Cook is a pioneer in financial services since her earliest days in the industry. Hear her personal journey for as a woman in the finance space who has risen to the highest level of her business and took the company public in the midst of a global pandemic. Hear how Finance of America helps advance women into leadership positions and offers other women in the industry advice on how to advance their own careers.
Transcription:
00:00:09:18 - 00:00:24:13
Heidi Patalano
Hi. I'm Heidi Patalano editor in chief of National Mortgage News. Here with me today for today's Arizent Leaders Session is Patti Cook, CEO of Finance of America. So glad to have you with us today, Patty.
00:00:25:10 - 00:00:28:01
Patti Cook
Thanks, Heidi. I'm delighted to be joining you.
00:00:28:13 - 00:00:56:07
Heidi Patalano
Yeah, well, I love that our theme today is about, you know, discussing your your journey as a woman in the finance space. You know, looking back on how you started all the way, you know, to taking Finance of America public last year. You know, it's quite a serendipitous time for us to do this because between when we initiated, you know, started discussing doing this talk and now you had actually announced an imminent retirement for you.
00:00:56:23 - 00:01:20:24
Heidi Patalano
So I think it's a really great time to look back on all of your huge accomplishments and accomplishments in your career and kind of and talk about your journey. So I guess I wanted to start off by discussing your early career when you were starting out. You you began at Salomon Brothers as one of the only female MBAs on Wall Street.
00:01:21:10 - 00:01:28:16
Heidi Patalano
So I wanted to ask, you know, what were some of the first challenges you faced when you started your career?
00:01:29:18 - 00:02:00:21
Patti Cook
So it's interesting, just to go a step before that, I was an education major undergraduate decided to go back and get my MBA when I graduated. And that was, you know, in the late seventies when women MBAs were rare. It was still a novel thing. It's hard to believe, right, because now we just take it for granted. But at the time, it was unusual That's important because it set the groundwork for me to be able to secure a job on Wall Street.
00:02:00:22 - 00:02:36:08
Patti Cook
They were looking for women. Solomon Brothers was a really interesting culture. If you looked at my background, I didn't necessarily have the white shoe pedigree in my education I went to St Mary's College, got my MBA at NYU, but Solomon Brothers was really just looking for energetic, aggressive hardworking people. So I landed there in 1979. I spent 12 years there, and during that time period, Solomon Brothers was at the forefront of fixed income and innovation.
00:02:36:24 - 00:03:01:10
Patti Cook
Hard to believe. I spent my career pretty much in the mortgage market. Mortgage backed securities barely existed in 1980. So the environment at the time was electric. It was incredibly motivating, to be honest. Even though there were few of us as females that were sitting on that trading floor, I never felt like I stuck out because of it.
00:03:02:09 - 00:03:40:07
Patti Cook
I really felt welcome. I felt I was, you know, looked at equally relative to my male peers. Honestly, the only time my being a female came up was the first time I was pregnant and it was 1983 and I told my boss and he's like, Oh my gosh, I'm not even sure what our paternity policy is. And then I went on to have three children in five years, which my boss at the time and I see him still and he used to kid me and say, I think he still had the record for the woman with the most maternity leave that Solomon brother.
00:03:40:22 - 00:04:02:15
Patti Cook
So at the end of the day, I don't think I never felt held back because I was a female and yet I felt good about the fact that I was there and that we were charting a new path for women on Wall Street just by the evidence of us being there.
00:04:03:10 - 00:04:18:11
Heidi Patalano
Right. Right. Well, that's another thing I wanted to ask you. Was there anyone like your peers you're in or anyone that you look to as you were starting out as kind of an inspiration that really kind of drew you to that field?
00:04:19:06 - 00:04:43:11
Patti Cook
You know, I think it's interesting if you go back at the time among women generally, it was in a way, a challenging time. Some women were choosing to stay home and others were choosing to pursue a career. And really, there was tension in a way between women when they got together. Those that were staying home might it felt badly they were giving up a career.
00:04:43:11 - 00:05:03:09
Patti Cook
And obviously, those that were choosing to work and have children look like they were making a decision, you know, not to be sort of an at home mom. So there was a little bit of that dialog going on. I think in terms of the mentorship, the women that were at Solomon at the time did have a strong bond with each other.
00:05:03:20 - 00:05:23:03
Patti Cook
Right. We were sharing our our issues, our challenges, you know, how do you support your family and at the same time pursue your career? So it wasn't like I had one mentor, but I did find encouragement and camaraderie with the other women that were on Wall Street at the time.
00:05:23:18 - 00:05:52:19
Heidi Patalano
Yeah. Yeah. And, you know, and today there are like more organizations and programs that kind of do that that fostered this kind of camaraderie and mentorship. So I wanted to ask about that as well, like how you've seen this kind of support network grow as you've grown in your career, like this kind of environment that that that supports women.
00:05:53:15 - 00:06:17:24
Patti Cook
Yeah. The biggest change, I think, between my early career and today is the flexibility in the workplace. There was really no option in the eighties to do anything other. I was on the trading floor, right? You had to be at your desk between seven and seven 30 and you were leaving at night, you know, five 30, 6:00, and there was really no other option.
00:06:18:05 - 00:06:48:23
Patti Cook
You weren't leaving early, you were working from home on Fridays. And I think what's happened is and look, COVID even put this on steroids was the ability to have some flexibility and work from home and finance. America has always had that policy. So we look for the best talent that we can find. And if that individual has some requirements to be in the office part time, we're willing to accommodate it.
00:06:49:04 - 00:07:09:20
Patti Cook
And I think as a result, we've attracted a lot of people that might have turned a more constrictive culture into terms of nine to five every day, five days a week. So I think there's more flexibility in the workplace generally, and clearly that benefits everybody. But particularly women.
00:07:10:11 - 00:07:42:02
Heidi Patalano
Yeah, absolutely. Yeah, that is very interesting. I mean, COVID has really changed. It changed so many extreme ways. Yeah. Yeah, absolutely. So I wanted to see if, you know, if you look back, you know, I think it's great that you you had this kind of community as you were starting out, but is there anything that you wish you knew or that or wisdom that you impart to people as they're starting out, particularly women in this space?
00:07:43:24 - 00:08:14:17
Patti Cook
So I think the advice I give is sort of gendered neutral, and it's not really directed towards women, although I think it certainly helps one think about how they balance the multiple demands that any one of us has in their lives. So here's what I would say. The first thing is if you show up every day and it's excellence first and you give it your cheers the best that you can be.
00:08:14:22 - 00:08:39:20
Patti Cook
Over time, excellence is rewarded Right. It's, you know, somebody just to digress for a second, some people would say to me, wow, how did you plan your path to be the CEO of a financial services company that went public? And my answer is, oh, my gosh, that wasn't even on my radar screen when I started but what was was I wanted to do well.
00:08:39:20 - 00:09:00:02
Patti Cook
I wanted to work hard and I wanted to get recognized for it. So I think that's my first advice to anybody. I mentor male or female. The second thing is, you know, people say one can have it all. You can be, you know, an A-plus as a parent is a worker, is it daughter, is a husband is a sister.
00:09:00:11 - 00:09:40:22
Patti Cook
And the reality is you've got to balance that overall. You need to sit back and look at your scorecard and how you're doing on all those dimensions, No one at the exclusion of the other. And you're always balancing where you're spending your time and your effort and trying to do the best at all of them. So I would say don't beat yourself up if you feel, oh, I feel badly because today I miss my child's soccer game or I feel badly because I left work and went home and didn't give it a second thought because I had three kids to take care of.
00:09:41:08 - 00:10:04:14
Patti Cook
So I think the reality is figuring out what's good for you and manage thing and balancing those different those different priorities. Like I often say, I don't think I got straight A's all the time in all those categories. But when I sat back, I felt that I got an overall all for doing the best I could to balance those different priorities.
00:10:05:10 - 00:10:33:17
Heidi Patalano
Yeah, yeah. And it's true. I mean, it does really apply to both genders. It doesn't, you know, you don't have to have this specifically, you know, for all of us, we have to balance all of those things. Yeah, that makes a lot of sense. So, you know, you did speak earlier to you know, how Finance of America creates flexibility for their employees and how that benefits them.
00:10:34:05 - 00:10:49:07
Heidi Patalano
What about leadership, mentoring, you know, fostering talent, helping people to see the trajectory of their lives and build a career What would you say that the company does? And what would you say is advice for that?
00:10:50:10 - 00:11:22:22
Patti Cook
So, you know, I look at it this way and a company has a responsibility to their employees and the responsibility they have to the employees is to be clear about those expectations, to pay them well for delivering on those expectations, to provide a great place to work where they are. They feel the value that they are contributing, and then ultimately to design a career path for them.
00:11:23:08 - 00:11:45:02
Patti Cook
So I take great pride in the ten year when I look at the people that we've hired and how committed they are to finance in America, how long they've stayed the level of employee engagement. So we're committed to it as a company across the board. We want to do the right thing all the time. For our employees, and I think we honor that promise.
00:11:45:20 - 00:11:48:00
Heidi Patalano
Yeah, we have leadership.
00:11:48:00 - 00:12:25:09
Patti Cook
Training. There are ways for them to contribute outside their job, for example, where really escalating our efforts and we've created some focus groups and working groups among the population about how to really make sure we're doing substantive work. As it relates to DNI, that's a huge employee engagement for those that are passionate about the issue, that's an awesome opportunity to do something other than their day job that they feel adds to the fabric of finance of America.
00:12:25:23 - 00:12:54:11
Heidi Patalano
Yeah, well, you know, this is all really interesting also in the concept and in the context of like the great resignation that we always hear about. It's it's really important to be an employer of choice. You really want to make your as a company, you want to be attractive to employees So I think I think that's interesting, like when you're trying to core talents that you want and retain talent, that you have these programs that ensure that they want to stay engaged.
00:12:54:15 - 00:12:54:22
Heidi Patalano
Right.
00:12:55:18 - 00:13:22:17
Patti Cook
And that was a big decision for us coming out of COVID. Right. I think companies across the board are struggling with what their policy is going to be about, work from home versus man some time back in the office. And we're really going back to the same policy we had, pre-COVID, which is we're flexible. Right. Right. Not requiring people to be back five days a week, three days a week, two days a week.
00:13:22:17 - 00:13:34:04
Patti Cook
We're really leaving it up to the managers to decide what works best for that particular area. And I think that's a huge competitive advantage when we're trying to recruit.
00:13:34:19 - 00:13:52:01
Heidi Patalano
Yeah, absolutely. Do you find that, like, what are those groups kind of coming to like it like one day a week that they all agree on, perhaps hourly? What are some of the work that the set up that some of these teams have come up with?
00:13:52:09 - 00:14:19:16
Patti Cook
Just it's really in flux and very much up to the individual managers. But I would say if there's a theme it's the recognition that being together for some part of the week is important. For some businesses, it may be two days a week for others it may be three. I mean, we have some areas of the company where you need to be in the office five days a week, and we had to provide for that safely.
00:14:19:17 - 00:14:54:13
Patti Cook
During COVID. So I think you're going to see a pretty diverse set of answers across the company. You know, at the end of the day, Finance of America, like other lending services companies, basically there is a sales culture, right? We're trying to do more loans with more people every day. And I think the energy that you need to be successful at that is contagious when you're together So if you look at our distributed retail network, we have 300 branches.
00:14:54:19 - 00:15:20:00
Patti Cook
Those branch managers and their employees are dying to get back in the office. Because the energy they get from each other fuels the success of that brand and its volume. So it's going to be very different, whereas underwriters probably are absolutely as productive at home, if not more so than they are in the office. So it's really a different answer depending on the activity.
00:15:20:00 - 00:15:21:16
Patti Cook
And I'm proud that we're able to do that.
00:15:22:19 - 00:15:52:14
Heidi Patalano
Yeah, yeah, definitely. I can see both sides of that. Certainly in media, it's great to be around your colleagues and workshop a headline and all that, so I can relate. You know, it is a different you know, we are looking at a moment of transition right now and I know Finance of America itself has shifted. You know, my colleague Bonnie Sinek interviewed you just a couple of weeks ago about your kind of counter cycle strategies and product diversity.
00:15:53:09 - 00:16:10:24
Heidi Patalano
So I guess I wanted to hear more about that. I mean, we did also just see recently that your president of Mortgage is departing. So there's lots of changes happening at Finance of America itself right now. And I just wonder if you could speak to those changes and what you're trying to line up ahead for sure.
00:16:11:00 - 00:16:39:15
Patti Cook
I mean, I look back on it and I think about how we describe the companies. We were getting ready to go public so this even goes back, you know, 15 plus months. And we talked about creating a company purposely to be able to withstand the cyclicality of the mortgage market. Little did I realize that that thesis would be tested to the extent that it's being tested right now.
00:16:40:02 - 00:17:10:00
Patti Cook
Right. We've seen a dramatic increase in rates. We've seen a dramatic fall in the expectation for refi so there's a lot of excess capacity in the mortgage market. The beauty for us is the thesis that we laid out is playing out. If you look at our fourth quarter earnings, right, we hit our range of guidance for the fourth quarter when most of our mortgage only peers did not.
00:17:10:16 - 00:17:44:07
Patti Cook
They generally suffered a greater decline in their earnings quarter over quarter than we did. Why our mortgage business behaved similarly to theirs. But our S.F. and F. S, F and s business where we house reverse commercial home improvement portfolio management lender services ten incredibly well. So the buffer that we expected them to provide during the downturn in the mortgage market was the case.
00:17:44:17 - 00:18:17:18
Patti Cook
And we guided for the first quarter a similar result. The expectation being mortgage is going to struggle to break even make a little bit of money. And yet these other businesses continue down the path of good solid volume margins and profitability. So I look at the way we describe the company and like I said, it's getting tested in the markets right now and fortunately behaving as we would have suggested it would Right.
00:18:17:18 - 00:18:45:10
Heidi Patalano
Right. That's very interesting. I, I love that that was kind of baked into it. So I would imagine that going forward you're looking to make more investment in, in those other products, in those other product lines. Can you talk about for example? Well, I guess I could also say, you know, you're looking for your replacement right now and you're looking for your successor.
00:18:45:23 - 00:18:48:16
Patti Cook
And I would We are. Yeah, right.
00:18:48:17 - 00:18:58:21
Heidi Patalano
Right. And so you'll be retiring once this person comes on board. So what are you looking for in this person in terms of their expertize?
00:19:00:13 - 00:19:31:13
Patti Cook
So I'd say a couple of things about it. I mean, I think I was uniquely qualified maybe to do what I was asked to do from 2016 until we took the company public. And what I relied on in order to be able to take the multiple of companies that we purchased on board them, integrate them, optimize them, make money and get it in a position to take the company.
00:19:31:13 - 00:19:58:08
Patti Cook
Public really played to my strengths of experience in the mortgage market, my capital markets background and my understanding of mortgage operations. So I look at that. I'm proud of it and I think I was the right person at the right time. I think today, as I look at it, for me personally, you know, ringing that bell on the New York Stock Exchange, was probably the pinnacle of my career.
00:19:58:20 - 00:20:26:04
Patti Cook
And I think it's time for me to do something else. And at the same time, I think we'll look for a leader that has not only sort of great energy, great leadership skills, but probably has a slightly different background than mine. Maybe a little more time spent on the customer, the customer journey, the digitization of the overall customer experience, than you'd see in my background.
00:20:26:13 - 00:20:33:08
Patti Cook
So I think it's somebody that can is a great leader, has a lot of energy with a slightly different background than I have.
00:20:34:16 - 00:20:50:18
Heidi Patalano
Right, right. Well, that's that brings me to another question that I want to ask you about in terms of the emerging tech that you're seeing out there that you're interested in. I wanted to talk more about the company's priorities in the tech space. So what could you say to that?
00:20:51:06 - 00:21:29:06
Patti Cook
Yeah, and actually, just to refresh for a minute, on our earnings calls, we've talked about three priorities, right? One is optimizing the mortgage business. One is continuing to invest in S7's, and the other is to invest in our data technology and infrastructure. And I think what's really interesting in the lending markets in consumer lending overall is I think finally, tech digital is playing a meaningful role in the strategic imperatives for these companies.
00:21:29:16 - 00:22:00:10
Patti Cook
So I've looked at the mortgage business a long time and for years as technology engineers, advanced mortgages got left behind. Right. They're complicated. They're highly regulatory. It was hard to make meaningful change in mortgage that that has changed. You're seeing it on the front end trying to empower the customer with more tools, letting them choose how they want to interact with us, and ultimately improving and reducing the cost of the overall process.
00:22:00:19 - 00:22:21:03
Patti Cook
So that is an important investment that we are making. So what are the tools that we want to give our customer to empower them? And then how can we modernize the backend of our process to reduce costs? It's one of our three key strategic priorities.
00:22:21:15 - 00:22:30:15
Heidi Patalano
Hmm. Could you dig into that a lot a bit about the back end and which parts that need the updating the digital, the more the increased efficiencies?
00:22:31:18 - 00:22:59:03
Patti Cook
Yeah, I think you can look at automation, and the first thing you're going to do is look at all the things that you do manually that can be automated. And in the mortgage market, there's still a fair amount of it. How can you use I'm going to say digital tools to improve the process? Right. How do you make the application easy to fill out?
00:22:59:09 - 00:23:23:00
Patti Cook
How do you be how do you leverage the data that you're getting from that customer? In the next loan, they might want to do with you. So I think it's thinking about everything that's manual, that's burdensome, that's analog, and trying to figure out how to modernize it, digitize it, etc..
00:23:23:19 - 00:23:32:24
Heidi Patalano
Right, right. Right. And there's also that aspect of like the lead generation for the other loans, basically, like who will be ripe for a home improvement.
00:23:33:24 - 00:24:11:10
Patti Cook
Totally. So that actually so in addition to being efficient, we want to think about how to keep that customer close and do more with them over their life. And that's a combination of expanding our product suite. So we have reverse. We have home improvement. We will look at student loans, personal loans, in order to cultivate that relationship with the borrower and give them the tools they need to manage the liability side of their own balance sheet.
00:24:11:20 - 00:24:22:14
Patti Cook
So it's all about empowering customers, giving them the tools they need to manage their own sort of financial objectives.
00:24:23:04 - 00:24:24:02
Heidi Patalano
Hmm. Mm hmm.
00:24:24:07 - 00:24:47:23
Patti Cook
Yeah. And I think we're all going to compete for that wallet right? If you look at all our competitors, whether it's Delphi or Loan Depot or Rocket on the mortgage side. Marcus it's a theme you're going to hear from all of us. So we believe at Finance of America, we've got a little bit of an edge just in terms of the number of products that we have.
00:24:48:06 - 00:24:57:02
Patti Cook
But it is a theme about customer empowerment that I think you're seeing in the industry. And I think it's real right Exactly.
00:24:57:02 - 00:25:23:09
Heidi Patalano
One stop shop. I hear that all the time. Once I know the ideal Right. Right. I mean, it makes a lot of sense. There's going to be like inefficiency built into that. If there's just one place you go to for all of these products, all of these things to manage Yeah, that's really exciting. So, you know, are you can you say is the company looking to make any acquisitions going forward?
00:25:23:12 - 00:25:25:03
Heidi Patalano
Or in terms of.
00:25:26:03 - 00:25:59:21
Patti Cook
Yeah, I think we get that question a lot because people look at the history and see that we've bought over the last seven years. 20 odd companies, I think to extrapolate from that into the future is different because we bought those companies to form Finance of America. We didn't build it organically. We built the company through acquisitions. Now that we have sort of the critical mass to do what we do, the acquisitions now will be much more opportunistic.
00:26:00:09 - 00:26:29:09
Patti Cook
You know, it could be that it adds to existing to an existing business, or it could be that it gives us a toehold in something new. The home improvement business is a good example. Pretty small company. They were coming out of bankruptcy, but we were able to buy their infrastructure, their technology for not a lot of money and leverage that into a new vertical for us, which is home improvement and personal types of loans.
00:26:29:19 - 00:26:40:24
Patti Cook
So I think the acquisitions going forward will be much less frequent than they were in the past. And they're more sort of opportunistic.
00:26:41:12 - 00:26:41:24
Heidi Patalano
Right?
00:26:42:07 - 00:26:46:06
Patti Cook
As opposed to a core part of our strategy to build the company.
00:26:46:19 - 00:27:02:03
Heidi Patalano
Right. Right. Yeah. So, you know, this is the news that you are retiring, of course, was was big. What do you plan? Can you say anything about what you plan to do? Following what? Well, I'm sure now.
00:27:02:13 - 00:27:27:03
Patti Cook
Yeah. It's funny, I've gotten a lot of advice from friends that have retired. Some say you need a plan. Others say you don't need a plan. You know, you'll figure it out once you retire. I think my goal initially I'm going with the I'm not overcommitting to a lot of things that I might want to do, post-retirement. I think I'm going to evaluate the landscape.
00:27:27:03 - 00:27:53:07
Patti Cook
I want to spend more time with my family. I've got six grandchildren. I want to travel and then I'm going to have to figure out, you know, what it means to retire from a job and stay into actually active, curious and maybe engaged. You know, you could look at boards, you could look at volunteer work. You could look at some consulting.
00:27:53:18 - 00:28:03:11
Patti Cook
I want to wait and see how I feel to decide how committed I want to be to something that might still kind of fall under the work heading, if that makes sense.
00:28:03:17 - 00:28:07:13
Heidi Patalano
Right. Right. And then also maybe write your memoirs. I mean.
00:28:07:24 - 00:28:21:09
Patti Cook
A great yeah. Right. But people will say to me, Patti, you ought to write a book. I don't know if that's something I'm necessarily good at, nor do I think it's necessarily all that interesting. But know. We'll see.
00:28:21:21 - 00:28:22:18
Heidi Patalano
Yeah. Yeah.
00:28:23:05 - 00:28:41:08
Patti Cook
It's been you know, I have to say, I'm incredibly grateful when I look back on my career and the opportunities I had and where it landed me at the end. Like, I'm grateful for the opportunities that I had along the way. For sure.
00:28:41:21 - 00:28:56:21
Heidi Patalano
Yeah. Yeah. Wonderful. Well, thank you so much for joining us here today. Patti is great to talk to you. Lovely having you here and really excited to hear about what you'll be up to next. So thanks to taking a moment to speak to us. Yeah.
00:28:57:20 - 00:28:58:10
Patti Cook
Thank you.
