Just because buying a home is an emotional process for the majority of borrowers, running a mortgage business doesn’t—and shouldn’t—have to be as emotional.
Ron Erdmann is a senior vice president of mortgage lending and a branch manager with Guaranteed Rate in Cincinnati, Ohio. He says that originators should take a scientific approach to their business and track numbers the same way any other business would.
“A lot of realtors and mortgage people are very emotional and they’re very people-driven,” Erdmann said. “They have a good month and they feel like they’re on top of the world and they spend all month processing it, and then the next month they’re slow and they spent way too much time on people that are already sending them business. I don’t think they realize the amount of number of contacts and people they have actually be staying in front of to hit their numbers.”
Instead, people will continue to call on the same handful of realtors who already refer business without realizing that they need to have X number of people referring them each year. Without analyzing those numbers, originators don’t know how many leads they’re actually getting.
Erdmann knows his numbers. In 2018 he closed $140 million in residential business, and another several million in commercial lending, which is a new niche for his branch. It was the best year he’s ever had, and the majority of it was purchase business.
Even though Erdmann and his team knocked it out of the part last year, status quo wasn’t good enough. He made some changes that have carried over into 2019, one of which was that foray into commercial business. A lot of his clients are self-employed and seeking to purchase buildings for their business, and he also wanted the ability to serve real estate investors who wanted to buy larger multi-unit type properties, and those investors who already have so many properties that they can no longer do conforming loans.
He’s also looking to build a business development team that will essentially spread news of his business far and wide.
“Right now I do a lot of business within the Cincinnati central area, downtown and north, but there’s areas that are 30 minutes away that nobody knows who we are. So I’m trying to develop a team of one or two business development people to help expand our influence outside the immediate market,” Erdmann said.
He’s in the upper echelon of mortgage originators, and that obviously translates to his ranking in Ohio as well. But, he said, there’s always a concern that other originators are after his business, his partners, and his clients.
“I’ve worked really hard to get to the top of the industry, in my opinion, and now it’s tougher to stay there, because it’s easier for realtors and other competitors to call on my realtors and say, ‘Ron doesn’t need your business,’ ‘Ron already has a team,’ ‘Ron can’t service you; I can take care of you.’ So my biggest challenge is basically competitors who are going after my realtors and financial planners.”
In order to stay on top, Erdmann employs that scientific approach, and he also has done his part to change the overall consumer experience. Even when the mortgage process runs smoothly, borrowers don’t always truly understand the process and where they are in it. He started sending his clients a weekly email of his 10-step process, along with a personalized notification of where they are in that process. He’s received positive feedback both in person and via online reviews, and borrowers are not only getting a better knowledge of the entire mortgage process, but also seeing what’s ahead for them.
Even though he employs a scientific approach to the way he runs his branch and his business, Erdmann says that relationships are at the heart of everything he does. At this point in his career, time is at a premium so his educational events also serve as a point of connection with clients post-closing.
“What I’ve found over the years is that I could do a really good job and take care of clients and have really good rates, but at the end of the day, if I don’t have a relationship with them, my chance of retaining them as clients and particularly realtors and financial planners [is slim],” he said. “Events are my way of following up with them after closing, and maybe we have a chance to go somewhere and grab a beer or do something that I get a chance to actually talk with them. At my level I don’t have the luxury of spending as much time with people and knowing them so I like to find other ways to connect with them afterwards.”
It doesn’t take a scientist to explain that success.