19 minute read
SURVIVING THE UPS AND DOWNS
The State Of The Mortgage Operational Employee
NAVIGATING THE UPS AND DOWNS OF THE MARKET
By CHRISSY BROWN, CMB, AMP, CRU, Special contributor, Mortgage Women Magazine
The mortgage industry has been experiencing some of the most challenging times we have seen. This is due to many factors, but mostly the dramatic swings in volatility. There are countless articles out there surrounding the impact of this market on borrowers, loan officers, fintech, and companies. There are also countless articles out there regarding the numerical stats surrounding layoffs.
The elephant in the room, or the topic no one is truly talking about, is the current mental state of the mortgage operational employee. The anxiety, the “quiet quitting,” the difficulty of the loans coming in, the burnout from 2020/2021 and the impact of the current mental state of sales. All paired with the incredible need for impeccable
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quality in this environment.
What do you say? How, as a leader, do you stay transparent with many unknowns? How do you guide them to rise above the turmoil and maintain their jobs? How, as sales folks, do you help your beloved ops staff during these times?
For many of the operational staff, this is their first rodeo with such a market. For those of us that survived the 2008 crash, this feels all too familiar but also very different. What feels the same? The uncertainty of the future of the mortgage divisions of your organizations, the uncertainty of income, and the fear of being laid off. I emphasize “mortgage divisions’’ in that last sentence for a specific reason. During the previous crisis, banks (depositories) had twothirds of the market share. As of 2021, Independent Mortgage Bankers (IMBs) have two-thirds of the market share. There are major differences between the two during hard times.
When I personally was laid off from a bank, in 2008, I was an underwriter at the time. It was very sterile in my organization. None of what was
occurring to operational staff felt personal. In fact, I was listed on the layoff roster as #197. I realized at that moment I was just a number that had to be eliminated. It can be good and bad to work in such a sterile environment. Again, I didn’t take it personally, but I surely wished someone cared about me and my contributions.
IMBs, for the most part, are privately held. They tend to be the product of the owners’ blood, sweat, and tears. Owners of IMBs truly care about their employees and the culture they have created. If you look at the 2022 Q2 profit report, IMBs
lost money per loan whereas banks made a profit. Why is that? They care so much about their employees. It’s hard to bear the realities and make the hard decisions. It feels personal.
IMB CHALLENGES
Some of the challenges that IMBs face, that banks do not, are in the fact that they do not have depositories to lean back on, higher cost to fund rates and truly at the end of the day, everything they have built and worked for could be dwindled down to nothing. Hard decisions must be made.
This feels very inauthentic to the IMB cultures that have been built. Most IMBs have built a culture of care surrounding their employees and borrowers. Hence why they have been so successful over the years. The “vibe” as a mortgage operational IMB employee feels very “off” during this time. They are questioning the very core of the
companies they work for. Who are these people I work for? I thought they cared about all of us. They seem so secretive.
The operational employee sees what is going on in the industry. They feel the lack of loans coming in. They see the layoffs. They see some of their competitors merging or closing. They are watching their peers get laid off and wondering why them? They see some of the most respected operational folks in the industry showing “open to work” on LinkedIn. It’s scary.
They are coming off a two-year stint where these folks dedicated their LIVES to closing as many loans as they could. Sacrificing nights and weekends. Balancing at-home learning with the most insane market they have ever experienced. More dedication than I have ever seen in my 26 years. At the end of that rainbow, there wasn’t a pot of gold. Instead, there is intense worry and stress. The biggest concern is, if I get laid off, where will I go? If everyone in the industry is cutting, what will happen to me? The answer, like most things going on right now, is unknown.
DEMAND FOR PERFECTION
Now let’s pair this with the rising demand for impeccable quality. Quality in this market is VERY important. If a loan is unable to be sold to an investor or an agency, it must go to the scratch and dent market. That market usually runs at anywhere from a 1-8% loss. Some loans right now are running at a 40% loss. We had a loan that closed, and the credit was expired at the time of closing. The S&D bid was a 30% loss. That is a lot of pressure on an already terrified staff. Unfortunately, it doesn’t matter. The average company cannot afford to eat that magnitude
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of loss often. The demand for salable quality in a market where the origination/loan quality is down is also very challenging. I swear to you, in the last two months I have been brought into some of the most unique scenarios that I have ever seen in my entire career. It’s challenging for borrowers and sales right now. We need to make every loan that can work, work.
The moving interest rate market and the restructuring of loans during this environment makes it very challenging to maintain that impeccable quality. As an operational employee, when you are hyper focused on not making a mistake, you tend to lose the forest for the trees, over condition and become fearful to make a risk decision. That kind of decision-making tends to add to the stress of sales.
STRESSED SALES
The last factor contributing to their strained mental state is the stress that sales are under. Most operational employees truly care about making their sales partners happy. Most are pushing through these fears to ensure they are taking care of their sales partners and borrowers. Unfortunately, sales folks are under more pressure and stress than they are used to.
In a very generalized statement, I would say that the average Ops employee is more of an introverted personality. They are detail oriented, diligent, organized, factual, reliable, supporting, trusting, objective, consistent, considerate, etc. This is what makes them great at their jobs. In the same generalization, most salespeople are extroverted personalities. They are dynamic, interactive, bold, fast-paced, action-oriented, sociable, focused, friendly, bold, etc. Again, it’s what makes them great at their job.
What we fail to ever talk about is the difference between these two generalized personalities when they are under stress. Under stress, the average operational employee becomes bland, suspicious, reserved, cold, indecisive, stubborn, docile, etc. Meanwhile, the average sales employee, under stress, becomes controlling, overbearing, intolerant, dramatic, hasty, aggressive, frantic, etc.
The operational employee doesn’t understand those characteristics as stress, as they do not personally deal with stress in that way. They tend to view those characteristics as “personal attacks,” which compiles everyone’s stress. (Disclaimer, there is a difference between natural stress responses and abusive behaviors. We will not tolerate abusive behavior from anyone). Same with sales. When sales see the “stress qualities” from ops, they see them as “not caring”. If both sales and ops could understand how both sides show up when stressed, we might be more gracious with each other and probably more efficient.
OPERATIONS STRUGGLES
The operations employee is feeling all those things. In some cases, they have experienced a loss of income, the perceived “personal attacks’’ from sales, anxiety about their future and their company’s future, pressure of quality, challenging loans, and the feeling as though they do not feel like they are
working for the “same company” they once prided themselves on.
So, what do you say, as a leader, to an ops employee during this time? I would say that most companies will make it through this storm. People will always buy/sell houses and mortgages will always be needed. We are an industry that provides one of the three basic human needs: food, clothing, and shelter. Everyone will not lose their job during these times.
As hard as it is, I encourage every operational employee to wake up every day and remember that they are professionals being paid to do a job. As an op’s employee, it is our job to extend amazing customer service, despite how the client or sales partner is responding. It is our job to read our AUS feedback, look at the documents, restructure loans and ensure salability and ability to repay.
It is our job to show up and give that 100%. It is our job to continuously improve and demand excellence out of ourselves. It is our job to realize the difference between sales stress and ops stress. To understand your clients’ needs and frustrations. To understand your sales partners’ needs and frustrations.
As I say to my team, read the room. That is your job. If you find yourself with an abundance of free time, ask to help even if it’s outside of your department. Ask for educational classes and opportunities to learn more about your industry and various positions. Go the extra mile. I know pushing yourselves to go the extra mile, after what felt like a marathon for the last two years, is hard. Unfortunately, no company is choosing hard right now. The market is dictating the hard and it is completely out of our control.
Remember, the market will stabilize, and life will return to a new normal. The anxiety will, once again, dissipate. This industry has unique ebbs and flows. Some refer to it as a feast or famine industry. That is the reason this industry pays very well.
So, try and put the anxiety aside. Rise up and push through that final mile. On the other side of this, your beloved cultures will be restored, and life will finally balance out. If sales and ops could appreciate and respect the simultaneous stress we are all under, we could truly help each other through these times, instead of harming each other.
As for those of you who are leading an operations team during these times, my heart goes out to you. I have never felt pressure and stress like I have this year. Keep making the hard but necessary decisions, keep leading in confidence and keep acknowledging the daily realities of your operational staff during these times. As an industry, let’s show our leaders some grace. These are some of the toughest decisions they will ever have to make, and I believe everyone is truly doing their best. n
Chrissy Brown is chief operations officer for Atlantic Bay Mortgage.
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Feeling The Pressures Of Overcommitment
THREE TIPS TO STAY ENERGIZED
Tina Asher I recently slipped back into some bad habits of overcommitting, that held me captive for a bit. As we head into a season of food, fun and festivities, it’s important to remember to take things in carefully, physically, and mentally.
Last month I had to put myself on a “yes” diet. No more filling my plate with saying yes to things that aren’t in alignment with what’s best for me, my family, or my lifestyle. I had a large helping of overcommitments on my plate and it weighed me down. I noticed I became reactive instead of proactive, and I wasn’t enjoying the things I had said “yes” to. I decided to go on a diet and cut some things out of my life.
Maybe you’ve felt that too. This time of the year can be exciting and stressful. Organizations, fundraisers, and activities have ramped up needing volunteers, donations, and commitments to hit their goals, help those in need, and to serve on top of family commitments, and — oh yeah, you probably have a job too!
Fortunately, I was able to make the pivot and you can too.
Here are three simple ways to stay energized when you feel the pressure of overcommitment creeping up.
REFLECT:
• When did you commit to this and why?
• Choosing to say yes to something in the future because you think you have time later is a trap.
There will always be something on your calendar begging for your attention. • If you aren’t prepared to say yes as if it would begin tomorrow, then it’s a clear no. The things you’re passionate about will be a no-brainer to say yes to and you’ll want to do them right away.
RESET:
• Examine your core values. I spend a lot of time on this with clients to make sure decisions are in alignment with who they say they want to be. • What are your most important priorities in life?
Will this new position, activity, or program enhance your priorities in life or hinder them?
For a deeper dive on this I’ve developed a Change
Cycle tool to help with this — reply to me and I’ll send you a copy of it. • Decisions become clearer when you are in alignment with your core values and priorities.
RECHARGE:
• Recognize that if you say no, you’re doing the program, activity, or organization a favor by saying no when you’re not 100% committed to it.
• When you know it’s not the right thing for you and pass on it, the opportunity opens for someone who’s eager to serve. You’ve helped them more with your no than you would have with a half-hearted yes. • Once you’ve lightened the load and only committed to the things you care most about, you’ll serve at a deeper level and feel more connected to your cause or position.
When I recently let go of a role that I enjoyed but couldn’t fully commit to, I felt I had lost 15 lbs. That was the fastest diet I’d ever been on, and it was done tastefully. I’ll still be able to help the cause, support the team, and be able to be more involved at a different level.
What will you take off your plate this year to
lighten your load and stay energized? n
Tina Asher is a coach and founder of Build U Up Consulting
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Strength In Numbers
SEEKING ADVICE FROM THE CFPB
Istarted working in the mortgage compliance world shortly after the creation of the Consumer Financial Protection Bureau (CFPB). As I read through the new rules being implemented, I often discovered ambiguities in the law.
In those early days, I regularly reached out to the CFPB through a reg inquiry. To do so, I would send the law that I believed needed clarification in an email along with my question.
The most frustrating part quickly became the phone call that followed with a CFPB attorney. Expecting clarification, I was surprised the first few times as the attorney on the other end read the law to me word for word, with no additional explanation, the same law that I had sent over in my email and spent days or weeks studying before submitting the question. As they read, I would often interrupt, hoping for clarification, and they would
Tyna-Minet Anderson is vice president of Mortgage Educators and Compliance.
continue reading or start over.
Needless to say, it didn’t take long before I stopped submitting reg inquiries.
In 2020, the CFPB created a new program, known as the Advisory Opinion Program, which provides written guidance to assist regulated entities to better understand their legal and regulatory obligations. Entities can submit requests for advisory opinions regarding any issue under the Bureau’s jurisdiction that can be resolved through an interpretive rule. Per the CFPB, the purpose of this new program is to help the bureau comply with one of its primary functions, which is to issue guidance to implement Federal consumer financial law. They stated that “providing clear and useful guidance to regulated entities is an important aspect of facilitating markets that serve consumers.”
We recently submitted a couple of questions, going through the process of drafting up the questions, along with any applicable laws.
Then we waited and waited. After the first month passed with no response, I
wondered if I would ever hear from them.
Around that time, my friend, Audrey Boisseneu, reached out to let me know they were having someone from the CFPB as a guest on her Mortgage Pros411 podcast and she asked if I had any questions.
Finally, I thought, this is my chance to get some answers. I presented the general topics I had questions about, but I also asked Audrey and Kevin to address the silence from the bureau.
A couple of weeks later, I received a single sentence follow-up to my inquiry asking to set up a call with a gentleman named Mark.
This call was definitely different from the CFPB calls of the original Richard
The first step in seeking clarification is to use the online tool found at https:// reginquiries.consumerfinance.gov. Simple questions can often be sent in a few minutes’ time. The bureau says that they will respond within 10-15 business days, and if they need more time than that, they will let the inquirer know. Keep in mind that they can’t provide guidance on state or Federal law that is not under the Bureau’s authority; nor can they accept comments on pending rulemakings. Those should be submitted to the public docket.
If you have a more serious, longterm issue that needs clarification, consider utilizing the Advisory Opinion Program. Not many requests are taken sector. The CFPB looks for trends in the comments as well as areas that may need additional guidance.
Recently, there was a request related to the automated valuation model (AVM) and compliance requirements related to it. It is likely the rules related to AVMs will have a regular impact on you in the business.
Another request that is currently open relates to needed mortgage loan programs. The CFPB is trying to find new opportunities for borrowers to utilize in an effort to promote competition and support household financial stability. If you are interested in commenting on this request or others, you can do so by going to consumerfinance.gov/.
Not many requests are taken up through this new program, but for the ones that are, this program provides written guidance to help those in the industry better understand their legal and regulatory obligations.
Cordray days. Although not an attorney for the CFPB, Mark was helpful in answering my questions to some degree with what he knew, and then guiding my requests down the proper channel. He also volunteered to follow up on outstanding items and future requests to make sure they were answered.
Between the rapid changes in the rates and the program adjustments, the industry needs clarification now more than ever. up through this new program, but for the ones that are, this program provides written guidance to help those in the industry better understand their legal and regulatory obligations.
A third way to get more clarification is to make your voice heard early in the rule-making process. As part of the process, the CFPB solicits public comments from the public, professionals in the industry, and organizations that support the industry
This experience has taught me that although we can continue sending anonymous requests for our students and clients, there is strength in numbers. Reg inquiries and other requests are tracked; if the CFPB gets a lot of requests, they are more likely to provide an official written FAQ or advisory opinion. n
Tyna-Minet Anderson is an attorney and co-owner of Mortgage Educators and Compliance.
