Robert McInnes & Brian Koss
Title: Co-founder and President; Executive Vice President at Mortgage Network
Age: 51 and 49
Experience: 25 and 27 years
Many mortgage lenders had a tough time surviving the recent housing crash. Very few managed to prosper. Danvers-based Mortgage Network is one of the few. Founded in 1988 by Robert McInnes and Albert Paré III, they now have offices in nine states and 175 loan officers operating across the country.
Q: How did you guys get started?
A: Robert: I met both my wife and my business partner back in college. Al and I were president and treasurer of our fraternity, and we worked together during the summers. My wife and I were out looking at property almost immediately after we graduated. We found a decrepit multi-family out in Wakefield – we were so naïve, had no idea how much work it would be! But our offer was accepted – and I was young, only 22. I always joke and say she tricked me into marrying her by buying a house together … [It was that experience which first got me interested in the mortgage business.] It was tough for us to qualify for a loan. The process was cumbersome. But I remember being fascinated by it.
Al, at that time, was a loan officer at a bank. I was a finance guy. We talked [about the mortgage business] a lot, and one night, we just said ‘We think we can do this better.’ So we each put a couple thousand dollars in, rented a little basement office. We had one phone, which we fought over, and a folding table. We didn’t even own the folding table – we borrowed it. And that was in 1988.
Q: You were pretty young. How did you get people to trust you to lend them money back then?
A: Robert: You know, people were very good about it. We’d always try to gauge how worried they were when we brought them down – two young guys in a basement. But you know, for the most part they were forgiving. I wish I had a better answer for you – but I guess everyone just makes a judgment call, and we had enough people who trusted us.
Q: How has the business changed, since that time?
A: Brian: In some ways, for us, it hasn’t changed as much as you’d think. So much has come full circle. What we always talk about with the people that we hire, it’s that our philosophy is you don’t just give the customer what they want, you give them what they need. Which, ironically, is where we’re getting back to – with all the discussions of QM and QRM and all this stuff, at the end of the day the question is always, can the customer afford it? And that feeds into the service. You ask someone enough questions, actually probing and really get to know them well enough to be able to do that.
Robert: Put it to you this way – we have a one-page survey [the customer fills out after the loan is completed]. That gets emailed out to several of the managers – and I read every single one. Sometimes they’re entertaining – I had one the other day that said one of our loan officers was ‘better than a pint of Guinness.’ But the question we track the most is, would you recommend Mortgage Network to friend or family? And we’ve been averaging about 98 percent ‘yes’ on that for the past several years, which we’re very proud of.
Brian: Not only that, those surveyss, when they do come through with something unusual, because we watch them so closely, before I even get them in I’ll have a loan officer coming to me saying, ‘I know what you’re going to say, but let me tell the story, what we did was…’ That means it’s already done what it’s supposed to do.
Q: In the wake of the crash, you’ve said you’ve focused more on retail underwriting rather than warehouse, which means more boots on the ground. Has it been challenging, re-growing the business that way, in an industry where a lot of experience hands have left?
A: Robert: We do a lot of hiring and training on our own – we have a crop of people that we hired about 10 years ago [who are managing their own offices for us now]. We had some really good years of that. The market changed, we were dealing with other challenges. [But recently] we’ve recommitted to doing that. It’s exciting. Our goal is to add a lot more new people to our business. Because [as one of my managers said] ‘We haven’t missed just one generation. We’ve missed two.’ I’m not sure that’s true. But I know we’ve missed at least one generation of new people coming along. We want to hire [experienced] people who are a good fit. But don’t want to rely on just on that.
Brian: After years in the business, I feel like I’ve met everybody at the dance at this point. And there are certain geographies where you think to yourself, ‘I’ve met everyone here, and I don’t want to dance with anybody.’ We’d rather be patient and get the right people.
Top Five Keys To Steady Growth As A Mortgage Lender:
- Have a big menu – offering a wide variety of loan products enables you to find the right fit for every customer.
- Think about developing portfolio lending capabilities. When Wall Street’s not there, it will be.
- Invest in infrastructure — Mortgage Master has custom software built to its specification.
- Plan before you grow — mentoring and oversight can suffer when too many report to one manager.
- Give people room to spread their wings.
