He now runs thriving mortgage firm
In his teen years, all David Abelyan (pictured) wanted to do was play video games – after all, he was something of a gaming prodigy, at one point the top-ranked player of his favored game with participants in the millions. A tad over a decade later, he heads up Cake Mortgage Corp., a national lender experiencing brisk growth even as overall originations have slowed.
Launched in 2018, the Chatsworth, Calif.-based business in the San Fernando Valley region that’s a suburb of Los Angeles now employs some 200 workers, with a goal of 1,000 in the next two years.
“We just had 30 start today,” Abelyan said in a telephone interview with Mortgage Professional America. “I think we’re at the 200 mark,” the company founder and CEO added. “If not, we should be in the next 30 days. We have 30 processors start, and loan officers and more underwriters starting very soon.”
The key ingredient in making Cake Mortgage a success is the staff, he suggested. “There’s obviously a lot of factors, but a big part of it is the team that you’ve assembled and how you treat your customers.”
His firm distinguishes itself in how it treats customers, he said. “Usually if you look at these big conglomerates, big mortgage, they have 10,000, 20,000 employees,” he noted. “You’re just a number. You go in there and you’re not treated any sort of special way. But with us we really take care of our employees, and that translates to them taking care of the customer.”
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But getting that customer service right is contingent on motivating the staff, he added. “I think if you have a happy employee that’s stoked to be at work that’s like ‘dude, I can’t wait to be at work and crush it with my co-workers.’ That’s it. I think our process is very simple. It’s usually quick 10-15 minutes over the phone. We take care of people. Our pricing is very competitive, we’re not greedy. That and some other ancillary things give us a little bit of an edge when it comes to an industry-wide slowdown.”
How does he motivate his workers? “We tell them we’re not here selling a t-shirt. We’re not here selling ice cream. You know what I mean? We’re literally selling one of the biggest transactions of this person’s life.” To ensure that dedication, he places a premium on good employee training, he said.
Abelyan decided to venture out on his own following stints at Pennymac and Greenlight Financial after becoming disenchanted with the way big business operates, he suggested. One loan in particular (he didn’t reveal where) was the last straw.
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“What really got to me was I was doing a loan for a veteran,” he recalled of the client who had refinanced with the company three times only to be charged a 1% origination fee that amounted to $3,000. Abelyan told the veteran he’d run a request for a waiver up the flag pole, only to see it declined. “Deep in this email, there’s this tiny PDF,” he said. “This is something I’m not supposed to see. I open it up and it says ‘economic calculator.’ They’re making $30,000 on this deal, and they’re not good with giving a 3-grand discount. I thought this is not cool; this is not right. So, I said I needed to do my thing, and that’s how I got started.”
Yet it wasn’t an easy road initially, the 30-year-old recalled. “I got started at literally the worst time to start a mortgage company in 2018 just when the treasury hit 3.3. It was really tough, but you do right by your employees, you do right by your customers, and that will automatically translate into good results for the company.”
He finally decided to quit his job when he got a call from a friend. “Man, it was just me and I had a buddy of mine who was an underwriter. He calls me and he’s like ‘hey what are you planning on doing?’ I told him I’m going to quit to do my own thing. To make a long story short, I call him again a week before I’m quitting to tell him I’m leaving right now, and he says ‘OK great. I’m quitting too, I’m coming with you.’ Hold on a second! Hold on a second. I haven’t got any money to pay any underwriters,” he recalled telling his friend. “But he wanted to come do sales.” After the first year, the company had grown to 20 employees before doubling the next year. Abelyan has set his sights on reaching the 1,000-worker size in a mere two years.
The Los Angeles region Cake Mortgage serves is populated by a diverse array of residents, including Armenian immigrants like his parents. Abelyan said he strives to help those with less-than-sterling credit achieve the American dream of homeownership.
“There are underserved markets where your credit score may be 500, 520,” he explained. “You’ve suffered a credit event three, four, five years ago. But you’ve re-established yourself and making your payments on time, but people won’t lend to you. It’s not that your creditworthiness isn’t there, it’s just that lenders deem it too big of a risk to give money to these people.”
“But it’s not the case,” he added. “They make the barrier of entry very high for minority communities – African American, Hispanic, primarily – so those people suffer as a result of that. It’s like ‘hey, man, I’ve been making my payments for two years, haven’t missed a single payment.’”
Helping such borrowers is achievable, he said. “You just have to put in a little more time, a little more effort into it. We just had this lady call in not knowing she could refinance, ended up saving her $1,100 a month. We actually took the time to look at her loan, and manually underwrite it. It’s cool helping somebody that 10 people have said ‘no’ to.”
He referenced personal experience that helps guide him, speaking of his mother who was never exposed to financial literacy to understand the intricacies of loan programs. “She rented all her life,” he said. On his website, he invokes her hardships during the Great Recession as further inspiration for having founded his business. “In 2008, I watched my mom lose our home as a result of a predatory loan,” he wrote on his website. “I vowed to myself then and there to make the mortgage process easy and transparent and that was the start of this journey.”
According to the website, his company has funded more than $3.5 billion loans, with 11,500 loans served. “It should be a celebration,” he said of homeownership. “You’re improving your life, and it shouldn’t be hard.”
That envisioned ease of process motivated him to change the name of the company to Cake Mortgage after an initial branding as Millennial Home Lending.
“It should be a piece of cake,” he said in extending the analogy. “It’s supposed to convey the ease of working with us. This is actually a thing you should be celebrating, and not something you should be dreading.”
Sure beats playing video games all day.