Monday, April 17, 2006

ABC: The basics of winning broker business

Spoke to Don Henig this morning. He's the president of American Brokers Conduit (ABC), a unit of American Home Mortgage. His executive vice president Lisa Schreiber joined us on the call. She oversees much of the broker-centric work ABC does to recruit and serve third-party originators.

Like most wholesale lenders, ABC understands that its business depends, now more than ever, on the strength of it's origination partners. Unlike most of the lenders I've spoken to recently, Henig and his team think they can do something to make the brokers that work with them more successful.

Most wholesalers will tell you that if their brokers are successful they will be more successful, but, at the end of the day, they're really looking for motivated self-starters who will take the company message to the ends of the earth for a little piece of the pie. ABC seems to be taking a different approach.

Take the company's Advisor Center for example. Free live seminars, featuring some of the top speakers in the industry, online training and marketing material and a planned online networking center are some of the tools ABC uses to enable brokers to do more in a slower market.

"Many of the brokers in the business have only been in for about five years," Henig says. "They haven't been through the cycle yet. So we have to help them grow their business throughout the cycle. That's why we started the Advisor series."

Last year, ABC trained between 6,000 and 7,000 brokers, Henig says. This year, closer to 10,000 will participate in the live programs. He admits that brokers tend to rush back to their offices, fired up by the presentations, and send business to ABC, but they are leaving with more than just another place to sell their loans.

"You may go to a seminar and get 36 great, new ideas. My advice to brokers is that they implement just one. If you take away and implement just one new idea, you'll be ahead of the pack," Henig said. "When that one works, you can pick another new idea and implement it."

In addition to training, Schreiber says ABC is working hard to put better technology in broker hands. Product Advisor helps brokers choose the right loan product for borrowers, and then provides pricing. A customized Fannie Mae Desktop Underwriter tool allows brokers to use the familiar interface even when they are submitting loans that don't meet Fannie's guidelines. For similar reasons, ABC is a Point lender, making it easy for many brokers to access its products.

Finally, ABC has turned about 115 of its underwriters into Broker Relationship Managers (BRMs). Henig describes them as underwriters on steroids and says they become a second (often first) line of communication with brokers in the field as they work together to get deals closed.

During this part of the cycle, every wholesale lender is focusing more on the brokers. Only a few will focus on the broker's business. They'll be the ones that win.