Maintaining The Right Team For A Difficult Market

With the worst of the economic crisis slowly fading into the receding distance, but with the full warmth of recovery still out of reach, originators will face an unusual market in 2011. The challenges of growing market share in this rough environment was the subject of a panel discussion at this year's Mortgage Bankers Association's Annual Convention, and the solutions seemed to fall squarely into the realm of corporate self-reliance.

However, achieving that degree of self-reliance is proving to be a concern.

‘There is a lot of volume trying to flow through a capacity-strained system,’ says Tom Millon, president and CEO of Capital Markets Cooperative, based in Ponte Vedra Beach, Fla. ‘There aren't enough of us to absorb the volume. Wells Fargo, for example, is bringing on two new operating centers this year to absorb what they consider to be strong volume.’
Finding the right team players has been equally aggravating.

‘Look at the licensing requirements – we're hearing that as much as 60 percent of the people taking the test for the first time are failing it,’ says David Lykken, managing partner at Mortgage Banking Solutions in Austin, Texas. ‘That is a staggering number. Of those who are passing it, 50% of the ones trying to get their licenses have credit issues.’

Lykken openly questions whether the industry will have the manpower in place to meet a vibrant upswing in activity.

‘The number of warm bodies that we have to sit down and take applications is going to be an issue for this industry, and I don't believe it is getting properly addressed,’ he says.

But how can today's originators ensure that those ‘warm bodies’ in place are not creating problems? Gabe Minton, chief strategy officer at Motivity Solutions Inc., headquartered in Denver, urged the implementation of a strategy that encompasses an overview of corporate strengths, weaknesses, opportunities and threats – also known as the SWOT analysis strategy.

‘SWOT exercises were created in the 1960s and 1970s by Albert Humphrey at Stanford University,’ says Minton. ‘Sometimes, SWOT exercises are performed off-site, and sometimes, there are cell-phone bans so the executive team can focus on the four core parts of the matrix. Usually, they are done strategically, but recently, they've been done more tactically.’

Minton urges that SWOT exercises be conducted with a degree of regularity. ‘Doing it every five years is not very constructive,’ he adds.

Greg Shumate, president of Brand Mortgage Group, based in Duluth, Ga., is a firm advocate of SWOT analysis, and he even takes the analysis exercise further than other companies.

‘Some people talk about doing it once or twice a year, but we try to do it every couple of weeks,’ he says. ‘We're getting changes thrown at us – investor changes, industry changes, law changes – and we're having to do SWOT more frequently.’

For Lykken, SWOT-style analysis must be followed through with a serious commitment to reinforcing quality operations – particularly if the analysis results are less than complimentary.

‘The amount of denial and resistance to the process is astounding,’ he says. ‘Some of the companies that you think are strong fail to survive because they fail to do a SWOT analysis. For a lot of us, there is the fear of the unknown: We don't want to go in and see what may be wrong.’

Lykken continues to explain that companies need to be serious when it comes to straightening out their problems.

‘The discovery is challenging – it decides the direction of the company,’ he says. ‘The information may not look good to you, but it can save your life. Companies that maintain a good SWOT management process and do it with frequency will survive.’

Lykken adds that having the right team players in place helps to further ensure self-sufficiency within mortgage banking.

‘The biggest issue comes back to control,’ he says. ‘As this industry changes and begins to move into this new world, it is more imperative that you are maintaining very tight controls of your processes, your pricing, investor relationships and commitment tracking. It is a control issue, and it will become an increasingly big issue as we go into a higher level of capitalization.’

However, this is not exclusive to lenders. Minton observes that vendors serving the mortgage banking industry will see a greater need for their expertise.

‘From a channel perspective, when you are tracking the changes brought about by Dodd-Frank, you have to ask if it is really getting simpler or more complex,’ he says. ‘This gives rise to a lot of opportunities for service providers to address these issues and help lenders move forward.’

One key area where Minton expects greater activity will be in a new corporate focus on technology.

‘There is a lot of movement with iPads and other smart devices,’ he says. ‘Banks, mortgage companies and vendors are creating applications for these devices. This will create a greater move to an on-demand economy.’

(Please address all comments regarding this article to Phil Hall, editor of Secondary Marketing Executive, at


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