The mortgage and consumer finance industry is one of the most important to the U.S. economy. Given the increased regulatory scrutiny this industry is currently facing, it is critical to have the right team in place to comply with the stricter oversight and still remain competitive on the harder playing field it’s created. This requires a highly trained and disciplined workforce to manage and execute fast-paced origination, underwriting, closing and servicing processes. As we’ve learned, errors in credit or compliance procedures can be dangerous, hugely expensive and time consuming. Having the right people, processes and tools can be the difference between business success and failure.
The current environment demands that mortgage industry businesses raise the bar and arm themselves with the most significant differentiator available—people. To achieve and maintain competitive separation in the vital but often overlooked area of human capital, companies need to reexamine their policies and processes in hiring and training.
Begin at the beginning
The way the manager builds the job description is the first pillar of the hiring process. How candidates are sourced can make all the difference in the caliber of employee a company attracts. The linchpin in this area is a well-crafted job description. This helps ensure the company attracts only those applicants with the corresponding skill sets for the position.
Virtually every resume emphasizes that the applicant desires a challenging position, even if that is not always the case. In the mortgage industry, as in many others, the first goal of the interview is to understand the applicants and what they desire to get out of the position, as well as their knowledge base and skill set. On their resumes, most applicants simply tailor the language to what they think the potential employer wants to hear.
HR executives typically stress the importance of active communication during the interview, often mixing in targeted follow-up questions to gauge an applicant’s facial expressions, body language and general comfort in their responses.
Interviewing applicants who have held high-level executive positions previously can be challenging, particularly in a buyer’s market like the mortgage industry today, with a wealth of experienced, highly trained professionals available. Thus, while solid mortgage experience can be beneficial, it’s not the only quality to consider. HR professionals often find attitude is an essential component and one that can have significant bearing on the final decision. This is especially true in corporate cultures in which everyone is considered an equal and everyone is encouraged to interact together as such.
Making the right match
In areas like mortgage credit services, different qualities are required for different job responsibilities and matching them up correctly is a key factor in future success. For example, loan processors and loan underwriters must have front-line origination experience. On the quality assurance front, a law degree or better can be the main prerequisite as the ability to present findings and articulate methodologies and strategies, as well as write and communicate, are extremely important. Because there are generally offensive and defensive elements to a successful platform, they need to coordinate well. Therefore, attributes needed for these roles are different. Candidates need to assess their best attributes and position themselves accordingly.
A motivated applicant, even one without direct industry experience, can work out quite well if given adequate training and clear expectations. For a firm like NewOak, which specializes in due diligence, re-underwriting, loan file review and legal, compliance and technology consulting work for its mortgage credit services clients, one key priority is the need to be responsive due to a constant flow of court deadlines. Applicants, especially those accustomed to working nine to five, would need to understand the different demands. This is also true of former senior financial executives accustomed to only interacting with other senior executives or only performing what they consider ”high level” work. Candidates need to fit into an already successful culture where everyone is expected to work together for the benefit of making all processes flow smoothly with commensurate quality and transparency.
Training for success
Mortgage professionals should have a well-prepared script for their duties and how they approach them every day. A combination of precision, speed, efficiency and complexity of the tasks, data and technology involved brings the importance of training and fostering a learning culture a necessity for long-term survival and success. Perhaps the most important ability to be identified in the hiring process is the skill of critical thinking. Applicants who come with legacy underwriting backgrounds have a basic understanding of the process, yet often only from their own individual angle and often do not see the big picture in terms of the entire process, from the time a borrower applies for a loan to the final decision, quality control checks and closing.
Moreover, given the volume of business during the peak years, underwriters may have focused on only performing set functions. For this reason, it can be beneficial to create a training program for small groups (10-20) of new employees in order to help them understand the complete process and apply critical thinking to each task. For example, while it may be typical to find 12-15 violations per loan, many of these violations can be easily explained if the employee applies critical, deductive thinking and looks elsewhere in the loan document for evidence the loan was processed correctly.
The project manager also plays a vital role with respect to training. He or she needs to assess the knowledge level of their team and ascertain if the team has the skill set to complete all required processes on a timely basis. If capabilities are lacking, additional training must take place to ensure the project can be completed on time. The project manager must set the clear standards of what is expected and mentor the employee, especially those with “plug-and-play” mentalities. In addition to knowledge, managerial and people skills are essential.
Process flow management
As mortgage origination, underwriting and quality control are high-volume, precise and data-intensive business functions, process-flow management and technology naturally play big roles. Identifying solutions and working closely with a financial technology team to see process-flow management effectively implemented requires individuals with special skills and interest which may not be related to deep mortgage market expertise. People with a good blend of business, finance, operational management and information technology who have interest in the mortgage industry can be ideal candidates and flourish in these roles with proper training.
Advancing in any company connected to the mortgage business is typically a matter of initiative and interest in building the skills to improve the quality and efficiency of the overall process. Classes and seminars are designed to help employees learn the big picture as well as stressing individual roles within that picture. Those employees, who can apply critical thinking, learn about different aspects of the overall mortgage process and work to improve it—as well as themselves—will be well-rewarded.
Marisa D’Vari is managing director of corporate communications for NewOak, a financial advisory and investment banking firm providing clients with strategic insight, transparency and risk management. She may be reached by phone at (212) 209-0847 or e-mail [email protected]