In the fast-paced world we inhabit, nurturing the roots of our communities often takes a back seat. However, a community thrives when its members are empowered with knowledge that can pave the path to financial stability and growth. Giving back to the community by educating them about mortgages is more than just a philanthropic endeavor. It is an investment in the fabric of society, fostering sustainable growth, and nurturing a culture of mutual respect and support. When individuals are equipped with knowledge, they can make informed decisions that benefit not only themselves but their community as a whole. Today, we have Shawn Karnes of Arvest Bank sharing how they give back to the community by educating them about mortgages.
Serving The Community Through Mortgage Education with Shawn Karnes of Arvest Bank
Listeners I’m excited to have another banker joining us on the call. He runs the mortgage banking division for Arvest Bank. He’s been doing that for the last 13 years. We’re going to hear a story today about how this bank looks at mortgages and how it is being led so successfully. It’s a great story. I’m looking forward to sharing it with you. Joining me on the podcast is my co-host, Marc Helm. Mark, good to have you here, friend.
Glad to be here.
And our guest is Shawn Karnes. Sean, what a joy to meet you and have you here on the podcast.
Yeah. Thank you. Thank you very much for having me join your podcast.
You’re located up in the Oklahoma area and I’m so excited. We have someone that I was really close to who has since passed away and moved on went with a COVID. Unfortunately got caught in the COVID and we lost him, but there’s some great mortgage professionals up there. But let’s start with talking a little bit about yourself, Shawn and if you could give us a little bit of background and where you’re at now, I should give us a context of this. Sean and I met for the first time at the Total Expert Accelerate23 conference. He had a refreshing new attitude about how to approach the market conditions were at, it was just wonderful. He had a large team there at the conference, so he got the tipoff that this was going to be a really good conference. He brought some of his top people there and I was so impressed with the caliber of the people and then how Sean engaged there, at one point in time. Sean was on stage during karaoke night doing great balls of fire, that’s a great song for what’s going on and how you’re approaching this market because you’re going at it with a great ball of fire. So anyway, Sean, so good to have you here. Tell us a little bit about yourself and your background that gets you got you to where you’re at today.
So I’ve been with Arvest, as you said, 13, I’m actually going on 14 years here in the next couple of months been with Arvest before that I was with Wells Fargo for about seven years and just accidentally got into actually after school, I decided, Hey, I need to learn to make money and there was a collection company and I went to work for this collection company. And if anybody knows what it’s like to work for a collection company, when you are calling on somebody else who made that loan, and now you’re the one trying to collect it, it was not a great job and I thought, you know what? I need to be the lender. I don’t want to be that guy that’s collecting on old debt and that’s how I started my career. I worked my way up over the years and now, 20 plus years of being in the mortgage industry. It seems just like yesterday,
Time flies when you’re having fun and making an impact in that. So, you got into this kind of accidentally, I’ll argue that I started in banking they started having me collect and repossess cars and motorcycles that the bank was doing. That’s when the consumer side of the business and I’ll argue that was probably one of the best educations that I could have gotten, because when you go look at a file and they said, here’s a file review, the full credit file, take a look at this, would you have made the loan? because this afternoon you’re going to go repossess that vehicle. You’re going to go repossess that motorcycle. I knew the outcome that the loan had gone bad, but I had a great opportunity to look at it at the beginning. And I go, I would have done this loan. What happened here? What can I learn from this? and I think that is a foundation when you do that consumer finance side of the business for a little bit. I quickly found myself in the mortgage banking division. Thankfully, I did, but it’s a similar path. So, Sean, I celebrate that and what you’re doing, one of the things that impressed me when we talked your approach to mortgage lending and what’s going on in the industry, but it was your overall attitude of how you’re taking on some of the challenges. We’re all hearing about the headwinds that are facing lenders having to do with housing inventory. How are you dealing with this?
Everybody wants to say we have an inventory problem, and we do don’t be wrong in Tulsa, Kansas City, Northwest Arkansas. This is where our bank footprint is and, we just have not kept up with the demand and population. In fact, where we’re at in the Midwest, we’ve had a huge migration of folks from different areas. In fact, Arkansas and Oklahoma had a huge migration of in the top 10, a population increase over the last two or three years. So, we definitely have an inventory shortage but more, it’s inventory. But a lot of folks talk about interest rates and to some extent, it’s neither one of them. What we really have is an education issue. We’re a community bank, and our job is to serve our communities, and the number one way for a bank or any company is to be a servant to that community, and the only way that you can be a servant is through education and what we really have is an education problem. We’ve got lots of this new generation that have not had the fundamentals of understanding the value of buying a home. They still, as they’re coming to this age, they still remember the great recession that they had. So, they’re like, oh, do I want to buy a home? and then there’s this lifestyle where I want to be a nomad. I don’t want to tie myself down to one area. So, I don’t have to worry about the upkeep or taking care of my house.
But what they don’t realize is what housing, even if you do move every few years, how housing is a sound financial decision for most folks there are so many statistics out there that show how generational wealth is done a lot through real estate and you show a family that doesn’t own that’s where you divide,
And it’s so true. I really liked that perspective. So, when you’re talking about education. How are you going about that? First of all, I think it’d be good to say who owns your bank because I think that’s a part of the story and their commitment to housing and serving the communities. It’s a great part of the story.
I think we’re the second or third privately held bank in the United States. Our ownership is the Walton family. Our founder was Sam Walton. What a lot of folks don’t know is Sam Walton, started Walmart actually got started in the banking business before he got into five and dime, which turned into Walmart and one of the things I know there’s a podcast, but I had it right here next to me. It’s a great book, Made in America.
Yes. I love that book. Great book.
His foundation about banks and when he used to start Walmart’s was home ownership He would put a Walmart where he knew that it had a high density of home ownership, this was way back when because if people owned their homes, it created a community and that created of course, us, this community bank that’s out there to serve the community. So that’s what our job is and that’s a little bit of our background, being privately held. We’re always looking at the P&L. We don’t always just think about each quarter. We have the opportunity to think 3 5 even 10 years out. And that’s what we do, and I know for a lot of folks, and definitely want to be sensitive. This has been a tough year. But I look at this year, this is a year of opportunity. This is a year for those that have good roots that you put processes and procedures and now you execute people are looking for folks that can educate them and help them and that’s what we’re doing in the community and that’s where I’m teaching ourselves force to do. So, we’re looking at nontraditional ways of going out and finding out how do we educate people so that we can help them get into homes.
Yeah, and it’s really good. Mark, when you meet Sean even on this podcast, you get a sense for his great balls of fire kind of attitude. He’s going to go find a way to make something happen and one of the things that you did there was. You had one of your, and I’m going to call her a data scientist, but someone who is looking at data, talk about your unique perspective in that regard and how you’re doing that. Cause that was so impressive. What was her name again? I sat next to her at a couple of the sessions.
Erin, she’s a wonderful, wonderful person. As a bank, we have so much information on our customers and you think about it when you do a mortgage application, you have everything on a customer. If you’re taking a good application, this is to those loan officers out there. You know, the age of the children, when their birthdays are so by using data and taking the analytics, we can anticipate or understand when a life event is going to happen so that instead of them calling us, we’re able to start going out to them. Hey, we know that maybe kids are going to graduate or there’s some life event based on the application or the information that we have, and we start looking at ways to start reaching out to them to start that education process. Some people will call it marketing. If you’re just marketing, then You’re wasting your time. People don’t want to be marketed. They want to have an education and understanding on what’s the next steps and who’s going to help guide me in my life path and again, that’s the philosophy of our bank. I love it.
I believe from what you said so far, you developed a very strong culture there that I wish I saw in more mortgage lenders in this country and maybe it’s born by the bank, but I think it’s born by you guys and knowing what your mission in life is that you just explained trying to do get homeownership into the hands of people that really want it and need it. But along the way, I’m sure you’ve done a lot of work on building strong relationships with customers and realtors, could you tell us how your process on that works and what you do to maintain that?
A couple of things. For some of us that started in the sales, I came in. I started on the collection and then I moved to the sale side, and it was so funny. I did whatever I lent, I had to collect on back then. Of course, now with Fannie Mae and Freddie Mac, you’re not necessarily collecting on it. The key is getting in the markets. So, when we have realtors or homebuilders or stuff like that, our team is with them partnering up in the markets, whether it’s through community events or anything they do that. Now, with that said, you can’t just show up and throw up and that’s the end of it. In today’s age, you have to have a solid plan and that’s a follow up plan and it can’t be a sticky note. It can’t be an excel spreadsheet. You have to have a good path to follow up and that’s what we firmly believe in utilizing CRM. A marketing CRM. That is a must.
And I throw in there and you’re specifically using Total Expert. That is yours, Aaron. And what a powerful tool it is. I love it. We’re giving them a shout out here. They’re one of our advertisers, Sean. So, I don’t want to do that.
Yeah, they are an advertiser, but they’re a great partner. We partnered up with them and when you talked about data, being able to utilize data or take those contacts to create journeys so that not everything is me just having to pick up the phone and call but setting up an automatic marketing journey, we talked about this with a realtor so a realtor comes in, we create open house flyers through this CRM, but I can also create a journey with that new realtor. So, let’s say I took an application today, Mark. And I put on there what that realtor is. And if it’s a new realtor, I can put them on a journey that says, hey, I’m going to follow up with them. Hey, thank you for the contract doing this, but I’m going to follow up with them in five days. I’m going to have in 10 days and automated email go out to him. Hey, how’s everything going? Because the key is guys, you can’t grow your business unless you have automation. You can’t just go off the sticky notes anymore or that Excel spreadsheet or what I see so many even on my team and I have to coach them through this or coach our leadership to coach them through it is they, oh, I’ve got it up here, Sean. I can remember. If you can remember everything and you know what I can tell you, you’re not going to be one of our top producers because you’re going to limit your capability. It limits your ability to grow.
What you said is so important and this next question I have is going to sound a little redundant because I think you build a lot of it in your strong relationships with your customers, which is part of the public and realtors, which is part of public. But You mentioned earlier it’s not rate out there and it’s not housing volume necessarily what’s available in the market, but it’s really education of what can be done, and I know you probably go a long way to educate in public on mortgage loans, how to get them, what they mean for you and et cetera. Can you talk a little bit about how y’all complete that mission inside your company?
Yeah, we do it many different ways and when you talked about realtors building a relationship in some markets right now, you got realtors that are a little bit down and sometimes it takes us as the lenders in the bank to get them up because I don’t have inventory to sell or the interest rates too high and it’s funny, I’ll do joint sales calls. I love to get out in the market. I tell any of our 300 folks, we’ll get out into the market, and you tell me where to go. I love to go on a sales call because I love to hear what’s actually happening in the market. And we’ll get out there and this realtor, or our potential builders got this whole hum. I just don’t know these interest rates and the cost and I’m listening to them and I’m like if you’re down, how does your customer feel? and they’ll look at me, sometimes their jaw will drop. I’m pretty bold because it’s up to them. We all have an opportunity to make an impact in somebody’s life and if they come to you and you’re him hauling around. You could be hurting that person from buying that house, taking advantage of that opportunity. So, one of the things we do is we teach our team. How do you talk to realtors? How do you educate them? How do you turn them their prospects into buyers and it’s by talking about the advantages, again, of home ownership the advantages of wealth, talking about appreciation rate, talking about long-term goals? Do you think rates are going to be this high, whether you do or you don’t? those are opportunities because the more that the realtors educated means that they’re partnering with their customer. The customer doesn’t just want a realtor that’s showing them homes. They’re looking for somebody that they trust that’s actually going to help them that’s not just trying to make a commission. That’s actually trying to help me move. I’m getting ready to move my family or whatever else. But the other thing is we also don’t just depend on realtors, and this is a lot to a lot of our loan officers. Sometimes we get stuck in a rut thinking that I have to depend on them in order for me to get business. And if I could show you our office in downtown Tulsa, I would say I look at downtown Tulsa and I see a whole bunch of people out there that have probably never talked to a realtor and they start their home search, not by talking to a realtor but they start online. All of a sudden, they drive by a house, then all of a sudden, they’re pulling up Zillow, or they’re doing this, and they’re starting to look I wonder what the price is in this neighborhood? and that’s where they start their search and then all of a sudden, they get discouraged. But the big thing is I encourage my team to really focus on relationships outside of just realtors, but looking at our commercial customers that we have, how do we get in to educate their employees? How do we get into those companies to be that financial service provider of choice, not just where we talk about home ownership and stewardship, but we talk about full financial stewardship? The other thing that I encourage my team, we work with a junior achievement in all of our states, and I don’t, I’m not sure if you guys are aware of this, but Fannie Mae has really partnered with junior achievement and junior achievement again, the biggest issue we have is education and when you can start teaching kids young about. being financially responsible with their money. It just goes on and before you know it, if you’re doing that as the bank and you’re educating them then before you know it, you get their accounts and they’re coming to you for all that because we want to be that steward. We’re not just here for that bank account or that loan, but we want to help our communities. One of the things again, it’s not just about the mortgage, but it’s about the financial wholeness of that customer so that they can make an impact in the community when we look at our wealth management products, one of the things that we really do well a bank is to make sure that we also communicate when we’re taking an application, we look at opportunities. Hey, you know what? We noticed that this customer let’s just say this. This customer is buying a house. They’re going most people, especially if it’s a young couple they put an individual name, they probably don’t have a will or anything like that. How great would it be if that loan officer called them and said, have you ever thought about this? If something was to happen to one of you, no matter what, this house would go into probate unless you set up a trust, then get him with the trust advisor. Even on our wealth management side, it’s not about thinking about who’s that next millionaire. It’s how do we get you here? at the beginning of life and let’s help you grow together. But yes I think a lot of times what we’ve lost in some mortgage lending, not all, but in some of it is, I think sometimes we got so focused just like some of the realtors have done and some others who got so focused on the commission or one thing that we really forgot about we are a servant to our customers and making that impact and I would tell the team here, your team out there that when you get your priorities right, you could start focusing on the right thing and then it never becomes a sales pitch. It becomes a community message, and you want to get that message out there and I think if people would start thinking about that, we wouldn’t have that call reluctance. We wouldn’t have that. You know what? I’m just going to walk into this business down here and talk to them about mortgage finance and say, hey, I’d love to come in and communicate. and educate your team on the advantages of homeownership. By the way, Mr. Businessman, did you realize that, if you can increase homeownership in the area, you’re going to have higher retention rate with your employees, and I think probably the number one obstacle that you face is probably turnover. It’s the most expensive, right? And they’re going to come back. It’s things like that, educating yourself and knowing in today’s market, you don’t just have to depend on that realtor sending you a loan. You can get out there and be sending realtors loans or sending realtors business to go find houses so you can make that loan for them and that’s the kind of thinking we have to have. Stop that stinking thinking. Stop that stinking thinking.
It’s not sitting there hoping, passing out donuts and rate sheets and hoping they’ll send the business, go create the business and there’s more and more evidence of momentum in that direction as we well know. Especially when you look at, I’m not sure exactly when we’re going to air this particular interview, but right now, what we’re talking about last week on the podcast, again, this week will be the lawsuit between the realtors with the consumer, the class action on the buyer commission side of the deal, the game is changing, Shawn, and you’re seeing that. Give us your perspective on some of the things that’s in your purview out your front window that you’re. Working on to stay competitive in the markets you serve.
I will tell you; it’s definitely utilizing technologies. We talked about understanding the propensity, getting out there, understanding that it is an education process, and we need to be educating them as soon as we make them a customer on all the different things that we have it’s also making sure that you have good follow up because guess what? There’s a big company out there and they do a great job at marketing. In fact, I think that they have like a prize or something out there that if the basketball, if you get all the brackets, you could win a million dollars and they get you to sign up and you opt in and all of a sudden you’ve opted in to getting all this kind of marketing but then again I don’t want to take anything away from that big organization. They can only focus on one thing, right? and that’s just that mortgage and as a bank, again, serving that local community, we’re here to serve, we’re here to understand that real estate market appraisal and all that kind of stuff and walk them through it. And again, I’m not taking anything away from anyone else, but that’s how we have to think. You can’t think like that old banker where I can just sit here, I can work eight to five, drink my coffee, go play golf on Monday and Tuesday, and that’s going to get it done. No, we’ve got to be out there, and we’ve got to be authentic and genuine. We have to utilize technology. We have to understand the propensity of the customer and for our loan officers, if you sell by rate, David, we said this at Total Expert, you die by rate because in a purchase market, it’s not about rate. It’s about coming up with the best solution. An example of that is, is you may have a customer that comes in today. Yeah, they have 20% down, but they’ve also are sitting over here with, 30 or 40,000 in credit card debt that they’re paying 16, 21 whatever usury law interest rate they’re paying for. Why not explain to that customer, Mr. Customer? Let me show you a better way for cash flow. Why don’t you take out that mortgage insurance? This is what it’s going to cost you per month. Use that down payment money to pay off this debt over here at this high interest rate depending on your tax grade, this could be potentially deductible. We can pull this off once your house hits at a certain LTV.
But that’s called education and when we start acting like where we want to serve and stop having that old refi mentality where I’m just an order taker. That’s when you start making a difference and that’s when your business will grow.
Yeah. One of the things we talked about when we first talked about having you come out of the podcast is how corporate relations build strategically through partnerships. These are some of the things. Give us some more insights into what you meant by building strategically. through corporate relations.
One of the things is you utilizing and whether you work for a bank or don’t work for a bank working with commercial lenders out their commercial lenders are going out there and they’re the ones making those big loans where the toiling gas or something like that, somebody’s got to finance all those companies that you see running businesses out there and the key is how do we get in with those commercial lenders to help them have benefit that they provide the employees in that bank and that’s where our in that company and that’s where you as a loan officer really partner with commercial lenders or companies and talking with them and their HR team working with them to come up with a relocation program for those that are you know that are selling to Fannie and Freddie. A lot of people don’t know, but there’s a special reload program that you can use through there that you get better pricing because of the way from a servicing aspect, the way that those loans perform anyway, by going out and partnering with those teams, helping them to understand their corporate relocation, most companies, a lot of people don’t know this. They’re not the one that does the corporate relocation. They hire somebody outside to do that corporate relocation. But a lot of those companies, if you really get in with them, we’ll say, hey, I want to use you, but I need you to use this local bank that we have here because they do this for our customers, or they do that for our customers. The other thing that you do is, one of the things that we believe in is not just an Ellie. We also are working on making sure that we send out to our customers, a total cost analysis where we do a comparison Where we have those different products and show them and we want every customer to have that again so that they have that option and they know exactly what they’re getting into and that we can educate them again, showing them. I know that you said you had 20% down, but you may choose not to do this, but let me show you this option and let me show you over 3 years or 6 years. What this means for you.
That’s really good. One of the things that I experienced when I met you, Sean, is you don’t get down. You are as that song said when you were on stage, goodness, gracious, great balls of fire. You live in a glass half full, go for its attitude. I want to talk about your leadership. I want to talk about how you lead your organization and what is the attitude that’s necessary in today’s market that you find that’s working so well for you guys are market leaders and where you’re in a market, you serve.
I think you just have to wake up with that passion to serve. Take it off yourself, for me, I don’t just think about the customers. I think about all of our associates, not just on the sell side, but our operations team, even our compliance team, wink, wink, but no, because it takes all of them. It takes all of us and making sure that everybody knows what their purpose is. I think too many times people just go to work in a job and I’m going to tell you, I think it’s more felt today than ever because so many people work from home and there’s a big disconnect because they’re working from home, and you lose some of that culture. So, we’ve got to go above and beyond to make sure people understand the why of what they’re doing and, whether it’s the person that’s been here 20 years, or it’s that new recruit that you’re trying to hire, before you hire them, they have to have that passion and understand that why and if their why meets up with our why, then you know what? It’s going to be an attraction and it’s never going to be a job, but it’s going to be a career. It’s going to be a place where I can stair step my way up. That’s what I try to instill with our team. I look at myself if I didn’t have mentors. We are big on mentors. We just hired another group of mentees. So many mortgage companies right now wouldn’t even consider hiring a mentee because of that’s going to drain my P&L, that’s a cost. Sometimes you have to spend a little cost now so that later on, again, we don’t just think about the P&L today or the next year, but we’re really thinking about how do we create that generation going forward? Because unfortunately, too many of our lenders are starting to look like not doing anything wrong, but have the silver hair,
The silver hairs. That’s so true. Very good. I just celebrate how your leadership style and what you’re doing there at Arvest. How big are you guys again? How many loan officers do you have?
So, we’ve got approximately about 200 loan officers and about 500, I say loan officers, but then we also have dual purpose that do a combination of real estate loans and stuff like that, but probably managing around 300 folks that can do some type of mortgage loan with us.
That’s amazing. So, it’s a good size organization, Shawn. I’m just so grateful to have had the opportunity to meet you and your team, I was really impressed, and I was wanting to share with our audience. You, I want our audience to meet you and if you’re competing against you, yeah, you better get there. I’m going to tell anyone better, get their attitude up because your attitude is one that is just going to be infectious and have a positive impact. It’s going to bring business in the door. I really believe it. When you find that you’re communicating out to the communities. One last question I just thought of when you’re communicating out to the communities, what do you find to be the most effective way to do
To partner up that we’re not going out as one, but you partner up whether it’s with a bank branch manager or you’re partnering up with a wealth management. The thing that we do is go out in force. This sounds a little crazy to the team, but we even have loan officers, mortgage loan officers that go out together in the community and they’re in so many organizations. Hey, no, that’s my area. That’s my area. Again, when you stop thinking about you and you start going out as that team, there’s power in numbers. So that’s really how we’re affected, and I will tell you, we are big about community involvement. We have everybody logged their community hours. We want to know what people are doing. We actually have that as part of everyone’s reviews. What are you doing on top of just going out and getting the mortgages going out and getting the sell? But what are you doing in the community to serve?
Yeah, it’s really good. We could go on and on. Mark, any last questions you have before we wrap up?
Just a comment. Listening to you talk today, Sean your enthusiasm is contagious, I can’t wait to see what your company continues to grow to be because I think it will be a company that hundreds of people would enjoy working with and I love your mission and how you’ve established it and it’s something that really need to be heard by people out there and I’m so glad that we’ve done this podcast with you.
Guys, thank you. I will tell you; mortgage is just one piece. We actually have over 270 some odd branches in our four state area and we employ over 6600 folks and the local communities across our footprint and the key is when we say community bank, community bank is a place where you know what the people that work here are the same people that you go to Walmart, with you go to church with, you go to whatever the convenience store with or bowling or golf or whatever else. And that’s what makes Arvest I think a gem and lastly, if I could just share to the folks out there, don’t take away 1 thing or take away at least this 1 thing when I talked about utilizing a CRM, make sure that you stay highly organized. The cycle time now is nothing like we’ve ever seen in the past, how long it takes for that customer to find that house to actually buy that house there. I don’t know that there’s ever been a time in history that could take so long. So having a good follow up plan, utilizing a CRM, Total Expert, or whatever it is, utilizing something to make sure you don’t miss out on that opportunity. Because if you’re not doing it, let me tell you, somebody else is as soon as you pull credit or do something on that customer. So, it’s up to you. If you’re going to be successful in this business, you better have a process and a procedure and a plan for follow up.
So good. Very good. You could keep this interview going forever. Mark. Thanks for joining on the interview. Sean. Thank you so much for being here and sharing some thoughts with our listening audience.
Very much appreciated.
Yes, sir.
Thank you, guys.
Thank you.
Important Links
- Arvest Bank
- LinkedIn – Shawn Karnes
About Shawn Karnes
Shawn Karnes has served in leadership roles for many years. The last 13 have been with Arvest Bank in the mortgage industry. He is currently Executive Director, Mortgage Sales & Development for Arvest, which serves over 270,000 mortgage customers nationwide totaling over $50 billion.
Shawn’s role includes overseeing and developing sales initiatives, marketing, and training; however, Shawn’s greatest passion is people. He has an inherent ability to identify strengths and encourage people to utilize their individual talents to reach their full potential. He is a motivator and a coach; he lives and breathes his company’s mission statement of “people helping people”.
Currently, Shawn is a member of the Residential Loan Production Committee for the MBA. Shawn served as commissioner for the State of Oklahoma department of consumer credit. Additionally, he is a past President of the Oklahoma Mortgage Bankers Association and has been a director on numerous committees and charities.
His most significant title is husband to Tara for 24 years and dad to Hannah, Hayden, and Gabriella.
Shawn wants to dedicate this podcast to Kent Carter.