Incoming Mortgage Bankers Association Chairman Chris George has a personal and wide-ranging conversation with Mortgage Media’s SA Ibrahim about the state of the industry, and how his family’s challenges have helped shape his professional views.
Mr. George, the President and CEO of CMG Mortgage in San Ramon, CA, discussed the role of innovation in the future of homebuying, and points to crowdsourcing as an example of people in the industry looking for ways to make things easier for homebuyers. “Products like HomeFundMe are borne out of the industry. They’re not borne out of regulators or legislators,” he said. “Industry specialists are coming out and saying, ‘Hey, you know what, this could help.'”
He also opened up about how his family’s challenges help him keep things in perspective. His son, Adam, needed a liver transplant when he was a baby, and his wife was able to be a donor. “Sometimes it’s better just to look ahead for the next three to five minutes and to focus on that and then, once you get to that. Then focus on the next three to five minutes, breaking those really difficult giant problems into smaller maybe bite-size edible problems that you can get your head wrapped around.”
Today, all four of his boys are working with him at CMG.
As he steps into the role of chairman of the MBA, George discusses the organization’s role working with state associations. Reforming the GSEs, focusing on diversity, and working to improve regulations are three places he identifies as unfinished work for the association.
Watch the interview, and read the Q&A here.
Q&A with SA Ibrahim and Chris George
SA Ibrahim: It’s great to be here with Chris George, who runs CMG Mortgage. He’s a wonderful human being and the incoming chair of the Mortgage Bankers Association. So Chris, delighted to be here in your office this morning.
Chris George: Thank you for coming and making the trip SA, it’s always wonderful to sit down and visit with you.
SA Ibrahim: So Chris, I’ve known you for years while you were building CMG Mortgage and it’s a very exciting and unique company and from my perspective, the employees who work here seem to be very happy working here too.
Chris George: You know what, I think that what we try to focus heavily on is culture at our company, maybe even a little before profitability. So, it’s important for us to be able to make sure that we are focused on how we do business and the way that we treat not just one another but also how we treat our customer. And, we think that comes by way of having people that come to work and enjoy what they do and enjoy who they work with and for and so, we foster that kind of company personality within our organization.
SA Ibrahim: Now that’s terrific and it’s music to my ears. I’ve always maintained that if you put your customers and employees first, you will end up putting your investors first.
Chris George: Yeah, you’re 100 percent right. That’s true, that’s very true and I also think that you’re right about that, that often times, so much of our industry is largely built on referral business. That you have to make sure that you take care of this customer today and it’s hard to do that because sometimes people are focused on today’s customer for a little while, but then they start focusing on the next customer and the customer after that because you know they want to build that pipeline. We do a lot in focusing on this customer now. We have a motto that we have built around that and it stands for, “Every customer, every time, no exceptions, no excuses.” So, it’s as if today that customer, they’ll feel when we’re speaking with them, when we’re interacting with them as if they’re the only customer the company is working on today. Because I want their walking away feeling to say, “My goodness, that was extraordinary, that was a feeling that I will not forget,” and the next time someone brings up, “Hey I’m looking to buy a home,” the first thought that pops into their mind is our company. That’s our goal and we take that very seriously, so from the top of the house, I guess that’s here, to the rest of the house, we focus on making sure we deliver on this motto. That it is going to be every customer, every time, no exceptions and no excuses. That we will take and lift every stop and every stone to follow through and delivering that promise to our borrower because ultimately, we think that that serves us long-term, both internally and externally with that borrower telling others about the experience they had here.
SA Ibrahim: Wow, that’s a great philosophy. Why don’t you tell us a little bit more about CMG Mortgage? How did it come about, how did you decide to get into this business?
Chris George: Well, we’re celebrating our 25th year in business this year and so, in July of 1993 we started this company in my garage in Pleasanton, California. A lot of people say, “How come so many companies start in garages in Northern California? Is there a shortage of commercial space?” And, I don’t think that’s the issue, I think really more a lot of companies in North California like me at the time were thinking, “Hey, I’m gonna minimize my overhead and I’m gonna figure out a way to get going in business before I have a whole bunch of expenses,” and so we started. This is my 36th year in the mortgage industry, I’ve done nothing else but this business since I’ve been 19 years old. I really enjoy the value proposition of not just being in this business but also really the value proposition of being a loan officer in this business. I love the fact that the customer can negotiate terms all the way right to the end and that the customer can … and the loan officer is really going to make a profound difference. If they do their job well they can make a very profound difference positively in a borrower, a buyer’s life. I mean, if you think about home. Generally, it’s the backdrop to most of the great and sometimes not so great things in your life. From the holidays, to the celebrations, to the weddings, to the funerals, to the graduations all of that. Your home kind of sits in the background behind all those things. In fact, sometimes people are so attached to their home, is that they won’t give it up. It becomes almost like a family member, they pass it down from one generation to the next generation because there’s just so much rich memory there. And so, I loved that philosophy about our industry and it’s always been something that I have enjoyed embracing. And so, starting the company back in 1993, we just wanted to be a regular old retail mortgage company and we progressed from there to being a mortgage banker into then wholesale and correspondent. And now, we lend across the United States, we do between 12 and 15 billion dollars a year as an organization and we haven’t lost focus on those original days of, “We’re gonna be competitive if we can keep our cost to produce down,” so it’s one of those things that we go through on a monthly basis. Every single month, we sit down and look at our P&Ls and say, “How do we save 50 cents on our flood certification? How do I save 25 cents on my credit report bill? How do I reduce something that doesn’t reduce the experience of the borrower?” It doesn’t necessarily take away from the company experience internally, but it’s the function of, “How do I reduce this down so I can either, A – provide a better service and a better price to my borrower; or B – provide a better margin, so I can pay my employees better?” The whole goal is to keep my cost down so that I can continue to remain competitive, externally and internally.
SA Ibrahim: So, your philosophy of always reminding everybody, and I remember that from the California Mortgage Bankers Association where we served together, is never forget that the end of anything anybody does in the housing finance or housing industry is the home owner …
Chris George: It’s the borrower.
SA Ibrahim: The borrower, and keep that person in mind. So talk about how that focus led you to HomeFundMe and what HomeFundMe is?
Chris George: I’m happy to talk about that. It’s funny that you mention the fact that I think sometimes we do forget. I do think in this whole world of expediency and picking up the speed process and the technology that comes around what we do, I think we do forget that there’s an individual, or a brand new couple, or a family that’s struggling to buy their very first home. That is looking at this process, not through the lens or the eyes that we all look through it, which we’ve done hundreds and thousands of transactions. But they’re looking at the process as the single largest financial event that they’ll probably ever get in the middle of and it’s dauntingly, overwhelmingly, anxiety-infused transaction that you’re saying to yourself, “Oh my gosh, if I mess this up, we don’t get to live in the neighborhood, or in the school district, or near public transportation, or near the freeway, or near the park that we’ve wanted to live in.” It becomes a very emotional, highly energy charged transaction, particularly if you’ve only do two or three of them in your lifetime. So, we don’t lose focus on that. We do make sure that we know that there is a human being at the end of the transaction expecting us to know what we are doing. Expecting us to make sure that not only do we understand our craft, but are we improving our craft to take a little bit of that anxiety out of the process? And that’s how HomeFundMe began.
SA Ibrahim: And, always serving their interests and putting their interests first.
Chris George: And, what’s funny is that when you talk about the products that were created in the industry, both negative and positively. We think the products that we create, and we do innovate product. We think we’re one of the few companies that come out with a different type of innovative product almost at yearly basis. The most recent is what you described as HomeFundMe. HomeFundMe focuses on helping the borrower not just scrape together the minimum down payment required, but it puts the power of crowdsourcing your down payment with your friends, and your family, and your work associates, the people you went to school with, your fraternity, your sorority, the folks you play softball with or go bowling with, your church or your synagogue, and the folks that you know in the neighborhood coming together, because we think buying a home is a community event. There’s a whole bunch of people that work in harmony to come together to help someone become a homeowner. We think that coming up with your down payment is the same way, not the minimum down payment. What we found out with HomeFundMe and the crowdsourcing event that it provides is that folks are not just scraping together 3% or 4% or 5%, they’re putting together 6%, 8%, 10% and 15%. They’re creating a greater equity cushion in the event things were to go sideways and further, they’re able to leverage the relationships they have. Some people are getting married, so instead of selecting a toaster, or a coffee machine, or a panini making machine they say, “Hey, click here and you can give a down payment that’s long lasting toward the wealth of my family, beginning wealth of my family.” So, with that in mind, we created and partnered with a pilot program, with both of the agencies, with a program that makes it easy for people to gift a down payment and makes it simple for that down payment to come through the process of ultimately helping you buy a home. It’s pretty powerful.
SA Ibrahim: Fantastic. Chris tell us about your journey as you went through life. What are some of the personal challenges and personal pleasures that you experience that brought you here and shaped you?
Chris George: Well I was not born too far from here up in Northern California in a small town called Martinez, California. I have five brothers and sisters and they range from a fire fighter, my older sister just became a judge, my older brother is in commercial real estate, my youngest sister is a music teacher at the high school that we all grew up in. We all play musical instruments and my younger brother, baby brother is also in commercial real estate, he’s a big wig in commercial real estate, both my parents were teachers. My father was one of the first people in his family to ever go to college. He actually was a school teacher and then a principal and an assistant superintendent for a school district here in Northern California, in Richmond, California. My dad always had this belief and this goal that on the wall, he wanted to have six diplomas on the wall and there were, thank goodness. My sister went to law school, there was two of hers up there. I couldn’t quite get that far, but my dad was a closet entrepreneur and when I first started my very first company even before CMG, every month I would send my dad my profit and loss statements. My father was a math and a science person, so he would go through every line and he’d call me up and go, “Hey, your phone bill is $18 more this month than it was last month.” I mean, that was the way my father’s mind but again, this focus on keeping my cost down not getting out of control. I ended up getting married in 1986 to a young woman that I went to high school with. We didn’t date in high school but we both went to the same high school and ended up moving down to Dublin, California and started my first company then, in my fourth bedroom of my home and had our first son in 1987, and my second son in ’89, and my third son in 1993 and 1994 my youngest son Adam was born. It probably was the very first beginning of understanding that while life may not be necessarily fair, it certainly is educational. I think the challenges that one encounters in their life somehow is preparing you for some other challenge further in your life. You don’t know it at the time and frankly I think often times much of the plan is not completely well understood frankly, but at the time my son was born in September of ’94 he was born with a pretty rare liver disorder and which he had to have a liver transplant. Unfortunately, while we were on the waiting list, his condition continued to get worse and worse and finally, in May of 1995, actually May 1st and we consider that to be my son’s second birthday, he ended up going through a liver transplant. Where he went through a 21-hour operation, where they removed his liver and luckily my wife has the same blood type as my son and so they took out a portion of her liver and transplanted that into my son. It was a long and has been a long arduous journey. Today sort of knock on wood if you met my youngest son. He is quite the character, he is also … All four of my boys work at the company but I often wondered back, “Okay, so what lesson is this that I’m learning going through this debilitating medical deal that puts both your wife and your youngest child in the hospital?” The lessons I learned back then have taught me to be able to navigate things like the great housing recession of 2007, 2008 and 2009. That sometimes it’s not important to look all the way ahead like, “I’m going to somehow … how do I deal with the next 30, or 60, or 90 days?” Sometimes it’s better just to look ahead for the next three to five minutes and to focus on that and then, once you get to that. Then focus on the next three to five minutes, breaking those really difficult giant problems into smaller maybe bite-size edible problems that you can get your head wrapped around because sometimes problems are so big they become so difficult to digest that you could just say, “You know what, to heck with it,” and you give up. What I learned through that condition with Adam is that, if you just take it … my dad would say, “How does a man begin a journey of a 1000 miles? And, that’s with the first step and then, how does he complete that journey? And, that’s one step at a time.” I kept that in my mind when I went through what was going on with Adam and frankly, what we went through the big recession that the housing turned down.
SA Ibrahim: That’s a very inspirational story. Now Chris, in the interest of time pivoting to one last area. You’re a unique individual, in all the time I’ve known you, you have this blend of passion and compassion. How are you going to take that to your new, to your role as the MBA chair and what kind of priorities do you see for the MBA on your watch?
Chris George: Well, a couple. Number one, and thank you for that, I do think that our industry is largely built on folks that are incredibly passionate and also compassionate. I’ll give you two quick examples. You are constantly seeing people and you’re a living testament to this statement as well as a people that give up not moments of their day but hours, tens of hours, hundreds of hours of time to contribute back to the industry, to make sure that we improve, innovate and continue to follow the rules necessary to be able to provide a superior product to our customers and clients. These are people across the country. I’m not talking about just the volunteers at the Mortgage Bankers Association and the board of directors, the residential board of directors, the commercial board of directors. I’m talking about all of the state associations, the mortgage bankers, the mortgage brokers, the bankers, the community bankers, credit unions and all other state associations that are coming together to focus on the very best parts of our industry. These are people that give up a ton of their extra time to be able to do what’s right and to be able to give back to an industry that has given so well to them. That passion, in my opinion, should not be overlooked because while yes, the MBA offers a tremendous value. There’s also the partnership that the MBA has with all the state associations around the United States and that passion is what keeps our industry vibrant in my opinion, the compassion. The compassion in many cases is overwhelming to me to watch how many people will just voluntarily give to great organizations like the Opens Doors Foundation, which partners with the MBA, like our organization the CMG Foundation, which partners with the cancer support community and the Gary Sinise Foundation and Opens Doors. It is amazing to me how many people are willing to say, “You know what, I’ve done pretty well in my life. It’s time for me to give to someone who isn’t as fortunate,” a complete stranger that might find themselves in a position like I found myself and my family with my son. To help an individual make their mortgage or rental payment at a time of need, when you’re wrestling with a terminally ill child is so incredibly relief-giving to that recipient. It’s the ability to sit there and say, “Oh, thank you because now I can focus on what’s important.” The passion and compassion leads me down a path of stepping into the chairman role. We have to make sure that we finish some of the unfinished work. Some of it is reforming the GSEs, it must get done. It hasn’t gotten done. If it doesn’t get done, we’re going to take away choices for our consumer and many of those choices are for people that are at the affordable housing level limit and it’s critically important we give them those choices. Number two, there are some regulations that have gone a little too far. I’m not saying all of them just some of them. I mean, for goodness sakes people talk about reforming Dodd–Frank and re-looking at some of the things that happened with Dodd–Frank as it’s almost sacrilegious. We’ve altered the United States constitution half a dozen times, I think we can look at Dodd–Frank maybe a couple of times and see where we might have gone a little too far and last but not least, I want to continue to focus on the diversity that’s needed in our industry that is reflective of what our upcoming customer base is going to look like. Certainly, in places like California, Arizona and New Mexico, Texas. That demographic is changing from what was predominantly white to Hispanic, to Latino, to Asian, African-American, to Middle Eastern. I think that we as an industry have to change to show that we’re more reflective of the customer base that’s doing business with us. Overall, what does that lead to? I think it leads to innovation, which is sorely lacking in our industry. Products like HomeFundMe are borne out of the industry. They’re not borne out of regulators or legislators. Industry specialists are coming out and saying, “Hey, you know what, this could help.” Things like Day 1 Certainty or collateral underwriter and a host of other innovative ideas that it’s making it more certain for a borrower to say, “Okay, I’m good to go, now I can go shop around for my best deal,” which is exactly what should happen in the home buying process. Well, it’s just some of the things that I want to focus on and frankly, look SA, I’m a guy that grew up in a small town that has no business siting in this chair talking to the great SA Ibrahim, right? So, you know what I’m saying? I’m not that guy. I’m just a guy that’s been amazingly fortunate in life and probably in my mind one of the luckiest guys on the planet and so, for me I don’t take this job half-heartedly. I take it very seriously. I plan to put my heart and soul into it and I assure you I won’t fail.
SA Ibrahim: I’m looking forward to the year of your leadership and looking forward to talking to you either between or certainly at the end. In many ways, you define what Mortgage Media and your company is all about, which is to after taking from the industry for years, putting back something in to it by sharing the stories of people like you and the home buyers, and the people who take out mortgage loans, who make our industry work and learning from them as well as getting inspired by them.
Chris George: Thank you.
SA Ibrahim: So, thank you so much for taking the time and talking with us.
Chris George: Thank you SA. It’s been pleasure, I appreciate it.