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Leadership and the Current State of Mortgage Banking

David Lykken
Nov 26, 2013

Everyone likes talking about the future. A Google search of the phrase "The Future of," depending on who you are and where you're searching from, will yield approximately four billion results. People write about the future of children, food, TV, books, government, ideas, and, of course, the mortgage banking industry. We sure do love to talk about the future. It's not a bad thing to think about the future; it's silly not to. But sometimes we focus so much on the future that we neglect to pay attention to the present. We can't know where we're going unless we know where we are. In order to have a good idea about the future, we must have an excellent grasp on the present. That's what this article is about--being better leaders now, in the current mortgage banking environment. Recently, I had the privilege of hosting a conversation on the Lykken on Lending online radio show with David H. Stevens, current president of the Mortgage Bankers Association (MBA). David not only demonstrates outstanding character in the mortgage banking profession, but he also does so in his personal life. He is an exceptional professional and an all-around stand-up guy. Our discussion focused on the current state of the mortgage industry, and David shared his perspective on a variety of issues from compliance to education. Our conversation, as many things do, got me thinking about leadership. In the current mortgage banking climate, what does it take to be a great leader? What characteristics must a great leader possess to excel in the current environment? On what areas must a great leader focus in order to succeed in the current climate and pave the way for a more prosperous future for the industry? These are the questions I will seek to answer. Here are my ideas … First and foremost, I believe that the most important thing for leaders in the mortgage banking industry to focus on in the present has nothing to do with mortgage banking; rather, it has to do with personal character and integrity. More than anything, it is important for leaders to develop a sense of balance in their professional and personal lives. The core of leadership is not about the position you hold in your company, the amount of people who work underneath you, or the associations with whom you affiliate. The core of leadership is about who you are. It's about the company you keep. It's about what you do when you leave the office. How much time do you spend focusing on your family life? How much commitment do you have to your personal friends? You have more than one job. You have your job selling mortgages, but you also have your jobs being a husband or wife, a mother or father, a sister or brother, and a good friend. Too many of us think that we have to make extreme sacrifices in our personal lives in order to be successful in our professional lives. Reality, however, is quite the contrary. If you don't have a firm handle on your personal life, the failure will trickle into your professional life and render you an ineffective leader. Great leaders are great leaders in and out of the office. Great leadership never sleeps. The second important criterion for leaders in the mortgage banking industry to excel in the present environment is to be informed on the issues. Being informed means understanding what is going on right now in Washington, D.C., as well as what is going right now on Wall Street—what is happening in the government and what is happening in the marketplace. For example, issues you may want to keep up on right now in Washington include the FHA bill, GSE reform, the final Qualified Mortgage (QM) Rule, the Qualified Residential Mortgage (QRM) re-proposal, and other various policy changes. In the market, you will want to be aware of what is happening with Fannie Mae and Freddie Mac, as well as the slow but steady decline of the refinancing share of the market. Get the news wherever and whenever you can. Spend time learning in the morning, at lunch, and in the evening. Watch TV, read the newspaper, and follow trade journals and magazines. Read blogs, listen to podcasts, and use social media to get quick updates. If you want to be a great leader, you will make it a point to be among the most informed people in your industry. Information is power. The third thing that will distinguish you as an eminent leader in the present mortgage banking environment has to do with the way you communicate with your employees, your clients, and the general public. In a recent survey, the American Bankers Association (ABA) collected data from 187 different banks, 72 percent of them holding less than a $1 billion in assets. Of the respondents, 70-80 percent said that they planned to use a vendor or consultant in implementation. However, 60 percent admitted that they were not receiving enough information on being in compliance from their vendors and consultants. There are many lessons you could draw from this data, but the point I want to make is that you need to be straightforward with people. Rather than presenting vague material to your employees or your customers, you should instead speak with clarity and precision. Be direct. If your employees are unclear about where you stand on an issue, they will perceive you as having poor leadership. If your customers feel like you aren't being direct with them, they too will doubt your competence as a leader. If you deal with the media or get involved in public relations campaigns, withholding information from people will cause them to become suspicious of you. When you're dealing with people, be straightforward. Great leadership is saying what you mean, and meaning what you say. The fourth area of focus leaders in the mortgage banking industry will want to pay attention to is education. In my discussion with David Stevens, we discussed the future of certifications such as the Certified Mortgage Banker (CMB) certification, a credential that David calls "the Ph.D. program of mortgage finance" and a designation that only 1,000-1,200 people in the country possess. David expressed a pressing need to continue the promotion of education. "Education protects our reputation," he said, "and blocks out those unable to meet the standards." I could not agree more. When we stop learning, we stop growing. In conjunction with what I discussed under my second point, we have more information available at our fingertips than has ever been available to people throughout history. But, just because there is an abundance of information available, that doesn't mean it is all credible or useful. Professional education provides something for the mortgage banking professional that all the blogs, magazines, and TV segments in the world cannot: Trustworthy information that is meaningful to the industry. Great leaders will be unabashed promoters of education. If you want to stay on top of things in the current climate, you will be constantly encouraging your people to challenge themselves professionally by pursuing higher levels of certification. Greater education makes our industry more robust, trustworthy, and effective in serving our customers, community, and world. Greater leaders believe strongly in education and preach its merit without ceasing. The final point I want to make in regards to how leaders in the industry can shine in the present mortgage banking environment is all about collaboration. Greater leaders will recognize the power of unity among other mortgage professionals. More than competing against these other professionals, you are competing against unfair regulation and global economic challenges. Banding together as one to strengthen the voice of the industry will pay dividends to everyone. In our conversation, David talked a bit about what he's doing with the Mortgage Action Alliance (MAA). According to the MBA, the Alliance is "A voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals." Although administered by the MBA, you don't have to be a member of the MBA to join. The MAA is simply an effort to create a network of mortgage professions who can receive information and have conversations about what is going on in Washington so that they can develop a unified response. In David's own words, the MAA is "One big, loud and powerful voice for the industry." Great leaders see the value in unity and collaboration. Alone, we convey only whispers, but in great numbers, our shouts will move mountains. In the end, there is no consideration of the future of mortgage banking without consideration of the present state of the industry. In order to even have a future, we must develop the necessary leadership skills and values to excel in the present. To recap, great leaders will: ►Demonstrate a remarkable sense of balance between personal and professional values; ++Seek out as much information as possible about the happenings in the government, as well as in the market; ►Communicate in a direct and sincere manner with our employees, customers and communities; ►Place a tremendous value on continuing education; and ►Show a willingness to collaborate with other mortgage professionals for the good of the industry. We cannot understand where we are going unless we understand where we are. If we wish to be better leaders in the mortgage banking industry, we will recognize this truth: the future is now. Be sure to tune in to the Lykken on Lending radio broadcast each Monday at 1:00 p.m. EST by logging on to David Lykken is president of mortgage strategies and managing partner with Mortgage Banking Solutions. He has more than 35 years of industry experience and has garnered a national reputation, and 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. 10, or e-mail [email protected] or [email protected]
Nov 26, 2013