35th Q & A with Thomas and Roberta Standen

A. This anniversary is both exciting and a somber one for me. It is exciting to know our company has made it through so many highs and lows in the market. We have made it through four recessions and four comebacks. It is truly something special to know that my grandfather believed in a viable and valuable business for the real estate lending segment of our industry, and we have now been a successful business for 35 years. I sincerely wish he could be here now to see what we have built from our humble beginnings to the company we have become now.

Roberta: “A fond memory for me goes back to what triggered Note Servicing Center being born. Tom (founder of N.S.C.) accepted the appointment wherein a Real Estate Broker, had arranged for private financing. The Broker then put together a multi-investor (fractionated) note with 165, yes you read this right, One Hundred Sixty-Five (165) Investors in the note. Obviously to most reading this, the note was created in violation of the Federal SEC rules and regulations which allowed (at the time) only 50 investors and the CA laws which limited the investors to 35. To make a long story short, Tom was required to divide the monthly payment of $700.00 and write 165 checks on a monthly basis.

Times were tough, rates were high, but people still wanted/needed to purchase a home. Tom stepped into this market to help people achieve their dream of home ownership by drawing the documents needed to get the financing they needed, and at the same time, helping people sell their home and move on with their lives. California Equity Corporation was born in 1984 to do just this. As agents in the Standen Company sold real estate, CEC would underwrite and originate the seller financing needed to complete the purchase. However, as time went on many of the sellers were coming back to Tom asking the same questions we get today. ‘Now that I have this loan what do I do?’. Many of the people in Mariposa are working class people and were not schooled in finance as Tom was. As a result, when a borrower paid late, or more than the regular monthly payment, or just wanted a payoff, they were not sure what to do next. After hearing this time and time again, Tom decided to add loan servicing to the list of services offered by CEC. From this, the idea of Note Servicing Center was born. The vision for the company was not a grand money-making opportunity, many loan servicers will tell you it’s a volume play, unfortunately there were/still are less than 20,000 people in Mariposa county, volume was not the driver here. The vision for our business was helping others, and it always has been. It’s what drives our people to come to work each day. Even now, 35 years later, the number of loans we service is higher, but the vision Tom had when he started this company lives on. We are now able to help more people than ever before thanks to our office and support staff.”

Thomas: “It was something special to be able to spend 11 years working closely with my grandfather, Tom. Something you have to remember, from 2003 to 2014 there were only a select few working in the office. I was in the office from 7:30 am to 5:30 pm every day, and many weekends were spent at conferences. I would come in early so Tom (Sr.) and I could talk about various issues we faced as a company, with the market place, and sometimes the country as a whole. I learned a lot during these times. Just imagine spending time with your favorite teacher in school and being able to talk and ask whatever question you wanted or needed to and get an answer. That is basically what this time was for, it was for me. I was able to listen to Tom as he dealt with clients, both happy and very angry, this is really where I learned how to deal with people by phone rejoicing with the fortunate and calming the apprehensive. But I think the best memories are those of my family in our office. Working with family is very, very challenging, however one of the nice things is your family always comes first. When my wife and I were newly married she was always welcome in the office, and when we had our kids they were encouraged to come up. I still try to keep those traditions alive, even though we do not have as many family members working here now. I still let my office staff know that their family comes first. The time you spend in the office, while very important to me and our clients, is far less important than the time you spend with your family.

Thomas: “It sounds like I’m making this up, but the most rewarding factor of starting NSC is helping our customers, working everyday alongside my employees, and really just getting to do something new every day. Many people think what we do every day is mundane or boring. Nothing could be further from the truth. There is always something that needs to be resolved, an unexpected issue that needs to be resolved, or a puzzle that needs to be solved. With the constant changes to state and federal regulations, software updates, and customer issues, there is never a dull moment.”

Thomas: Our company has grown from a single person, with a single loan, on a single computer, with a dot matrix push-pull printer, into a company that now employees a team of 12 people with the ability to communicate with all 4,000 borrowers and 2,000 lenders individually via email, or 24/7 through our online platforms. However, the platforms we use do not take away from our roots of one-on-one communication. Many customers prefer to interact with us either in person and by phone, and our staff is large enough to effectively communicate with our call volume, but small enough to where we continue to have a comfortable relationship with our customers. Over the years we have hired the perfect mix of people who understand our business and have a great relationship with our clients.

In addition to our internal factors, our company has teamed up with vendors to assist our clients in various other aspects of loan servicing. We are working with foreclosure companies and attorneys to bring foreclosure services to the loans we service, leveraging their knowledge and resources to bring this service to our clients. Additionally, we have partnered with a tax service to assist our office in paying the appropriate payments to the appropriate entities and on time. Finally, NSC has contracted with US Risk to provide forced placed insurance coverage to protect our client’s investment from loss due to a borrower’s failure to insure their property. We will continue to deepen our business relations in order to provide the best variety of services for our clients.

From the beginning, our company has been service oriented, and over the years, as our clients have changed, the relationships have changed as well. When we were strictly handling the seller carry back lenders, the service was more hands on as we walked the customer(s) through the origination of their loan, in to the servicing of their loan, and then to the sale of the loan if that was something they were looking for. Since our customers have changed to more of a mortgage broker, our role is still one of a supporter; however, it has moved into an information driven role. Our customers now want a servicer they can reach out to by email, or through our website to gather the information needed, and then go on with their day. Now, we are contacted when there is a question that the website or email communication cannot answer. Because of this, our customer service staff is focused on giving their borrowers the best servicing experience available, turning them into repeat borrowers for these mortgage brokers. We see how diverse our client base can be, and we pride ourselves in personalizing our customer service for each client’s needs.

When NSC first began, it was a one man show. At that time, the computer was top of the line, and one man was on one computer doing all of the work. However, with 250 KB of memory and two, 5-inch floppy drives, that thing could write 100 letters in 12 hours! Eventually, we added servers which had tape backups. This was the latest and greatest way to backup important documents and files. With a tape backup, we could backup our important documents to a tape that was between the size of an 8-track tape and a regular cassette tape. If we ever needed something that was stored on these tapes, retrieval was as easy as mailing it off to a company who specialized in the data retrieval, and a week or two later, we would have our backed-up information returned.

Now each employee has a computer that fits their needs, and customer service and operations have an all-in-one computer which never leaves their desks. Our sales representatives have tablets, which are equipped with the same computing power of the all-in-one computers and allows them to access everything they need, even while on the go. We are running a server with 5 terabytes of memory and data backups are automated taking place every 30 minutes. If we need anything from a backup, we are able to have our information within minutes.

The internet has fundamentally changed the way we interact with our customers. Although we still set phone appointments and meet clients in person, we don’t rely on that type of communication to close our servicing transactions. The internet gives us the ability to efficiently obtain the documents needed instead of relying on the mail service or having to meet with someone in person to get the documents needed. Now, most of our customers come to us through web searches on the internet and complete their own note setup right on our website and can attach the documents needed for setup at the same time. If anything is missing, it is just an email away. Additionally, lenders and borrowers are able to login to their accounts through our website, giving them 24/7 access to their accounts.

The internet has also allowed us to automate a lot of our customer interactions. Lenders are notified by email when the borrower makes a payment, and the lender can see how much the borrower paid and how much of that payment he/she will receive. The lender is also notified if the borrower is sent a late notice, if a payment is returned as NSF, and more. The internet has made our processes much simpler which frees us up to create a better customer service experience for our clients, and to give them as much information as possible, as quickly as possible.

In 1984 when Note Servicing Center was a new company, we were processing check payments from borrowers using the precursor to excel, handwriting all of the checks and mailing them out to the lender is what we did and was very time consuming.  Thankfully, we are now able to do so much more.  With current technology, we now pull payments from our borrower accounts, and directly depositing payments to our lender accounts.  We send late notices to borrowers by mail and email, notifying lenders of this the same day.  In the early days, we had no system setup to accomplish this task and notices had to be sent by the lenders.  When we started, we had no way to pay escrow payments to tax and insurance companies.  We currently contract with other companies to have these bills sent directly to our office for payment from the borrower’s escrow account.   Finally, keeping up on the changing regulatory landscape, making internal adjustments to processes, and adding the right staff members to our company, allows us to keep our company moving forward while also protecting our customers.

Customer service has always been a hallmark of Note Servicing Center, this is our greatest strength.  All employees are trained on our systems, programs, and procedures.  Our customer service team however, receives additional training.  We believe as a company in the service industry, it is very crucial that our customer service team knows how to professionally work with people  before they work in assisting our clients.  As a result of the thorough training, our customer service representatives are well equipped and able to answer any questions that our clients may have.  Returning phone calls and voicemail messages are a priority to Note Servicing Center.  It is our goal to returns calls and voicemail messages within 24 hours but I am happy to say that most are returned within the same business day.  Our objective is to help our customers feel like we are working alongside them.  We want our clients to feel confident that we have their best interest and success at heart.

As with any business, Note Servicing Center has faced our own set of challenges.  I started with the company in 2003 and the first real challenge that I can remember was of course the real estate meltdown of 2006.  Things were very tough for several years after that time.   There were many days between 2007 and 2010 where we weren’t sure if Note Servicing Center would make it.  However, we are a family owned company and as far as the Standen family is concerned,  failure is not an option.  We value people and relationships, and we knew that there were a lot of people relying on us, both inside and outside of the company.

The second challenge was a change from one servicing program to another.  We realized we had made a mistake and made the tough decision to go back to the original servicing program.  All of this change happened in a one year time span.  As most of us know changing databases is difficult enough but imagine changing servicing platforms?  There is always risk when moving data, at that time, we had twenty years of servicing transactions that had to be converted from one language to another.  We ran into  many issues,  both in the conversion process and then with the new program itself.    As a result, we decided the best thing to do was to go back to the original servicing program and cut our losses.  Thankfully, the  transition back was a much smoother process.

The third and most impactful challenge was the death of not only the founder of Note Servicing Center, but my personal mentor and grandfather.  Many times, it seems like it was just yesterday that we lost him, but it has been almost five years since his passing.  Thanks to our dedicated staff,  our customers never saw a hiccup or change in the level of service they received.  The loss of the founder, my grandfather, was a very big blow to Note Servicing Center as well as me personally.   I count myself lucky to have been at his side almost every day for the 12 years we worked together.  My goal is to keep the company moving forward with the vision he had for the company.  With the changing times and regulations, I have had to make a  few changes here and there, but always keeping our tagline in mind for our customers “You build your business we save you time and money”.

As a company we are diligently working on our processes.   I project that over the next five years,  NSC will have a smooth, systematic, computer automated process in place.  These changes should not affect how our clients interact with our office staff as our customers will continue to receive the human interactions they have come to know and love.  It’s the many “behind the scenes” operations we conduct for our customers that will be handled in an automated fashion.  I will say, I understand that everyone has their preferred way of communicating and that is why we have and will continue to have options for our clients.  For instance, some clients prefer to have statements physically mailed to them, while others prefer to receive an email, and there are those who don’t want either a mailed statement or an email but would rather go to the website and retrieve their account updates when it is convenient for them.  Lastly, we are always here to pick up the phone if you prefer to call in.  This is how we tailor our systems to our client’s desires and needs and that part of NSC will remain the same.   It’s all about automating the processes while keeping that human touch.

As any business owner,  I wish to see Note Servicing Center expand its position to a leader in our industry.    Over the years, I have seen how larger companies disregard their customer and employee wants and needs for the sake of the bottom line.  This is something I want to avoid at NSC, we have always been a family company, not only family owned but family focused.  As a result, I my long term goal is to grow big enough to support more customers and yet stay small enough to know their names.

It was more of a quote I received than advice:

“Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.” Ronald Regan.

As a recovering workaholic and micromanager this was one of the hardest things for me to do.  I finally had to resign myself to the fact that my team may not do things the way I would and that it would be okay, as long as they were able to get the job done and were not violating any rules or regulation.  I found, to my surprise, they not only got the job done, but were able to do it faster, and better than I could have.  This principal not only spurred action in the office, but it also spurred innovations that I had not thought of on my own.  As  business owner and leader of my company, I encourage others to apply this to their company or division.  It will be difficult at first but I think you will be surprised at how it frees up your time to mentor and lead your team rather than doing everything yourself.

SERVICE Is the definition of NSC!

I use the word service to describe Note Servicing Center as our company was birthed from my grandfather’s desire to serve and help others in the note investing arena.  At the time, my grandmother was a real estate broker and there was a trend that they were seeing.  Because of the economy and high interest rates, it was more difficult for home buyers to obtain affordable home loans.  A lot of sellers were carrying back their loans but didn’t have the skills, time,  or desire to service the loans themselves. That is when my grandfather decided to learn everything he could about loans and servicing.  The rest is history.

We continue to value and serve all of our clients,  from the smallest single member loan to the most complex multi-lender loan.  This is still and always will be  one of our company’s core values.  Every one of our employees is trained to serve our clients by giving them a truly unique experience.  Over the years we have implemented new policies,  procedures, and have updated our software,  all with the intent to better serve or customers.  We will continue to make changes when necessary so that we can continue to offer the best service in the industry.