Episode Transcript
[00:00:00] Speaker A: The Mic'd up show. This is season four where every mortgage has a story. And we try to bring the mortgage industry to life. To you. And so this is a very special episode where we dive into somebody that represents having stories within the mortgage. Remember, we are the ultimate hub where these hidden stories that I talk about behind mortgage in the industry come to life. I'm Michael Kelleher.
[00:00:28] Speaker B: And I'm Michael Zao.
[00:00:29] Speaker A: And in every episode, we will dive deep into the entrepreneurial spirit, which is where we'll start this one. The strategic insights and the breakthrough innovations that build the world's greatest mortgage companies. So whether you're advancing your career, scouting for industry leaders, or exploring opportunities in fintech and prop tech, you're in the right place. Get ready to unlock the story behind every mortgage. Let's dive in right to the entrepreneurial part. If you are a loan officer listening, your gateway is a warehouse line. Often as you get started somewhere along that line. So we will be talking about lines, we'll be talking about relationships, and we'll be talking about that entrepreneurial spirit. Chris 2011, you were pitched an idea to run a franchise in a business that literally probably has its ups and downs. And I'm talking the trampoline business of bouncing up and down to what we all know as Sky Zone.
I find it similar to how lenders are recruiting branches these days out there and picking up, training, managing. Can you talk about the mindset of going into one of these businesses and deciding you, you are going to be an entrepreneur and you are going to build a team? Where were you driving? Where were you looking at office space? Where was that moment where you knew you were all in?
[00:02:02] Speaker C: Well, that's a great question. I mean, at first the intent was we had seen this opportunity and I was one of the first five franchisees, really, the intent was to open one. And me and my partners, we were still doing other things and we were just going to have this one location. And then it, you know, some legs developed and we saw opportunities in other markets. So we bought other markets, opened up some other locations, ended up selling some markets. So as it did gain those legs, I mean, we felt like the most important thing was, was people, you know, you had to have good people.
You're not always in the location that you're operating in. We were for our first location, but we weren't for the second, third and so on. So having the right people was, was very important and, and that just takes a lot of effort, a lot of recruitment, a lot of networking, a Lot of background checking, you know, doing all the things that are necessary to find really good people. Outside of that, obviously, location is important and that's where real estate folks help and, you know, help you find the right location not only to fit the requirements of the park itself, but you want to be in a location where it's going to attract the right guests, etc. It's no different than any other business. Sometimes location is very important, but having your name branded out there and having people, people being able to find you, whether you're in a, in a location or you're a service that comes out to people, they still got to be able to find you. So that's really important as well.
[00:03:52] Speaker A: It just sounds like there's so many similarities to the mortgage industry and the way it's growing today. Chris Avery, for those listening, is vice president and relationship manager of Mortgage Warehouse Lending at First Horizon bank, which is one of the most established and reputable warehouse lines in mortgage. He's focused on relationship development, as you can tell, the service and the retention of the independent mortgage banker. So if you are listening to our episodes, you understand we typically break it down as brokers are in the community and they have somebody else underwrite close alone. The independent mortgage banker we find, is the heartbeat of innovation. They are typically the ones that buy into software early. So we're big supporters of them and they can do that at scale and they don't have to deal with the regulatory environment of banks and credit unions. So we're big fans of keeping them going. And a lot of them got into the business as loan officers and their entrepreneurial spirit took them to be leaders through getting a warehouse line, which we'll get into at some point. They had to. Chris can explain that. But Chris, you just didn't fall into. Doesn't sound like a, like right into being a loan officer. You went right into taking your management and relationship status and brought it over to mortgage. But again, like everybody else, you didn't go right into it out of college, you fell into it. Can you, can you tell us where that transition or bridge?
[00:05:24] Speaker C: Yeah, absolutely. So in 2015, we were approached by a company to buy up our locations and I was looking for something to do. I didn't have to do anything immediately. And my former industry was in consumer packaged goods. I spent a lot of time calling on large retailers such as Walmart, Target, and, you know, wholesalers like Sam's and Costco, things like that. For several different companies. There was always the opportunity to get back into something like that. But I wanted something new and challenging and it happened to be my, my, one of my attorneys that did a lot of our lease negotiations knew the, the, the folks that were running the warehouse lending group at First Horizon put us in touch and thought we would be a good fit. And it was kind of a unique situation because once I, once I came on board, it was a good fit. I found that most everyone that I worked with did not come from the banking industry or the Mort.
They were just people that had good business skill sets, good talent, good thought process, could develop relationships with people, knew how to support their customers and serve their customers. And you know, I think of that when it comes to the mortgage industry because I do believe having been in it now nine years, a little over nine years, I don't think there's a direct pathway or a proposed direct pathway to the mortgage industry. Usually when you hear people talk at conferences and their guest speakers, they talk about their entrance into the mortgage industry and it's usually some type of joke of hey, I got this job out of college and I happened to be in the industry and here I am 30 years later, there really wasn't a plan to get into the industry. So my thought is why isn't there a plan? Why aren't we creating paths to get into the industry? And, and I do, I do see a lot of fear in the industry to go out and hire people from outside the industry because they want a real quick hit, you know, whether it's bringing on someone from another organization in a similar position just to come fill a need or a void, that kind of thing, versus finding somebody that could really grow with your company, learn the business and be there for a long time and serve your business and your customers? Well, I think there is that opportunity.
[00:08:04] Speaker B: Wow. So then in regards to getting into the business, when it comes to warehouse lending, sometimes there'll be originators and they have this entrepreneurial spirit. They're already self generating business, they're already running somewhat of a piano and they're thinking, hey, you know what, I think I might be able to do this on their own. So you know, if you're, if you're funding three to eight deals and you got an accountability partners also funding three to eight deals, can you tell us what would that look like to someone that says, hey, you know what, I don't want to just be a broker, I want to, I want to actually be an independent mortgage banker with warehouse lines. How would they come to you to, to establish that? And even if someone's already established as an independent mortgage banker. Do you work with established ones as well as not established ones? What is that? What does the process look like for either of those?
[00:08:54] Speaker C: Yeah, it's a good question, Michael.
The first part of that is every, every single customer that we work with, everyone that is, is an owner or a leader in the independent mortgage banking world is an entrepreneur. So you're, you're starting off from that, you know, from the, from the get go. If you want to own your own company and you want to go out on your own, there's nothing stopping you from doing that. You just want to make sure you set the right path. You can't just go out and do it and not have a plan of attack. And when I think of folks that have a lot of industry experience, they may have experience in running their own shop or to your, your point, their own P and L. That's important because you really need to know how to do that. But there are several things you need to make sure that you have in place before you just go out and do it. You know, first you got to have the, you got to have the people, you got to have people that can, that, that can play a role in your organization so that you can accomplish everything that you need to accomplish to be successful. And that ranges from origination to underwriting, to funding to post closing, you know, even to the accounting side, et cetera. I mean, that's all gotta to be in place based on your volume and where you want to get to where you want to grow to. You also need to make sure you have the right vendor relationships. There's so many vendor relationships that a company has to have. I mean, it ranges from your, you know, loan origination system to, you know, making sure you have outlets to sell your loans to. So you gotta have, you know, investor relationships. And you can't just have one, you gotta have many, you gotta have a warehouse line relationship so that you can fund your loans.
We, we are the, you know, kind of the lifeline to a independent independent mortgage banker. I mean, we're providing them the capital to originate loans and then they sell those loans on the secondary market and then they recoup, you know, the capital to pay off the warehouse line and then obviously some on top of that, which is, you know, profit or revenue to them. So you don't want to, you don't want to just go out and, and, and set something up and then go get all that stuff. You have to, you really have to do some behind the scenes work and get all that set and ready to go before you pull the trigger, so to speak. You know, with, with us, I mean there's, there's a lot of different warehouse lines. There's a lot of good warehouse lines and we all play a role and we all serve different segments of the industry ranging from large customers to small customers to middle sized customers, etc. We, we, we all fund a variety of loan types and, and have different, you know, different attributes and services to our lines that, that appeal to folks. So you got to make sure you have what fits, fits you and what you're trying to do and to make sure somebody is going to be there with you through a little bit of the thick and thin. We've seen the highs and the lows, the challenges of the industry were we're, we're in some challenging times. I think we're coming out of it, but the last couple years, I think everybody on it has been very challenging. And we've seen, you know, five, six warehouse lenders over the past two or three years exit the market. Some of them were totally unexpected and really a shock. And you know, there's times where you have few warehouse lenders, there's times where you have many. You just want to make sure you're working with somebody that has proven to be consistent over time. I think we fit that bill. And you know, it's important, you know, everyone's going to have requirements. You just got to make sure you're, you're, you're meeting the requirements to, to get a warehouse line or to become a partner to an investor or to sign on for any of the technology platforms necessary to run your business and many others.
[00:13:23] Speaker B: Have you also seen, because of the spaces that we're in, certain smaller banks or credit unions may have said, you know what, we just want to exit the mortgage space and then approach you and say, you know what, we have the balance sheet, but we would like to utilize your warehouse line for our FDIC or credit union type of bank. Have you also seen smaller banks and lending institutions, even though they have capacity, still utilize a warehouse line with you?
[00:13:52] Speaker C: Yeah. So banks and credit unions do from time to time utilize warehouse lines. I would say it's on the fewer side versus the mini side. Most of them, if they have a mortgage arm, are originating mortgages and they are putting them on their balance sheet, they're either servicing the loan, sometimes they're selling them on the secondary market, but then they're, you know, originating new loans and servicing those and getting the servicing revenue for Those loans as well. There are situations where you can see that a mortgage arm of a bank and, or a credit union may outpace what the bank can lend itself because they do operate under regulations and requirements. And in that case they may seek a warehouse line or several warehouse lines to be somewhat of a secondary or tertiary lender. In that case they're going to be their, their own primary lender, but they're going to seek additional help. So we do see that from time.
[00:14:57] Speaker A: To time on the note of help when a loan officer or a branch is doing really well and they say hey, maybe we can do this on our own. There are requirements like you were saying, skin in the game to, to be able to get a warehouse line. Is the pathway, the growth seen in the eyes of loan like I guess two questions. One would be what is the obstacles in their head that you think are not real obstacles, reasons they don't reach out to you and they should or whatever their starter warehouse line is. And then number two, are you finding they're able to sell themselves into the liquidity needed or do they typically partner up with a, a relative or a non active investor or somebody to help them get started?
[00:15:40] Speaker C: You can see some of that. I mean some people come with the necessary liquidity and, or net worth. Liquidity is very important to a warehouse lender. We want to know that you have a Runway to, to navigate the challenging times. From time to time you see loan repurchases. We want to know that, that you can buy a loan when necessary. And when you have challenging times and your company's not making money, do you have the capital to inject back into your company to make sure the operations are in a continuous forward motion so you know that, that is, that's all important. Where, where they seek their liquidity as a bank, we're going to want to know where it comes from. I mean if we get a call from somebody and just says, hey, I'm ready to do this and I've got $10 million, our first question is going to be okay, where, where is the $10 million? We want to see, you know, supporting statements that show that. And if they can't show that, we're going to ask where it came from. And if it looks like we can't determine where it came from, we're going to want to know the trail. And it's okay to say, hey, it came from dad, it came from Uncle Joe or, or, or a family friend or something like that. That's okay. We, we just want to know So I think you should be prepared for that. As far as loan officers who want to run companies loan office, every loan officer I know loves to generate the volume, the sale, they love the sale. And then I think they quickly find out just like any salesperson, it's not just loan officers, but let's just talk about any industry. Any salesperson really likes the sales process. Now when you, when you start to lead a company, you find that there's so much more behind the scenes to make that company successful. Whether it's the personnel, you know, recruitment or personnel issues with people that are already with your company, whether it's accounting function, whether it's systems function, it. So there's a lot that goes into running a company and they have to have their hands in that. Now they need good people to see that. But typically, I'm saying typically good salespeople have a really hard time giving up that function. And when they're called to do so many other things, they, they somewhat lose their passion. So I'm not saying at all that, that, that good salespeople or good revenue producing people shouldn't go out and start a company. Just I always tell people to look inward, know what you're good at, know what, where your strengths are and then go find people to accommodate the other skills where you may not be as strong. I like to consider myself a self aware person. I think I'm good at building relationships, I think I'm good at the sales process. But there's many things about our business that I can be a lot better. I mean when it comes to, you know, we have to look at everyone's financials and I think I'm good at that. But there, there are some complexities to some financials where I have to recruit some help internally from some of our folks to say, hey, I need your eyes on this. I don't know that I'm seeing this correctly or you know, something seems odd here. Can you help me figure it out? I, I can't be everything.
So I got to know what I'm good at, but I also got to know where I need to solicit help from and who I need to solicit help from.
[00:19:37] Speaker B: Is that internal for you or do you seek outside of the bank itself?
[00:19:43] Speaker C: Most of it's internal. Yeah, we have a, we have a great team of people in a lot of different positions. So you know, in, in, in my role with my customers or my prospects, I'm seen as the face of the organization and really the, the first step of the relationship and there's, there's nine other people that do what I do and we do all do a great job and we, we all cover the entire country and everything we do is based on relationships. And I don't think any of us would have it any other way. A lot of people will ask us, man, doesn't that get tough or don't y'all get frustrated that y'all may step on each other's toes and, and there is a little bit of that, but we're all professionals and we, we talk through it. But I think we would all like the opportunity to go and spread our reach across the whole country and create our own network of relationships that, that can help us inside the bank. I mean we have, we have plenty of people within our group and within our credit organization and our executive leadership that are ready to roll up their sleeves and help. And you know, that comes from just day to day operations. So client services to, you know, financial acumen and analysis to the credit side to the compliance and risk side. So there's a lot that we're privy to as far as personnel, not only within our warehouse line group, but also within the bank itself to help us to become successful, but also to help us serve our customers with excellence.
[00:21:32] Speaker A: So yeah, you always need great partners and that could come in, people could come in technology.
When you have a great partner, the employees that work for them too, you always want to reach on as resources. We're going to have a quick segue to our sponsors who are great partners to many of the lenders across the country.
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 homebuyer, 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 or 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 year.
Well, those are, are great partners and great partners always have great relationships, especially business to business. What do you see as the difference in right now you are business to business in your. We open the show talking about how you had tens of thousands of customers come in every year. What do you think the difference is in customer service between a business to business relationship and a. Just like what loan officers are facing out there, just customers.
[00:23:45] Speaker C: I don't know that there is a, a lot of difference.
I think, I think I would say when you're, when you're focusing on an individual, you're helping serve that individual's need at that time. When you're focused on a business, you, yeah, you may be selling a service or a product to that business, but that business may be focused in other areas. And I think if you want to add value, you got to help add value into those other areas. You can't be like just me a. Me too.
You know, I've always said most people have heard the acronym with them what's, what's in it for me?
And you know I always say that I try to start my negotiations on things is with wifit, what's in it for them? Because I feel like if I can go to their side first then, then if I'm adding value, my needs and wants will be taken care of by providing the, the, the right positive relationship, the right positive service, the right, the right value.
Some negotiators I actually was talking to last year, somebody that wrote a book on negotiations and literally told me that was wrong. And I said okay, you know, I wasn't going to argue with it but it works for me. It may not work for everybody else, but I try to see customers, whether it's an individual or a business as a, as a lifetime customer. I'm not a, I am a realist. I know that, that, that customers don't always last a lifetime. But I like to think at the beginning and I like to think through the process that it's going to last a lifetime. So while there are transactional aspects to a, a relationship from a business standpoint, whether you're dealing with an individual or whether you're dealing with an entity, the, the more you can take the relationship away from the transactions and from what each group is trying to accomplish, then I think you're going to have a longer lasting relationship. You know, I see people, I see people kind of go back and forth over some pretty small things that are going to be inconsequential in a cost or revenue perspective versus seeing the, the end game and what that can mean, you know, through a, through a long relationship or a lifetime that goes along.
[00:26:46] Speaker B: The lines of you'll always get what you want if you help enough people get what they want. And for the average independent mortgage banker, do they stick with you as a main warehouse line or what are the advantages of having multiple warehouse lines or even having a warehouse line versus just funding off the balance sheet itself? So in, in line with the partnerships as well as helping other people get what they want. Can you speak to, to answering those?
[00:27:14] Speaker C: Yeah. Well, I will say it would be very difficult for an independent mortgage banker to fund off of a balance sheet because they don't have the depository relationships, they don't have the capital behind them to fund their own loans. There are some very high net worth individuals that own mortgage companies and I think even they would tell you that they could not fund all their loans on their own with their own money and wait to sell that on the secondary market and recoup those funds because if they did, they would have to wait to fund more loans. So they do need that warehouse line.
I think that's essential. I also would say having multiple warehouse lines is important.
While we've been doing this consistently for decades and, and haven't exited the market and reentered the market, we've also seen some entities that I personally didn't think would exit warehouse lending have done so over the last few years. So you just never know what's going to happen. So I think it's, it's critical to have at least two relationships. Then it really depends on, on size, what size you are, what kind of volume you have. Um, every warehouse lender may have a max line size and if you get to a point where you have a couple lenders that are getting to the point where they only want to have this line size in place, you may need to have three or four. But I would, you can get to the point where you have so many, you, you can't feed them all. So then the relationships aren't as impactful because you're not giving them enough volume and they're just there. So it, you may not be getting the, the, the, the best terms and you may not be developing the best relationship because of that. So it's, it's, you know, it's, it's, it's something you got to review. But there's also no scientific formula as to how many warehouse lines you need based on a certain amount of volume.
[00:29:41] Speaker B: When an independent mortgage banker has multiple warehouse lines, does it become like big brother, big big sister relationship or where sometimes you want to give a little, sometimes you want to take a little. And in. Since you have some insight with some of your competitors, can you tell me what it's like when sometimes liquidity is tight or, or when it's really loose? How does that work?
[00:30:05] Speaker C: Yeah. So as far as the big sister, big brother, I, I can't speak to my competition and how, how they do things.
You know, we want to support our customers and we want to support everything they want to do and we want to support them with issues that come their way and I think we do a really good job of that. But sometimes it does come with a conversation of, hey, you know, if I do this, I need a little bit more from this side or that side. I mean it just, that's the nature of business because we can't just go and support all the things that, that may be considered to be issue or non priority loan types or volume. We, we want, we want the good stuff too. And sometimes it comes with that. So you do have to have those conversations. But I do think it's a give and take and I really try to set expectations with my customers on the front end of hey, here's what we are trying to accomplish. Here's. I know what you're trying to accomplish through our conversations. If we do this and you do this, does that work for you? And I think if we can get on the same page, we have a really healthy relationship that, that moves down the road really, really efficiently, swiftly and without a lot of speed bumps or, or potholes.
I think if you don't have those conversations or if you try to hold things over someone's head, I think it creates a adversarial relationship and then, you know, then, then the relationship starts to go in a lot of different directions, including out the door.
[00:31:58] Speaker A: A warehouse line is essential for these IMBs. When we say IMBs, they represent a large part of the market. You're talking hundreds of thousands of loan officers in your community their owners are dealing directly with. Chris, to shift gears, we always say this show is to give people in the industry who they cannot afford or they're so talented, they're not sent to these conferences. But if you go into these conferences, including Long. We were just at advocacy down in D.C. where people give up their time to advocate for the industry, obviously believe and love the industry. You got somebody like Chris talking with Jean Lugot from Prime Lending, who's been for decades there, huge company. Bill Loman, American Pacific Mortgage. I think maybe basketball, college basketball. I don't know what they were talking about, but when Chris went up, they immediately let him in on the conversation. That's not rare, but at the same time, it doesn't happen all the time. They have a line of people trying to get in their ear. Chris has access to that because of how many conferences he's been to, how much he's given to this industry.
I don't know if you want to start with that CMB pin on your blazer there, Chris, or you want to start with the story about how you always have a blazer that stands out. I could go back probably 20 straight conferences and know I ran into you because of one of them. Can you talk about how this big, huge, huge, huge industry, $6 trillion feels so small if you start going to these conferences and how somebody can get as comfortable as you like. Where does that first step start? When they walk into their first conference?
[00:33:40] Speaker C: Yeah, so.
Well, when I first came into the industry, you know, a little over nine years ago, I. My very first conference was the Florida MBA conference in June of 16.
And it, you know, my goal was to go and just start meeting people. I didn't care what your position was. I didn't care what role you played in the industry.
I would sit down with you, have a conversation, talk about what you did and what I'm doing or attempting to do and what our company does. And from that, you just start to meet others and you start to develop relationships.
I think going out and you're going to go to conferences to try to accomplish some things and get business done. But at the same time, I think there's a lot of importance to going out and building relationships because that means we're, we're more connected. It means that when something happens and someone needs your service or, or your product, someone out there is going to advocate on your behalf because they know you. And, you know, there's many times where I've gone to so many conferences in a row, I try my best to see who's going to the conference. I try to set up meetings in advance. I try to have a set of goals and objectives and sometimes that works and sometimes I'll come away and feel like I haven't accomplished anything from that conference other than meeting a lot of nice folks and seeing a lot of industry friends and industry connections. On the flip side of that, the subsequent conference or conferences, maybe I didn't have time to set up meetings or anything. So I'm going in blind. And some of those can be the very best conferences because there was no agenda. I just go and become my former self of meeting anyone and everyone I can, learning about anyone and everyone I can, and seeing how we can mutually help each other. And it goes back to what you said Michael, earlier is, you know, when you lift some others up. Yeah. You know, they're going to, they're going to lift you up too.
I would just say if you go out, you know, be, be genuine, maybe start with a smaller conference and, and let that lead to, to bigger things. I think if you went to, you guys have been to secondary, you guys have been to annual, those are big conferences, they're spread out and sometimes you can be dropped into that and you're like, man, what do I do? Where do I go? Who do I see? And it can be a little daunting. I think if you go to some smaller state and regional conferences and get to know people and people get to know you, it can really branch out from there.
[00:36:46] Speaker B: When you're at the conferences on the short occasion that maybe you're not as prepared meeting wise, do you have an idea of how to picture what is your perfect customer in the event that you meet someone that you haven't met before and say, you know what, this is how I would like to be able to help this customer or this potential customer. They don't know it yet, but we can actually help them. What, what do they look like personality wise? So they can not only if you know at their first conference, not only fit in with you, but fit in with others. So, so that basically you can lift the tide. All boats can rise in that. In that case.
[00:37:25] Speaker C: Yeah. Well, let me start by saying when I said earlier that I, that, that I may not have meetings set at conferences, I wasn't saying I wasn't prepared for meeting. I'm always prepared for a meeting because I know my company and I know my business and I know what we do, I know what we don't do. So when I meet somebody, I can sit down and have a meeting with them to understand what they do, what they have, what they don't have, what, what they're trying to accomplish, etc. And we can figure out whether we have a mutually advantaged relationship upon us or. Or not.
I would. I would say to anyone and everyone that if you go to a conference and. And you're trying to be someone or something that you're not, I don't. I don't think it's going to come across. I don't think people are going to gravitate to you.
I, you know, I'm. I'm many things, and I. But I also know what I'm not, and I don't. I don't try to be any of those. I see people at conferences that I'm in awe of. I'm like, I like the way she negotiated that, or I like the way he responded that and said that. And I'm sitting there going, man, I gotta. I gotta do some of that too. And then I sit back and go, that's not me. That. That was awesome the way she did it. That was awesome the way he did it. But that's not me. People would. It would feel weird, it would look weird, and it would be weird. So you just gotta be yourself. And I get told all the time by people that, right, wrong, or never. They're like, chris, you're just. You're always so genuine, and. And I do feel like I'm genuine, and I feel like I know what I. What I am and who I am and. And what kind of relationship I want to be for people and what kind of relationship I want them to be for me. And. And I just try to, you know, find the positives in that and. And enjoy, you know, enjoy life and enjoy business and, you know, let's see where this all takes us. But I think if you. If you go and you try to emulate something you've seen on TV in negotiations or something you've seen from somebody else, if it doesn't fit you, it's just not gonna work. So I would just. If you like people. I love people. You know, Michael, you know, Michael Kelleher, you know, I love people and love, you know, talking and. And getting to know people. And a lot of times outside of the. The, you know, conferences.
Well, at conferences, I'm. I'm a little bit different because I. I try to. I try to keep things on a. On a personal level. I think we have very little time face to face with people, so I feel like I can get on the phone with anyone I meet and have a business conversation for 10 minutes, 15 minutes. Not to say that in person. I don't want to do business, I do. But if I have my preference, while I have limited time with somebody in person, at a conference or otherwise, I want us to be personally connected. I want to know about them, what makes them tick. I want them to know about me, what makes me tick, what I like, what I don't like, what they like, what they don't like, what their families are like, what their hobbies are. Same same for me because I feel like if we're connected, we all want to help each other more, we all want to serve each other better, we all want to make each other more successful. I think if we just sit down and have business conversation every time we see each other, it's harder to connect like that over the phone or through a video.
Through phone and videos where we can actually have just the hard facts of a business conversation. So when I go to conver conferences or go out to meetings, I try my best to have more of a personal interaction and then follow it up with a business conversation after the fact. I don't want to waste that face to face time with something that could be done over the phone or an email.
[00:41:48] Speaker A: As we wrap up here, I'll make an observation that I think is relevant. I see the industry right now as one where we talk a lot about volume when we're making our economic predictions. But more and more it's obvious by the mergers, acquisitions, the companies going out of business, the warehouse lines. It's a unit based business and if you have enough units you can make your process profitable. If you don't have enough units, you need to have a plan or the plan might just be an ostrich. Put your head in the ground and hope that you can have some thriving 25 pick up sticks in 26. Whatever it is that gets you what you've seen is a grinding halt. The industry has really come to in the vendor, partner, lender relationship. There's not enough units to buy. There's not enough lenders and units out there for all these buying to distract people enough. And so what you're seeing at the industry events is the lenders are trying to avoid what I call outcome conversations where the conversation or meeting requires a inferred outcome. Like if I meet with Mike, I know I either going to have to sign up at the end or not sign up. They over the last say year and a half now need a reprieve from that so it gets fun again. Fun again means rates start dropping. They have the go to go buy stuff. They'll go into it Knowing that one of these outcomes will happen. And so that's why you need a plan, like Chris said. And I think now more than ever your plan should be to avoid outcome conversations, but have a plan on when you're going to meet or call that person down the road so that when you meet them, you're not pushing for an outcome, you're just in the moment, in the experience.
And I think they appreciate people that are at the conferences right now. Chris, we talk about it all the show. So whether it's for the audience now or we clip them all up later, but you're obviously there, not always looking for an outcome. That's why you gave your time for the cmb. Can you just explain what the CMB is for a loan officer listening and what it meant for you when they finally put one on your chest?
[00:44:08] Speaker C: Yeah, let me, let me say one thing first and I'll get to that. So you were talking about the outcomes.
I, I think a lot of people, whether you're what, no matter what position you're in, but you know, let's talk about salespeople. You have goals and objectives. Everybody should have goals and objectives, whether they're personal or company mandated, whatever, you got to have something that you're reaching for. But I see too many times people have results oriented goals and objectives and I'm not saying that's bad, but what they lose sight of is the activity that will get them there. And too many people lose sight of the activity. So if I want to grow my volume by 10% or if I want to achieve this kind of volume or this type of growth or I want to earn this kind of incentive or this company trip, etc. They have that in their mind and they get either excited or upset depending on where they're trending towards that. Whereas the people that I find to be the most successful are the ones that are activity based. So they, they decide on the activity that's going to res, that's going to achieve the results. You know, how many calls do I make, how many meetings do I go to, how many trips do I go on, how many people do I connect with that kind of thing? Because it will happen. And, but, but you got to, you got to keep it, you got to be disciplined, really disciplined person I think is going to be the most successful. All right, so off of that and onto the cmb, which I think is a little, you know, related.
So I decided I've only been in warehouse lending and, and I'd had so many people that I knew that were CMB's. And so many people talking to me at conferences like Chris, you should, you know, try to get your CMB. Try to get your CMB. So I got really excited back in late 22, early 23 about you know, going for my CMB. So I thought to some people that were also interested and signed up for the prep course and did that in early 23 and it was really eye opening to me because of the amount of industry knowledge that you soak up through this process. Being a warehouse lender and only a warehouse lender now I'm understanding more about the origination process and the regulations and, and different aspects of the origination process. Same with servicing and secondary marketing and hedging and in industry regulations and current laws and things like that. So I think it really broadens your horizon.
You know, going back to the results thing. I think the result is I get my cmb. But I think also you have to, you have to be disciplined and put the activity in there that will get you there. The studying, the practice questions, the talking to other people, you have to devote that time but you have to be disciplined about it.
And it might move faster or slower for some people. I will tell you it moved slower for me.
I finished the prep course, did some studying with my group, took the test in June of 23 and there's six sections. I passed three sections and I didn't pass three sections so I had to take those three sections again. I decided to take some time off during the summer and then in the fall to you know, pay attention to college football and stuff. So then in the winter of 24 I picked back up my studying for those three sections and in June took those three sections the test again, passed it and then spent you know, the summer preparing for the orals and then took my oral exam in September so that I could walk the stage with folks at the annual in Denver and, and I've loved it and you know, trying to find where I can add the most value to the CMB society. You know, I've taught a class, you know, at Middle Tennessee State University at the request of the TMBA or Tennessee Mortgage Bankers association on warehouse lending. I really enjoyed that. I'm working with the MBA and Michael Upman right now about School of Mortgage Banking one and two. I'm going to shadow in August, you know, to possibly become a, a teacher there and then there's other, other areas that you know, I'll look, that I'm involved in and look to be involved in so it's, it's a great thing to do. It's obviously a great thing to accomplish. When you really look at the number of people in the industry and how many active cmbs there are, it's really a very small number. So those that are cmbs should be very proud. Those that are trying to become cmbs should be very encouraged and should be excited about moving through that process and getting the cmb. I recommend it to everyone. But I also say don't do it just to get a pen. The pen is nice to have, but do it to learn more about the industry and to broaden your horizons from what you do so that it'll help you in your, your daily life in the industry and what you're trying to accomplish.
[00:50:11] Speaker B: Well, Chris, number one, thank you so much for joining us on the show today. One of the things I really appreciated is we've interviewed a lot of leaders inside of the mortgage banking space and sometimes what the one thing that we'll get from it is to stay in your lane.
However, what I would say in this particular interview is as a rising tide lifts all boats and I think that when you have, when you are a leader or whether you are a beginning leader or whether you are in the middle of that journey, number one, Chris, it's important to understand who is with you on your journey. Number two, it's important that on the, on that journey, whether you, whether you think they're helping you or whether they're not helping you, it's still helping you. So appreciating, appreciating who is on that journey and what you get to not only learn about other people but also yourself is going to help the independent mortgage banker. And I think that with your type of mindset on what each individual leader is looking for, you can actually tap into that based upon your self awareness, based upon the people that you know are going to help you. And I appreciate that because not everybody has that type of self awareness. And so you're bringing a rising tide to lift all boats. And so thank you so much, Chris, for bringing that to the show, not only in helping the, the beginning leader, but also the existing leader so that we can understand not only how you run your business, but how everybody else is helping everybody run all of their businesses so that our tides can rise with you.
[00:51:51] Speaker C: Oh, well, it was my pleasure. I've really enjoyed it. I really enjoyed the preemptive work for the show. You guys are fantastic and I think this is a big value add what you do.
[00:52:07] Speaker A: 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.
