“What makes a great leader in the mortgage industry?” This question came up during a dinner I shared recently with one of my industry peers. While leadership is often more art than science (notwithstanding our initial response from the old 1970s Milton the Monster cartoon intro: “Six drops of the essence of terror; five drops of sinister sauce …”) during the course of the hour, we agreed that in addition to core leadership traits, there were five additional characteristics that were increasingly critical for leading in today’s demanding mortgage arena: Command of the regulatory compliance arenas; decision-making based on reliable analytics; a never-ending passion for efficiency; leadership in leveraging new technologies; and finally, the balance, maturity, know-how and stamina to weather any market condition that may arise.
Command of the regulatory compliance arena
In an ever-evolving industry, it is a never-ending battle to stay compliant. It requires patience in some areas and action in others. While it is complex to navigate the vast number of regulations that govern the financial industry, it is vital that leaders continue to pursue and hone this skill. Successful industry leaders will tap into the most up-to-date technology to help understand and dissect how regulations apply to their businesses.
Imagine a race car traveling at 120 miles per hour. When the driver is making a pit-stop to change the tires, they must remain fixed on the track, but must also rely on a whole team of experts to determine what adjustments need to be made to get back in the race. As that relates to the mortgage industry, a leader will always keep “The Big Picture” in mind, but must also rely on vendors as well as technology to maintain readiness and efficiency even while keeping his or her business consumer-friendly.
Decision-making backed by reliable analytics
Managing with a “gut feeling” is important, but the reality of today’s marketplace is that change happens quickly and advantages are measured in increasingly minor units. Content must be accompanied by context. Knowing where and how to compete is critical; intelligently managing partnerships is crucial, and failing to recognize industry trends and not being able to react quickly can be a death sentence to the unsophisticated business.
The challenge, then, becomes assembling the information that can help support strong and solid decision-making. Reliable partners who are transparent and can provide breadth, depth and historical perspective, as well as ones who can give you the information vital to your continued success. For example, lenders often allow their loan officers the flexibility of choosing which third-party providers they work with to close a loan. But are they making the best choices? How do those providers perform relative to others in their space? Knowing how their pricing and service levels compare to other available vendors can be critical in managing those third-party networks. Great leaders ensure their businesses have an understanding of how each provider’s pricing has performed historically relative to others in the same local market. This can significantly improve the speed, cost, performance and efficiency with which that lender can perform the closing, with the net result happier regulators and higher consumer satisfaction.
A never-ending quest for efficiency
All too often, companies operate under less than optimal conditions because they are concerned about the potential impacts of change. Leaders cannot simply sit and watch as technology advances. They need to be at the forefront of implementing solutions that can and will enhance their business efficiency. The worst thing they can do is freeze while in the process of improving company processes.
All too often, people are afraid to engage in projects fearing the unknown or the inevitable challenges along the way. Instead, a leader will ask the tough and thought-provoking questions: “Why is this done that way?,” “How can we do this better now given the current circumstances?” and “What will be the true benefit?” … all while continuing to look for further change opportunities to help the company as a whole. True leaders must constantly evaluate and re-evaluate processes to determine the most effective methods to improve workflow and productivity—even if that means “breaking” the status quo.
Leads the company to emerging technologies
Using technology to improve internal efficiencies and workflow should be a goal for most companies. Tech-savvy leaders will consider the effect technology can have on meeting compliance requirements, improving internal workflows and better serving customers. More importantly, these individuals will be proactive in their quest instead of reactive based on the latest crisis. This is a key difference from the average person who does not understand the effect market changes will have on a business and the ongoing benefits technology can provide in preparing for those changes.
Realizing the difference between developing your own technology, which can be a lengthy process, and partnering with a trusted technology provider is another distinction of a tech-savvy leader. It is one thing to understand how technology can aid in faster workflows and monitoring compliance status, but it is yet another to truly comprehend the far reaching benefits that will be achieved. Leaders with long-term vision will use technology to its fullest and will consistently look for all possible areas where it can be deployed to improve processes and create value to clients.
Fortitude for any cycle
The current financial market is still in a state of limbo. Given the uncertainty that recent regulatory changes will have on overall business, as well as changes in the surviving companies, many analysts were projecting 2014 to have a more rocky start than it has had. Leaders must remain true to their foundational values and do what they believe is correct. Stand by strong principles regardless of the market climate; be it riding high on large loan volume or low with small volume. Many people get too caught up in what is happening in the current market to have the foresight to see the next turn in business. It is important to be able to respond to different market conditions while maintaining consistent business practices. True leaders are prepared to make important decisions based on the state of the current market and tend to do so sooner rather than later.
Leaders emerge when the market shifts, and they understand that managing businesses through these different and often difficult changes include making investments when the market is slow in order to best prepare for the next up cycle.
Are you on the path to become a successful leader?
Successful leaders emerge from situations where they are required to assess situations and develop a plan of action that is best for everyone involved. Understanding the industry is only one aspect of being a successful leader. Understanding and using technology, comprehending the role of compliance, focusing on efficiency, being consistent during any type of market condition and using data wisely are paramount to being an effective leader. Strong and effective leaders ensure that all of the tools available are used to make wise business decisions that will lead a company to success. Having a strong, efficient individual at the helm will result in satisfied customers, loyal employees and efficient workflow processes through which any company can weather all the market shifts.
Brian Benson is CEO of ClosingCorp, a provider of residential real estate closing cost data and technologies for mortgage lenders, real estate professionals and consumers. He is responsible for overseeing the company’s daily operations and long-term strategic direction. He may be reached by phone at (858) 551-1500.
This article originally appeared in the April 2014 issue of National Mortgage Professional Magazine.
