In getting ready to write this article, I went back and re-read the article I wrote a year ago about the future of mortgage banking entitled, "What Lies Ahead for Mortgage Lending?" Back when I was writing that article, I remembered asking myself, "Do I really dare write about what I see coming at this industry?" I saw some really ugly things coming down the pike, and predicted as much. Unfortunately, those predictions, all of which came to pass, are but a prelude to what is yet to come. Change is coming … some good and some not so good, but interestingly enough, both the good and the not so good changes are going shake this industry to its core. That is why I'm titling this month's article “Change? You Haven't Seen Anything Yet!"
But first, an explanation as to what a "C-Suite" is. I have been writing for National Mortgage Professional Magazine now for over a year and was recently made aware that a large number of faithful readers of this series of article have been wondering “What the heck does Dave mean by the C-Suite?" My apologies for any confusion or questions… and I maybe will ask that this explanation be included in future articles.
Every company has a "Chief" … the boss, the owner, the president and chief executive officer (CEO). The bigger the company, the more “Chiefs” there are. Mortgage companies typically have a chief financial officer (CFO), and frequently, a chief operating officer (COO), and in the case of banks involved in lending, a chief credit officer (CCO). This group of senior managers is commonly referred to as "C-Level” executives. And because these “C-Level” executives typically have their offices in the same location, i.e. office suite, that area became know as the "C-Suite," the group of offices where the CEO, CFO, COO and other C-Level executives work.
My apologies again to the readers of this article over the past year who have wondered what I meant by the “C-Suite.” I now understand why it may have been difficult to understand the perspective from which I have been writing these articles for the past year if you haven't understood what I meant by that “C-Suite.” Hopefully, you now understand that each month when I write this article, I endeavor to provide a perspective that should be or hopefully it is coming from the C-Suite in the form of decisions made by the C-Level executives running the company.
So, back to the subject of this month's article which is having to do with the extraordinary changes coming on our industry … changes that are beyond anything most of us ever thought possible. Things have been set in motion, mostly by the federal government, that will undoubtedly result in yet more dramatic changes in the way we go about our business.
►We have not yet begun to understand the full impact of “financial regulations,” thanks to the Dodd-Frank legislation that was signed into law a short time ago.
►We have not yet begun to comprehend the full impact of the higher capital requirements for every independent mortgage banker across the country.
►We have not yet begun to realize the full impact of the unbelievable growth of the federal government and the control it has over our industry.
►We have not yet begun to realize the consequences of this Congress’ out-of-control spending.
Sadly, the regulations being put in place to protect consumers are actually hurting them and the economy. The more stimulus that we have thrust upon us, the longer it will take for us to get to an economic bottom so that we can start the recovery that we so desperately want and need.
Yes, changes are coming, all the result of regulations already passed by Congressmen and Congresswomen that have little or no understanding of the consequences to our industry or to the consumers they're trying to protect. I don't care what side of the political aisle you may favor, but the vast majority of Americans realize that now is the time to clean house. It's time that we have a new crop of Congressmen and women who will do their best to undo as much of the damage that has been done before it is truly too late. If you are not involved in politics, you need to become involved now for the sake of our industry and our country.
After recently speaking at a conference (I would be happy to speak at your next conference), someone, who reads my “A View From the C-Suite” monthly, asked me, "Dave, I've been reading your articles and have been intrigued and encouraged by your prediction that ‘more money will be made in the next five years in mortgage lending than the previous 25 years,’ and I am wondering if in light of all the changes taking place in our industry, whether you still believe this to be possible?” Let me assure you as I did that person … yes, I absolutely and emphatically declare that more money will be made in mortgage banking in the next five years than in the previous 25 years!
You may be thinking, “How is this possible?” Here's a tip … most people that hear that statement do not bother to ask the logical "follow up" questions. Maybe that is because some simply do not believe it is possible, and therefore, find themselves living a self-fulfilling prophecy operating at levels far below what they are capable of enjoying. Their disbelief or unbelief disqualifies them for a shot at “the prize.”
On the other side of the spectrum, there are those who hear or read the same proclamation and walk away quietly knowing that it is not only possible but that they are some of the few already enjoying "the prize.” In spite of all the negativity, obstacles and challenges facing our industry, they are living the dream. But one thing I have noticed, they are not talking about it … and oftentimes, you won't know by the way they live that they are as successful as they are.
Then there is everyone in between the “doubters” and the “doers” who still have a shot at “the prize," but for a lack of discipline, lack of vision or a host of other reasons, they fail to achieve their full potential.
By the way, you may wonder what qualifies me to make such a bold statement as I do with this prediction. It's not the fact that I've been in the mortgage business for 37 years, nor is it because I have owned or been an owner/operating partner in a number of mortgage or mortgage-related companies across the country, but rather, it's the fact that for the past 10 years, I have had the privilege of serving as a consultant to hundreds upon hundreds of companies across this great country. I have watched some companies that most didn't think had a snowball’s chance in hell of making it succeeded beyond anything anyone could imagine. Conversely, I have watched companies that many thought were surely destined for greatness, crash and burn seemingly unexplainably.
One of my favorite business authors is James Collins. He has written several good books, the most notable being, Good to Great. But my favorite book written by James Collins and co-authored by Jerry Porras is Built to Last. If you have this book, read it again. If you don’t, I recommend you buy it and download it onto your favorite e-reader as well. Here’s why … they studied and researched a large number of companies in search of the “best of the best companies.” The criteria used to select the companies they studied was amazing. When I read the list, I began to wonder if any company could meet their stringent requirements to qualify. Interestingly, too many companies qualified and the criteria was made even more stringent to narrow down the list of companies they included in the more in-depth study. It is fascinating to read. For the companies that made it past the final cut, were some interesting common denominators. What I saw were these primary five “CHIEF” guiding principles: Character, Honesty, Integrity, Ethics and Faith (CHIEF).
Please excuse me for playing on this acronym, but I am going to emphatically say that unless you have these “CHIEF” principles guiding you as the “chief” executive of your company, your probability of extraordinary success is limited, if not impossible. These guiding principles are like having a good bright lantern while hiking a precarious path in the night. For those of us in this industry, we are walking a very precarious path with an increasing number of twists and turns (changes) ahead. One misstep could put you out of business as quickly as falling off a cliff would.
The change that is coming to our industry is largely the result of the fact that many lost sight of these five guiding principles. But here is the “redemptive” good news. The greatest distinction we have as humans amongst all of God's creation is that we have free will. We can make a quality decision to change, and if the will to change is based on the right principles, we can change our lives, our companies, our future and our destiny.
On Aug. 28, Glenn Beck had a “Restoring Honor” rally in Washington, D.C., where hundreds of thousands of Americans from every walk of life, race and religion showed up en mass. In my opinion, the reason many came was more than just to support "the cause," but to make a statement about their own commitment to return to honor which involves each of these CHIEF principles … Character, Honesty, Integrity, Ethics, and the most important, Faith.
For those who choose to change and embrace these CHIEF principles, I believe their chances for success increases exponentially. Conversely, for those who do not, the chance of failure increases dramatically. I'm not looking forward to the coming government controls and intrusions into our industry. Many believe that this coming November, we will see an uprising of “We the people …” I pray that “We the people …” will elect a new crop of freshmen Congressmen and Congresswomen will have the will and guts to roll back much, if not all, of what the current Congress has put in place. But no matter which way all that goes, I know that if you will operate by these five CHIEF principles, you can be one of those that will be “Built to Last” and achieve success regardless of how challenging environment becomes.
As always, I welcome your feedback.
David Lykken is president, mortgage strategies and managing partner with Mortgage Banking Solutions. David has more than 35 years of industry experience and has garnered a national reputation. David has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 977-9900, ext. 101 or e-mail
[email protected].
