Many mortgage professionals mired in the slowest housing market in over a decade have recently faced some difficult conversations with their employers.
More than 20,000 industry workers
When interviewed in January and February of this year, company leaders of some of this year's top-ranked
In a National Mortgage News survey on employee satisfaction, mortgage lenders received their lowest marks on how well they communicated the company's finances and how secure staffers felt about their employment. In contrast to that, respondents indicated widespread satisfaction with benefits and other corporate offerings, suggesting less transparency around one of the most important aspects of work.
"If you don't tell people where we stand financially, they're going to make it up in their head and it's going to give them fear," said Dean Harrington, CEO of Shamrock Home Loans, which was ranked this year's top
Private lenders aren't compelled to release their quarterly performances, but periodic, companywide reviews are a shared practice among leading firms. The frequency of meetings varies among lenders, but the topics are consistent: production, income goals and conditions in the market at large.
"With liquidity challenges as much as they are across the board, we talk about that on Mondays," said Susan Naftulin, president of Rehab Financial Group, a fix-and-flip lender. "We talk about why we may be turning down certain loans. We talk about why we're making certain strategic and policy decisions, so they know. "
Shamrock holds their meetings quarterly, and discusses units closed, revenue, profit per loan and loan size, Harrington said. The firm's payroll declined $2.9 million in 2022, and the CEO said he thanked his employees for their loyalty in a January meeting.
Employees can be hesitant to discuss money, with such questions akin to asking a colleague how much money they earn, which may feel inappropriate, leaders suggested. In a boom market, an employee asking about finances could be seeking a raise, Harrington said, while in a down market, the question suggests fears over an employer making payroll.
The conversations are even more important at employee- owned firms, or those with an employee stock ownership plan. At Axia Home Loans, the leadership's primary responsibility is to protect the share price for employees and therefore remain transparent, CEO Alex Rosenblum said. The firm has an "ask me anything" call approximately every six weeks, where Rosenblum answers questions upvoted by participants.
"With an ESOP, it's technically a retirement plan," he said. "So we have a fiduciary duty to maximize retirement benefits to our employees."
Companies are obligated by state and federal law to notify workers of impending layoffs, but many don't file the 60-day Worker Adjustment and Retraining Notifications in their respective states. Professionals have said they feel scorned by their workplaces, which in some cases, allegedly reneged on promises of having significant war chests that would hold them over in the waning market.
Some of the lenders ranked by their employees as the best in the industry to work for weren't immune to layoffs or pay cuts. What set them apart from those in the headlines was how they approached those terminations. Their workers largely had an idea of impending actions against the backdrop of declining originations and rising mortgage rates, which have forced many to trim budgets.
Home builder and lender joint venture Mattamy Home Funding had a round of layoffs in September, and is remaining transparent with its staff about another potential looming cut, president Estelle Norvell said. The company, which had a net gain of employees in the past year, talks about its volume every month with its staff.
"We can't ask you to trust us and [then not] be transparent about what's going on," she said. "So I think a lot of people actually feel better about that transparency in that, whether it's good news or bad news."
When cuts happen, leaders need to be "extremely sympathetic" about it, Rosenbum said. They may be inevitable; lenders can mitigate the damage with some shrewd action. Harrington offered frank advice for mortgage firms weighing the difficult choice to lay off employees: fire the people who should be fired, so you don't have to lay off the people who need to be laid off.
"That's how I look at it if someone's not performing," he said. "You're in dereliction of duty as an owner by not calling that out."
Some firms have been fortunate to avoid letting workers go, but that hasn't caused leaders to let their guard down. Rehab Financial Group has never conducted layoffs,
Naftulin said, the result of conservative business management. However, communication remains paramount with a market anticipated to dip further this season before it recovers.
"I really firmly believe that my biggest responsibility as an owner and a founder of a company is to keep my employees because they support families," said Naftulin. "They support themselves. It's how they feed their kids. It's how they send their kids to college. I take that responsibility to heart and incredibly seriously."
Keep calm and carry on
A steady, experienced hand helps many of the
For all employers on the list, the average time at the company for the highest ranking employee was 14.7 years, meaning that many were already on board at the time of the financial crisis.
"It's not our first time at the rodeo, it's a unique challenge and a horrible challenge at the same time," said Don Giorgio, the CEO and president at UNMB Home Loans. Giorgio started at the company his father helmed in 1989 and took the top spot back in 1995.
"We're in this together, we're not alone; it is an industry wide problem, not a UNMB problem," Giorgio said.
The Levittown, New York-based lender focuses on the opportunity for its business, and that's an attitude driven by experience.
"It's not a matter of if this ever ends, it's a matter of when it will end, and I've been fortunate enough to have been through many cycles, and the sun will come out tomorrow," said Giorgio.
Chaos provides an opportunity for growth even in a challenging time, said Kevin Pezzani, chief operating officer at Supreme Lending, headquartered in Dallas. While only at Supreme since September 2021, Pezzani has more than three decades of experience in the industry.
"Several things I've learned in the past have helped us today: Accept the reality of where you are at and don't
be afraid to act; Redefine what success means and looks like; Be honest, no matter what, even if you don't know the answer; Have a plan, execute, reassess, adjust, re-execute, repeat. Look for opportunities to be more efficient and to open doors you may not have seen before," Pezzani said.
Transparency in communications is also important for Supreme's leadership.
"We have created a safe space for our people to feel comfortable talking about what is happening in the industry," Pezzani said.
Keeping staff informed is also important for Developer's Mortgage of Columbus, Ohio. The company holds face- to-face meetings, if not weekly, at least every two weeks, explained Linda Heaston, its president.
These sessions allow management to interact with the staff, see how their moods are, learn what their experiences are with customers and what they are hearing, while at the same time "sharing with them our values and that we're still here," said Heaston.
That includes getting out the message about affordable housing and the opportunity to help consumers who might not qualify for a mortgage today. Developer's provides tools to help loan officers keep these customers engaged and "and feel like there's still hope out there even though they're hearing all this negativity," she said.
As part of its outreach, Developer's founders have worked with a no-kill dog shelter and that has created volunteer opportunities for employees, Heaston said.
"I'm a firm believer of having a family atmosphere," Heaston said. "We want to engage with them, we care about their families and care about their well-being, we try to do activities to engage with that as much as possible."
Heaston has been in the mortgage business since 1986 and at Developer's for 33 years. The company is a purchase- focused shop, and the employee tenure averages four-plus years, which is a positive sign in a business where people can shift jobs at the drop of a hat.
"They see the strength of the company, and obviously we reinforced that this isn't the first time we've seen hard times, that we're still going strong," Heaston said.
During busy times, these employees might need to put in a lot of hours. But when times are slow, they still have a job at the company, she continued.
Anybody can cut company expenses, and UNMB has adjusted where it has to. "But at the same time, I'm very clear, we are not planning for failure," Giorgio added.
Meanwhile, Supreme Lending renovated its corporate office in Dallas to create a better environment for its team to return to as the pandemic restrictions wound down. That included putting in "a game room outfitted with numerous options and the latest tech and lounge areas for socializing and informal meetings," said Mills Landon, chief strategy officer, who has over 20 years of experience in the business. "We also formed a concierge team dedicated to planning opportunities for fun and engagement at all Supreme events."
These tough times are an opportunity for growth, to pick up talented staffers who through no fault of their own lost their jobs, Giorgio said. "There's a lot of opportunity. We know left and right companies are closing, shutting their doors, and this is all I know how to do, so I'm going to do it to the best of my ability.
"I think all of my colleagues should understand and respect that the mortgage industry along with our Realtor partners, we lead the country, we lead the economy," Giorgio said. "It's up to us, not Congress, not the president, but us to set that tone and bring this country into a better place economically."
Every five or six years, the cycle affects the mortgage industry, "unfortunately, maybe not as impacted from all sides as we are in now," Heaston said. "But at the same time, the economy's still moving. They still see people out there."
