Musician segues into mortgages

Who could have imagined that a rock bassist who performed for years with a popular South Side band and even appeared on Dick Clark's "American Bandstand" TV show would transform himself into a very successful mortgage banker?

That is exactly what Joe Cuttone of The Hounds, and later bassist for solo artist John Hunter, did.

In 1986, after opening for Foghat and REO Speedwagon as part of The Hounds, having a contract with Columbia Records and appearing on "American Bandstand" alongside Hunter, Cuttone gave up music for mortgages.

"I had two kids at the time and hated Los Angeles. As bass player, I had handled most of the business for the band, so when I heard about a job here, I borrowed my dad's suit and tucked an 8-inch braid into the back of my shirt and went for an interview," Cuttone said.

He was hired as a loan officer by Tom Rank, founder of today's Lisle-based American Fidelity Mortgage. Rank was a Realtor with Century 21 in Naperville who had seen a need for a mortgage company that could serve the real estate community by offering a variety of programs and products from a number of different lenders.

"This was the original mortgage broker concept," Cuttone said. "A broker could take a loan and place it with a number of different lenders. They took the idea from insurance brokers who sold policies for a variety of companies."

Rank had started his Naperville-based company, which was originally called "Century 21 Alumni Mortgage," in 1981. Cuttone went to work for Rank in 1986.

Two years later the firm became a true mortgage banking firm because, by then, it had its own money to fund the loans and just sold the servicing to other companies. In this way, Cuttone said, they were able to offer their customers better rates.

Over the years the company changed names and locations two more times, becoming Alumni Mortgage in 1995 and American Fidelity Mortgage a year after that. Wheaton became its home base for several years and then in 2010 the company moved to its current headquarters in Lisle.

During this time, Cuttone capitalized on his sales personality and became the firm's top producer, simultaneously progressing up the ladder to manager, then vice president, then president. He purchased the company from Rank in 2006.

Today American Fidelity Mortgage is a "direct endorsed underwriter" for FHA loans and an automatic underwriter for VA loans. This means the company has the ability to approve those types of loans in-house.

"But ours is still a small, local company by design. We have 48 employees and probably write about 1,200 loans per year, mainly in Illinois. But we also do a few in Indiana and Wisconsin. Our average volume is $500 million in loans per year," Cuttone said.

American Fidelity has also become known for writing reverse mortgages, which are designed for senior citizens, becoming one of the Top 100 endorsers of these mortgages in the country.

"I have a healthy skepticism of this type of loan and don't believe they are right for everyone. We didn't really start selling them heavily until I hired Rich Glover, who is a member of the National Reverse Mortgage Lenders Association and has a real passion for these loans. Members of his team are the only ones who handle them for us because it takes a certain mindset to do them and I don't want to ramrod people into them," Cuttone said.

In 2010, during the recession, he invested his time and money in obtaining a cloud-based loan-origination system so American Fidelity could better compete with the big companies. The system allows secure, online preapproval applications and also enables its loan officers to work securely from their laptops off-site.

Then, at the end of 2014, Cuttone chose to trim back the firm. American Fidelity Mortgage had grown to 14 branches and Cuttone felt it had become too big and impersonal with too many layers.

"When you own a company, you want to make sure your people are presenting the company in a way that is professional, honest and caring and in this business, you want to make sure that the real estate agents have confidence in you. To earn that confidence, I had to work harder than everyone else and I didn't want to lose that.

"I wanted to make sure that we maintained our quality because ours is a referral business and we need to make sure our customers are so satisfied that they will come back for their next loan," he explained.

So Cuttone chose to make American Fidelity Mortgage leaner and more controllable. It became a boutique mortgage banker that could embrace and lead its customers through the complicated mortgage process and offer free pre-approvals for people seeking to buy a new home. He also hired Frank Zak from Chase to run the day-to-day operations.

Cuttone went back on the street to meet the customers and write loans, meeting clients in real estate offices or wherever is most convenient.

"In the future, I see American Fidelity Mortgage continuing to fill the void between the large and medium companies. Since we are locally owned and we do business where we live, go to church and where our children went to school, people know us and feel comfortable doing business with us," he said.

"This is a family business. My son, daughter, wife, sister, brother-in-law and niece all work here and we also have lots of friends working for us. They know they have to do a great job or Thanksgiving dinner will be miserable," he quipped.

American Fidelity Mortgage, which is celebrating its 35th anniversary this year, is the fifth oldest licensed mortgage banking company in Illinois. For more information, call (630) 681-1010.