14 minute read
CONSTANT LEARNING CULTURE
Creating A Culture Of Constant Learning
EDUCATING EMPLOYEES WITH NEW SKILLS IMPROVES THE BORROWER EXPERIENCE
By DAWN ELMORE, SPECIAL TO MORTGAGE WOMEN MAGAZINE
Success in the mortgage industry is typically the result of creating and delivering a great experience for your customers, whoever they may be. There are, of course, many obstacles that often get in the way. One of the largest is being able to teach your employees new skills in an industry that is constantly evolving.
Right now, the industry is changing faster than ever. As a historic refi boom comes to an end, originators are shifting their attention to homebuyers while expanding access to non-conventional loan products. In the meantime, millions of borrowers are coming off forbearance plans and need loan workouts. And the entire industry is under the increasing glare of regulators to make sure consumers are treated fairly.
All of this is pressuring organizations to find people to fill new roles, train existing staff for new jobs, and find ways to keep the talent they already have. It’s a tall order for any company — but the challenge is not insurmountable if you have the right mindset and tools in place.
THE IMPORTANCE OF CULTURE
Let’s face it, this is a highly transient industry. People come and go all the time, and the demand for talent fluctuates with each new market cycle. It’s the nature of the industry to hire up in good times and let staff go during bad times.
Needless to say, this trend can negatively impact company culture,
Dawn Elmore is head of strategic initiatives at Sourcepoint
which is the most valuable aspect of an organization. According to PWC’s 2021 Global Culture Survey of 3,200 leaders and employees, 67% of survey respondents said culture is more important than strategy or operations. Meanwhile, 69% of senior leaders tied their success during the pandemic to their company’s culture.
If you look at the most successful and long-lasting companies in our industry, you’ll find organizations that have worked hard to create a place where people feel respected and enjoy coming to work each day. A big part of that is providing people the opportunities to learn new skills and rise up the ranks. In other words, they create a culture of constant learning.
Make no mistake, we’ve entered the age of the knowledge economy, where growth is not measured by production but depends on the quality and accessibility of information. In order to stay competitive, lenders, servicers, and other mortgage-industry participants are increasingly relying on their ability to hire and retain employees who are well-educated on digital advancements, new regulations, and market trends, so they can better respond to customer needs.
To build a culture of learning, an organization needs to have a cohesive strategy. New and tenured employees have varied expectations about what they need to learn for their current job and what they want to learn to meet their personal career objectives. Strategic learning initiatives also need the involvement of stakeholders from different areas of the organization.
Successful companies view their employees not as bodies to fill an office, but as unique individuals who want a successful mortgage career. They know that if their people aren’t constantly learning, they’ll never reach their full potential in this industry — and neither will the company. That’s why the best companies typically develop what I call an ecosystem of learning. And in this ecosystem, technology plays a driving role.
HOW TECHNOLOGY HELPS
Like many large organizations in our industry, my company devotes significant resources to training our
people. For example, we created Sourcepoint University, an inhouse framework for learning and a professional development center to help employees expand their services within the company. Still, it’s the engine that drives our training that has really made the difference.
Last year, we developed First Learning Intelligence, a virtual, onthe-job assessment platform that uses bot and AI technologies to create personalized learning pathways for employees. After employees finish formal training, First Learning Intelligence brings them to a master level of competency much more quickly than learning and making mistakes while on the job, which requires retraining and coaching employees. First Learning Intelligence provides individualized training in real-time, using methods designed to enhance an employee’s domain expertise and professional development.
We call it learner-centric technology because it creates a personalized, engaging, and measurable learning experience that is driven by triggers and rewards. Essentially, it creates a culture of collaborative intelligence between human and machine. The digital learning formats engage the new generation of learners who are used to digital experiences and have found this medium engaging. Personalized, anytime learning helps them reach mastery faster and they feel more confident and prepared for the complex learning that occurs on the job.
With First Learning Intelligence, there are dozens of learning modules and literally hundreds of different learning pathways. Once you choose a module, a robot guides you through the learning process until you master that subject or area. Our most popular module right now is our underwriting module, which takes highly performing processors and provides them with mastery learning for the skills needed to make loan file decisions.
Because our learning modules are completely digital, we don’t have to invest as much money or time in hiring trainers — plus people learn in a much shorter time frame. Our modules also help with retention. First Learning Intelligence assures that everyone has an opportunity to improve their skills In order to stay competitive, lenders, servicers, and other mortgage-industry participants are increasingly relying on their ability to hire and retain employees who are well-educated on digital advancements, new regulations and market trends, so they can better respond to customer needs.
to move up the organization — even into leadership positions if they have the aspiration and the will to learn.
MAKING LEARNING CONSTANT
AI isn’t just useful for training employees so they can take on new roles. It can also be used to provide constant, on-the-job learning as well.
For example, right now, mortgage servicers are under a lot of pressure to help borrowers who have been financially impacted in some way by the pandemic and are struggling to make payments. There are many ways these interactions with borrowers can turn sideways, which can prevent the borrower from getting the help they need — and cause a great deal of stress and frustration.
AI-driven technology, however, can now be used to evaluate these interactions in real time. Based on previous conversations with the same borrower, we can now analyze the borrower’s speech patterns and emotions to guide associates on how to create productive conversations — while they have the borrower on the phone. The concept is similar to mobile navigation apps that provide drivers with directions based on real-time traffic data.
CREATING OPPORTUNITIES FOR GROWTH
While some may believe the use of technology diminishes the importance of human expertise, the reality is it actually enhances it. Properly applied, technology also has the potential to ,remove bias in learning and promotion opportunities, enabling all employees — especially women — to reach their highest potential.
I’m a perfect example of this. I began my career in the mortgage industry working in customer service. Thanks to on-the-job training opportunities, I’ve been able to move into new positions overseeing default, bankruptcy and mediation, and closing, just to name a few areas. Through the process, I’ve developed new leadership skills, I’ve become a better teammate, and I’ve grown personally, all because I had the opportunities to learn skills and the benefits of many amazing mentors and talented colleagues throughout my career.
Recently, I was recognized as one among the Powerful Women of Mortgage Banking, an honor that I doubt would have been possible if my company had not developed a culture built on constant learning and created opportunities for anyone to learn new skills. For this reason, my advice to any woman seeking a successful mortgage career is to look for companies that not only talk about diversity, but also invest in the resources to ensure that anyone who aspires to grow can thrive.
At the end of the day, smart organizations not only create great experiences for their customers, but they do the same for their people — and building a culture of constant learning is among the very best ways to do so. After all, in an industry as dynamic and everchanging as ours, there’s always something new to learn. n
How Tragedy Is Transforming Condo Project Reviews
Henry Ford once said, “the only mistake is the one from which we learn nothing.” To be sure, there are tons of mistakes that happen in the housing industry that are worth learning from, but few lessons have been as painful as the ones following the tragedy that took place in Surfside, Fla. last year.
The collapse of the Champlain Towers and the loss of 98 lives has forever changed the condominium market. There have been few larger examples of this fact than Fannie Mae and Freddie Mac’s new guidance for financing condo and co-op properties, which will have a huge impact on the mortgage industry.
In particular, the new guidelines will significantly alter condo project reviews, which are going to be infinitely more complex and labor-intensive than before. Fortunately, there are things lenders can do to prepare.
FOLLOWING UP ON FANNIE MAE AND FREDDIE MAC GUIDANCE
The new GSE guidance offers a lot for lenders to chew on, starting with determining which condo projects are even available for financing. For example, before lenders can do anything on a Fannie Mae loan, they
Lisa Geloso, is head of product development & customer success at CondoTek
need to check Fannie Mae’s Condo Project Manager to see if the property the borrower wants to buy is actually available for financing. If it’s on Fannie’s new “unavailable” list, the answer is no.
Fannie Mae also requires a questionnaire that lenders need to fill out that creates multiple challenges for lenders, appraisers, and homeowner associations (HOAs), since some require responses that could open up liability issues for HOAs that they aren’t prepared to deal with. In addition, the GSE is requiring all condo and co-op projects, whether they are new or existing, to have a 10% line-item reserve in their operating budget, which many do not.
The guidance from Freddie Mac largely follows Fannie Mae’s. However, Freddie Mac is not changing reserve requirements for any project review types. According to its bulletin of Dec. 15, 2021, Freddie Mac will allow sellers to continue to rely on a working capital fund for new condominium projects or a reserve study for both established and new condominium projects when the project’s budget provides less than 10% replacement reserves.
Under the guidance from both GSEs, however, the largest impact on lenders will be the amount of time, effort, and resources they’ll need to devote on project reviews, which will include much more documentation about condo or co-op developments than ever. In fact, it’s this change that’s likely to cause lenders the most trouble.
Prior to new GSE guidance, depending on the review type, the recommended documents needed to review a project were the typical documents, such as the projects legal documents, financials, appraisal, and questionnaires.
Now, however, lenders will need to determine if a project has any significant deferred maintenance or received a directive from a regulatory authority or inspection agency to make repairs due to unsafe conditions. When this is disclosed, lenders must now document any and all inspection reports, recent repairs and improvements, deferred maintenance, special assessments, and whether the project has the proper reserves in place to maintain the safety and habitability of the units.
WHAT’S BEEN HAPPENING
To put it bluntly, these guidelines dropped like a bomb on the industry. We were in communication with Fannie Mae before they came out and had discussed how the GSE was going to look at things like reserve studies. But even we didn’t expect the depth and breadth of these guideline changes.
The reality is there has been a growing level of apathy among condo and co-op HOAs when it comes to making necessary repairs to their properties. In that sense, Fannie Mae and Freddie Mac are doing the right thing by basically requiring lenders to vet these developments more deeply to ensure they are structurally safe and there’s enough capital available to make necessary repairs.
Our hope is that new GSE guidance changes the industry in a good way. But they are already proving tough to deal with. For instance, within two weeks after the new Fannie Mae guidance came out, more than 900 properties were showing up as unavailable for financing on Condo Project Manager. That number has escalated quickly in the three months since.
Lenders need to explore these projects with a completely different lens than before. For example, one of the most
important elements of Fannie Mae’s new guidance is the special assessment review. If a project has special assessments in place, a lender needs to request and review any documents related to them to find out what The collapse of they are for and if they reveal the Champlain structural or habitability issues Towers and the down the road. Some lenders loss of 98 lives have already been doing this, but for has forever many, this will be a completely new changed the process. Fannie Mae has condominium also suspended the ability to use market. reserve studies to approve new construction projects or existing developments. In the past, lenders could use the reserve study to show a project had significant reserves in place to handle maintenance and repairs. In fact, every lender we talk to uses them. But the new 10% requirement is typically much more than a new condo development requires since it’s unlikely that a building is going to have a structural failure in the near future. At the same time, we see a lot of existing developments that have large reserve accounts that don’t want or need to have 10% for reserves. Because of the sheer amount of paperwork being requested, many lenders are turning to third parties for assistance. It’s also worthwhile to note that there may be changes to GSE guidance as well, since both are temporary. We’ve heard that some large lending groups have been pushing back on some of these requirements, either because they don’t make sense, or they will be too impractical to implement. We’re hopeful Fannie and Freddie take this feedback into consideration, but in the meantime, there are things lenders can and should be doing when looking at getting condo and co-op properties financed.
WHAT CAN LENDERS DO?
More important than getting financing for any specific condo or co-op project, lenders should be making sure a tragedy like the Surfside condo collapse never happens again. Lenders can help us get there by following a few basic best practices.
The very first thing is to determine a project’s eligibility through Condo Project Manager not only at the beginning of the origination process, but prior to closing as well. Assuming a project is eligible, they then need to review all appropriate documentation, including, but not limited to, the questionnaire, appraisal, budget, title, HOA meeting minutes if they are available, and violation searches and highlight possible red flags.
The point is to perform a thorough search for any information about construction and deferred maintenance that could possibly have an impact on a building’s safety and habitability. This should include any and all available inspection, engineering, or other certification reports completed within the past five years.
In some cases, lenders may need to exert pressure on HOAs to get the proper documentation and get the questionaries answered appropriately. Some lenders are already using the GSEs’ questionnaires and incorporating them into their own questionnaires that they use, which we highly recommend. Another good recommendation to obtain documentation is to seek out parties with an interest in the transaction such as the real estate agent, seller or unit owner, or buyer, as they may be able to provide documentation.
Beyond research, lenders need to train and align their sales, processing, and underwriting teams on new guidance from the GSEs and create a consistent underwriting policy for financing condo and co-op properties. While Fannie’s guidance doesn’t make room for reserve studies, for example, these documents are still useful for determining deferred maintenance and repair issues, so they should still be taken into account.
The bottom line is that the new GSE guidance will prove to be a challenge for condo and co-op lenders, and they are definitely not perfect. But the idea behind them is sound. No one in the housing industry wants another tragedy to occur. If that means going the extra mile in due diligence, it will be well worth the effort. n
