Key Factors RealEstateAF

Building Dreams and Legacies: The Mann Mortgage Story

• Mark A Jones - Founder of ReviewMyMortgage.com

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From a one-room office in a former mortuary to a mortgage banking empire, Don Mann, founder of Mann Mortgage, joins us to weave an extraordinary tale of tenacity and vision. Our conversation takes us through the heart of the American Dream—a narrative punctuated by Don's North Dakota roots, a life-altering boating accident, and the sweet success initiated by handing out M&Ms. His is a story that traverses the ebbs and flows of the mortgage industry, unearthing the resilience and adaptability needed to thrive through decades of economic shifts.

This episode is more than just an entrepreneurial chronicle; it's an intimate glimpse into the transition of leadership within a family business. Don shares the emotional and practical nuances of passing the torch to his son, ensuring that the foundational values and legacy of Mann Mortgage endure. It's a testament to the power of familial bonds and the importance of nurturing the next generation to foster growth and innovation.

Housing is more than walls and a roof—it's the cornerstone of stability and prosperity for many. As we explore the transformative impact of homeownership, particularly for those breaking the cycle of generational renting, we uncover how mortgages do more than finance homes; they finance dreams and legacies. Join us for a heartfelt journey that celebrates the milestones of property ownership and the profound influence it has on individuals, families, and communities at large.

Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.

Speaker 1:

Let the journey begin. And we're back with another episode of Key Factors Podcast Real Estate AF, where the AF stands for and finance, and I'm your host, mark Jones, and we are powered by ReviewMyMortgagecom, the largest index of mortgage programs in the nation. And in this discussion I brought along somebody that I looked up to, or I look up to both from a literal standpoint and kind of from a physiological whatever you want to call it standpoint, but somebody that has walked the walk and talked the talk. So when he mentioned that he was coming to San Antonio to visit and see how everything was going, I asked him if we could jump in the box again and see if we can't get a discussion that many others out there could possibly benefit from. So, without further ado, I would like to introduce the owner, founder and head of the golf coordination at Mann Mortgage, don. Mann Don, how you doing.

Speaker 2:

Doing great, great Good to be here with you.

Speaker 1:

Awesome. So our last time that we had this time to have a discussion, it was really brief and we didn't get to talk much Kind of rushed. I'll be honest, I was nervous at the time like holy shit, it's Don.

Speaker 1:

Mann, I don't know what to talk about. I'm a scary guy, yeah, but since then I've gotten to know you more, I've gotten to be more ingrained within your company, your organization and what you guys do, and now it gives me kind of the ability, the confidence to ask you a little bit more, to dive a little bit deeper into who you are and how man mortgage came to be. So, that being the case, I want to ask Don, how the hell did you get started in the mortgage business? Where'd you come from?

Speaker 2:

Well, I'm a North Dakota native right and went to college at the University of North Dakota and graduated in 1970.

Speaker 1:

Okay, okay.

Speaker 2:

Were you around in 1970?

Speaker 1:

I was not, oh, I wasn't even a thought in the eye, as they would say.

Speaker 2:

I don't know how many people these days were around in 1970, but thankfully I still am, yes. So yeah, I graduated from college and you know the first thing you do is well, what am I going to do for a living? I had a business degree, so 71 was kind of a bum year. It was kind of after the Jimmy Carter era Right around, hippies started coming around yeah.

Speaker 2:

Vietnam War was kind of just getting over. But anyway, I went looking for a job and just was having a tough time and I happened into my local bank where I had my checking account. Okay, I knew a guy there. I thought I'd just go see him and see if he's got any ideas for me on what I should do for a living. And lo and behold, he says gosh for me on what I should do for a living. And lo and behold, he says gosh. You know, we have an opening here at the bank. It's kind of an entry-level officer, you know assistant comptroller kind of a job. You know I bounce checks and balance the bank's checking account and kind of help the tellers and stuff like that.

Speaker 1:

And at that time did you have any banking experience other than what you personally did with the bank yourself? No, none, Okay.

Speaker 2:

Not at all, not at all. So it's kind of where I started in the banking world, and this was a small local bank and you know, it didn't take me long to recognize there's two good jobs in a small little bank like that. One is the president and or owner and the other one's the comptroller, because he's the beankeeper and it's important that he does so. I guess I was there for three years and then recognized that you got all the prestige in the world working for a bank but they didn't pay very well. So, true, yeah, so I was recruited by a local savings and loan and that got me more into the lending side of things than the operational side of things, and so I did that. For I actually worked for two different ones really when the savings and loan industry was melting down, and so I was a little frustrated working for these savings and loans during that time, because it you needed corporate approval to buy paperclips and they really had you Under their thumb for sure Under their thumb for sure, yeah.

Speaker 2:

So this is kind of a neat story. I had lunch one day with a realtor buddy of mine and I was bemoaning the fact that I was unhappy with what was going on in my job and said you know, what I really want to do is move to an area that's recreational, and I'm thinking Minnesota Lake Country. And you know, if I'm going to be a banker and be under the thumb with these people, I want to at least live someplace. Nice. Grand Forks has a lot of nice people there, but you know it's really flat and this was still in North Dakota, North Dakota yeah.

Speaker 2:

So, god, it was a week later. This realtor called me. He says hey, don, there's an ad in a paper for a manager for a savings loan in Kalispell Montana. And he says I've been there and it's gorgeous. I'd never heard of Kalispell Montana. So I got out my atlas and looked at it.

Speaker 1:

Back then they didn't have Google for you to just jump on and see pictures and reviews.

Speaker 2:

No Yelp, there's a lot of things that we didn't have in 1970 that we have today. But anyway, here's this Cowspell, 35 miles from Glacier National Park, and there's this big lake there called Flathead Lake. So I thought, gosh, that's kind of a neat deal. So I sent them a resume and, lo and behold, they called me and invited me out for an interview and offered me the job on the site. Wow, and it was the first newly chartered savings and loan in the state of Montana. Okay, since the 30s.

Speaker 1:

Wow.

Speaker 2:

And it was the first newly chartered savings and loan in the state of Montana, okay, since the 30s, wow. And these local people decided they wanted to start their own savings and loan, and so they so was that something that was beginning to happen?

Speaker 1:

that day and age within this industry is, I can't say most, but people were getting the idea of I think I should start my own or I think I should break off from the usual.

Speaker 2:

Oh, I don't think that was so much the case, because, again, that was a pretty time when savings loans were really, really been struggling. But the idea of starting a new one, you don't have any of the latent issues that the existing ones had, that's true, yeah, and that really intrigued me. So I was excited and they were excited, and so the way we went moved the family out to Kalispell, montana, and are still there 35 years later.

Speaker 1:

Yeah, and funny. I had never known about Kalispell, Montana, until I met you guys. To be honest, we flew into there and it was like, wow, this is beautiful, Holy cow.

Speaker 2:

And not only that, they're just good people there. Yeah, you know, it's just good old folk.

Speaker 1:

That's true.

Speaker 2:

And you don't have a lot of bad guys there, yeah. So, anyway, I went to work for the savings and loan and enjoyed it, but it was the same under the thumb thing. I'm a worker bee and the owners are the owners, and actually they started doing some things that were inappropriate, I thought, and so I had to make a call to the regulators to say hey, you know this thing is getting a little out of control.

Speaker 2:

I don't want to be blamed for this. And so they came in and looked and they agreed, and the owners blamed me for that problem and invited me to move on. And actually this savings loan lasted two more years than they had to shut him down. Wow. So there I am in beautiful Kalispell, Montana, looking for a job, and I went to work for a guy who had a mortgage company.

Speaker 1:

So at that time, working for the savings and loan place, were you writing loans just yet or were still on the operations kind of overseeing? I was the lender, okay.

Speaker 2:

Okay, yeah, yeah and uh, so I mean that part of it was fun. Yeah, um, so, um, anyway. So I I um through that that time period with the savings alone. I'd met these guys that owned this mortgage company and we didn't have mortgage companies in North Dakota and I really enjoyed the principles of it all in that it's a sales job and you're paid for selling.

Speaker 1:

That's right.

Speaker 2:

And bankers just never pay commissions, that's right, you know. And bankers just never paid commissions, you know. And so I went to work for this guy and did very well with it, and you know, I didn't make a zillion dollars but I did pretty well. I was pleased with the income. But all of a sudden I started getting collection calls. The cute little girl that sells radio advertising comes in and says hey Don, you haven't paid your bill yet and if you don't pay it by Friday I don't get my commission. And I tried to explain to her. I don't run the checkbook, I just work here. So I called the boss and said hey boss, what's going on? And he says well, it's just a little tight right now. Same thing happened to the cop. I couldn't get my copy machine repaired because they hadn't paid the bill last time. So I knew this company was having some financial troubles.

Speaker 1:

When about? Was that what time period? That was 83.

Speaker 2:

Okay okay. Good deal.

Speaker 1:

We'll keep a timeline going because I would love to see how history tends to repeat itself eventually, and let's see if it does, you know, but go ahead, continue.

Speaker 2:

So one day I'm about three years into this thing and one day it's announced that the company is being bought by another guy and of course, I don't know why and what's going on exactly, other than I know that they aren't paying their bills. So a new guy takes over and we show up the next day working for a whole new company. I thought, well, gee, the owner is supposedly a superstar financial trader, so away we go. And we're a couple years into this new guy and the same thing's happening. This company had tried to branch out and to increase volumes, but they weren't paying people fairly.

Speaker 2:

So I always like to say that I learned from some experts on how not to do things. Yeah, and so I sat down with the boss of the second company and said geez, it's really hard when your reputation on the street is you don't pay your bills. His response was ah, a lot of companies in Montana don't pay their bills. So I told him I didn't think that was a very good idea. Right, found myself out on very good idea. Right, found myself out on the street again.

Speaker 1:

Yeah, I mean, how weird is that concept? We're here writing loans for people that are supposed to be paying their mortgage eventually I mean, typically after 45 to 60 days after close, you got to make the first payment and then every month after that, most of the time, for 30 years payment, and then every month after that, most of the time for 30 years, and you've got a leader at the time that is nonchalant about the principle that you're lending on.

Speaker 2:

So you know, when you find yourself out on the street, you, you, you know, do a little soul searching. Yeah, what am I going to do next, Don, and I liked the business I really did. It was very rewarding business and just helping people. So I got a little help from some friends and they said why don't you do your own thing? I didn't have a lot of money, but so happened that I did have a boat and the famous non-man boat story.

Speaker 1:

And I'd love to hear it, but before you do, let me bring this bad boy up so the camera crew can see this. So I won this little bad boy right here in a drawing at one of the meetings that we had. Matter of fact, it was in Florida that my name was called and I was in the restroom. When I came back from the restroom, kristen said look, you won this. I went what is this? She said I don't know. So as I got to talking, there were all a bunch of different moments that essentially made man Mortgage, man Mortgage. And look right here, if you guys can see that there's a boat and Don's going to tell you about this, go ahead, don.

Speaker 2:

So I had invited my family from North Dakota out for a week on Flathead Lake, okay, and rented a cabin and had my boat there, of course, and it was the seventh day of the rental period and my family left that day, and so there was one more night to be had at this lake place and so, um, I'm sitting on the deck with a friend, um, and just having a toddy, and, um, the storm happens and it's like a hundred year storm or 500 yearyear storm on Flathead Lake. Next thing I know, there's these huge waves coming in at us. Flathead Lake's a very big it's a massive lake. Yes, yeah, when it storms you get some pretty good-sized waves. Here's my boat, tied up to the dock with ski rope.

Speaker 1:

Whatever you could find at the time.

Speaker 2:

So the next thing I know my boat is on the shore getting smashed by waves. You know you can't pick up your boat physically, Just go back up Piece by piece. Maybe you go back up on the deck and have another beer. So that's pretty much what happened. I woke up the next morning and went out to see what I had left, and my boat was half full of sand and the other half was water and the glass had been broken out of it. The whole left side of the boat had a big, long crack in the fiberglass. Luckily I was smart enough to have insurance on the boat and so I had an insurance man come out and look at it and he totaled the boat, gave me $7,000 for the boat.

Speaker 1:

Now, mind you back in, this is probably 1984, 85-ish, it's 88. 88. Okay.

Speaker 2:

It's actually 89.

Speaker 1:

So 1989 is when the boat took place and I'm keeping a timeline of this for a reason. And $7,000 is what came of this, because of them insurance adjuster totaling that out. Okay, go ahead, but it let me keep the boat.

Speaker 2:

Okay, and so I have a friend that does boat repairs so I took the boat to him and he for $2,000, he kind of fixed it. The boat was cheesy when he was done but you know it worked.

Speaker 1:

Yeah, it runs, it ran, it's a boat. Yeah, kind of like this. Your buddies are like I don't know about that boat and you're like do you have a boat? I don't think so.

Speaker 2:

The boat works, it floats that boat and you're like do you have a boat? I don't think so. It works, that's right. That's right. That's an important thing with a boat, that's true. It's got to float, buoyant, yes. So, anyway, I put five thousand dollars in my pocket and this is about the time I'm struggling with what to do and um so um, that gave me the kind of the financial cushion that I felt I needed. My wife was a schoolteacher, okay, and so, between her and my faith that I could originate loans, I got set up as a broker.

Speaker 1:

Okay.

Speaker 2:

Got my FHA ticket as a mini. They call it a mini eagle. Okay, and so November 15th 1989, I'm in business. I had gone looking for a location and you know, when you only have 5,000 bucks, you Limited. You know you're Slim pickings and I'm a conservative person anyway.

Speaker 1:

Sure.

Speaker 2:

So I find this. It's a one-room office in a former mortuary. Oh goodness, Wow. It had been converted to an office building, so I moved in there and business was dead.

Speaker 1:

I was going to say that's the one place that most go to die. You went there to thrive, yeah.

Speaker 2:

Somebody had to say that that's awesome.

Speaker 1:

Yes, that most go to die. You went there to thrive, yeah, somebody had to say that that's awesome.

Speaker 2:

Yes. So yeah, I opened my business. My business cards were M&Ms and my marketing plan was I got glass jars and filled them up with M&Ms and took them to every real estate office, Really, and said when you run out of M&Ms, holler and I'll come back and fill up your jar. How cool, and that worked. Except, you know, I'd drop it off in the morning and they'd call me in the afternoon. We're out already, anyway. So I was the chief cook and bottle washer, an individual all by myself, and the landlord of the building was a friend and he furnished me a desk and a chair. He furnished me a phone it was a multi-line phone that he had for the building so he would answer my phone if I was out of the office and had a copy machine that I could use so much per copy and a fax machine. So my rent was $250 a month. So $250 a month, wow, okay. So $250 a month and I'm in business?

Speaker 1:

Heck, yeah, matter of fact, you had enough savings to last a little while without even any production I had to eat True.

Speaker 1:

So, yeah, away I went. So Don let me ask you, when you got set up as a broker and today's world and that world are totally night and day, but at that time brokers still were using other people's money essentially to fund the loans. They were connecting the investor to the consumer's file, so to speak, and handing them off with you. Was it the same kind of concept, you guys? Because being a non-mortgage banker, you didn't have to have warehouse lines because the investor had all that stuff stood up for you.

Speaker 2:

Actually, my first source was a bank.

Speaker 1:

Okay.

Speaker 2:

In Great Falls, montana, president of the bank was a friend. Makes sense Common theme there.

Speaker 1:

Yeah.

Speaker 2:

You know, guys got to have friends.

Speaker 1:

It's not what you know, it's who you know.

Speaker 2:

So yeah, he sponsored me and I would originate the loan and ship it over to him and he would underwrite it, or the staff would underwrite it and hopefully approve it and close the loan.

Speaker 1:

Now, back then I'm sure there were somewhat of guidelines, nowhere near as stringent as they are today. What were some of the deciding factors of whether a loan would get approved or not? I mean, I would imagine back then didn't they require 20% on every loan. Was there anything like that for first-time homebuyers?

Speaker 2:

Well, there was still, you know, the FHA program, okay, and VA program Okay. That was pretty much it, yeah. And then conventional lending with you could do. Conventional with MI back then, right, 95 percenters, conventional with MI back then 95 percenters. But the conventional with MI just wasn't necessary because the FHA program was far better than that and I did a ton of FHA lending and it was a great program, absolutely. They were probably more lenient in underwriting than a conventional.

Speaker 1:

Still are to this day.

Speaker 2:

Yeah, yeah, and so that's their purpose, right? They're created by the government to help people get into houses.

Speaker 1:

Right.

Speaker 2:

So it's always been an awesome program. So I did a lot of that and probably experienced more conservative underwriting within the banking world, and so it didn't take long for me to start the search for more traditional broker outlets. Sure, and so you know that's what I did.

Speaker 1:

Now back then. Do you remember what rates were around roughly?

Speaker 2:

You know they were 12. Okay, 12 ish, you know. And in fact I've just been amazed that since I started man Mortgage 35 years ago, it seems like rates keep trickling on down and, gosh, I had customers that I had refinanced four or five times. Yeah, did them at 12, and then we refinanced at 10, then we refinance at 10, and then they just kept going. Yeah, so, um, uh, it was kind of an amazing time to start a business, sure.

Speaker 1:

Just fortunate Timing is everything. Uh, as many would say. Uh, those that have experienced, and and I guess the the the line of questioning for this is to bring out that experience, because we've only been through what we have and the only way to learn from others is if they share, because if not, you got to go through it yourself, and I am one that typically does go through it myself and tries to learn the first time. But if there are any roadblocks or any landmines that others have stepped on, my goal is to listen, because they've done it before, and to avoid because I know what it's going to do. I'm not trying to get my leg blown off theoretically, but yeah. So From that point of you're starting to thrive, it was still you yourself. Where was the change or shift to growing?

Speaker 2:

So after a year of doing it on my own, you know, thankfully I was successful. Yeah, because I had been in the business in the area and just working for others, and so I, you know I worked hard at it Darrell Bock.

Speaker 1:

Well, I can imagine that you were a pretty likable guy too.

Speaker 2:

Jim Collins. Well, I don't know about that, but my little M&M thing worked and I went to all the MLS meetings with realtors and did a lot of door knocking and put ads in the paper. So, yeah, I mean it worked. But I'm swamped right and I spent a year really working my tail off to get this all done. Yeah, because I was chief cook and bottle washer, right, everything, everything. So about a year later a guy walks in the door and he was a friendly competitor and his name is Tom.

Speaker 1:

Friendly competitor. I like that.

Speaker 2:

He was a good guy.

Speaker 1:

Yeah.

Speaker 2:

We'd shoot the bull at MLS meetings yeah.

Speaker 1:

I think competition is good in our industry. Without competition, there is no market. I mean, it essentially is a monopoly, and that's not what we have here. There's competition that allows us to kick different ideas off each other and, honestly, that's what this show is about. This podcast is about melting pot Share your ideas, because there becomes a certain point in one's career that it's gotten so difficult that you can share it without any kind of fear of somebody duplicating it. And if they do more power to them, I mean, at the end of the day, I know what it took to get here. So if you can do it too, hey, let's good job, man, you know. So yeah.

Speaker 2:

Anyway. So Tom comes in and, um, you know, he, uh, he was unhappy with his employer. His employer was having financial troubles. And so he says you know, you got your own thing here, don, can I join you? Well, yeah, because I was ready for help. Right, I needed a loan processor person, but to do that I had to move out totally of my one room $250 overhead and I needed to buy a phone and a desk Fax and printer. And a fax machine and printers and all this stuff.

Speaker 1:

Actually we didn't have printers back then oh, I believe that, okay, because we didn't have computers. No computers, yeah.

Speaker 2:

We had Xerox.

Speaker 1:

That's the true definition of sign here press hard. And the press hard was so it can go through all three, four sheets of that paper. Yeah, yeah, they came out with that xerox paper so you didn't have to use carbon stuff anymore yeah ibm, selectrics, I don't know if you remember that I I remember Never seen one, but yes, there's a museum around here, probably so.

Speaker 2:

Anyway, it was going to be a big move overhead-wise and I was comfortable with it.

Speaker 1:

Big move, but big risk, I mean. I think that needs to be said. It's a risk. At the end of the day, if this doesn't pan out, it's your ass yeah.

Speaker 2:

So Tom had recently bought out a private money lending person.

Speaker 1:

Okay.

Speaker 2:

And with that came four or five desks, a copy machine, a fax machine, a phone system. So he says Don, I got all that stuff. I mean it was.

Speaker 1:

Yeah, it was purchased, depreciated and now it's yours. It's cheesy, yeah.

Speaker 2:

But yeah. So we moved into a new office that had enough room for a processor, hired a processor. My deal with Tom was hey, listen, the overhead. You and I are going to split the overhead 50-50. Whether you do one loan or 100 loans, or whether I do one or 100, 50-50. And so that was our deal, and so all of the income generated from the loans I originated was mine and same with him. So that was our relationship to start with and he was happy with that and it worked out fine Pretty straightforward, yeah, yeah.

Speaker 2:

Go ahead. So we did that for a year year and a half maybe and a lady that I had worked with at one of the previous mortgage companies lived in Helena and Julie was her name, and so Julie had been working for a bank and was frustrated the same way that we all were.

Speaker 1:

I'm hearing the same tune there, yeah.

Speaker 2:

So she calls and says hey, don you know, you kind of got your thing going there and can I join you? Oh, okay, so I explained to her our deal and the same deal Tom and I had, julie and Tom and I would have. And so Julie joined us and so now we have two 33.333.

Speaker 1:

Yeah, yeah.

Speaker 2:

So, gosh, it wasn't I't, I don't know. Three, four months later, a guy in missoula who we kind of knew uh, called and said hey don uh, I know you got julie and you can I get in on this deal okay, so you were building an, a team, basically yeah, and I you know did zero marketing right. I just answered the phone.

Speaker 1:

I'd rather be lucky than good any day, yeah.

Speaker 2:

There's a common theme there. I'm going to talk about that later. Okay, so that's how we started. Six months later a guy from Billings, montana, called. He wanted to join us, and same with Great Falls. So all of a sudden we have four or five branches in Montana and we're doing pretty well with it. You know all good seasoned people yeah, you know that have been in the business for a while and you know you recognize that volume speaks volume. You know you kind of get people's attention. When I'm Don Mann, one horse show operating out of a mortuary Raising the dead, nobody was too excited, you know. But all of a sudden we got five locations and we're doing some significant volume. So we could expand our broker world but all the time recognizing that we needed to get into more of a mortgage banking mode. We need to develop warehouse lines and do our own underwriting.

Speaker 1:

And that's a good time for this question is what was the deciding factor or what was the writing on the wall that you guys started to experience, that you even understood or started having that conversation of okay, we've been brokers, we're doing well, but it's time to possibly look at switching over to mortgage banker side of things, and warehouse lines come along. What was the tipping point?

Speaker 2:

You know I think for the most part it's underwriting, conservative underwriting the broker world, I think, has more conservative underwriting but also being in control, Not relying on some company in Denver, Colorado, to type up your closing documents and ship them out to you in a timely manner. And if we could do that on our own, we can prioritize or we can work overtime if necessary to get it done, and so the mortgage banking side of that just allowed so much more freedom with that.

Speaker 1:

Freedom, but at the same time, more control as well. It's weird how that works you get more freedom, but you also get more control. Right, you'd think it'd be opposite, but it makes perfect sense.

Speaker 2:

Hmm. So we at that point developed the net worth by hook or by crook to get our full FHA ticket. Okay, to get our full FHA ticket, okay. And ironically, this lady from California, whose mother lived in the Flathead Valley, knocks on my door one day and says I work for a company called First Collateral Warehouse Lending. And do you need a warehouse line?

Speaker 1:

Wow, rather be lucky than good any day, absolutely.

Speaker 2:

It was just, you know, we were sitting there. Where are we going to get a warehouse line?

Speaker 1:

And so this lady walks in and bingo there we were, so I want to pause there for a moment to explain to the listeners what a warehouse line is. The difference between mortgage banker and mortgage broker is mortgage brokers use the investor's funds to fund the deals. Matter of fact, they use the investor's underwriters, sometimes processors, et cetera, whereas mortgage bankers, like what we are on this side of the tracks, we have our own. Now, it's not. We have our own big pile of cash and we're funding all of these deals. You have enough cash that allows you to leverage and create warehouse lines that then open up the door for larger funnels, larger funding ventures, the ability to fund more loans in a shorter period of time and not having to wait for the money to clear off the books. Essentially, am I right on that?

Speaker 2:

Yeah.

Speaker 1:

Okay, very good.

Speaker 2:

So it's short-term borrowing. There you go, so you can write a check on day of closing and then that money is outstanding until you eventually sell the loan, which usually happens in a couple of weeks. Right, right so anyway, yeah, we developed the warehouse line, and the lady in Helena was also an underwriter and so she was excellent at underwriting and excellent at operational things, and so we were a full-fledged mortgage banking firm. Wow, pretty quick Pretty quick and this was about 93.

Speaker 1:

Okay, okay.

Speaker 2:

Yeah, probably the next significant thing that happened to us was an account rep for Bank United called on us. He was a guy out of Portland, oregon, and had heard about us right, the buzz is going around and so he knocked on our door and said you know, he wants you to send deals to us. And so, you know, and shooting the bull with him, explained to him our business model and what we're doing, and he says you know, I like that. He says I think I can sell that. So he joined us and hit the road and started developing branches for us outside of the state of Montana, gotcha, okay, okay. So a lot of them were Bank United branch offices and so, yeah, all of a sudden we had I don't know eight 10 branches all over the place and that's really you know kind of what we're doing today.

Speaker 1:

It's true, yeah, and one of the reasons why and I've said it before that attracted me to man Mortgage and what you guys are building is the philosophy that you guys have, the mission statement or the core values that you promote every single day in what we do, the fact that you've got the entrepreneurial spirit, celebrate ease of doing business.

Speaker 1:

These things are something that should be almost basic principles in what we do, especially someone that wants to own their own business and operate within the means of that company that's backing them. And I think a lot of folks take that stuff for granted because they go to certain mortgage companies with the promise of things like this or the promise of the philosophy being that way, but thus far, I mean, I'm almost two years into this and man mortgage walks the walk and talks the talk. You know, of course, their shit stinks, like everybody else, but from a standpoint of leadership and transparency and full autonomy, I think it's something that you guys have done a great job in doing and for you, you grew that in a very small place in the United States that caught fire essentially, and spread throughout the United States, and now we are here in Texas, however many hundreds of miles away from home. But yet the mission, the philosophy and the core values are still resonating from what you guys built. You know.

Speaker 2:

Yeah, you're right on. The people that joined me a little at a time were not rookies in the business. They were well-seasoned people that knew the business and it was comfortable that they knew what they were doing and that they would take good care of our customers and and so that that philosophy, or that part of recruiting new branches, is permeated throughout the company. We don't want to hire somebody that doesn't know how to spell mortgage.

Speaker 1:

Don't forget the T, that's right.

Speaker 2:

It's right, yeah, so, so that, yeah, it's worked. And then, um, like I mentioned, you know, having worked for the other companies who all of a sudden aren't paying their bills um, it was important to me and being conservative, that we manage our cash sure appropriately and had retained profits within the company so that we didn't have those kinds of problems. We've never had a problem paying our bills and that type of thing. So it's like I said it's a company that's grown from those that didn't do it.

Speaker 1:

You're right. It's grown from from those that didn't do it right, and I think the saying is pigs get fat and hogs get slaughtered, and I think it's very easy for anyone with success in this industry to become very hoggish. There is a obvious sense of that conservative mindset mentality, because there's been some tough times throughout the mortgage industry. In time, we can talk about 2008. We can talk about what we're going through now, but have still been able to sustain and withstand all of these. I don't know, we would call it bullshit. That goes on in our business, right?

Speaker 1:

So, that being the case, were you still over man mortgage at the time of the 2008 crisis? Oh yes, what was that like? Can you take me, because I will tell you, I wasn't in the industry just then. I was working at Chase Bank as a business banker at the time and for me, I noticed well, people aren't buying houses right now Doesn't affect me much, and at the time, I wasn't even. Well, I was old enough to buy a house. Matter of fact, I ended up buying one two years later. I think that was our first home, but it was different from what we do and how we operate today.

Speaker 2:

So what happened in years leading up to 2008 is pretty much Wall Street created a thing called subprime lending. They came up with loan programs that basically fog a mirror and will give you a home loan and what that did was kind of fired up people to speculate and kind of the industry took off and we didn't like those programs. Makes sense, because it's still important to us and anybody that's a professional in this business is you don't just make a loan to somebody because they want it Right. It's important that you make a loan to somebody who deserves a loan Right and qualifies for that loan and you feel comfortable that you're not putting them into a situation where they're going to have a trouble making their payments and all of the things that happen after that. That's just not good business.

Speaker 1:

I agree, I agree and I think the biggest piece to that and I'm glad you parlayed them which is deserving and I hear it all the time but they deserve it. They deserve it Okay great. Do they qualify? And that is the big piece that some, most, were missing. They all deserve it. Well, we all deserve it, but do they qualify? And that was something that, as an onlooker at the industry at that time and then I watched things like the big short and you go, holy cow, that's how it was like that guy was a waiter and now he's buying multiple properties, et cetera, because he's able to write any type of loan. Well, that catches up to you and I think it caught up to the whole industry at that time, and you guys didn't receive any bailout money or anything like that. So that tells me that you were writing decent loans, or at least good enough loans that you didn't have to undertake these massive losses when the time came that the industry shifted, it changed.

Speaker 2:

Yeah that's right on, exactly. That's right on, exactly. And so, yeah, our decision to be conservative in that era was worthwhile, because and it was a little frustrating you know, you lose a deal to somebody who would make one of these oddball loans on to them for a year because appreciation in the housing industry was so rampant that it just a year later they could turn around and sell that house and make huge profits. And when they did it they'd tell their buddy about it. I said, buddy, I want to do that too. And so people that couldn't no way afford this kind of thing, where we're doing that and so they were. There was loan programs with adjustable rates where the the initial rate was really, really low, so the payment was really low, so these speculators could afford to make the payments for that year. There was even a negative amortization. Oh wow, I don't know if you've ever heard.

Speaker 1:

No, I've heard of them, but you bringing it up brings me back to the concept of what it even is, and it's it's so bass-ackwards, it's crazy.

Speaker 2:

Yeah, you'd set up with monthly payments less than what it takes just to pay the interest.

Speaker 1:

Right.

Speaker 2:

So where are we going from here? If you borrowed $100,000, at the end of a year, you probably owe $110,000 on the loan because that negative payment there that wasn't even paying, the interest was accumulating with the principal.

Speaker 1:

Right and, at the time, the concept or the mindset of investors, the ones actually funding these loans and buying these loans, were you don't miss your mortgage payment. Everybody pays their house. What are you talking about? Well, they do, but they pay their house, not the other three that they purchased in addition to that one.

Speaker 2:

Well, and it's kind of ended up like a musical chairs thing and all of a sudden the music stopped and all of a sudden those subprime loans went away, yeah, and all of a sudden those subprime loans went away, yeah, because they were all terrible and they were having lots of problems, lots of losses from those things. People were getting loans that they couldn't possibly pay Right, and it was speculation, and so when the music stopped, you know, that's when the industry took a hit.

Speaker 1:

And I guess that kind of goes back to that conservative mindset that if you built your business let's face it on straws and sticks, on these speculative loans, well, when it shifted you didn't know how to sell the normal, conservative type loans, the correct loans. So more than likely most businesses that were in the business of doing loans that way didn't know what the hell to do. Well, if we can't do any loan, how do I even qualify a borrower? Meanwhile, there were companies that were doing it the right way from day one.

Speaker 2:

That makes sense. This is funny. The trade journals would publish what they called an implodometer oh goodness, and you ever hear about those? No, tell me more Implodometer. With every month. They'd list the companies that had gone out of business. Oh wow, just because they had huge portfolios of the subprime product and there was no longer a market for it. Right when the warehouse people. They got left holding the bag.

Speaker 1:

Hence the bailout money and everything else, because, let's face it, mortgage-backed securities, real estate, I think it's like 30-some-odd percent of United States GDP. So we make the world spin essentially and I say that to folks and they're like I don't really get it but yeah sure, no, no, no, we really do. There's a lot of of money in our economy that is based off of mortgage lending, that is based off of real estate. It's just a simple fact If you do any kind of research. Darrell Bock.

Speaker 2:

So you know, from the time that I got in the business in the 70s in and around mortgages, very rarely was there ever a foreclosure, very rarely, and there was always appreciation but it was. You know, it was a steady appreciation and, and even well into the 80s and the 90s, um, very rare to have have a lot of foreclosure activity. It happens, sure, people would get into a loan with small downs and then their life would fall apart for some reason and uh, so, uh, they had a hard time selling in some cases. But it was a rare rarity until this 2008 debacle, debacle, that's what we'll call it.

Speaker 1:

That's right. Is that a good word?

Speaker 2:

It just annihilated our industry and those bad actors and there's plenty of blame to go around, including fannie and freddie allowing it, that's right, allowing it and they got a little bit of that involved with that themselves. True, because they saw the market going to the wall street people instead of to fannie and freddie right and and so, uh, um, as any good government would do, they want their piece.

Speaker 2:

Well, yeah, so all of a sudden we've got a huge pile of regulations that we have to live with, because they don't ever want this to happen again those in the know. There's no longer those wild and crazy loan programs out there, and there are serious qualification processes.

Speaker 1:

Yeah. So now we've gone through that little piece of it. At one point in time and I don't know if it was a little while ago or recently, but at what point in time did you shift over from CEO, founder, presidente to all right guys? It's time to be a professional golf caddy to myself every once in a while and kind of look at things from a further back picture and empower someone to take this over. I mean, at what point in time was that?

Speaker 2:

Oh, it kind of. You know it started when I was about 55 and I, you know, I worked pretty hard. Sure, you know I was 40, I think, when I started man Mortgage and so by the time I'm 55, I got a lot of years in there and a lot of anguish and a lot of joy.

Speaker 1:

And they say that we age a little bit faster in this industry because of that.

Speaker 2:

Probably to have more cocktails. Yeah, that's true, so I don't know. It started then and I suppose the mid-60s. I just decided it's time. I was fortunate to have a son who had been in the business with me for 20-some years by then, so I gradually shifted duties to him and started doing less myself. I still have been involved After 35 years. It's your baby and it's tough to not do anything. So I still hound on the poor guy once in a while. You know my era we didn't do things that way. Well, that was 35 years ago, con, but he's a pretty sharp kid, takes after his mother. I believe that she was very important, very intellectual person. Anyway, he does a good job.

Speaker 1:

I'm kind of there to be his confidant liaison, guiding light, sometimes swift kick in the ass.

Speaker 2:

Yeah, we get along pretty well. He's done a great job. He's got a gift of hiring really good people and so, yeah, the company has grown far more under him than it ever did with me, so I'm excited for his involvement, and we also have a grandson in the business now. Yeah, tommy, yeah, tommy man, and he's only 27, so he's got a few things to learn.

Speaker 1:

Of course, still wet behind the ears, but he's getting it, yeah, yeah.

Speaker 2:

So in theory this thing can go on.

Speaker 1:

And that is the goal definitely, especially aligning the people that you guys are doing, keeping that same mentality, philosophy and overall values that you guys started with. So a couple more questions before we end this thing and I'm just going to go freestyle with it. At what point in time did you feel that Jason was ready to carry the torch forward?

Speaker 2:

Oh, you know you're visiting with him Not daily but quite often and he shares things that are going on from a corporate standpoint Right, and he started being on our board and listening to the issues, and so it's a gradual learning process for him. But he was also originating at the same time and he was an excellent originator. He was whatever year he'd lead the league yeah, and who's doing what time. And he was an excellent originator. He was whatever year he'd lead the league and what's and who's doing what, and so it was hard for him to give that up and get into a corporate world. But so it was kind of a just a gradual move that we went through.

Speaker 1:

And that's that's kind of why I asked that, because most of us top producers. It's hard for us to let go of anything we do in this business. Um, when you're building a team, when it's time to delegate certain things for you being a producer, uh, converting to the owner, and Jason, being a producer, having to give up some of his responsibilities of the top producing hat Was that difficult for you guys, that transition?

Speaker 2:

I wouldn't say so. No, you know, we had pretty good lines of communication A lot of straight talk.

Speaker 1:

Yeah, there you go.

Speaker 2:

So, yeah, anyway, it's just such a wonderful business and I got to tell you this story, Please. This was about two years ago. I'm at a birthday party for Stephanie.

Speaker 1:

Okay.

Speaker 2:

Stephanie is, you know, a big shot in our operations and wonderful lady and just she's probably responsible for recruiting most of our operational staff.

Speaker 1:

We just love her. She's awesome and, matter of fact, her son is in the IT side of things. We were talking about IT stuff earlier today, but yeah.

Speaker 2:

So I'm at a birthday party for her and this lady comes up to me and says hi, don do you remember me? And you know, the older you get, the fewer brain cells you got.

Speaker 2:

And so I said well, let's see, help me out here. And she knew. I didn't know who she was, but I had done a loan for her probably 25 years before that, 20 years before that, and she was still thanking me for putting that loan together for her. She was a single mom with a disabled child and she couldn't get anybody else in town to help her. And you know, 20 years later you hear those things and you appreciate that what you're doing isn't a job and it isn't just a process of making money.

Speaker 2:

You really are helping people and you know people come back to you four or five years after you did their loan for them and maybe they were a little marginal going in Sure. Four or five years later their house is appreciated and they've turned that house into a bigger, fancier house using that equity Right. You know they retire cash in on the sale of that house all because you helped them out, yeah Right, and helped them get into that first loan and it's just a very rewarding part of our business.

Speaker 1:

Don, I'm happy you said that that's one of the things that number one never gets old in this industry thus far, and it's also the thing that sucks you right back in after you've had a tough day or a tough week and, in many cases for folks around the industry, a tough year sometimes and in many cases for folks around the industry, a tough year sometimes. And I don't think it's just the simple fact of you gave them a loan, you took the time to put that loan together, all that good stuff, but what it really does and I have experienced this as well, and I believe it's kind of what you're talking about here which is you open their mindset or the door to the next possibility in their life and you've got a demographic of folks that have rented all their life, generation after generation after generation, that most of the time they believe that they can't qualify for a loan. They don't know what the first thing to do to get a loan, and it becomes this pipe dream after seeing multiple generations just being renters. This is what we do until that, one kind of, like they say, potential only is potential until you take that lid off. And now the potential is out of the bottle and in this case and in many cases, that one customer that you come in contact with that you get to experience later down the road in your career. If you still are in the career in the business, that brings you right back to why you're still doing it.

Speaker 1:

The concept of yeah, we have way more impact on the economy than most think because of people like that opens the door and shows them the opportunity that it could breed the additional outlets and leverage that they can create down the road. But even more so, she just taught her next generation that it's possible and the chain has been broken. You know, and that's uh, I don't care who you are, it should resonate with you on a bigger, um, kind of uh, I'm working for something bigger than myself concept, and I love that. I mean it shines through in what we do every day yeah, so uh, let's, let's talk briefly about and that is a cool. It's not even a story. This is a cool journey of coming to be.

Speaker 1:

I mean, we turned a oh shit moment into a oh shit moment, from the boat experience to pocket in a couple of bucks. That didn't go to BS, it went to fund the next mission that you had and it did well. And, like we said, we'd rather be lucky than good any day, but I think you have to put yourself in a position to even be lucky. A lot of people would say, oh, that's luck. Well, at the end of the day, you still worked your butt off to put yourself in the position that that luck came about and you were able to seize that moment. That being the case, you've gone through 2008 debacle. I'm sure there was something in the 80s that was not similar, but something that shifted the market and shook the market a bit. And then you fast forward to today and we've got rates used to be at 3%, almost two quarter percent, because of a false reality that was being levered to induce action in our market. Because of the pandemic Coming out of that. We've got higher rates that me and my generation have seen, but in the grand scheme of things, they're still relatively low rates.

Speaker 1:

What are your thoughts on what the future holds with mortgage, with technology being implemented into mortgage and the? I can't say that it's becoming more difficult to get a home loan, because it's not. It's becoming how to get a home loan, because it's not. It's becoming. How do I put this? We were talking about the American dream earlier today, and I myself still believe in it and preach about it. It's becoming more difficult to relate to people as whether they still see that as a dream or a pipe dream in the sense that that's not even achievable because everything's so high. Um, what are your thoughts on all that stuff there?

Speaker 2:

Well, I uh, you know um if you've probably been a while since you rented um if you've probably been a while since you rented, but I rented one time.

Speaker 1:

I had gotten back from McMurray university I was playing football, got back, went to a community college, was living with my parents for maybe six months, and this was I was still 18, maybe just turned 19. And it was time. It was time to move out on my own. I rented for a full year and at that time, after the year, I went. This is a bunch of BS. I am not getting any of this back.

Speaker 1:

Of course, it was cool to have a pool there and to be able to have people over, and then it just got old. I liked my money and I wanted to see it and I wanted to keep it. Got old, I liked my money and I wanted to see it and I wanted to keep it. And after that first year at the time it was me and my girlfriend slash fiance we weren't even fiance yet I just told her hey, look, I'm going to buy a house. Do you want to jump on board or not? Because, regardless, I'm done renting.

Speaker 1:

And we ended up buying our first home USDA a hundred percent financing home USDA a hundred percent financing and, uh, that ended up making us about 90 grand when we sold it, uh, after six, seven, seven or so years, eight years, converted it to a rental after three years and then, three years later, four years later, we sold it and it was like we didn't put much into that, we just held it. And the concept of wait to buy real estate. No, no, no, no, no, I'm an advocate for buy real estate and then wait.

Speaker 2:

You know, Well, I think the 2008 meltdown scared a lot of people. Number one and seemed like the irresponsible lending that was going on kind of permeated throughout the country, and and so homes really started depreciating for the first time ever. I go back, you know 70. Sure, that's quite a while ago.

Speaker 1:

Yeah.

Speaker 2:

And I'm sad to say but it's true and so, um that I think that memory is still there and people are afraid of that.

Speaker 2:

But yet the story you just told has happened to thousands and thousands and millions of people.

Speaker 2:

You know they bought a house, they sucked it up and said dang it, I'm tired of the landlord not fixing things and raising the rent all the time and getting mad at me because I parked my car in the wrong spot.

Speaker 2:

And you know all the things that landlords do. And and you know, all of a sudden, they're in a house and they're in control. Right, they, they can make an improvement if they want, they can do whatever they want with that house, and the affordability factor is important. But it's important that they buy the right size of house, I agree, yes, and the monthly payment that they're comfortable with, so that they can still go out and party every weekend or do the traveling or whatever it is that they can still go out and party every weekend, or, you know, do the traveling or whatever it is that they love to do. You know it isn't going to be inhibited by the fact that they bought a house, right, but years later they're going to look back and say this was a really smart decision that we did Finally got off the dime and quit being a renter and start owning.

Speaker 1:

That's true and I think a lot of the affordability issues that we're seeing today and a lot of people are comparing it to the income and what you're able to buy or afford, and I believe it has a lot to do with the concept that the next generation or people these days don't understand what sacrifice is to gain later and most of the people that I have originated alone for in the past 12, 13 years first time homebuyers their lifestyle tends to change once they become a homeowner and kind of like you alluded to, it's not that they don't go out and party, et cetera, et cetera, but the party comes to them Now. Uh, they don't go out and spend the extra money because they're embarrassed that they're still living in an apartment or they don't want to have the fear of messing up their, their uh landlord's home, things of that nature. But you tend to start eating at home more, you tend to start having people over, having gatherings instead of going out to party, whether they do it for that reason or not. Fast forward a couple of years and you look at your tax bill and you go wait a minute, my house is worth what? Okay, so there's some equity here.

Speaker 1:

What can I do with that equity, and then the conversations start to expand, the mindset starts to expand and, kind of like you talked about a bit ago, that then trickles down to the next generation and next generation, and what I'm a big advocate for and what I'm preaching these days is for people to understand that it's not an overnight thing.

Speaker 1:

You've got to sacrifice a little bit. You've got to sacrifice a little bit. You've got to buy within your means. No, it's not going to get you the $300,000 home it did in the last three years because rates were damn near zero. We're now back to reality, where equity is going to continue to rise and, regardless if it's at a slow pace or a fast pace, it's still rising, and a whole lot more money you're going to get than paying rent or even having money in a savings account. To be honest, yeah, it's a tough concept for many to get, and I believe that we, as loan originators, as experts, have to continue to sing the same tune. Give the life examples to these folks until they get it, because if we allow the let's call it bigger uh corporations that are in the business of buying homes continue to outpace the first time home buyers, they're going to be left, uh, forever renters, unfortunately.

Speaker 2:

Well it's. It's tough, I know prices of homes have accelerated to unbelievable levels, really, but so have incomes. Right Gosh, they just raised the minimum wage at McDonald's to $20.

Speaker 1:

Unbelievable. Hey Don, I'm about to retire and go open up my own McDonald's. Be an employee.

Speaker 2:

How are the benefits? I just like those hamburgers, yeah. But you know, I've always told people. You know your house payment is really the first payment you make, because once you're into this thing you're not going to let it go. You're going to fight tooth and nail to hang on to that house. Some of your other things may suffer, but you're going to make that house payment first. Yeah, I mean how many customers have come to you to buy a house and they've got one of those big, fancy $100,000 pickups with the big wheels.

Speaker 1:

Because we're in Texas Too many. Oh yeah, they're working in the oil fields and all of a sudden they get their first big check and they go buy that truck.

Speaker 2:

And they've already got a $1,200, $1,500 a month payment on their big truck. It's true, and then they're worried about a house payment. You know, uh, it's a priorities thing. You know, yeah, they're cool driving around and they'd pick up with the big tires.

Speaker 1:

But that's depreciating, by the way that's depreciating.

Speaker 2:

You bet, you bet and uh, you know, do they make that the truck payment first that's true true, oh no, they're going to make their house payment first.

Speaker 1:

That's right, because you got to have somewhere to park that truck. Yeah Well, don, this has been great. I think we talked about quite a bit. I mean, we went from 1970 all the way 1983 and all the milestones in between. That has stood man mortgage up for what it is today and honestly, I'm proud to hang my DBA under man mortgage and the coolest part is I don't feel like I'm under you. I feel like we are all on the same level, on the same page, and have the ability to voice our opinions, our thoughts and solutions. Because, at the end of the day, I don't think a loan officer is just a loan officer. We're problem solvers, baby. That's what we do, and if you're not good at solving problems, chances are you're not going to be a good loan officer. So is there anything else that you'd like to let the folks know about? Maybe anybody back at corporate office, anything like that? Now's the chance.

Speaker 2:

You know our job corporately is just to support you. You know I want to have a back room that takes care of you. When you have a customer that comes in here and needs to close a loan in two weeks, we can get that done. We really can. I've got to keep you operating in the fence line. Yeah, of course, Because we all have regulations to deal with and you can't go crossways with regulations and we're very emphatic on that because we don't want to lose this because we're doing bad things. But our job is to make you shine and we want your feedback.

Speaker 2:

The corporate world sometimes gets tunnel vision and they don't really understand what's going on in the world. My son tells me that all the time, like I said, the way we're doing things today isn't at all like they were when I was in charge, and he tells me to suck it up and understand. Suck it up and understand. But yeah, our corporate role and I think we do a pretty darn good job of it is to make you shine and make sure that your customers get a good deal. They aren't losing a purchase on a house because we haven't done our job right. It doesn't close when it's supposed to close and we're proud of our back room and the way that they handle things, the sources that we get our money from, and so that the pricing that we offer to our customers is very, very competitive, because, again, volume speaks volumes.

Speaker 2:

That's right, and so that's another part of our success is we have worked hard at doing that, and so it's just overall. I think that's why my mortgage is around 35 years after I stepped in the mortuary and started passing out M&Ms.

Speaker 1:

That's very cool. How cool of a story. Well, don, I want to thank you for taking the time and sharing what you have thus far. I'm looking forward to the continued journeys that I get to go down with you guys and also be a part of. It's a cool concept to have like-minded individuals in different states that have the same mindset or on the same page and, if we're not, have the ability to voice those opinions and they're taken seriously. So I want to thank you for that, for creating something so freaking badass that it allows me to kind of go. This is the place you know. Um. That being the case, ladies and gentlemen, I hope you got something out of this. Uh, I'm not saying to go out there and open your own mortgage company or anything like that, but, uh, if you're an originator out there and you want to learn more about what we do as a company um, both, I think, mortgage and man mortgage uh, you can just visit manmortgagecom. They're kind of a big deal. They're kind of the man in Montana, so to speak. And, like I said, you heard it here from the national regional manager of beverage and golf coordination, mr Don Mann. That being the case, guys, we will catch you on the next one.

Speaker 1:

Welcome to Key Factors Podcast, where knowledge meets ambition in the fast-paced world of real estate and mortgage. I'm your host, mark Jones, bringing you the latest insight, trends and expert advice to navigate this dynamic property market. In each episode, we dive deep into the heart of the industry, dissecting market movement, exploring investment strategies and unlocking the secret to real estate success. Whether you're a seasoned professional, an aspiring investor or simply looking to stay ahead of the curve, this is the ultimate guide to making informed decisions in the world of property and real estate. So grab a seat and let's uncover the key factors that make all the difference. Welcome to Key Factors Podcast. Let the journey begin.

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