just, as a sector of the industry, made so much damn money, and that helped all of us to overcome the storm of the last three years. I'm not saying everyone has stayed in business, but I'm a little bit money a lot, and.
And that's the truth of the matter. I'm able to absorb a lot more today just because I've made more. And I say, but I saved more. I learned from my past experiences. So the victories for me come in the survival of it. But that's just as an individual loan officer, too. I keep telling my LOS that, like, if you guys can make it through this, you're surviving. This is a game of survival right now. Stop. I always tell my employees, stop trying to work my man. Well, I tell my managers who want to grow and get pay raises, stop trying to worry about growing. Don't be so. We haven't hired anybody in a year. I think last year I hired. I'm not kidding you, like, two people the whole year. Two people. And we lost, like, 25 people. You know, I went from 300 people down to 100 people in 30 months.
I remember you.
[00:37:44] Speaker A: One of the first to cut, and you cut fast. So, I mean, for. For all you listeners out there, I was living in it, and you are at the front line there.
[00:37:53] Speaker C: I appreciate it. We. We.
I will tell you the hardest thing in my career business.
It wasn't not paying my credit cards. That was hard. It ruined my credit. Whatever. I almost went bankrupt twice. May of 02, March of 09. I didn't go bankrupt, but I almost did.
Firing people, it's typically when you fire somebody, you don't fire them because they're doing a good job. You get rid of them because they're. They're negative to the business. That hurt. The hardest thing I've ever gone through in business was laying people off. I might almost start crying right now thinking about it. It was May of 2022, and we were going like, we were profitable in May of 22. But I just. I Just like, I didn't predict this, for God's sakes. Inflation, all this stuff. But I was like, man, this is not. We got to start laying people off right now. Our production's gone down too sharply. It's not coming back soon. We gotta lay people off. We laid off 31 people in one day.
I spent the whole weekend before crying my eyes out. The whole weekend. Because it's one thing to go to somebody who's a jerk and say, get out of here. And because we're live on LinkedIn, I'm not using the words I normally use, like, usually every third words at Michael, you know that.
So I'm really reigning in the beast of just giving my true. How I want to talk. But the person, it's a jerk. Yeah, I appreciate it, but, like, the person that's a jerk, like, I'm like, if you don't get out of here, I'm going to drag you by the head and throw you out of here, you know, whatever it is, that's easy. But to go to somebody who tells you every day, hush, you're the best boss I ever had. Like, I'm so thankful that I work for you. And they come in every day and they do everything you ask them to do, and they do it with a great attitude. And you got to go to that person and say, you know what? I know you're doing everything I asked you to do. I know you have a great attitude. You've always been so committed. I gotta let you go.
And you know, in your mind, like, they, they. They're not gonna go just walk and find another job the next day. They're not going to. That was cr. I cried my eyes out the whole freaking weekend before that layoff. And we've had more layoffs since. But the problem was I tried to save everybody. Twenty years ago, I tried to save everybody, and I almost ran myself in the bank. Not only does everybody have a job, I almost went bankrupt. So the one thing I would say to myself was, it's either lay off some to save the remaining or try to save everybody and everybody's out of a job, including yourself. And that's why I made those moves. It was my experience from 20 years ago. I refused to lay anybody off to the point where I was using my credit cards to pay to do payroll. That's why I had 600 grand in credit card debt and I lost all my savings. I was keeping everybody on my credit cards. And I told my buddy Tad, we were at. Out in Irvine. I used to go out to California, do seminars out there. I'd stay at his house, 25Amorett Drive in Irvine. He sold his and so he wouldn't mind if I said that, but we, we'd be sitting in his pool. And I'll never forget him saying, him saying in 2008, I'll never forget this has stopped coming out here. You're losing too much money. And I was like, I don't care if I go bankrupt. I'm not letting go. I'm keeping everybody. Yeah, well, the market showed me a lesson or two. So it's, you got to let people. It's very sad. I mean it's even right now, like I will start crying thinking about May of 20, why I let all those people and I got that list by the way. And I promise you, when we grow, there's probably 10 or 15. I'm going straight back to, to say, hey man, come like, let's go. I feel kind of bad because I'm like, man, I, I hired them before and I laid let them go. I don't know if they trust me anymore. Which hurts by itself because they're really good people. But laying people off is very hard.
[00:41:27] Speaker B: Wow, you've given us a lot of great business principles. Ashton, I have one question for you and then I'm gonna let Mike take over here. What does your average day look like for you as a leader, as an originator?
[00:41:41] Speaker C: I get up every morning at 3:30 in the morning.
I have a workout routine that I do.
I have a sauna, cold tub, I do all that I read. So when I'm sitting in my sauna, I have a Kindle that I read in my sauna.
So I read and then I clear my email starting at 6am I'm not married and I have no children.
I should say that too. I'm 52 years old and I've always had people say, well, how should I have kids? Bull crap. I've got employees, man. I got a hundred employees right now. I'll tell you this one.
Employees are worse than children. You want to know why? Because kids, at least they have an excuse. They're kids. They do something stupid. It's, well, he is 13 years old, he's 9 years old, he's 17 years old. Try to figure that one out. For a 40 year old who makes six figures, you know that dramatically different. So I don't want to completely say by not having children or something, it gives me the total freedom of anything. But anyways, I clear out my emails and Then I come into work and I just sit at my desk and I do my calls. I network with real estate agents, I do my loans, and then I get done at 5. I go work out with my buddy and I return calls like a nut. My phone's blue to me 24, 7.
I don't know. I went to Vail Colorado earlier this year. It was awesome. Went for a week and a half. I'm going to Sedona, Arizona in January. For a week and a half, I'm going to Oklahoma. The Oklahoma association of Realtors have me come up to talk at their convention. I'm only talking for two hours on a Tuesday, but I'm going out there for 10 days because I'm going to go back to Oklahoma State. I'm going to see my coaches. I stayed at my coach's house. When I go out there, I'm going to see all my old teammates. I'm going to work out with them. I love it. When I get back out to Oklahoma State and I see my old teammates, we work out, we hand fight, stuff like that. I mean, it's like fricking in the good old days, we beat the piss. Well, they beat the piss out. Well, they beat me up after. They beat the piss out of me now, too. But I do the best I can to hold them off. But my buddy Steven's got a really bad knee now, so I think it's, it's a little more even than it used to be. But I don't know. Like, people, I say, hash, you work all the time. I don't work all the time. The truth of the matter is, is I ebb and flow. Like, I'm serious. When I'm off of this call here, I think I might go out. I'm looking out our window right now. I might go do mulch or I might go spray the weeds.
Like, for the next hour, I might like I, I ebb and flow. I've learned how to work the right way where, like, I, I'm in and out. Like, I work for an hour and then I, I, I go and just do things that frees up my mind. We decorate our building with decorations, our Halloween decorations. I'm starting to get those out on the second floor. So I do things that relax my mind, like this podcast. I sincerely appreciate the opportunity you guys give me. It's like. But this, this takes me away from talking to customers about missing contract dates and stuff. So you don't want to work for 10 straight hours. You got to ebb and flow.
[00:44:14] Speaker A: Yeah, I go to a lot of conferences and I have to say, hash, this is what more of the medicine that people need to hear. And I'm glad that you chose our podcast to to spread it out on. And I hope all the listeners are listening and really enjoyed this. And we, as always, want to thank our listeners for joining us. Thank you for joining us on this journey into the heart of mortgage innovation.
Remember, every mortgage has a story, and we're here to help you write yours. If you enjoyed today's insights, please subscribe, share with your network, and connect with us on social media.
Until next time, keep pushing the boundaries and uncovering the stories that drive our industry forward.
[00:44:59] Speaker C: Sam.
