‘Coach you up, or coach you out’

National Mortgage News - - Compliance & Regulation - — Bon­nie Sin­nock

Amid tepid orig­i­na­tion vol­ume in­dus­try­wide, High­lands Res­i­den­tial Mort­gage man­aged to in­crease the dol­lar vol­ume of home loans it pro­duced in 2018.

The Dal­las-based lender, which orig­i­nates gov­ern­ment loans and Fan­nie Mae prod­ucts, orig­i­nated an es­ti­mated $1.5 bil­lion in mort­gages dur­ing 2018, ac­cord­ing to CEO Ken Hick­man. That’s up from $1.27 bil­lion in 2017.

While the non­bank lender is largely fo­cused on hir­ing ef­fec­tive pro­duc­tion pro­fes­sion­als, it con­sid­ers its en­tire staff to be cen­tral to its abil­ity to ef­fi­ciently orig­i­nate and close mort­gages.

“We don’t keep orig­i­na­tors around that gum up the sys­tem,” Hick­man said. “If you do, we ei­ther coach you up, or coach you out.”

High­lands’ pro­duc­tion gains stem from ex­pand­ing into a new mar­ket and its ex­pe­ri­ence con­tend­ing with chal­leng­ing eco­nomic cy­cles. It got started in 2010, when the in­dus­try was still in re­cov­ery from the Great Re­ces­sion. Its abil­ity to re­cruit and re­tain strong orig­i­na­tors by pro­vid­ing an at­trac­tive work­place also plays into its abil­ity to gen­er­ate strong pro­duc­tion num­bers.

“If you have the cul­ture, and you are at­tract­ing the right peo­ple, you can have a com­pany that’s ef­fi­cient, and then you can be prof­itable,” Hick­man said.

The mid­sized re­tail mort­gage firm con­sid­ers an ef­fi­cient clos­ing key to at­tract­ing sales tal­ent. Its goal is to re­turn a re­sponse to bor­row­ers about loan pack­ages sub­mit­ted to un­der­writ­ing within 24 to 48 hours. That re­sponse may be a yes, no, or a “maybe” that comes with a re­quest for more doc­u­men­ta­tion, although it en­cour­ages the sub­mis­sion of full loan pack­ages at the out­set.

High­lands also re­cruits and re­tains orig­i­na­tors by en­sur­ing they have the se­cure tech­nol­ogy they need to work ef­fec­tively in the field, in­clud­ing ac­cess to dig­i­tal mort­gage point of sale au­to­ma­tion and mo­bile de­vices such as tablets.

The com­pany also stresses pro­grams that show it cares about its em­ploy­ees and their lives out­side the of­fice, some­thing 94% of work­ers at sim­i­larly sized em­ploy­ers on the Best Mort­gage Com­pa­nies to Work For rank­ings say their em­ploy­ers do. Among other things, the com­pany chips in to help em­ploy­ees in need. Ex­am­ples in­clude a worker that needed help pay­ing to re­pair a home that was dam­aged by a fall­ing tree dur­ing a hur­ri­cane.

High­lands also finds pro­vid­ing flex­i­bil­ity to work out­side the of­fice helps with re­cruit­ing, but it’s not a “carte blanche” pol­icy, Hick­man noted.

In ad­di­tion, it lets em­ploy­ees use sick and va­ca­tion days in­ter­change­ably, some­thing half of the com­pa­nies its size on the Best Mort­gage Com­pa­nies to Work For rank­ings do. High­lands also en­cour­ages com­mu­nity ser­vice and makes do­na­tions in lo­cal and re­gional mar­kets it does busi­ness in, as well as abroad.

“We wanted to be a com­pany that gives back,” Hick­man said. “That helps make it a place that peo­ple want to work.”

Events that make com­ing to work fun have also helped with re­cruit­ing and re­ten­tion, he said. The com­pany re­cent had an ugly Christ­mas sweater con­test and has given its em­ployee Ap­ple prod­ucts and tick­ets to lo­cal sport­ing events.

The lender aims to add more mort­gage vets to the mix by up­ping its use of re­cruit­ment ser­vices, and its “Bet­ter Univer­sity,” a 90-day on­board­ing pro­gram to help sea­soned pro­fes­sion­als get ac­cli­mated.

To main­tain a pos­i­tive cul­ture, Bet­ter Mort­gage equips its staff with 100% paid in­sur­ance pre­mi­ums. It also of­fers free meals, al­lows lim­it­less paid time-off to full-time work­ers, and helps its team mem­bers bond through of­fice game nights, happy hours and other ac­tiv­i­ties.

A cul­ture built around ro­bots and jelly beans

Amid the shift to a pur­chase-driven orig­i­na­tion mar­ket, mort­gage lenders have had to closely ex­am­ine their pro­cesses to find even the small­est gains that make their scarcest re­sources — em­ploy­ees — more ef­fi­cient. Ra­dius Fi­nan­cial Group turned to busi­ness in­tel­li­gence and robotic process au­to­ma­tion tech­nolo­gies to stream­line work­flows and elim­i­nate ba­nal tasks.

The Nor­well, Mass.-based lender started by scru­ti­niz­ing ev­ery step in its work­flows to iden­tify op­por­tu­ni­ties for im­prove­ment. Then it de­vel­oped a pro­pri­etary bot farm to han­dle rou­tine tasks that don’t re­quire hu­man in­ter­ven­tion.

“We spent a lot of time look­ing at our work­flows and in map­ping those out, we iden­ti­fied ba­sic tasks that we had in­cred­i­bly smart staff mem­bers do­ing,” said Dustin DeMeritt, chief mar­ket­ing of­fi­cer of Ra­dius Fi­nan­cial Group.

“We iden­ti­fied 15 or 20 dif­fer­ent things we could use robotic au­to­ma­tion to do. Our team set out to start cre­at­ing bots to do those things.”

The bots have be­come so en­grained in the Ra­dius cul­ture that they’re part of the fam­ily — and are treated as such.

“We have north of 25 ro­bots and they all have names and per­son­al­i­ties. Our de­sign­ers have pic­tures of them on their desk, they con­sider them their kids,” DeMeritt con­tin­ued. “They’ve taken on this life of their own. From a mar­ket­ing stand­point, our char­ter is to bring them to life. They’re liv­ing, breath­ing parts of our cul­ture and that’s who we are.”

In a com­mod­ity-driven in­dus­try, there’s a mul­ti­tude of lenders to get mort­gages from. Mar­gin com­pres­sion is also a ma­jor chal­lenge for the over­all in­dus­try and the top chal­lenge for Ra­dius. For a lender to strive and sur­vive, it needs to sep­a­rate it­self from the pack.

The way Ra­dius con­tin­ues to grow and be ef­fi­cient is through AI, learn­ing and robotic au­to­ma­tion. Keep­ing op­er­a­tions ef­fi­cient means stream­lined mort­gage de­liv­ery and lighter costs. When you look at how much time, en­ergy, ef­fort and per­sonal at­tach­ment Ra­dius has with its fin­tech, that’s what truly dif­fer­en­ti­ates it.

“We look at com­pres­sion and won­der how you con­tinue to grow very ag­gres­sively,” said DeMeritt. “We’ve been in the busi­ness 20 years. We’ve nav­i­gated the fi­nan­cial cri­sis, we’ve ac­quired and had or­ganic growth. We’ve played by the rules and con­tin­ued to win, grow and be suc­cess­ful. Be­cause one of our core val­ues is char­ac­ter mat­ters.”

The Best Mort­gage Com­pa­nies to Work For sur­vey high­lighted that a com­pany is only as good as the peo­ple run­ning it.

High em­ployee re­sponse rates show they care about their com­pany and vice versa. Re­ceiv­ing com­pany ac­co­lades is al­ways nice, but the why is more im­por­tant.

Build­ing an en­thu­si­as­tic staff means find­ing the right peo­ple while mak­ing sure they’re prop­erly val­ued — which in­cludes their time. Ra­dius does some­thing called Jelly Bean Day. A jar of jelly beans sits in the of­fice, each bean rep­re­sent­ing a day in an av­er­age life­span. Ac­com­pa­ny­ing the jar is a sign that says, “What are you go­ing to do with your day?”

“Would you read a book, go on a walk, run a marathon, vol­un­teer, hang out with your mom and dad, spouse? Live like you’re dy­ing. You’re not just com­ing to work to get a pay­check. Cer­tainly I get that part, but there’s more to it than that,” DeMeritt said.

Ra­dius wants its em­ploy­ees to think about what’s most im­por­tant to them and what they would do if they had one more day, or in

this case, one more bean.

In­spir­ing ex­cel­lence through re­spect

By cul­ti­vat­ing a cul­ture that pri­or­i­tizes work-life bal­ance, col­lab­o­ra­tion and re­spect, New Amer­i­can Fund­ing seeks to nur­ture mean­ing­ful re­la­tion­ships with em­ploy­ees, cus­tomers and even ven­dors.

The Tustin, Calif.-based lender and ser­vicer was founded in 2003 by the hus­band and wife team of Rick and Patty Arvielo. As it grew, they re­al­ized the sig­nif­i­cance of a strong com­pany cul­ture.

“Com­ing out of the melt­down, my wife and I de­cided we wanted to it right, we wanted to make sure we’re pay­ing at­ten­tion to the things that are im­por­tant to pay at­ten­tion to. And the topic of cul­ture came up,” Rick Arvielo said.

So in 2012, the Arvie­los at­tended Zap­pos In­sights Cul­ture Camp, a three-day lead­er­ship sem­i­nar pro­duced by the on­line re­tailer. Zap­pos CEO Tony

Hsieh is widely cred­ited for fos­ter­ing a cus­tomer-cen­tric cor­po­rate cul­ture. The boot camp of­fers a first-hand look at the in­ner work­ings of Zap­pos to in­spire ex­ec­u­tives to take what they learn back to their com­pa­nies. For the Arvie­los, that ex­pe­ri­ence led to the cre­ation of what the lender calls NAF360.

“We wanted some­thing that re­ally sig­ni­fied what we were go­ing to hang our hat on and be known for,” he said. “The 360 de­grees sig­ni­fies treat every­body you come into con­tact with dig­nity and re­spect. It seems like such an ob­vi­ous thing. In the mort­gage busi­ness, we no­ticed that wasn’t al­ways the case.”

And it’s not just about how fel­low em­ploy­ees and cus­tomers are treated; New Amer­i­can re­al­ized it needed to pay at­ten­tion to its ven­dor re­la­tion­ships, too.

“We took it to ex­tremes; we said ‘ Lis­ten, we don’t want you to just treat your fel­low em­ploy­ees with dig­nity and re­spect, or your bor­row­ers — that’s ob­vi­ous. We want you to treat even our ven­dors who rely on us for their liveli­hood, they de­serve to be treated with dig­nity and re­spect,” Arvielo said. “We ac­tu­ally had in­ci­dents where we had to let top pro­duc­ing loan of­fi­cers go be­cause they treated a ven­dor hor­ri­bly. Just to prove the fact we’re se­ri­ous about this.”

As part of NAF360, the com­pany has an “am­bas­sador of fun,” whose job it is to en­gage work­ers in its other lo­ca­tions out­side of the head­quar­ters.

Events like “Fun Fri­days” have in­cluded things like free gourmet cof­fee and food trucks on­site, along with var­i­ous con­tests and even a wa­ter bal­loon fight. “It is some­thing that we work hard at; it just doesn’t hap­pen,” he said.

But what works for re­cruit­ing loan of­fi­cers is that the com­pany has for­ward-think­ing ideas for tech­nol­ogy and mar­ket­ing, in­clud­ing of­fer­ing So­cial For You, a step-bystep mul­ti­me­dia plat­form for so­cial me­dia en­gage­ment. But it can’t stop at hir­ing.

“You need to give [em­ploy­ees] an op­por­tu­nity to rise up through the ranks, just as would any­one else,” he said.

Part of that is a pro­gram called, “If you want to grow, we want to know.”

“We re­al­ized some­times we would lose a val­ued as­so­ciate be­cause they didn’t think they had an op­por­tu­nity to ad­vance here,” Arvielo ex­plained.

New Amer­i­can em­pha­sizes re­cruit­ing a di­verse staff, not just at the sales level, but in man­age­ment as well. It has 2,963 em­ploy­ees in 185 branches; ap­prox­i­mately 58% are women and 40% are mi­nor­ity. Orig­i­na­tions are about $900 mil­lion monthly, and it ser­vices $28 bil­lion.

“This is some­thing that my wife is very pas­sion­ate about. You need to hire the peo­ple that are serv­ing the bor­row­ers that they res­onate with,” he said.

Ken Hick­man

Dustin DeMer­ritt

Rick Arvielo

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