WE’RE HEARING I’m going to take a break from talking about football this week to discuss something more important. I can’t believe I wrote that, especially after the games we saw last week. But even after giving it a second thought, I must conclude that understanding our own business is more important than understanding why so many of the assumptions underlying my fantasy football picks were so far off.
This is just the beginning of the season and the lessons we learn early on will fuel the changes required to bring the best teams to the playoffs. You can bet there are plenty of football players sitting in the locker room this week going over the films, learning from their mistakes and from those they still hope to beat.
Our game isn’t that different. What we learn by analyzing the numbers from previous quarters can fuel changes that allow us to come through the year with better numbers. This may be critical for publicly traded institutions who must show improvement or explain it to shareholders, but it’s also important to even the smallest team as they try to make the most of the recovery.
With that in mind, Stratmor recently completed its midyear survey. With over 100 institutions taking part, the questions were designed to get to the heart of what lenders were doing to shore up their businesses in the face of a quickly changing regulatory landscape. Think football players competing on a field where the line judges were free to move the first down markers at will. Or, perhaps more appropriately, hide them altogether and just tell you when the ball had traveled far enough—after the whistle blows and the play is over. That’s a tough game.
Despite that, the responses to this survey were generally upbeat, with lenders taking actions they hoped would put them in good stead with the regulators but also give them a fighting chance to win the game.
I can’t share everything with you from the survey, not because we’re trying to sell it, but because those firms who were willing to share their responses with us are the only ones who can and should benefit from the entire survey. An unwritten (or perhaps it is written down somewhere) rule of the peer review process. But I can share some very interesting “game stats,” if you will, from the first half.
Of the companies we surveyed, over half had added sales staff during the third quarter as a result of what they had learned/experienced during the first half. About 30% had thinned their teams, but mostly in the back office, the fulfillment department. Few institutions were willing to cut their sales staff. In fact, 73% of respondents—a group that was comprised of both independent and bank-owned mortgage operations—said they would not cut loan officers or account officers this year.
It’s gotta feel good to know that your team owner doesn’t have plans to cut you from the starting lineup. But if football has taught us anything about the mortgage business, and I don’t know anyone who would expect it to, one bad game can get you benched. If you kill someone, you can get tossed off the team completely. Of course, in our game, it doesn’t have to get that drastic. Just provide some negative borrower experiences and you’ll see what I mean.
If you want to know more about the midyear survey and our future surveys, drop me a line.
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience, from Fortune 500 companies to startups, including management of two of the most successful mortgage e-commerce platforms. He was formerly with Chase Manhattan Mortgage and ABN Amro, where he was a senior executive during the sale of its mortgage group to Citigroup.
