Episode Transcript
[00:00:00] Speaker A: Hello and welcome back to season four of the Mic'd up show where every mortgage has a story. And the Mic'd up show is the ultimate hub where hidden stories behind the mortgage industry come to life. My name is Michael Kelleher and together we dive deep into the entrepreneurial spirit, the strategic insights, the breakthrough innovations that build the world's greatest mortgage companies. Typically you would find these at different conferences across the country, including the one our guest today, Stephen A. Milner, just came from in San Diego. Our show is for you in the mortgage industry that maybe doesn't have the financial access. Maybe your lender owners or bosses have not sent you nationally yet, maybe because you're so talented that worried you might not come back. But for whatever reason we give you access to to these giants of the industry to show you that they are very accessible and they do want to lift all ships with the tide. So whether you're advancing your career or you're scouting for industry leaders to work alongside or exploring opportunities in fintech and prop tech and how can come into mortgage, you're in the right place. So get ready to unlock the story behind every mortgage. Let's dive in today with Stephen A. Milner.
I have seen him throughout the years. I've been going to conferences since 2013 and you can always recognize him by his suit and his tie. And it's more recognizable these days where the they even go as far as saying it's business casual at this conference. And I remember even right before or right after Covid I went to an IMB where I had the suit and tie on probably for different reasons, trying to make up for an image early on and, and now I wear it because my wife is shocked if I go to a conference and I'm not wearing a tie. She doesn't get it. So I do put it on and I was getting harassed in the elevator in a good way, busted, you know, and you know it's, it's business casual they were saying. And I said I know, I just, I wear it. And then Stephen A. Milner got on the the elevator. No one said anything to him because he has been really a decorate person in this industry.
He started as a loan officer in 1981 so he can speak not just being on the front line, a loan officer, but as he started his company in February of 1994 as a CEO that oversees day to day operations of one of the largest IMBs in the country and certainly in New York, he has maintained keeping his license as a licensed mortgage originator in 50 states plus Washington, D.C. and as we become more and more regulated, it's become more and more difficult. So if I take you back to that February day where you went from a loan officer to starting your own company, are you any different then than you are now? Like, what was that first day walking into your first branch or, or building that you actually were going to be running?
[00:03:07] Speaker B: Well, first of all, thank you, Michael, for the introduction. And Michael Z. Great to see you, sir. Looking good.
Just as a brief background, as many of you know, I was a school teacher for 18 years. And in 1980 I started originating loans at 21%. That was the average loan rate during the Reagan and Bush administration and ended up teaching in 86.
And I formed, I got involved with a mortgage brokerage company from 86 to 94 and Bayside, Queensland. And I had two other partners there and they wanted to stay a mortgage broker. I had visions of becoming a mortgage banker. So we amicably parted ways at the end of 1993. And on February 17, 1994, I opened up US Mortgage as it is today. And I've always thought my goal was always to become a licensed mortgage banker. And it took about two years with. @ that time it was just the New York State Department of Banking.
The Banking Department. And it took me about two years. As you know, many companies are still not licensed in New York because it's just very difficult for some reason. But I think as one of the first mortgage brokers that got approved as a banker, and that was my goal and aspiration to become a lender. And it was very exciting. You know, I started the company by myself. I capitalized it myself. No partners, no investors, no stockholders, just me. And we opened up an office in, on Long Island. And I continued to grow the business, originating loans, recruiting salespeople, building out the infrastructure.
I stayed away from the subprime era, the late 90s, early 2000s, under the Clinton administration and the George W. Bush administration, I stayed away from those loans. I've always said one of my Milnerisms, as I call it, if it doesn't make sense, it doesn't make dollars. So I just didn't understand those loans. And I've always felt that a borrower must, must be able to demonstrate the ability to repay the loan and the willingness to repay the loan. And that philosophy is probably what has kept us, kept me in business for going on what little over 31 years now. And as you mentioned before, Michael, during the Great Recession, the Financial Reform act was passed. Part of that was the creation of the SAFE act, which required loan officers to become licensed. So I wanted to expand throughout the country. At that time, we were only licensed in New York and New Jersey as a banker. And I felt I wanted to expand my footprint throughout the country. And then in, as I said, the SAFE act was passed, requiring loan officers to become licensed. So I volunteered myself to be the qi, the qualified individual to become licensed as a loan officer. So it took me about two years.
I traveled to, at that time, you had to travel to a testing center in the state that you wish to get licensed in. So I traveled from Hawaii to Alaska to Maine to every testing center. Took me about two years, but I got it done by 2010. And that enabled US Mortgage thusly to become licensed in every state. So by 2010, we were licensed in every state, including Washington D.C. which is. So we have 51 licenses. And I, and I, and I spend 39 hours, eight hours for the CE and then another additional 31 hours every year doing my continuing it.
I still originate 8 to 10 loans a month with my assistant Julie Curto, who's been with me about 27 years now. She's licensed in 48 states. I think it's very important for a CEO to originate. I, I believe in doing that. It really keeps me in touch with the challenges and frustrations that loan officers are going through at the kitchen table, so to speak. And I really enjoy that part. It keeps me in touch with marketing initiatives, lead generation initiatives, as well as product. There's so many different types of products available now, more so than they were ever before. But so that's sort of an, an overview of where I've been and where I am now, where I'm going. We continue to expand throughout the country. So and I really appreciate this, this discussion, so thank you so much. I hope I answered your question.
[00:07:36] Speaker C: So it's amazing, Stephen, because you know, you're coming into the mortgage industry just out of the savings and loan debacle, fall of comps down to Illinois and then the, the reform act. And then you go from that into the Russian bond crisis of 98 and then you go straight into whatever was going on in the early 2000s. And then, and then we go through the pandemic and so on and so forth. Not only is there a lot of emotions going through that, but one of the things I thought I find striking in, in what you have accomplished during this time of origination is that you're, you're taking a no nonsense, very make sense approach to your origination platform. You didn't like subprime mortgages that much. Not sure how you feel about non qm. We'll get to that shortly. How do you lead by example in your practice as an originator to go do 510 loans with your assistant and then transfer that into telling your other branches and originators to also follow that example. When most originators are talking to themselves to say let's just do everything that we can, you've lived through all these experiences doing make sense lending, what do you tell your originators to say? Just make it make sense.
[00:08:53] Speaker B: Great question, Michael. Well, one of my major skills and I think my highest and best use as it comes to origination is that I consider my an expert in lead acquisition. As you know, as you know, we're distributed, retail, self sourced, self generated business model. We do about 92, 94, 93% purchase money all over the country and that's how I built my business. And I love mentoring, I love teaching. To this day I still focus on educating and working with my salespeople. I travel all over the country to all our different branches and I'll be the first to volunteer to do a lunch and learn or a networking event.
I'm very focused on strategic planning and goal setting and I will provide private tutorials to any loan officer who really wants to grow their business. My philosophy here at US Mortgage has always been that we're giving people an opportunity to build a business within a business at no cost. And that is our model here. And I love mentoring, I love teaching. I'm great at marketing and I'm great at lead acquisition. It just happens to be probably my highest and best use as a leader because I live it, I go through it and I can help a loan officer become very successful within a short period of time. And I've done that with many, many, many loan officers. And you know, as I always say, no one woke up one day and they said they wanted to be a loan officer, right? No one I know and I know a lot of people in this business and it becomes an evolution and it's a great opportunity to build a business. And that's what I just happen to be good at. Marketing and lead acquisition, the various technique techniques that I use that I've been using since 1980 that to this day I still use them and I and I promote them and I teach them and I mentor them and I think it works pretty well.
[00:10:50] Speaker A: So yeah, I think you have a really an amazing trait of There's a famous Instagram out There where someone says to really unlock wealth, you need to learn how to work on yourself and not just work on your business. And it's starting to unlock for me coming to life. I began writing on LinkedIn and it wasn't for the vanity metrics that most people think in marketing. It was the type of people that all of a sudden were direct messaging me that could relate to writing better than video the whole time. And I never knew that because I didn't take the time to work on myself in that area. I think loan officers that come in and work with somebody like yourself, you've really mastered having a brand, an aura to yourself that must lead to lead generation of being somebody they can trust and have a, a feeling that they know exactly what that person needs for a mortgage.
[00:11:48] Speaker B: I can just add one other point. Sorry, Michael. One of the things I stress to all my loan officers is that they must adopt what I call a giver's gain mentality. They have to be able to ascertain first what they can give to their referral sources before they try to gain. Most loan officers have their hands out and they want to try to gain immediately. That has never been my methodology.
My methodology has always been to try to explore what the business model is of particular referral source, such as a realtor or an attorney or an accountant. Get to know them, get to ascertain what their business model is and what you can do as a loan officer to increase their business. And by doing that, you're going to be giving first and then gaining just becomes a natural occurrence.
So I meant to mention that before, but the givers gain philosophy is something that most loan officers do not do. Their hands are out for business because they have the best rates, the best, the best products. You have to think differently. You have to, you have to help people improve their business. Give first and then you will gain. Sorry Michael, but I just wanted to interject that.
[00:13:02] Speaker A: Well, sometimes you need to see it to believe it works. And we had Dave Licken as a guest last week and he talked about her, of her at Southwest Airlines. And what separated him was he would go down and take the bags and, and throw them in and see what. Because that's really where the pain points were for his customers, was in those luggage drop offs, not up in the air often times. So when you said you originate, that's what sticks out to me. I also point out I was at a conference recently and I ran into Stephen and Jim Bop and we were eating and I told him about my new daughter And Elise Geller with a family. And he gave, he sent me, he took down my address and sent me this book the new first three years of Light. And what his message to me was a stat about how much of an IQ is produced and how important every minute is at this point in her life. And it'll tell you pieces for example that a baby. It takes 18 months for a baby to really remember an object. So whether you take it away or not, it's not going short term memory, you just want to replace it. It gives you all these ways to make the mind bigger, the mat bigger so it can absorb more reason. I say all that is it wasn't just for me finds out. I find out he has a whole office full of these. And so when he finds first time home buyers or any buyer that's filling up because of one of the 7ds dependence has a new baby, gives it to them. So that's an example where you're not just at a high level giving it to me. You're able to show a story where you're still on the front lines and you get what people tick because every mortgage has a story.
[00:14:41] Speaker B: This is podcast would like a book. Please send me your information and I'll gladly send you one. And just to expand on what Michael was just saying, a child attains 50% 50% of their adult IQ by the time they're 5. 50% so by the time from 5 and through adulthood they only gain another 50%. So this book really is very detailed, it's intense. It's like 370 pages, I believe it is. And there's different ways as a parent. Yes, First Three Years by Burton L. White. It really identifies some of the things that you can do as a parent to help increase your child's iq. It's a very good book, but it does take time, effort and energy to read it. Let's face it, you know, and. But there's things that you can do and if anyone would like a copy, I'd be glad to send you one.
[00:15:36] Speaker C: That reminds me of the same. I think it was Zig Ziglar or Jim Rohn that said if you help enough people get what they want, you will get eventually what you want. What are examples of the some of the questions that you might ask somebody else to glean from them what it is that they want. Because I mean we, we don't actually a lot of people what I found out in me talking when I asked them questions, they actually don't know what they Want until you actually get very granular with them so they find out what's important to them. Would you be able to share with us some of these questions that you might ask?
[00:16:11] Speaker B: So my methodology and answering your question is as follows, which I've been using for 45 years, since I started in the business.
My goal was to try to ascertain how, as I said before, how I can help some, how I can give to someone before I gained. So my methodology is as follows. I sit down with the person, I basically ask them, I basically describe to them or basically state to them. I should say that I have different ways in which I can help increase your business.
My goal of which is to sit down with them, cup of coffee, lunch, breakfast, dinner, whatever it is. At that meeting, gentlemen, what I will do is I will start that meeting simply by saying that I'd like to get to know where you have been in your business and personal life, where you are now in your business and personal life, and where are you going primarily in your business career.
And I want to hear what their story is. And then I tell them before you tell me your story, I won't share with you my story.
And I then describe to the person where I have been, where I am now, and where I am going. And by doing it that way, I have found that the person that I'm speaking to feels comfortable about telling me their story. So I will tell my story first and then they will tell me their story. And I'm taking notes. If they're in my office, I'll. By the time I'm done with this story, I'll have three to five pages of notes from the time they were born, what high school they went to, what college, what was their. What degree did they have, what was their career, their MA Their personal relationships, their children, the whole story. I'll get to know everything about them. My goal, Michael, is to explore where they are going. They can easily tell me, and it doesn't have to be rehearsed. We all have a story, we all have an evolution, right? So they'll tell me eventually where they have been, where they are now. And I'm focusing on where are they going. And I want to be able to walk out of that meeting thinking of a way where I can give to help them increase their business. And it's a very structured kind of discussion. Again, I tell my story first and that creates an opportunity for the person to feel comfortable. Instead of asking the person first, tell me their story, I'm going to open up about My whole, my entire story, you know, from the time I was born in la, Los Angeles, all the way through the time I decided to become a law officer in my entire story and I, I tell everything, I open up my entire life to everyone that causes a level of comfort. And again, my goal is to walk out of that meeting thinking of a way that I can really understand what their business model is and what I can do to help them. And it's worked for me for 45 years.
But my recommendation is it's a very structured approach. But the whole idea is to know where is this person going with their career? Whether it's an accountant or a realtor or an attorney or an insurance broker, a financial advisor. What can you do to help them? At the end of the day, you have to be able to help someone.
[00:19:30] Speaker A: Can you share the story of that first person you put in a home? Do you still remember who it was or what mortgage and home was behind that, that story?
[00:19:41] Speaker B: Well, it's funny, when I first started, I started originating loans because I was a school teacher and wasn't making much money. I started in June of 1980 and the company I was working for had a training program but they did not offer the training program to part time loan officers. I wasn't about to give up my career as a school teacher. I had to feed my family, right? So I started to learn the business myself. What he did was he gave me his copy of the Fannie Mae and the Freddie Mac seller service guides which were about 4 inches thick. There's no technology in those days. I read them in one week I came back, I started originating loans.
But because I did not receive any training, my first 24 loans that I originated never closed. I made zero dollars. It was very. But I've always believed in life and our personal and our business life that persistence can overcome resistance. That was by January, by June of 81. Then I went to another mortgage company about an hour and a half away from where I live and I started to learn the business I was still teaching. And I'll never Forget this. In 1981 I got a referral from a realtor for someone who bought the house about house for about. Amazing. It's interesting how you asked that question for like 125, 125,000. At the time the loan amount was about 98,000. The interest rate, you're sitting down was 21%. During the, during the Reagan administration and Bush administration interest rates stayed as double digits through like 1991. If you ask your Parents or your grandparents, they bought houses. In the 80s they paid double digits. But people still, during the 80s, they still wanted to fulfill the American dream of homeownership.
They did not want to rent. And that's still the case today. You know, of course, you know, but people still pay 20, 21%, 18%, 16%. But that was the first deal I closed at 21%. And they were, and the couple was thrilled. Later, of course, later on they refinanced and all that. But I'll never forget that it was very exciting. Even a 21% CDs at the time were paying 15%, believe it or not, certificate of deposit paying 15. But I remember that.
[00:22:09] Speaker C: But you know, I, I, I can resonate with the persistence leading to resistance because nowadays I would say that there's a lot of originators, even if they're doing four to six loans a month.
The, the news travels and fast. When it comes to, for example, like this past week we saw, we had the news of Mr. Cooper being sold off and you know, there's a, whatever or you know, two, three years ago, we have higher, there's always news that's causing origination turmoil at the retail level. And I think that when it comes to talking to originators out there, how does that extend to your originators? Because you're talking about new originations. However, with that type of news, you know, we, we can't help but think about how do servicing companies attempt to go and back solicit or this, that and the other. How do you lead in CRM management, customer retention management, and aggressively market your past clients so that although the, you can be persistent with new business, you create resistancy and good service. Also market your current database. How do, how do you lead from that in customer referral and customer retention?
[00:23:32] Speaker B: Well, we have a very extensive marketing department, to be quite frank. And, and in that marketing department, we have a CRM, a CRM expert that we use who helps our loan officers use the, the CRM. And we encourage that they, you know, whether it's sending out birthday cards or closing anniversary cards, I don't, you know, I, I, and, and, and they do that with the loans that we sell on where we retain the servicing, for example, to Mr. Cooper as an example, we, we sell, we sell a significant amount of business to Mr. Cooper over the years and that our loan officers are going to continue to maintain their relationships with those loans that we close that we did sell in this case to Mr. Cooper. And then now Rocket Mortgage is going to inherit that, that's that servicing portfolio, which I understand, but I'm very, you know, that's part of our marketing strategy is to stay in touch, to stay in communication either through the use of a CRM regularly or just stay, you know, just stay in communication with your, the customers that you close your loans for. There's a lot of different things that you can do, you know, but most common ones are anniversary cards, happy birthday cards, you know, and you should allocate. And we encourage our loan officers to allocate at least one day a month to send out birthday cards to everybody in your closed loan pipeline. It works very well for us. I mean our loan officers depend on repeat business from the customers that they establish relationships with, but also for those that they haven't closed loans for that have been referred to them. We use the CRM for constant communication and it works very well.
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[00:26:59] Speaker A: As someone who's the son of a gym teacher who found time while having us to manage a restaurant and go on and get her masters at Boston University and then eventually become a principal.
I have an appreciation for the profession of teaching students as it gets harder and harder with these devices. Right. But you've all, once you are one, you're always one, and you have that in your heart. Stephen, how do you take all those years of experience in the classroom and your exceptional preparation, how do you apply it to teaching those about homeownership before they move into their first home?
[00:27:42] Speaker B: When I'm speaking to a client.
[00:27:44] Speaker A: Yeah, I was saying a customer. But if you want to apply it to maybe loan officers that join the first time, however you feel like it's the perfect way to use that superpower or experience that others may not have, does it still pop up even now?
[00:28:01] Speaker B: Yeah. I mean, the whole idea behind home ownership is to create is, is to, is to educate and teach people on, on the fact that home ownership is the key to building generational wealth. And that's been duplicated many, many times. And I think consumers understand that. To make light of it, sometimes I'll tell them if they're renting, I'll tell, I'll ask them a math question which is simply, so if you're renting, Mr. Borrower, Mr. Potential Homeowner, what is your interest rate? And they will respond by saying, well, I don't. With a puzzled look on their face, they will say, well, I don't have an interest rate. I say, well, do you pay rent? Yes. Well, how much rent do you pay? Oh, $2,500 a month. I said, okay, you pay $2,500 a month to the landlord. That means your interest rate is 100%.
And they look at me like a deer in the headlights. And I explained to them that their goal should be to create a path to homeownership. And I tell them that one of our, as far as US Mortgage is concerned, our objective here has always been, our mission statement here is that is simply that everyone is entitled to a roof over their head.
I also tell them at the same time that everyone is entitled to a roof over their head, but not everyone is entitled to a mortgage. And I think that was a mistake we made during the Great Recession and the financial crisis. But, and if they're not ready to purchase, then I will still pre qualify them. I still promote pre qualifying them. I still promote that the loan officers educate them on the home buying process and what's involved and hopefully they become good students and you become an advisor to them, to the, to the customer. As far as how to reach the goal of homeownership. And that's what the United States. Not to be political, but we offer that more than any other country in the world, in my opinion.
[00:30:04] Speaker C: Stephen, I love that you're a steward of education. And as part of that, not only are you educating your customers, like sometimes when I was originating retail a few years back, I would tell customers, I said, well, you know, if your house goes up by 3%, your rate of return actually goes up on the amount of down payment that you have. Your down payment valuation on the return is not 3%, 3% of the gross amount. And so they go, what do you mean? Well, if it, you know, if you put down $20,000, you know, and your house goes up by 3%, that's $3,000 on your $20,000, that's got 15% rate of return. And, and that type of education is invaluable because not every person is a, as an investor in, in practice and mindset. And the same sense, when you talk to an originator, sometimes they are a great originator, but they're not a, I mean, you have a, you have a skill set beyond most because you can be a business owner and an originator and understand both to the originator that's out there in our listening audience that are originators. How do you speak to them? If they are great originators, but not necessarily good, I'll say, hopefully gently, maybe they're not great business people, but they're great originators. I'm sure you've met them before. What do you speak to them so you can give them the fiscal education to say, you know what? I know that you want to have your own piano and run a team of branches, this and that, but based upon what I think I've seen of you, you should stay an originator. But I will make you in a better originator and teach you how to do that. How do you speak to the originator so that they can, they can exercise that type of wisdom to glean.
[00:31:43] Speaker B: Well, when I sit with a loan officer on when, when I'm mentoring or even teaching them, which I still do today, I develop what I call the five milliner commandments of loan origination, the five Milner commandments of loan origination, which are that a loan officer, a potential loan officer, or even a current loan officer has to become a student of the following tasks. They have to know how to be, how to sell, how to qualify the borrower, how to take a full application, how to follow up with their pipeline and how to market themselves. Those are the five Milne commandments. You have to know how to sell, how to qualify, how to take an application, how to do pipeline follow up and how to market yourself. And I tell them straight up that there are times over the years as you develop your business, you may be good at selling and marketing, but you're not a good tech. And maybe you don't develop the tech, the technical skills of qualifying the borrower, taking the application or pipeline follow up. Then there are those that I tell them that are great at the technical side, the qualifying, taking the app and the follow up. But they have what I call, what I refer to as call reluctance. They don't. They, they're not strong in selling and marketing. And I encourage them that at some point as you develop your business, you're going to want to bring on at least a part time loan officer after you identify what your weaknesses are, or loan officer assistant after you identify what your weaknesses are to fill, to fill in what you are not strong at. Maybe it's the technical side or maybe it's the selling and the marketing side. And I tell them that that will come over time. But at the very least as you're developing your business, you should try to become an expert at those five Milner commandments, as I call it. And they embrace that, they welcome that, they understand that. And I help them at each of those five with each of the five commandments. This there's techniques for knowing how to sell to your borrowers and to your referral sources.
There's a, there's reasons why you want to pre qualify somebody and how to pre qualify. There's reasons on why your, your applications should be complete applications so that when an underwriter looks at that, it tells a story. It's like a novel pipeline follow up. You need to know the status of your pipeline so you can communicate that to everyone that's directly or indirectly involved in that transaction. And then of course you have the marketing side. I always tell people that marketing is the key to building, expanding your lead acquisition processes. And that's how you accrue and accumulate new referral sources or existing referral sources through marketing. Marketing is the key and to growing your business. And you have to be able to do that. Now if you have call reluctance because of that, well then you have to fill that. You have to fill that void. I always say do not do something you could pay somebody to do, whether it's cleaning your pool, mowing your lawn. Identify your strengths and fill your weaknesses with someone else. That could help you continue to grow your business. And that philosophy seems to work. And that's what I, that's what I encourage them to do. Identify your weaknesses and then take it from there. And it does work and I've been doing it for many, many years. And, and marketing is the key to growing the business. And I always say a business without a sign is a sign of no business. So they should be doing that.
[00:35:33] Speaker C: Stephen, when I see you in your suit and tire, I mean this respectfully, but it kind of reminds me of you're like Superman. You know, your suit is like a Superman suit. And the reason that I say that is because it's a. When, when. When you're putting on a suit reminds me of kind of the older time to think of like Roland Arnell or, or Anthony Mazzello. And, and there's an old, there's an old school representation of not only respecting yourself, but also respecting the business and the trade as well. And that's a. Not only is that a part of your brand, it's also a part of who you are. And I think that brings a sense of confidence not only to, to you as the brand, but also to the originator. It's something that's actually kind of a lost art at the moment when speaking about your branding and marketing yourself and especially in terms of call reluctance, I think the preparation of what you wear and then how you present yourself when you're getting ready, whether you make, whether you make your bed, shave, put on your suit and then you are ready for action. Is that something that you currently coach and help people on when they work for us? Mortgage? And how does that. And how, and how does that received by your teams so that they can put on their suit, whether it's a Superman suit of a, of a suit and tie or what in their brand new. Maybe it's a T shirt or sweater. How do you convey that so that they can have that confidence? So the, the car reluctance not necessarily goes away, but it, it wanes as they practice more.
[00:37:04] Speaker B: Well, interesting Marvin, you bring that up because prior to Covid, I did have a dress code in the company for men and women.
I always felt we're remote, we're in banking.
We don't sell pets, we're banking. You should look professional, especially in the distributive retail business model. And I think that's why I try to set the example. I wear a suit every single day. I go to sleep like this, to be quite frank. And, and, but since COVID to be Quite frank people are. They've changed their attitude about that. I shave every day, you know, I wear a suit every day. I try to set the example, you know, and as I said before, I'm the first to travel to my branches in Texas or California. And if we do it in an open house or, or I'll do an open house with a loan officer and I'll look professional. And I think it's important to look professional. We're in banking, you know, and I think I try to exude that philosophy and that and set that example. Some people accept, like it, but some people have just, since COVID just continue to wear a suit. Even when I go to conferences, most men are wearing suits and an open shirt. You know, I just personally don't agree with that, you know, and. And I will be, you know, quite frankly, when I go to conferences, whether it's a mortgage bankers conference, because I'm very involved with the mba and I probably be one of two people or so that are in a suit and tie. I don't know. That's just the way that what's. What's evolved over the last five years, you know. But I think it's important, you know, and I think that I try to stress that to loan officers, men and women that you're in banking, you should look. You should look the part. I hope that answers your question. But that's.
[00:38:58] Speaker C: Yeah. Is there that you speak to yourself, like to. Do you motivate yourself or do you meditate? Maybe you pray to God. Maybe you, maybe you have something that you continue, a mantra that you speak to yourself. Do you have anything like that that you practice as a part of your routine?
[00:39:13] Speaker B: Yeah, well, the milk. There's a.
Yeah. There's a great book by William McGovern called Make your bed. And my entire life I make. I make my bed every morning. And it's amazing when you do that. And I highly recommend that not only in the morning, the impact of doing it in the morning is that you walking around the bed, you're pulling down the fitted sheet, pulling down the, the COVID sheet, pulling down the covers. And what I have found over many, many years is that that's causing me to really think about, okay, what do I need to do today?
That's one advantage. The other advantage is, as stated in the book, is that I don't think it's healthy to come home. To come home and your bed is not made. So I've always done that my entire life. And that really sets to be cognizant of what I have to do every day. And it really helps me think about the kinds of things that I need to do because I'm actually. When you're walking around the bed, you're thinking about all that's about to happen and occur when, you know, when you get to the office. So that's one of the routines I go through, you know, and, and again, my, you know, I just love this business. Some people live to work, some people work to live. Working to live is budgetary in nature, which I understand you have to feed your family. But I think in this business, especially for loan officers who are, who are commissioned only generally speaking on the, in the distributed retail market, they have to be able to get to the point where they live to work rather than work to live. Living to work is where you have a passion for what you do every day. And if you don't have that, if you do not have that passion, then that could be challenging. And that's what I tell people. You need to develop a passion for what you do. And I think people welcome that philosophy. And not only the loan offices, but many of my employees, many of whom have been with me 30 years, they just know that if you're going to come to work, then you have to have a passion, otherwise do something else.
[00:41:22] Speaker A: And one way to re energize that passion in this industry is an upcoming conference called the Advocacy Conference. One piece I commend about you, Stephen, is you show up. And obviously showing up is not always the easiest to do it consistently year over year, decade over decade. But I think the younger generations just don't show up as much. Whether it's in mortgage or your local meeting every Wednesday, there's different ways that they give back. But as this industry consolidates, there's less representation at the top. At these advocacy conferences and other conferences, the advocacy is your why if you plan on retiring or working the next decade in this industry, what does the industry mean to you? And this is where the industry goes and tells D.C. why we're important for homeowners to build generational wealth, not just some rocket app that clicks on subscriptions. Right. The education you talked about can, can you just, I guess, talk about showing up for advocacy and what loan officers need to understand that they might have to pick up some slack in a consolidated industry to make sure we have enough numbers in, in the future at these, at this conference specifically?
[00:42:41] Speaker B: Well, Michael, I, I attend the spec. I attend conferences about six, probably 18 a year. I'm very active with local, local, statewide MBAs. I was chairman of the board last year for the Mortgage Collaborative.
I'm very involved with the Mortgage bank as independent executive council. I'm on the council.
My purpose in going to be quite frank is to leave those meetings, those conferences with what I call nuggets of information.
I'm always willing to learn and I'm the first to say that I do not know what I do not know. And I go to the nac, the National Advocacy Conference, because I want to become educated on what issues, as far as the NAC conference is concerned, could impact our business. And I do that on a state level as well because I would like. I need to know what. Because we're in every state, so I need to know what statewide issues could impact my loan officers in certain states in every state. So I try to become a student and that's why I go to these conferences. And I guess. And Michael, when we go next week, I'm sure one of the topics is going to be the HUD mortgage letter that was issued last week regarding non permanent resident aliens that FHA loans that, that will not be insured after May 25th. And I think it's important as a C level individual and a mortgage company that you become a student of these issues. And I think because it does, it could impact how your business, how you're running your business. As a C level employee, I've always said, and you know, education is very, very important and you have to stay informed. I've always said an educated consumer is our best customer. And I like to feel educated. So I can relate to my, my loan officers who are my customers. My loan officers are my customers. They need to know what's going on in the industry. Today we had a senior management meeting and that was the main topic today about, okay, how are we going to handle the, the impact of the non permanent resident aliens? In our case, we do 11 to 12%. Michael, at the beginning of this meeting you said that, I believe you said that there's another company that does 8 to 10%. I mean, that could be impactful.
[00:45:07] Speaker A: And they thought it was just people. You know, the media makes it sound like it's people that maybe came over the, the border illegally, but it's not, it's, it's so many different great employees here in America that have the W2s that really qualify perfectly for a mortgage repay.
[00:45:26] Speaker B: They have socials, they have W2s. They're just not permanent residents. But don't, but listen, one of the main topics I'm going to be talking if, you know, now that you got me started on this topic is that personally, I feel by the summer, by the end of the summer, Fannie and Freddie are going to adopt the same restriction. So look out for that. And I think that's going to be one of the takeaways that I want to walk away from from the conference. To what extent does the NBA feel that that's going to happen as well? And that could be, that could be impactful.
[00:45:57] Speaker A: We all just so people know when we go down there, like the hud, this black and white, there's a lot of gray area that we're asking for guidance on. And so the gray area right now around Fannie is it says you do not, you do not lend to people in this area that you think will not be residing there for at least three years. And now with everything you're hearing in the media, you have to start to wonder can I consciously say that this person will be around in three years if they're trying to fight against that and, and maybe, you know, remove their citizenship. That's going to be a gray area until they actually announce something and they might just stay in gray area. And so it's on Stephen and whoever myself. We go down there and we just try to tell the politicians the adverse and also the ripple effect. It's never like the primary decision they make. It's the ancillary collateral damage that really hurts. Hurts those. So that's. We all sit at our state tables, right Stephen, and sort of do it unified together within our state. It's the easiest conference to go to because you actually have allies.
[00:47:06] Speaker B: I think Michael, they're also going to be a lot of discussion about the privatization of Fannie and Freddie. I mean on the conservatorship. Dodd Frank, I guess, you know, and 09ish. I think July of 2010 Dodd Frank. Dodd Frank was that was implemented and Safe Pick CFPB was created in January 11th to oversee Dodd Frank. But I think.
So they have been in conservatorship since then and they're making billions and billions of dollars. So at some point I think there's going to be discussion at the National Advocacy Conference about the likelihood of the DSEs becoming private entities like they were before. Right. And what, what is the time frame for that and that that occurs and what would be the ramifications to independent mortgage bankers or the entire origination business model? Personally, I think that they're going to raise their government. Their guaranteed rate fees. The guaranteed fees, I should say the G fees, as they're called. And that could impact interest rates, but we'll see how that goes. But I'm sure there's going to be a lot of discussion about that. I'm sure that's on the list of the president wants to do in terms of saving money. I would think I could be wrong.
[00:48:23] Speaker A: But I think you're right. I think us as an industry go down there to make sure at least if it happens, it's fair on the other side and it's not made the biggest lobbying purse win. And then we have to collectively almost agree on that together. I will let Mike do the final sign off, but I did want to make one quick point, Stephen, in the form of a rhetorical question or an actual question for comment. But I do think as we talk about generational wealth, and we will go down there and talk about generational wealth, the fact that you had a path and even said go on a journey son, before you come back, but the fact that your mortgage company represents a generation or pass down where your customers that you've told years ago you're going to look out for them for their generational wealth, you have a family plan to make sure that you're, you know, next in line is going to help out their next in line. I think that's really cool. And hopefully we get to hear more stories about that by our guests on the show and more people promote doing that. So I'm sure you enjoy working with your son day to day. I know you do.
[00:49:29] Speaker B: I just interject, because you brought that up, that I do believe that a company should have a built in succession plan. Many of the companies that have entered into M and a activities since 20, since the last five years did not have a built in succession plan. And that's caused a great deal of many, that's caused a great deal of discontent during any kind of sale or merger or acquisition, in my opinion.
My story on that is really quick. When my son was born in 78, 1980, 1996, he says, dad, you know, he was just accepted to Boston University at the time he graduated high school. And he says his name is Scott. And he says, you know, dad, it makes no sense for me to go to college. Why should I go to college? And you spend all that money? And he spent four years in college. I sat him down and looked him in the eye and I said, Scott, two things are going to happen. Number one, you're going, you're going to go to college. I'm going to pay for it. Number Two, you're not going to join my company until you can bring something to my company. I said to him, just because we share the same last name does not mean you're going to come into my company and possibly ruin what I work 18 hours a day for. And he did not understand, quite frankly, what I was talking about. And I went out to tell him that. There's terrible stories you hear about children who enter their parents, company. They don't understand at an early age, you know, about the. They don't understand the business, they don't understand how to deal with people.
And very often the business fails. But most importantly, the relationship with their parents becomes very challenging, and it could lead to the ruination of a relationship. So he embraced what I said. He went to Boston University. He became a very successful investment banker on Wall Street. And then in 2010, when I got licensed, when the company got licensed in every state, he decided to come on board because I felt that he could really bring value, because at that point I had to expand my senior management team, all of which are still with me today. And he's the president of the company and I am again the founder and CEO. Again, no partners, no shareholders, no stockholders. It's just. And we have distinct responsibilities. He's great on the IT side and on the. On the economic side, you know, in terms of creating successful pro formas for potential candidates that we look to bring on. He's great with that. He's got a very high, what I call EQ emotional quotient. You know, very calm, very easy to get along with. And people really realize that. And I stress to people, when I'm talking to them for the first time that whether they, Whether they.
Then, if they're thinking about making a move, whether they come to me or another company, they should only go to a company that has a succession plan built in to upset your whole life, your career, to find out a year or two later that the company is going to be sold because there is no succession plan, I think is a mistake. So we stress that. And he and I have a wonderful relationship. We get along. We have separate and distinct responsibilities. I'm very involved in the marketing and the education and the training. He's very involved on the. On the IT side and the accounting, and we really have a great relationship. The only problem I have with Scott, to be quite frank, is that he cannot keep up with me. But he's still working on that.
[00:52:55] Speaker A: Not.
[00:52:56] Speaker B: Did you hear that? I know he's not on, but just.
[00:52:58] Speaker C: Say if I could glean anything from our interview with you today. Steven I would say generational wealth is is one of the themes and topics of of our entire conversation. There's a I think there is an attitude generally speaking that people think generational wealth only is on a fiscal or monetary level. However, generational wealth from the way that you have proceeded to sell, from the way that you have led and are leading and are doing with your son currently at US Mortgage has led us to believe that generational wealth just isn't about financial means. It is also about the way we do business, the personality and disposition of how we approach business and then also how we can glean from that to lead that to another level generation after generation and then not with US Mortgage and your leadership of founding the company to your son and maybe to the next generation. Whether it's by birthright or whether it's by M and A, there is a culture that Stephen Milner has in generational wealth in his leadership. I love that you have commandments. I love that you have a sense of leadership of what you not just what how to do things, but you are also doing those things that you practice in your origination, in your leadership and as an executive at the sweet suite level for US Mortgage even. Thank you so much for coming and providing us with this with your wisdom and glean leaning of leadership and style. Because this, this interview just isn't about asking you your story. It's also about providing leadership through the Mortgage Collaborative and through the mba and how you are providing generational wealth not only from a financial level but also in leadership so that the next generation of originators and C suite owners of IMBs can also lead themselves into success as well.
[00:55:01] Speaker B: I just want to close by saying that as a leader, when you're working with any employee, always remember that if the student has not learned, then the teacher has not taught. Which means that you have to explore different ways to teach the content to your student, whether it be a loan officer or whether it be a non commissioned employee. And sometimes people don't have the patience that is required. Not everyone is going to learn the content as you think they will.
So and sometimes it's a struggle with our children, with our employees, the student has not learned and the teacher has not taught. That's always been my philosophy.
[00:55:53] Speaker D: 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.
[00:56:08] Speaker A: Us on social media.
[00:56:10] Speaker D: Until next time, keep pushing the boundaries and uncovering the stories that drive our industry forward.
