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As published in Mortgage Report August, 2004 CEO Interview:Richard Whitworth recently sat down with Mortgage Report Publisher, Andy Cohen to discuss MorSystems
Andy Cohen: Tell us about your background?
Richard Whitworth: Well, I started Carmel Mortgage on Saint Patrick’s Day 23 years ago, I grew the company to be one of the leading mortgage companies on the central California coast. My oldest daughter is now President and CEO of that same company. She runs the entire operation and maintains our corporate offices in Carmel and our 2nd new branch in Salinas. Carmel Mortgage’s Carmel Office specializes in jumbo single family financing as does the newest Salinas office. I now serve as Chairman of that company.
ANDY COHEN: Why did you choose to get involved with the internet when you already had a successful mortgage company?
Richard Whitworth: I was involved in the early implementation and deployment of long overdue mortgage industry technology in the early 1990’s. It all started when the mortgage industry started pursuit of and utilization of credit "scoring models". The use of scoring models in the mortgage industry came about as the major secondary market players - Fannie Mae and Freddie Mac developed new automated underwriting systems. As we all now know, those systems compare payment histories from literally millions of similar loans coupled with credit scoring, etc. for the final underwriting decision.
I was one of few brokers in the U.S. selected by mortgage industry leaders and the Agencies to work through the Beta phases of this revolutionary technology. Prior to the proliferation of home computers I had developed an early approach to making the application process a little easier – it was a video program helping a borrower through the 1003, line by line.
By the time we met with mild success there, the personal computer was beginning to show up in more and more households. I immediately began designing a software program (initially called Speed of Lite) to give the computer user a friendly application that looked nothing like a 1003, but converted to an LOS through another program called Converto.
The client application is now known as Borroware®. The first version of Borroware® was designed to be downloaded by the borrower. I realized very early on in the development of the internet that the average borrower would not want to expose all of their financial data over the internet for 20 plus minutes. The past 6 or so years have proven that to still be true, Fannie Mae’s last consumer survey showed that only 2% of borrowers would complete an online application. Most unbiased industry professionals still say that only 5 to 10% of the public will complete an online application. Borroware® downloadable software eliminates that problem entirely. We just launched the same easy to use software as an online application for the 5% to 10% who are willing to apply online. Regardless of the consumer’s comfort level, MorSystems’ broker clients have the easiest smartest application available.
ANDY COHEN: What are the biggest challenges of running MorSystems versus just running a mortgage company?
Richard Whitworth: Developing new systems to meet the diverse needs and goals of the brokerage industry with superior systems and tools takes a lot of money. I must wear two hats; one as the CEO of a rapidly growing technology company and number two, handling the inherent administrative responsibilities generated by such growth. I am a visionary guy, the ideas, design elements and systems come easily to me; the administrative responsibilities are painful to say the least.
ANDY COHEN: Does MorSystems have any plans to go after the consumer market?
Richard Whitworth: No, we have absolutely nothing to gain by interfering with the mortgage broker’s business model – we exist only to enhance their businesses; to save them time, give them superior technology at a low cost and help them make money with our systems.
We are developing a marketing system to help them gain additional market share with their Realtors in their local markets. My mortgage brokerage background gives MorSystems perhaps an unfair advantage in knowing the psyche of the typical consumer – The majority of our competitors have little to no broker experience.
Our systems are designed to bring the broker the deal in the first place through valued consumer friendly applications and websites. Our clients tell us that after shopping many website providers, it is quite apparent that we have a strong broker background and we have just what they have been searching for. It’s easy to make the broker successful by giving his client what they want; we target brokers’ and their client’s needs and goals on a daily basis.
ANDY COHEN: How have you been able to build the MorSystems brand?
Richard Whitworth: We began with the search engines and we are now between 1 and 4 on all of the major search engines. We now advertise in quality mortgage trade magazines, such as one named, um let me see now, oh yea - Mortgage Report. We became a NAMB industry Partner in 2004 and enjoy the great things people have to say about us in various industry forums. We are becoming clearer on the radar screen and as you know, the more a company is recognized, the more it is capable of. We are very excited about our growth and we are meeting all of our numbers. The MorSystems brand is growing as people read this interview! This is a very exciting time for us!
Andy Cohen: Are you concerned about competition?
Richard Whitworth: Because we continue to offer what we, our client and their consumers say are the most professional looking websites and the easiest client loan app online we are very confident that we will continue to take an even bigger market share going forward.
Wisdom dictates that one should always be concerned about ones competition, however concern has nothing to do with fear, we have no fear of our competition regardless of size.
Andy Cohen: How do you identify and differentiate yourself from your competitors?
Richard Whitworth: Our doctrine, philosophy and company trademark tells it all - “You Deserve Mor™, You’ll Pay Less”. We offer more and we do everything possible to keep the price low. Main differences are, we CONSTANTLY upgrade our client’s websites and web functionality for them as new technologies evolve. For instance, we just added Borroware® Online™ to our clients’ websites along with their Borroware® Download version they have already been using. Our clients now have two powerful Borroware® client loan applications for their prospects and clients to choose from.
MorSystems has also taken borrowers into account every step of the way, I explain to our prospective clients that my extended background in the brokerage business has been an immense help to me and that I have been blessed with a knack for “putting the humanity into the technology and into the websites” – this is a critical ingredient in separating us out. Other mortgage web providers tend to focus only on the loan officers and how to benefit them. We knew in order for our clients to stay with us we had to provide our clients with tools their clients want. It has been easier for me to design our products with brokers, agents and borrowers in mind because of my experience as a broker and a borrower, and my daughter’s continued experience as president of a mortgage company and as an agent.
ANDY COHEN: What type of partnerships and strategic alliances has MorSystems made?
Richard Whitworth: Our new website offers discounts on mortgage tools from affiliate companies such as Pocket Power PC, a great Pocket PC loan application system, audio generator and 800 call capture service, companies that we have used ourselves and know they work. We have many other relationships in various stages of development and implementation.
ANDY COHEN: Are you looking at expanding into other fields besides the mortgage?
Richard Whitworth: No, we want MorSystems to be an all inclusive mortgage technology hub where mortgage brokers, their agents, Realtors and consumers can conduct the easiest, costs reduced transactions available.
We have four powerful new systems in various stages of development and implementation. MorData®, a customer relationship management program will be the next program launched by MorSystems. We anticipate rolling that system out in early 2005. The database system will help automate mail campaigns and will organize follow up calls, letters and postcard mailings to agent’s clients and much more –stay tuned!
ANDY COHEN: What are some of the benefits of using MorSystems?
Richard Whitworth: Any business in the financial industry must have a professional website. Look at who your competitors are other than local brokers, look at lending tree and ditech for example, never mind the large institutions who are trying to kill off the broker.
We feel that the sites we offer are cleaner, far more intuitive for the consumer and compete on a level of e-loan, Lending Tree, etc. in quality and appearance. The biggest mistake we see time and time again is the broker who spends an arm and a leg on marketing, and then sends that very client to an inferior website – where they inevitably get turned off after comparing it with the big institutional sites.
Today’s consumers know a weak website in a heartbeat; we feel MorSystems’ sites offer consumers a reason to stay and an intuitive comfort level with the broker who purchased our website. It is VITAL today to have a professional website to stay successful in the mortgage industry.
Borroware® saves agents and their client’s time, offers the client 2 applications regardless of their technology comfort level. Borroware® is a perfect loan agent training tool, it contains tool tips for each field regardless of the consumer’s employment, etc. The marketing potential with Borroware® is limitless, each loan agent has their own personally branded versions with their name branded one ach and every file.
Automated rates are pulled twice daily based on the broker’s selections and markup.
The overall benefit of having a MorSystems Website is having such powerful technologies in a professional website without spending tens of thousands of dollars.
ANDY COHEN: How will technology advances affect your business?
Richard Whitworth: We embrace new technology everyday – this is exactly what we do, we embrace it, improve it and distribute it to brokers. Enough said there!
ANDY COHEN: Why should a mortgage broker have their own website?
Richard Whitworth: Over 70% of the public now starts their loan and real estate activities online. A broker’s website is their main chance to elevate themselves to the level of the institutional lenders that the prospective client has no doubt looked at. You know what they say about first impressions, it better be good, it must say I am an industry professional, one you can trust. MorSystems’ sites provide the consumer that level of confidence. A professional site will become more important to broker survival each and every passing day.
ANDY COHEN: How fast can a broker have a website?
Richard Whitworth: We have client's websites up in 1-3 days. As soon as they sign up and their domain is transferred to our servers, their website is up and running. Our new MorSystems website provides a full online site signup and broker build capability, one more powerful difference and ability for us to keep costs down for both Mor and the broker.
ANDY COHEN: Can a mortgage broker make money from the internet?
Richard Whitworth: Yes, but not from simply putting up and old website or some online flier. It must have value for prospects and offer tools that prospects want such as rates, useful information, and easy applications, and it must rival the institutional sites that most consumers are comfortable viewing. Brokers also must market their website and draw people to it.
Mor’s websites are designed to capture the interest of the consumer to get them to apply or call. Borroware® helps facilitate savings to both the client and the broker in time and money. A broker can make money with a site by utilizing all of the tools provided in the site by MorSystems. Borroware® facilitates a quick easy application, that app is automatically pushed to the broker’s LOS to move on to the decision vis-à-vis Fannie, Freddie, E-mits, etc. All of this leads to faster, smoother transactions and stronger client retention.
ANDY COHEN: With thousands of mortgage broker websites already on line how can an individual site with limited resources get noticed?
Richard Whitworth: Literally by every means possible as they all do today – conventional means of advertising, be it postcards, TV, newspaper, real estate guides, etc. all designed to invite the consumer to utilize the customized content and ease of use of the Borroware® applications, etc. Build it – MARKET IT – and they will come.
ANDY COHEN: How can you convince skeptics to use your system?
Richard Whitworth: We do not lock people into ANY type of term contracts because we know our clients will be satisfied and stay with us. We convert skeptics each and every day. Many are skeptical because they have had a negative experience with a current website provider. We simply explain that sites get stale virtually every year – one year out and a site that was at least presentable no longer is keeping pace with the rapid growth and design changes out there.
MorSystems is constantly adding new designs to each level of site we offer; clients can change their site with one click of the mouse (at no charge) – their site will always we right up to speed with the changing marketplace - with MorSystems that is.
ANDY COHEN: Does MorSystems have the financial resources to succeed in the 21st century?
Richard Whitworth: Absolutely, now that we are on the map providing websites nationwide and have met good people along the way who believe in our company and know we will succeed. In addition to increasing cash flows we are going for another round of funding as we speak.
ANDY COHEN: Are you concerned about any pending regulatory issues that may affect your business?
Richard Whitworth:
No, the intentions of our government are always good, though many times misguided. I believe that the wisdom and leverage of our fantastic NAMB organization, strong local state chapters together with professional mortgage brokers will prevail.
Legislators need only keep in mind that the majority of borrowers still understand that it is the broker who keeps the institutions competitive by shopping rates until they find the best deal for their client. Without the broker, that competition goes away.
A strong lobbying effort doesn’t hurt either – support you state chapters and NAMB!
ANDY COHEN: If you could start all over would you have founded MorSystems?
Richard Whitworth: Absolutely in a heart beat, as I mentioned early on, I was involved in the VERY early stages of technology, you know right after we all came out of the caves into the sunlight.
