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Special Reports
Recruiting & Training:
Renaissance Professionals
'Third Parties Effective When Used Strategically'
Referrals and financial planners have done well.
NEW YORK -- Originator Thornburg Mortgage is an advocate of recruiting
third-party business partners to handle some aspects of its work but believes it needs to be done strategically
and under certain terms, according to president and chief operating officer Larry Goldstone.
"We do use third-party vendors. We've outsourced a lot of our back-office
functions. So call centers are, by and large, outsourced [as are] processing, underwriting closing and servicing.
But it's all done on a third-party private-label basis. So, theoretically, you shouldn't know and anything, anybody
you deal with will always represent themselves as being Thornburg Mortgage," he said in a recent interview
about the company's second-quarter earnings at ON's offices here.
Mr. Goldstone, like many who prefer using third parties to handle certain portions
of their business, cites the flexibility of this type of staffing as among its benefits.
As a result of Thornburg's use of third parties to handle certain aspects of its
back-office and call-center business, the company's executives feel they "don't have to worry about hiring
and firing as volumes ramp up and then ramp down and then ramp up again," he said. As a result, Mr. Goldstone
said he feels that Thornburg has "eliminated some of the cyclical risks of the business."
In addition to using third parties to handle some of its phone and back-office
work, Thornburg uses third parties as a source of a large percentage of its origination work, he said. Mr. Goldstone
estimated that roughly about 80% of the company's volume comes from correspondent lenders that sell closed loans
to the Santa Fe, N.M.-based company.
He said Thornburg is able to reach out and solidify relationships with the borrowers
who take out these loans through the servicing relationships it obtains in about 80% of the correspondent product
it buys.
As it does for all the mortgages it services, Thornburg makes it a point to have
one of its representatives call the borrower when it obtains that servicing relationship and introduce the company
to the borrower, Mr. Goldstone said.
"We call [the borrowers], we welcome them to Thornburg Mortgage, particularly
in the case of correspondent loans where you have a change of lender," he said.
"In other words, the loan was closed to XYZ savings and loan's name and then
it got transferred to Thornburg Mortgage right after closing. [Because of this] those people frequently can send
their payment to the wrong place and it gets lost and there are early payment defaults that way," said Mr.
Goldstone.
"So, in a lot of cases, this calling program not only welcomes [customers]
but it makes sure that they know that they have a servicer, that we're the servicer - where the relationship resides
now," he said.
"We can alleviate a lot of lost payments that way," Mr. Goldstone said.
Thornburg also has been working to recruit financial planners as business partners,
he said. As a source of loans, both financial planners and customer referrals have over the past 12 to 18 months
become more effective than the Internet as a source of mortgages for the company, said Mr. Goldstone.
"We're reaching out and getting financial planners to trust us to handle
their client mortgages ...," he said.
In addition, "referrals, ... people who have been satisfied with our process
and then they're telling their friends, 'gee, you need a mortgage, you've got to go to Thornburg,' ... that's really
strong," he said."Basically these days we're in the mid 90% range for customer satisfaction so people
at closing, based on surveys ..., " Mr. Goldstone said.
"The fact that they would come back and do it again, the fact that they would
recommend friends doing it, ... I think those are some things that make us different than the mass market make
us different than the mass market [where some lenders may be] really big and maybe not so customer friendly,"
he said.
Customer referrals and financial planners are sources that now account now for
about 55% to 60% of Thornburg's new retail mortgages, the president and chief operating officer said.
"Those are the strongest sources and that's [good] because what that says
is that our marketing and our [service] levels are such that we're reaching out to new customers," Mr. Goldstone
said.
One type of loan channel Thornburg generally tries to avoid in its loan source
recruiting effort is the mortgage broker channel, the president and chief operating officer said.
"We really don't work with mortgage brokers. I think we have one mortgage
broker that's approved to do business. It's in our local market. That's the only exception we've made to that policy
or procedure," he said.
Mr. Goldstone said the company's executives prefer working with correspondents
because he and other executives want to deal with originators "that have capital and are regulated entities."
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