Life is a learning process for Chris George, rancher, family man, near high school flunk-out and, incidentally, founder, president and CEO of California-based CMG Financial, a $500 billion mortgage company seriously bent on humanizing the mortgage process.
As a struggling high school senior with five accomplished siblings, George was advised by a guidance counselor to “look for work fixing small engines.” But at 19, in 1982, he went to work for a finance company—and the rest, as they say, is history.
“I was a young male who fit the stereotype of the time,” says George. “You might say the mortgage industry found me, and I felt a gravitational pull.”
George had a slight hearing problem, he explains, which made him a really good listener, and to his surprise, he found out pretty quickly that he could sell.
“But I didn’t like the attitude of most loan officers to customers,” he says, “or the cookie-cutter approach to making loans.”
So, in 1993, at the age of 31, he started CMG Financial, housed in his garage, with seven employees committed to his mission of turning every residential mortgage transaction into a personalized experience.
Barbara Pronin: Chris, what was your plan when you started your company? What did you want to do differently?
Chris George: The more time I spent at the finance company I worked for, the more I began to question the way the loan process worked. I was tired of seeing customers turned down for a mortgage loan because they somehow didn’t fit the mold. I knew there had to be another way. I started CMG Financial on the simple premise that no two customers are the same—that every homebuyer has a unique story, and that there must be more ways than one to make a loan work.
BP: Where did you get the funding to start a business?
CG: I got it off the ground by maxing out my credit cards. I had no money of my own. But my dad had taught me that no one could tell me how to be successful—that if I failed, I should fail forward, learn from it and do it better next time. That gave me the confidence to make the leap.
BP: What did you take away from your experience as a young loan officer that influences your thinking?
CG: In my heart of hearts, I’m still a loan officer. I know that every loan counts because every loan represents a family trying to achieve the dream of homeownership, and doing the right thing for that customer—finding a way to help them achieve that dream—is more important than profit. That means digging in for every customer, every time. It’s a commitment, and I empower every one of my loan officers to take the same approach. They all have my cellphone number. They can call me any time, day or night, and they do, because they know that I’ve sat in their chair and I know what they are going through. I will do whatever it takes to help them help a customer walk away successful.
BP: Can you give us an example?
CG: Sure. One of our loan officers in Southern California had a qualified, repeat customer in Maine who wanted to buy a home on one of the lovely islands out in the center of a lake. But even though the property had been backed by Freddie Mac in the past, both Fannie and Freddie said their rules were clear: “No loans on a property that doesn’t have public access.” With her options pretty much exhausted, the loan officer called me directly—because, again, that’s our policy. Long story short, I talked to Freddie Mac’s CEO at a conference soon afterward. He couldn’t believe I was chatting him up on behalf of one specific loan. But one step after another, we were able to make the loan work.
BP: Your company has innovated some unusual loan programs. Which are you most proud of?
CG: Let’s start with the Home Ownership Accelerator Loan, better known as the All in One Loan, or sweep account, which links your checking account to your home loan. Essentially, it’s a tool that sweeps money in and out of your account in a way that lets you write checks as you need to, but automatically applies the excess funds to your home loan. It’s not for everyone, but for those who typically carry a high checking account balance, it’s a great way to pay off your mortgage faster and pay significantly less interest. The typical 30-year loan, for example, can be paid off in 11 – 14 years using this program, and the borrower will pay $50,000 to $60,000 in interest over the long haul instead of $80,000 to $90,000. We started this program in 2005, and it was so popular that by 2008, we were breaking our own production records.
BP: Then came the 2008 downturn…
CG: Yes, and a lot of companies went down as a result. But I hate losing because I didn’t do everything I could, so I took a deep breath and went a few million dollars into debt to keep the company afloat. We went from 500 employees to 100, and at the worst of it, fewer than that, and it took us five years to pay down the debt once business began to turn around again. But our mission never changed, and today, we have over 2,400 employees, we’re licensed in all 50 states and D.C., and we did $30 billion in business in 2020.
BP: That was quite a gamble and quite a recovery. How are you able to stay so flexible?
CG: As a privately-owned company, we can make decisions quickly. We don’t have to wait on a board or investors for approval. That gives us the freedom to pilot and present new programs and solutions as we sense that customer needs are changing. And we’re totally free to go the extra mile. My core belief is that anyone and everyone we deal with is our customer—including all the REALTORS®, who are truly our partners—and I need them to leave happy. A happy customer is a customer for life, and I’m really proud that 70% of the business we do comes directly from customer referrals.
BP: You can’t possibly help every customer every time?
CG: No, but we bend over backward trying. One of my loan officers called me at 11 p.m. on Christmas Eve, working on a loan he said he believed in. We made a few phone calls, and we made it work. That’s just what we do.
BP: I noticed something on your website about a HomeFundit program. What is that about?
CG: It’s a crowdfunding program to increase your down payment, putting buyers in a stronger position when they are ready to make an offer. It’s really just a very easy-to-use gifting platform that’s popular for those who are looking for unique ways to increase their down payment, especially among couples getting married. Most couples planning a wedding today have already lived together for a while. They don’t need toasters or towels. What they want is money toward a home purchase—and they have families and friends, and a good-sized social network, many of whom will be giving them wedding presents anyway. The HomeFundit program is a unique way to get the word out so they can start their married life as homeowners.
BP: Last year began with a global pandemic that continues to upend business as usual. How has your company adapted to meet these very unique challenges?
CG: The pandemic has been a unique tragedy, and we mourn for those who’ve been impacted. At the same time, months of isolation and the chance to work remotely has had many working Americans on the move, so REALTORS® and all of us in the industry needed to step up to meet demand while finding new ways to work. Of course, we sent most of our workforce home, and we cut down where we could on brick and mortar. Thankfully, with good planning and committed thinking, our people have been outperforming themselves.
BP: What’s happening now, during this period of recovery?
CG: In many ways, business has forever changed, and some of it for the better. As company president, and as past chair of the MBA (Mortgage Bankers Association), for example, I made 47 in-person appearances across the country in 2019. Last year, every meeting took place via Zoom, which saved a lot of wear and tear, increased efficiency, and gave me more time with family. That kind of change for the better is not apt to go away—certainly not altogether. It’s also given our employees options. About a third of our people are back in the office because that’s where they prefer to be. Another third will never return because they like working remotely—and a third are choosing to alternate. That’s fine, as far as I’m concerned, because happy people are the best producers, and this is one more way to make sure they’re happy.
BP: You were honored as 2019 HousingWire Vanguard for your leadership in the industry, Chris. You’ve served as chairman of the MBA, and you actively support several charitable organizations. How do you find the time when you are so involved in your business?
CG: I have to reference my dad again, an educator and a great mentor, who said that being a good leader means putting the needs of others before your own. I believe that—and taking a leadership role in the industry gives me a chance to advocate on behalf of lenders and the consumers we serve.
BP: What about your charitable commitments?
CG: Our CMG Foundation raises funds mainly for three organizations: Northern California’s cancer support community; MBA’s Opens Doors Foundation, which pays mortgages and rent for parents with critically ill children; and the Gary Sinise Foundation, which, among other things, adapts homes to meet the special needs of the nation’s injured veterans and first responders.
BP: You are also establishing a presence in the joint venture sphere. Why?
CG: From my own experience as founder of a company, I have a real appreciation for the entrepreneurial spirit it takes to form a joint venture, and I like seeking out exclusive joint venture partners—REALTORS®, builders, financial institutions and such who share our cultural dynamic. The goal, of course, is to work alongside them to help create the company they envision.
BP: It sounds as though you are comfortable in your shoes, Chris—that you are living the life you probably never envisioned while you were casting about after high school…
CG: Wow, that’s a mighty thought. But yes. On a personal level, I’m blessed with a family I love. We live on a ranch not far from our offices here in San Ramon, and I’m grateful for them every day. And the company? It sounds corny, but I really like who we are. I believe we are making a difference—a positive difference—in people’s lives. And at the end of the day, that’s what matters—wringing the most good out of every day and taking every opportunity to be better.
For more information, please visit www.cmgfi.com/jv-partners.
Barbara Pronin is a contributing editor to RISMedia.