Calling banking companies aimlessly is one of the most tedious tasks any investor face, but what if you can actually make this endeavor way easier? In this episode of the Note Closers Show, Scott Carson breaks down the easiest way to build a bank asset manager list by downloading the list of mortgage bankers, mortgage companies, and loan servicing companies doing business in Texas by checking out the Texas Savings and Mortgage Lending website. He discusses how to use this list effectively to find deals from mortgage bankers all across the country and target business development reps at servicing companies.

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The Easiest Way To Build A Bank Asset Manager List

I wanted to share something. It’s been a while since I’ve talked about the subject. I said, “Why not bring it back up?” I’ve been getting questions and bombarded with emails, and some comments from people asking me, “There’s going to be a big downturn in the market.” I’m like, “Yes.” You have to look at all the numbers that are coming out. The WalletHub had an article about the top 100 cities are being hit the hardest. That includes five cities in Texas and a variety of the major metroplexes that have been hit hard with people not only filing more for bankruptcy but people who are looking for loans, increased percentages of their credit cards, which mean they’re using credit cards more. Also, credit scores are dropping across the country. One of the biggest questions people are asking is, “How do I find banks that have non-performing notes?” It is not difficult to find banks. You could jump on the FDIC.gov list and start looking at quarterly reports. That’s a tedious process. You could use Distressed Pro to jump on there from Brett Palumbo and start looking at his software, which we’ll look at the quarterly reports and start to analyze and tracking stuff.

Some Misconceptions

You could buy the Bauer Financial list for roughly $300 to $400, to give you a breakdown of which banks have non-performing portfolios, non-performing assets, the percentage of the portfolio, and how much they have. That’s not going to give you an email. It will give you a customer service number, but you’re still going to have to do some work to find it. There is an easier way to prime that proverbial pump for very little money and time. We all love that if we can save time or money. This is a free list that I’m going to tell you. Before I tell you where we find this list and how we use this list for years, I want to clear up some misconceptions out there. Banks will sell you non-performing notes. They will sell you one-offs, except for the bigger banks. I’m talking about the top 5 or 10 banks. They’re not going to sell you a one-off residential note. There are plenty of other lending institutions in the areas out there to find portfolios or one-off notes that you can cherry-pick from or add to your portfolio. The list I’m going to talk about is not everywhere but it does include resources from every state out there for the most part. For those of you that don’t know, I got my loan officer’s license back in 2005. It’s when I first became a licensed loan officer in the state of Texas.

It’s usually you had to pass for group one insurance license, you then wrote to the State of Texas for $125 to become a loan officer, and then you boarded your loan officer’s license with a mortgage broker. I did that initially. My first loan was with my parents. We did a refinance on their house. They were at 12% distress rates. We were able to roll in all their credit card payments, their bills and other stuff into their mortgage. Their payments went down by half than what they were paying out. The water was trying to come over the side of the boat in half. We also set them up on bi-weekly payments or bi- monthly payments so that they paid off the house in seven years versus twenty years. My dad cried at the closing table.

That’s one of the things I got so passionate about financing especially loans. Later on, I became a mortgage banker when I worked for Bank One, JPMorgan Chase, and then went out and became a loan officer as we started Ariel Capital with my friend, Boyd Popps. We all know what happened in 2008 when I left and I got in the note business. Along the way, as I sit in 2008 and as I was leaving Ariel Capital to start Inverse Investments and start that route as a note investor, I’m looking at how do I find people. I started thinking and I was like, “If I’m going to be keep chasing mortgage bankers, most of the major banks have a federal charter so they’re excluded from filing at the state level.”

We have a federal charter and it’s different. I’m like, “How do I find those?” Around 2008, 2009, we all know what hap

National Mortgage Loan Originator License

pened and resulted in the national license in NMLS, National Mortgage Loan Originator license. What used to happen in states would require mortgage companies and mortgage bankers to register with each state. You had registered to do business in Texas, Oklahoma, Illinois, California and all those states. If you want to do business, you either had to pass a license for that state or if you were in one state that took enough continuing education, paid fees, a lot of times your license would roll over to that state. We were doing loans in 30 different states. Part of that was licensing but also, we were partnering up with a national charter bank called the World Savings. We were able to originate in a bunch of states through a subset of World Savings. World Savings is gone. It became a Wachovia and it got bought by Wells Fargo back in the day. Mortgage brokers that are outside, that have a warehouse line, and are independent of a big federally chartered bank still have to register with the state.

 

I was like, “I might have an idea here.” I jumped online and I said, “What department in Texas handles mortgage broker licensing?” It’s the Texas Department of Savings and Mortgage Lending at SML.Texas.gov. I go there and the website’s been the same for the most part. They change and update, but they handle the licensing of mortgage brokers, servicers and mortgage companies doing business in Texas. I started looking at other states. Not many states have this available on their state websites. It’s not always the Department of Savings and Mortgage Lending. In some states it’s the Department of Insurance. In some states like California have the Department of Real Estate that handles that.

Each state is a little bit different up there. I paid California back then. I called them and said, “I’d like to get a list of all your mortgage bankers and servicers that are licensed in your state.” I’d have to send a check-in for $50 with a self-addressed stamped envelope. They would send me back a 3-inch floppy. I’m like, “What the hell am I going to put this in?” A couple of years later, they sent back a CD ROM. Now it’s a download, but I don’t know if it’s $50 anymore. When I started going to some different states, I found that I could download this information for free. Why is this so valuable? If you’re looking for note deals, you target banks, but there are also a lot of mortgage bankers and service companies out there that have products that you can cherry-pick from.

Mortgage bankers are often originating loans. Sometimes they’ll keep it in-house in their own portfolio. Other times, they’ll have it on a warehouse line of credit that they’re selling off to the bigger banks who are provided that warehouse line of credit. Sometimes they buy that stuff back and hold it on their lines. For a $100,000 loan, it’s costing them 10% to 20% in fees off that loan that they can make in a year in rinse and repeating the velocity capital. If you’re making three points on a $100,000, your goal is to get to $100,000 out twelve times a year. You’re making $36,000 off that $100,000 loan by rinse and repeating, originating a loan, funding loan, warehouse line, mothership. Wells Fargo comes back and pays you $103,000 for it. You’ve got that $100,000 to go lay down again. That’s how a lot of the mortgage bankers make their money.

List Of Licensees

Getting back to this list, if you go to SML.Texas.gov, it’s the Department of Savings and Mortgage Lending in Texas. On the front page, it will show you on the right-hand side that says, Quick Links, Apply/Register, National Mortgage Loan Servicing Information, Download List of Licenses, and Pay Penalties Online. I’m not paying a penalty. I’m not looking for NMLS information. I’m looking for the download list of licensees. If you click on that button, it takes you over to another page and downloads a list of licensees. It’s self-reported to Texas SML by a licensed company or individual. It’s usually current up to the previous business day.

Doing Business In Texas

It’s a list that shows you who’s licensed to do business with Texas. It gives you three things to download for free. Company and a branch roster download and a sponsored individual roster download. You don’t need a branch roster or sponsored individual. What you want are the company roster downloads. You click on that button, it takes a couple of minutes, but then it downloads a huge list to you. It downloads an Excel spreadsheet. On this spreadsheet, it has a ton of context. You always know when lending is going good in the nation. I have downloaded this list for many years. It marked the tenth year I’ve downloaded as I’m looking back because I’ve saved the list every month. Every time I download it, I do it on a monthly basis because there are always new people getting licenses to do business in Texas.

Why is Texas such a great place to get license to do loans? It’s because of our fast foreclosure lists. We do everything faster, fast highways, executions and foreclosures. It’s a great place to be a lender because you can foreclose quickly when someone’s not paying. It’s also not too difficult to be licensed. You have to pass a test, get fingerprinted, passed an FBI background check, and make sure you’re not the Unabomber. It’s not that difficult. Pay your fees and pass the test. It’s easy to pass the test these days.

 

Now you’re not just paying a $125 fee to pass your insurance test. You’ve got to take a different test. That’s okay. It downloads 4,221 total contacts. Those 4,000-plus contacts are spread over seven different classifications. You have the mortgage banker registration, the residential mortgage loan service registration, a mortgage company license, and then you have four other categories that you don’t need that are on there. It tells you who’s going to get license here. You have an Auxiliary Mortgage Loan Activity Company license. The Credit Union Subsidiary Organization license, you don’t need that because you’re not going to see a lot of loans from credit unions on residential commercial loans.

If you’re a commercial lender, you don’t have to go through the licensing side that you do on the residential side. For commercial lenders, you’re going to start doing commercial loans if you want to and you find someone to help you out with it. You have the auxiliary mortgage loan activity, a credit union subsidiary, an independent contractor, and then you have a financial services company registration. Out of those total seven, you’re going to remove those last four. I might even remove the mortgage company license, you may not need that because there are a lot of people that are mortgage companies. They’re not originating. They’re brokering stuff. They don’t usually have a lot of loans on their books because they are originating on behalf of somebody else’s sell-off.

You don’t need that list, but it is a good size list. I have had some luck marketing out to this list. Out of that 4,221 total contacts, the mortgage company licensed makes up a big chunk of that 2,833. Roughly, it was about 67%. You can get rid of the mortgage company license. The beautiful thing about this list when I talk about marketing tool, it’s one of the easiest things. It gives you the name of the company, that NMLS ID, licensed type, the status if it’s approved, expired or voluntary surrendered, and status date for that when it was originally issued. Are they authorized to conduct business in that state? It gives you their mailing address and physical address, city, state and zip code. If you’re looking for mortgage bankers or other services that are in your state if you’re not in Texas, there are people in about every state.

You have a phone number, which is sometimes a customer service number or a direct line. You get the fax number, and then you have an email address. The caveat about the email address is you don’t have a contact name. If you look at the email, sometimes it’s going to be like, “Chris Mason at Packers Mortgage Company.” You got a name and phone number there. Sometimes you have an extension added to that with a phone number or somebody you can call to. This email address is either usually the person in charge of the company or the person in charge of licensing. Whoever the person is, they’re making sure the loan officers or mortgage brokers where they stay up to date with the licensing. I use this email list as a phenomenal list to start mailing to. The phone numbers are great because you have a direct line of contact that says, “I’m trying to track down the first in charge of your secondary marketing, your bad loans on your portfolio or warehouse lines.” It’s going to be a different kind of call-out message or even email that you send out depending on how you segregate this list.

You’re going to get 2,800 mortgage companies on there. If you remove that and keep the two hot lists, the mortgage banker registration list, if you filter down to those that are approved still in the State of Texas, the mortgage banker is probably the number one hot list. Those are people that originating that or they have warehouse lines. There are 414 approved mortgage bankers doing businesses in Texas. They’re not just doing business in Texas. They’re doing it in a variety of states. Some may just be in Texas, but any good mortgage banker is going to be looking to add licenses or affiliations with other companies across the country. These may be net branches. Different mortgage companies that are mortgage bankers that have branch offices across the country. We’ve seen a lot of that.

 

It may be one person in the entire whole 10 or 25 branches who’s in charge of licensing. Still, it’s effective to reach out to 414 mortgage banking companies. It’s a good starting point. The next most valuable list is the residential mortgage loan service registration. When we filter the list down, there were 331 licensed loan servicers. If you look at who is still approved, it shows 271 to do business in Texas. That means there were 60-plus that aren’t approved to do business. When I looked at the names, some of them are bigger names out there that are servicing loans. I know they’re servicing loans in Texas, but they’re no longer licensed or approved in Texas. That’s a no-no, but they’re still doing business and active.

Loan Servicing Registration

Why is the loan servicing registration important? If you’ve got 331 or 271 is still good to do business in Texas, these represent loan hubs because

they’re dealing with investors like you, me, some bigger guys, or whatever it might be. They might have a variety of clients anywhere from a hundred to thousands of other loan originators, banks, lenders or note investors like you and me who have bought debt and are having it serviced. This is on the residential side of things. That becomes 271 potential sources for finding deals or portfolios. What you do with this list is you don’t call the servicing company and say, “I want to speak to your secondary marketing department.” They’re going to be like, “We don’t have one.” What you do with this list is you call and say, “I need to speak to somebody who’s in charge of business development.”

I learned this from my friend Joel Markovitz, who’s been in charge of business development for several servicing companies, NuView, Land Home and a couple of others to bat around in his years in the mortgage industry for many years. You want to speak to the person in charge of business development because this is the individual that’s going out to conferences, approaching mortgage companies and trying to get that bank or lender to give them the servicing. They’re trying to give them their business so that their staff can service the loans for a fee each month.

We had one of our students in the past, Bill Coppedge, who was in charge of business development at Fay Servicing, a big lender in Chicago. He taught me that the business development guys are getting paid a percentage of servicing fees each month from what they bring in. If you’ve got a good business development guy or girl, they’re making more of their money from those fees on a monthly basis. The last thing you want to do is call and ask to speak to this person in charge of business development and say, “Do you know anybody or any of your clients that have any non-performance stuff or loans that they’re looking to move or sell?” That’s what you want to ask, but you have to realize that that sounds like, “Do you want me to see about moving loans off my portfolio so you’re taking money out of my pocket?” That’s a big no. You don’t want to do that.

What you want to do is add a magical statement. It makes them all warm and fuzzy because there might be willing to help you out, “I want you to retain servicing, provide it’s enough loans to keep on your portfolio,” because some servicers have loan minimums. Someone wants at least 10, 20 or 100 loans, it all varies on the servicing company. Some want bigger portfolios. They don’t want to deal with one-off guys and the small one because it’s not worth their time.

You go, “I would love to talk with any of your clients that have loans or looking to move, if it’s performing or not.” There’s a servicing company out of California that wants performing loans. They don’t want to deal with a non-performing because they don’t want to jump through all those extra things they’ve got to do. That might be a logical source like, “Do you have any of your clients that have non-performing on your books that they might be looking to move in this for you?” Those 271 or 330, some of them are still worth down for dollars and the ones that the license are expired. Those are potentially 330 hubs of sources for notes for you. If you make 50 phone calls a day, that would take you 1 to 2 weeks to make those phone calls. You would know all the business development guys or girls and make relations with them and go from there.

 

I always like to send an email to the licensing department on that list alone and do a smaller list of 331. I’ll say, “Who’s in charge of your business development at blank servicing?” You might do individual emails. I would still recommend you to do a blast out to them through Mailchimp. The biggest and most important thing we’re seeing happening with email service providers is the fact that they don’t like these big list blasts. You’ve got to be very careful, especially on this type of list. When you download the list and you cut, clean and spice it so you’ve got your mortgage banker of 400-plus. You got your loan servicers of 300-plus. You’ve got to chop that lists up into bunches of 100. Upload that list of 100, send an email out, upload a second list of 100, sends the same email out, and start seeing what happened.

You should see a pretty good open rate initially. You’ll see some emails bounce back as maybe things have changed, but keep track of who opens your emails. That becomes your hotlist to dial for dollars that following day. Also reaching out to the same companies, jumping on LinkedIn, and seeing who’s in charge of business development or EVP is a business development at specific servicing companies or jumping on their website. A lot of times they’ll tell you and show you who’s in charge of business development on their websites as far as their staff. That’s a great place to start with. You could jump-start your note business by dialing for dollars on these. If you don’t have a bank contact or you don’t have any money, this would be the best thing to start with. It’s free. When I got started calling banks, it was a rough time in 2008 and 2009. I tried to pull as many free lists to find somebody to get creative. This one list I found still works to this day.

You’re going to see more lenders, especially popping up here on that list. Mortgage brokers are expired, voluntarily surrendered. Maybe they’re subprime lenders pulling out of the market because of everything that’s going on with COVID. I highly encouraged you to use this list. It’s SML.Texas.gov. If you go to our homepage, you can click on the link. These are two hot lists that you got to put some work in with either email blasts or phone calls, and then jumping on LinkedIn. Doing this on a regular basis, “We don’t have anything now, next.” You are going to find something out of these lists. I guarantee it if you put it to work and you follow the right things to do. You don’t want to start calling them at the last week of the month and the last week of the year.

The best thing to do is implement this specifically the first two weeks of the month in reaching out, following up the third week, and then taking the last week off. Most of these mortgage bankers, they’re looking at end of month numbers from their sales staff. The same thing with the servicing company. They’re pulling into monthly reports with payments to get out to their clients. Even avoiding the last week and the first week of the month for the servicing companies because that’s when they’re doing a lot of reporting. I highly encourage you guys to take a look at this list, download it, and put it to work. Few people are doing this. I know some people are calling and they’re having success. I know a lot of people that talk again, “I want to do this,” but they never use this free list as their tips to market to. That’s one of the most important things.

Get in that habit. Don’t send one email and go, “Nobody responded.” Pick up the phone, dial for dollars, drop an email, jump on LinkedIn and leverage those three things together. It will truly make things happen for you. Happy hunting, ladies and gentlemen. If you add those two together, you’ll have roughly 600 to 700 contact for you to reach out to. That’s a great starting point. You don’t need a lot of sources that have property on a regular basis. You got to be good about following up with them. Go out and take some action. We will see you all at the top. Bye.

Important Links:

• FDIC.gov
• Distressed Pro
• SML.Texas.gov
• Auxiliary Mortgage Loan Activity Company License
• Ariel Capital
• Joel Markovitz – LinkedIn
• Fay Servicing
• http://NoteWeekend.com
• http://WCNMembership.com

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