A Loan Road Ahead
Despite out-of-the-gate success, the owners of First Houston Mortgage are constantly reevaluating the company to stay ahead of the curve

By Nicole Bradford
Houston Business Journal

The owners of First Houston Mortgage Ltd. have built a different kind of company in a challenging field - one that can be compared in some ways to dentistry.

“The mortgage process right now is like a personal audit”, says First Houston Mortgage CEO Dana Gompers. “I liken it to having a tooth pulled.”

While the application process may be more difficult for clients, Gompers points out that the mortgage lending business has been a wide open field in recent years as a career path.

He says the prospect of fast, easy money has led people from other careers into the mortgage industry, one in which, Gompers emphasizes, there are few barriers to entry and the potential for instant gratification.
“You can start a mortgage company this afternoon,” he says. “You take a test, get the license, and you’re in business."



Gompers says most mortgage professionals go into business with one main priority: To get more loans.

But he and First Houston Mortgage President David Zugheri say a lack of foundation and continuing education in the field are the main reasons that many mortgage companies do not grow, or even fail.
“They focus on going out and getting loans - they live in the day…,”Zugheri says.

Growth is something Gompers and Zugheri know about from experience. Since opening their business together in 1997, they have gone from a two-man operation in which they answered phones and shared one computer to an active residential mortgage player grossing more than $7.5 million in both 2005 and 2006. In addition to mortgage brokerage, the 60-person First Houston Mortgage also funds and closes its own loans.

Gompers, who began his career 11 years ago as a loan officer, struck up a friendship with Zugheri when the two worked across town in the same field. A year and a half later, they quit their jobs, cashed in their retirement plans and began their own company with about $8,000.

After two months - and to the surprise of some of their peers still working for other employers - the new little company was in the black. Not willing to rest on their initial success, the partners continued to study other accomplished firms to discover what those businesses were doing right.

“We looked at guys like us 10 years ago to see how they do business,” Zugheri says. “The people who were successful treated their people well. They knew how to manage and lead.”

Zugheri believes that one trait of a successful business owner is what he calls, “being a student of your profession.” Both Gompers and Zugheri have earned the designation of Certified Mortgage Bankers, the highest level of certification awarded in the field. Those who complete the program of coursework and oral and written exams are recognized as experts in the field. CMB’s also are required to complete annual continuing education requirements.

“When you have your CMB, you get to be a resource,” says Zugheri, who markets the company through nightly appearances on “Street Talk Live,” a financial talk show airing on 700 AM.

The CMB designation is, according to the Mortgage Bankers Association, “the mark of professionalism in the real estate finance industry,” and is held by only 800 of the estimated 500,000 people working in the mortgage finance industry in the United States.

Envoy Mortgage’s chief operating officer, Jim Hopkins, also earned a CMB, and Vice President Brad Mauritzen will be certified in February. As a result, the company has the highest number of CMBs under one roof in the state.

“You have to lead by example” Zugheri says. “Before we ask (employees) to do it, we go out and do it. Before we ask them to answer the phone, we do it. He who is closest to the broom sweeps.”

Gompers says having a management team that is familiar with the everyday tasks performed by each employee is vital to understanding the systems in place and how each could be streamlined to function more smoothly.

“David or I can go sit at any desk in this office right now and do that job,” he says. “We know what it is they do all day and we can say ‘Hey, would this be more effective if we did it this way?’- and know what we’re talking about. That’s versus the owner who goes out and plays golf all day and then comes in and tells the employees, ‘I want it done this way’.”

When Gompers and Zugheri started the company they worked as loan officers, later hiring more loan officers and working to increase production. They soon realized, however, that focus and leadership were essential to drive the company forward, and their roles needed to change.

The transition was not easy. In fact, Zugheri insists that the role of “producing manager” is an oxymoron.

“Making that disconnection (from producer to manager) is the hardest thing for people to do,” he says. “You could easily see your income reduce to a fifth.”

So, while Gompers and Zugheri were in their late 20s, as many of their peers in the field were buying expensive cars and luxuries, the owners of First Houston Mortgage sunk the profits back into the business.

“If we were going to be successful, we were going to have to put our production aside,” Zugheri says. “If it didn’t work, we would go back to producing loans.”

It worked.

And these days, the partners focus on hiring people who they believe will fit in with the culture of the company regardless of their professional backgrounds.

In fact, between 50 percent and 75 percent of the people hired at First Houston Mortgage have no mortgage experience when they first come on board.

“It’s not about skill - it’s about the very fabric of the person you’re working with,” says Zugheri.

Hand-picking the right people can be a laborious process, but Zugheri says it’s worth it, especially when compared to the “hire by numbers” strategy used by many in the business.

“While you’re busy making loans, you conduct a 20-minute interview and then it’s ‘Here’s a chair; here’s a desk’,” he says. “The bring-‘em-all-in concept - that’s known as head-count mortgage.”

With the right people in place and a focus on streamlining processes, First Houston Mortgage also ensures its place in the future by embracing technology. In a business where many of the processes are 30 years old or more, Zugheri says, ignoring the inevitable could lead to mortgage bankers going the way of the old-fashioned travel agent.

To combat that fate, First Houston Mortgage is currently working on the first completely paperless mortgage, right down to a customer signature that can be rendered over the internet.

“The Internet had torn down all barriers as far as location,” Zugheri says. “It’s a global collaboration.”

Indeed, now in their mid-30s, Gompers and Zugheri are young enough to apply modern Internet technology to an otherwise tedious lending process, but with a keen understanding that success in business comes neither quickly nor easily.

“It’s a crock-pot approach to making money as opposed to a microwave approach,” Gompers says. “When some people put together a two-year plan, we put together a 10-year plan.”

Nicole Bradford is a Houston-based freelance writer.