When you ask Ralph K. Little about the phenomenal success of his company, he rolls out a six-foot piece of paper and the bar graphs show why Little & Co. has been on the INC. 500 list of the fastest growing companies in America for three consecutive years.
Working his mortgage assistance company virtually alone in 1980, Little had sales of $45,000, but thatn increased to $6.2 million in 1988. And 1989 could bring the total to $9 million.
Little's success probably can be attributed to two things: finding a void and developing a service to fill it and being willing to expand the company when other clients became available.
Little's firm helps mortgage companies determine why borrowers are a few months behind in their payments and, if a house has been abandoned or foreclosed, to make repairs and secure it against vandalism or weather-related damage.
Although Little & Co. doesn't do much business in Utah, Little chooses to maintain his office at 2681 Parleys Way, and 4,000 field representatives help him operate in every part of the country. His completely automated operation keeps him in constant contact with the field and his clients.
At the request of mortgage companies, Little sends employees to interview mortgage holders to determine why they are behind in their payments. It could by illness, loss of a job or a death, but sometimes people just walk away from a house and leave the state.
Little doesn't make recommendations on what a mortgage company should do with the delinquent mortgage holder, but his reports about the prospects of a person getting a new job or going back to work following an illness help the mortgage company make adjustments in the payment schedule.
"Most people behind in their mortgage payments try to hide from the mortgage company, but if they communicate, their mortgage company will work with them," said Little.
Divorce is the main reason people default on mortgages, Little said, followed closely by a lack of moral commitment to pay off the obligation. He said a change in the way loans are made by mortgage companies also contributes heavily to the increasing number of foreclosures because salesmen are so anxious to make a loan and get a commission they often don't throughtly investigate the prospectiveborrower.
In the 1970's when inflation was high, Little said many people could make money by selling a house after only six months of occupancy. But now, people must be committed to paying for a house for many years before realizing a profit and many young people aren't willing to do that, he said.
Little said mortgage companies have an interest in avoiding foreclosure because they make money when the payments keep coming in. "Foreclosure is the last resort for both sides," he said.
The second part of Little's operation is security and property maintenance, an important item because the mortgage company has an interest in maintaining a house so it can be sold to a new owner quickly.
Serving as the eyes and ears of the mortgage company, Little's employees report on the condition of the house when they interview the purchasers on why they are delinuent in their payments.
After the house has been foreclosed, Little usually changes the locks, shuts the windows, drains the water lines and puts anti-freeze in the sink traps to avoid damage in the winter. Garbage is removed and lawns cut.
Little had good intentions about a college education and in the summer of 1968 enrolled at the University of Utah. After a mission for The Church of Jesus Christ of Latter-day Saints, Little was back at the U. of U. in 1971.
In 1974 he got married, quit school and sold real estate until 1978. He knew real estate wasn't his field because even in the "hot" real estate market of the 1970s he didn't do very well.
He thought back to 1974 when he worked part-time for a mortgage company interviewing delinquent borrowers. He hustled then to make the contacts and completed a month of work in 10 days.
While still selling real estate, Little made some telephone calls to mortgage companies that had loans in Utah, asking if he could find out why people were delinquent and submit reports on the reasons. He got some accounts and soon his territory expanded to Ogden, provo, southeastern idaho and Denver.
Eventually he hired people to do the work in Denver so he wouldn't have to travel so much. By 1983 he was content because his business expanded to 12 western states and had $450,000 in sales.
Calls from First Security Mortgage in Utah and ICM in Denver changed the status quo in a big way. With those two companies added as clients, Little and Co. expanded quickly and now he more than 60 clients receiving his reports on delinquent borrowers within 10 days.