Frontline Series: Countrywide, America's Wholesale Lender: The keys to Countrywide's successGary Simpson and Ralph LoVuolo Sr., CMCCountrywide,America's Wholesale Lender
Publisher's note—This is the first installment of The
Mortgage Press' "Frontline Series," an in-depth profile of the
pioneers and innovators of the mortgage industry. We begin with
Countrywide Financial Corporation, because in many ways, they were
the originators of the contemporary home financing marketplace. In
addition, the company's reputation for dependability and innovation
is well known within the mortgage industry.
The behemoth that is Countrywide Financial Corporation began
humbly in 1969 as a small two-person office, co-founded by Angelo
Mozilo and the late David Loeb, with the goal of providing home
loans nationwide. Starting out with an office in New York, they
soon moved their headquarters to Los Angeles. After nearly four
decades, this former two-man office has evolved into a diversified
financial services company offering home loans, insurance, banking
and other products and services to consumers and businesses.
Countrywide is a member of both the S&P 500 and the Fortune 500
and has a workforce totaling more than 50,000 individuals at more
than 800 locations across the United States and abroad.
An important division contributing to the success of this giant
company is the wholesale lending division of Countrywide Home Loans
Inc., a leading wholesale lender in the U.S. Approximately 35,000
mortgage brokers work with this division through a nationwide
network of seven regional processing centers and more than 50
branch offices. Known as Countrywide, America's Wholesale Lender,
the division has focused on sales and fulfillment effectiveness,
productivity and first-class customer service that help to ensure
mortgage brokers and other third-party mortgage originators have
one source for all of their prime and non-prime lending
solutions.
Recently, The Mortgage Press had the opportunity to speak with
the senior management team of Countrywide, America's Wholesale
Lender, consisting of Todd Dal Porto, Brian Robinett, Eric Spence
and Debbie Rosen, about their strategies for success, the
challenges presented by the current mortgage marketplace and how
they plan to continue that success in the future.
Todd Dal Porto, senior managing director, Countrywide Financial
Corporation and the president of Countrywide, America's Wholesale
Lender, outlined what he sees as the keys to Countrywide's
phenomenal success.
"I think what we recognize first and foremost is that our
success is specifically linked to the mortgage brokers and loan
officers whom we support," he said. "You may have heard our tag
line, where we truly do have a 'one loan at a time' mentality. You
can't make every loan, but we are in the position, through our
extensive product line and some well-honed [technological]
processes, to offer solutions to virtually any borrower. While we
have great support from our parent company, Countrywide Financial
Corporation, I think that the keys to our success are our
commitment to our business partners' [mortgage brokers] success and
our focus on one loan at a time."
This meshes with the broker-centric mentality that Countrywide
exhibits in dealings with its business partners and is part of the
praise that the company has received from the mortgage broker
community. Dal Porto added, "Clearly, any origination person
understands the value of every single deal. It could be that a
particular loan is the key to ongoing business from a business
partner—a real estate professional, financial planner, what
have you—or the end of that relationship. I know first-hand
what it's like to originate loans for a living and to lose loans.
From our perspective, we have a truly unique understanding and
hunger to make deals for our business partners. We don't take loans
for granted."
In addition to having a broker-centric mentality, Countrywide is
known for the rigorous vetting process that it requires of
potential recruits to its lending team. "Certainly, we look for
successful salespeople," commented Eric Spence, managing director,
national sales manager for Countrywide, America's Wholesale Lender.
"When we are recruiting, we are looking for the best wholesale
account executives in the business. Obviously, we are very focused
on recruiting top-notch professionals."
Spence went on to explain that he sees a lot of opportunity in
the current marketplace and that there are a tremendous number of
mortgage brokers to be served from an account executive
perspective. Even with approximately 1,200 account executives in
the prime and specialty lending (non-prime) groups, he believes
that there is still room to grow the number of account executives
significantly.
That sentiment resonated with Brian Robinett, managing director
and chief operating officer for Countrywide, America's Wholesale
Lender. He stated that he believes that there are several thousand
prospective business partners out there that Countrywide would like
to do business with. "There's no perfect list of mortgage brokers
in the country. I can't go to the National Association of Mortgage
Brokers for a list of all the brokers in the country," said
Robinett. "But, I do know how many we do business with. I do
believe that there are potential business partners out there, and
if we don't go call on them, we can't do business with them."
The brokers that Countrywide does business with are also subject
to their rigorous vetting process. Debbie Rosen, managing director
of the specialty lending group for Countrywide, America's Wholesale
Lender, said, "We are very careful with that. It is very important
to us that brokers—we call them business partners in the
Countrywide family—are reputable, believe in the same things
that we believe in and believe in providing the right loans to
customers on an individual basis. Also, that they don't bring to
the equation any past problems. We want to make sure that their
records are clean and that they are focused on doing the right
thing, not only within the industry, but also individually for the
customer. It may seem to be onerous, but we believe that it is the
right process and that it is very important that we have qualified
brokers working with us. We also believe that it protects the
family of business partners that we currently have on board."
Countrywide also has an extensive training program that every
new sales employee is required to undergo during their first 30
days of employment with the company and includes constant training
throughout a person's career with Countrywide. The company has a
detailed sales management training program that everyone—from
the members of the first level management team up to their most
senior members—is put through once a year, in addition to
refresher training throughout the year that is built upon the goals
stated in the initial management training program. Ethics and
industry knowledge are foremost in this training program.
At a time when there are many lenders that are having difficulty
realizing the synergies between prime and non-prime
lending—to the point where some are pulling out of the market
altogether—Countrywide has been successfully positioning
itself as a one-source lender for the financing needs of mortgage
brokers. In fact, in 2005, Countrywide established a new record for
the industry as its annual mortgage loan production volume reached
$491 billion, despite a significant slowdown in the mortgage
marketplace. Furthermore, the total volume in Countrywide's
wholesale division exceeded $100 billion in 2005, making it the
first wholesale mortgage banker to achieve this unprecedented
milestone. With that impressive track record, Countrywide has no
plans to pull back from their goal.
"There are markets that we have not penetrated in the manner to
which we aspire. We are working to better align and integrate our
sales efforts, because we have business partners who choose to do
prime loans with us only, and conversely, we have business partners
who wish to do only non-prime business with us," Dal Porto stated.
"What we've found is that the business partners who are offering
our full menu are generally our best clients in terms of activity
and volume. Those who understand that Countrywide can service the
full credit spectrum as a one-source lender are far more productive
with us, and I would guess they are far more productive and
successful in the marketplace."
Countrywide currently maintains separate sales forces for prime
and non-prime lending services, but both are housed under the
company's wholesale lending division. While this may appear to be
an inefficient use of human resources, it furthers Countrywide's
goal of being a one-source lender by teaming up the account
executives from the prime group with the area managers of the
specialty lending group.
Robinett elaborated on the reasoning behind this strategy. "From
a sales perspective, we can do a better job of focusing on and
supporting our business partners with a more holistic sales and
relationship strategy," he said. "However, because the products
require special expertise—there are significant differences
between prime loan products and non-prime loans; it would be
difficult for a single salesperson to have a mastery of our entire
product line—I think that it's important to have the two
separate sales forces, but they must act in unison in terms of the
way they approach the market, the services they provide and their
accessibility, while maintaining that specialized expertise."
Dal Porto noted that one of Countrywide's main initiatives is to
make sure that their account executives (prime group salespeople)
and area managers (specialty lending group salespeople) encourage
their business partners to submit more of their loans across the
credit spectrum to Countrywide. "I'm a big believer in
specialization, especially with a product line as deep and diverse
as what Countrywide offers," he said. "If you don't have
specialists—people who understand their particular
discipline—then people tend to specialize on their own and
their focus tends to be narrower than you might prefer. Mortgage
brokers want to deal with a salesperson who knows how to provide
solutions for them."
Regarding the reception that this blending of the sales forces
has received in the mortgage industry when there are still players
in the market who are defined as either prime or non-prime lenders,
Rosen said, "I have the business philosophy that people ought to be
allowed to deal with you the way they want to deal with you. If a
business partner just wants to be in the non-prime business, we
need to facilitate that by providing a very strong account
executive who can help drive that business for that business
partner."
She noted that as the industry moves towards more of a purchase
money market as opposed to the strong refi market of the past few
years, more and more of Countrywide's business partners have had to
offer a fuller menu of lending products in order to survive. "You
see more of a gray area emerging where those brokers who were
focused primarily on the prime business are reaching down the
credit ladder while those brokers who specialized in the non-prime
market are reaching up. It is the crossing of those two distinct
circles that presents the greatest opportunity for us to lead our
business partners through this changing market. Everybody has to be
doing a little bit of everything to survive."
Facing a market that continues to contract and with the prospect
of an industry shakeout looming on the horizon, Countrywide's
wholesale management team believes that they have the keys to
remain successful. They believe that Countrywide's focus on
providing the best service possible for their business partners and
their reputation for dependability will give them the edge in
attracting business in a more competitive marketplace.
"We have to continue to not only perform well, but to perform
better," said Dal Porto. "In any market, large or small, it is in
brokers' best interests to align with stable, consistent and
leading lenders such as Countrywide."
Robinett added, "We look at everything from a very long-term
perspective. We know that each segment of the market will ebb and
flow pretty significantly over time. Whether that is from changing
interest rates or whatever, we're very focused on being the
one-source lender for our business partners. When they have a loan
[application], regardless of credit or borrower profile, we want
them to think of Countrywide first."
