Before she founded The Loan Story, Maria Chen was a stay-at-home mom with a literature degree looking to learn something new. She found a job as a receptionist at a mortgage company, and quickly rose from secretary to loan processor to loan agent to top consultant. In 2005, when she couldn’t find a company with her vision of quality service and leadership, she decided she was more than ready to create her own. Her business sense came from prolific reading and her leadership came from years of volunteer work at a performing arts non-profit. Maria successfully navigated The Loan Story, located in Santa Clara, CA, through the 2008 housing market crash, and continues to make her vision of quality a reality.
How did you get started with your business?
I entered the mortgage industry in 1986. When I started I knew nothing about mortgage. I had a degree in literature and I was a stay-home-mom with two young children. I was so bored. When I heard a mortgage company in my neighborhood was hiring a part-time secretary, I thought, that’s easy, I can do that. I got the job and then during my second week one of the loan processors had a big fight with the boss and left on the spot. This was right in the middle of the 1986 refinance boom and there were 40 loans on the table. My boss came over and tossed me an underwriting manual. He said, you’re an English major, you can read over this, right?
That’s how it started. I went from being a receptionist to a loan processor to a loan agent in a couple of years, and I stayed until the company folded in 2005. It was successful until 2004 when the company was sold to one of the loan officers who wasn’t a good manager. He expanded too quickly and ran out of money. He came in to the office one day to tell us he couldn’t pay us and then we never saw him again. We had to scramble to find a company to partner with us. Meanwhile, I looked for alternatives. I interviewed five companies but none fit my business mission. I was looking for a high quality service business in the front line of mortgage loans with a commitment to the industry and good leadership. My husband said to me, "you’re almost 50, so if you can’t find a company you enjoy, it will be hard." I thought about it and in 2005 I started The Loan Story.
How did you fund your business in the beginning?
I took out a home equity loan of $100,000. I didn’t take any additional funding. For the first year it was just me and an assistant. I didn’t take a salary; I put everything into the company.
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Running the Business
How did you learn to run your business?
Over ten years of volunteer experience saved my life. Since 1995 I volunteered for a performing arts non-profit. I started as a volunteer and became a board manager, then a program manager. I was responsible for negotiating with artists and leading the volunteer team. With non-profits you can’t pay anyone to do work, so you have no leverage with the volunteers. It’s like herding cats.
Who was your first customer?
I brought my own clients to Loan Story. My clients are roughly 50% Asian, 50% white, like the surrounding neighborhood. When I started, I was one of the very few Asian mortgage brokers, so yes I did bring in Asian clients. However, I intentionally cultivate non-asian relationships in my work. My work is on the sales side, though it’s not subservient to the client; it’s about guidance, financial consulting. But sales is really not a respectable job in Asia. There, salespeople are little better than beggars. Americans respect salespeople more and they are more loyal to business relations. Asians tend to shop around you; they’ll take your knowledge and your time, then leave. But Asians always have money to buy, so when the market is slow they keep us in business.
What’s the biggest mistake you made in the first year?
I did not actively recruit people. In the beginning my strategy was to just focus on building a pipeline. The first year it was only me and a processor. Second year we had one more person. Third year, three more. I didn’t actively recruit people until the 2008 market crash.
What’s the smartest thing you did in the first year?
When the market crashed in 2008, competitors who were in it for the money left. Everyone was shrinking their operations. I read enough books to know that if everyone goes one way, you should go in the opposite direction. So I expanded. I had an office big enough for 50 people, and I began filling up those spots. With a bigger team everyone brings in their own expertise. I added more bank associations, because more lenders means more choices for the clients. And I kept the lenders happy by consistently sending them quality loans. We now have over 50 lenders and 22 loan officers, and not a single defaulted loan.
What’s the most rewarding thing about running your own business?
I really enjoy learning new things. I was doing mortgage for 17 years before I started Loan Story. I was already bored by the fifth year. By the tenth year people were asking me to start a company with them or to be a manager. I should have started Loan Story earlier. The market was good from 1986 to 2008, and tough from 2008 to 2013. I caught the tail-end of the good period. Luckily we’re doing well because we went in the right direction. Most of the brokers I knew in 2008 are no longer in business.
What’s the most challenging thing about running your own business?
Finding quality people. There is a lack of structured training in this industry. It’s hard to know just by talking to people if they will do well, if they are honest, meticulous, and diligent.
What I’ve Learned
If you could go back to when you were starting your business, what advice would you give yourself?
I would start my company earlier in my career and recruit right. I would hire the best processors with higher pay because good processors attract good loan officers.
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About the Author — Sarah is a recent graduate of UC Berkeley where she learned to love the diverse personalities of mom-and-pop stores. She likes intriguing storefronts, creative specialty stores, and well-designed business websites.