Advice to brokers: "Everybody has to change their tune"

The mortgage veteran's playbook on how to survive in a troubled market

Advice to brokers: "Everybody has to change their tune"

By any account, Dean Rathbun’s devotion to the mortgage industry runs deep.

His father and stepfather were both realtors – not in itself a surefire sign that he would follow in their footsteps, but Rathbun (pictured), senior vice president at United American Mortgage, did not need convincing.

“I said I’m going to get my real estate license. They said ‘OK, great, but you’re going into lending because you won’t have to work seven days a week, like us’. I was good with numbers, so I agreed,” he told Mortgage Professional America (MPA).

“They gave me a pager and business cards, and they said ‘go get loans’. I said ‘OK’ and was literally out in the street in real estate offices and industry meetings every minute of the day.”

Much has changed since then. With the advent of the internet and social media, there is no longer a need to hit the streets in such a regimental fashion, but his enthusiasm for the job, almost 35 years after starting out in the mortgage industry, remains undiminished.

So much so that he works seven days a week - not exactly what his father had in mind for him, but Rathbun is not complaining.

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“At this point, I don’t have to show up, but I love it,” he said. “I can’t imagine doing anything else.”

His joie de vivre is reflected in an impressive track record. He has been closing a myriad of loans since 1987 and during that time closed mortgages for more than 4,000 homeowners, including first-time buyers.

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But his interest goes beyond the day-to-day aspects of the business. He’s also been a guest speaker for many real estate offices and has been a member of the National Association of Mortgage Bankers for more than two decades.

He has also trained more than 100 loan officers, which leads inevitably to the question - what are the biggest mistakes young mortgage professionals make?

“I think it’s the ability to judge how long it takes to build the business,” he said. “In the beginning there is a lot of famine, but it can become a feast if you stick with it.”

His advice is to “appropriately budget” and “do the right things”, which in his view means something as apparently mundane as returning phone calls.

“It’s the little details; staying in touch and keeping them updated. When you go into hiding from a consumer or realtor, they only assume the worst,” he noted.

Read more: Sprout Mortgage abruptly closes, lays off some 600 workers

These days, assuming the worst is probably par for the course for those on either side of the business.

With Americans reportedly cancelling deals to buy homes at the highest rate since the start of the year, inflation now at 9.1% and rates set to rise even further, it’s perhaps no surprise there’s been an 18% drop in mortgage lending compared a year ago.

Added to which are job losses and, unexpectedly, sudden mortgage company closures, including those of Sprout Mortgage and First Guaranty, which happened within seven days of each other.

Rathbun remains unperturbed, however.

“It’s certainly what we’d call a flush-out period again, (but) we go through different cycles in this industry. For us, it’s actually an opportunity. Our biggest growth was from 2010 to 2012,” he pointed out.

To rise up to the challenge, brokers used to the low hanging fruit of refi loans have to learn to adapt with an almost Darwinian zeal.

“I’ve heard loan officers say they won’t work with realtors, or that they won’t do non-QM deals. Generally being very picky in what they were doing. That’s fine when you have 200 million people refinancing at one time, but when all that changes, everybody has to change their tune.

“We have the opportunity to not only close and fund a loan, but also to go out and do non-QM. Right now, we’re doing a lot of seven- and 10-year ARMs, because there’s a lot of talk of recession. If recession comes, the Fed (will) lower rates and then we have an opportunity to do refinances and help clients into lower, long-term fixed rates.”

Another recent feature of the changing mortgage landscape has been the ability for brokers to choose from among multiple wholesale lending partners, a development Rathbun welcomes.

“We’re able to pivot within hours - not days or weeks - and rearrange that loan to go to the appropriate lending source,” he said.

Reflecting on his career, he admitted to having spent many sleepless nights during the 2008-2010 financial crash, wondering whether he would even survive in the business. He overcame that ordeal but appears to have kept his feet on the ground to the point that he’s still prepared to clean the toilets at the California-based company’s headquarters.

“I do whatever I can to make it a better work environment for everyone in the building,” he said. “We’re all here to be productive, to make money, but also to be there for one another and to set an example.”