JUNE 2009 O ILLINOIS
MORTGAGE PROFESSIONAL MAGAZINE
O www.NationalMortgageProfessional.com
Gregory Lutin, Executive Vice President and National Sales Manager of Flagstar Bank
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Each month, National Mortgage Professional Magazine will focus on one of the industry’s top players in our “Mortgage Professional of the Month” feature. Our readers are encouraged to contact us by e-mail at newsroom@nmpmediacorp.com for consideration in being featured in a future “Mortgage Professional of the Month” column. This month, we had the chance to chat with Gregory Lutin, executive vice president and national sales manager of Flagstar Bank, headquartered in Troy, Mich. A 1987 graduate of Skidmore College with a degree in business, Greg joined Flagstar in 1994 as an account executive, when the company was known as First Securities Bank. He was there for three years and left for a brief twoyear span (1997-1999) when he joined Equibanc, World Mortgage, only to return to Flagstar. He returned to Flagstar as Florida area sales manager in 1999, moved up to vice president/sunshine regional manager in 2003; first vice president/southeast regional sales manager in 2006; senior vice president/divisional sales manager in 2007; and in 2009, became Flagstar’s executive vice president/national sales manager. He resides in both Boca Raton, Fla. and Bloomfield Hills, Mich., and is married with three children, Danielle, Allie and Grayson.
How did you first get involved in the mortgage industry? I grew up in the northeast, having not worked in the mortgage business when I was up there. The economy was slow in 1992, and that same year, Hurricane Andrew hit south Florida. In rebuilding the area, there was plenty of work available, and I spent six to eight months as a catastrophe adjuster. I had a bit of a construction background, and was able to fit right in and hit the ground running. I enjoyed my time in Florida, and in order to remain there and enjoy that lifestyle, I needed a career. I answered an ad in the newspaper seeking a mortgage originator. Just prior to accepting the position, a friend of mine had a family-owned bank, Prime Bank, in Boynton Beach, Fla. and informed me they were opening a mortgage department. He asked me to come in and gave it a whirl, and I truly enjoyed it. I would see the rate sheets that would come across in the morning and it opened my eyes to the wholesale world. The fact that we were selling whole loans to investors was a foreign concept to me. It made me realize that there were investors, people underwriting these loans, and from there, I learned about different products and programs. I enjoyed interacting with the investors to whom we were selling these loans. One of my investor contacts gave me a call and asked if I was interested in coming to work for them. I went to work for Unitower Mortgage in 1993, a servicer that was acquired by a bank, and from that point, I must say, I was pretty successful. I lived in the area, but didn’t know any mortgage brokers. I got a list of active brokers from the Florida Association of Mortgage Brokers (FAMB), and just smiled, dialed, faxed and ran the phones. I was drawn into it. I liked the concept of providing value to mortgage brokers. At that point, it was 1994 and rates started to rise. I got a call from First
Security Savings Bank, now known as Flagstar Bank, who was looking for an account executive in southern Florida, and I joined the company in 1994. What keeps you in the mortgage business and drives you to remain in this industry? I have always seen opportunity. When I made the move over to Flagstar, it opened my eyes to a number of inefficiencies in this business. It was antiquated. The fact is you just need to apply basic business principles … we recognized the opportunity, and did things faster. We always had something interesting to sell. I think that’s what has kept me in this all these years, knowing that we have always been visionaries. People look at this place as “just a mortgage company,” but we were an evolving mortgage company. We weren’t the size of the bigger companies. We did things differently, and that was what intrigued me. If you think outside the box and take advantage of the flexibility of our systems, you will realize that this is truly your own business. This has afforded many of us a great opportunity for success. In January 1995, we rolled out automated underwriting, we were one of the first at the third-party originator (TPO) level to use Loan Prospector (LP). We did that in conjunction with using live video conferencing. We could sit down at the originator’s office, complete the application and have the underwriter on video conferencing from the desktop, run through LP and give the conditions on the spot. It was unheard of at the time. Do you think if the mortgage professional thinks outside the box, there will always be an opportunity for them, despite the state of the economy? Absolutely. Relationships will always be at the forefront and serve as a driving force. But it’s time we took a look— after this restructuring period—on the broker, banker and correspondent
sides. We need to set the appropriate standards for mortgage professionals. We need to implement standard quality control procedures, and improve the overall perception of the mortgage broker. Right now, the broker, in many cases, is looked down upon and is seen as one of the many causes of our current economic situation. We obviously believe there is a definite need for brokers. Some of these originators will make the transformation to the correspondent side, which many will need to consider, and depending upon what type of regulatory restrictions they face, may or may not be a reality for some. What is the difference between the companies that are failing and a company such as Flagstar that is still standing among this current crisis? You had traditional A-paper lenders that either set up sister companies or were cross-selling conforming and non-conforming products through their channels and a lion’s share got sucked into it. The margins were high, and those, like us, who chose not to loosen credit as much as the rest of the industry lost market share. Based on our view of risk, we did not believe the yields justified the risk during the years where a number of the riskier loan products were prevalent. The industry jumped in, and is now paying for it with severe losses. At Flagstar, we stayed true to our core business of agency products and did not get heavily involved in many of the riskier non-conforming products. When we look at those times, we see that Flagstar kept account executives who could have went elsewhere. Flagstar was able to maintain these employees and the fact is that AEs normally stay with their companies an average of three years. How has Flagstar been able to retain their employees in creating a corporate culture that fosters longevity? Many of us were here prior to going public in 1997. It was a family-driven