Pieklo Talks Margin Compression, Borrower Education And More
On Wednesday, April 21, the Mortgage Leadership Outlook featured Robert Pieklo, CEO, Equity Home Mortgage. Pieklo joined series' host Andrew Berman, head of engagement and outreach for National Mortgage Professional Magazine, to discuss the value of a mortgage broker, his lessons from the last margin compression, the importance of borrower education, how to leverage the Clubhouse app and more.
After spending 17 years as a mortgage executive, Pieklo decided to start a small origination company with Shaun Hamman. He got his start in 2003 with AFR as an originator. That company became a mid-size national bank, and Pieklo was promoted to run the retail division and then capital markets. After 4 years, he was promoted to the company’s chief strategy officer to steer company growth plans; he was also responsible for all mortgage and servicing sales, as well as trading and hedging for the company.
After selling his stake in the company in 2018, Pieklo went on to run originations for a large public mortgage company. Under his watch, he turned the originations business around and grew the volume from 500mm to 1.5b a month, leading the division to profitability. After 14 months, the company sold to a large publicly traded REIT.
Originating was always in his heart and he is looking to build a company based on honesty, transparency and serving the customer.
Highlights from the interview:
- Pieklo advises that in response to current margin compressions, mortgage lenders should look to lower operational costs and cost to complete. “Without a lot of loans, your cost to complete comes up a lot.”
- “When rates move up, you’ll have MSR values go up… but there is going to be a cap. You can only multiply the servicing value about 4 or 5 times because a loan is only going to be around for a certain cost of service. Once the servicing fee is maximized, you are going to see some inefficiency processes,” Pieklo said.
- “Some people ask ‘If the system is so sophisticated and technology is so much better, why does it take so long to process a loan?’ Well, the system for processing a loan is broken. Everyone has fragmented data,” Pieklo said.
- “If I were a company in this area, I would create a platform that has on-demand disclosures, easy to upload conditions and be able to deliver an in-process CD that speeds up everything. There are only a few companies that have that and they’re the major players in the wholesale space.”
- “What made me a good executive is my knowledge and background as a mortgage originator. I use what I know from the front end and tie it into the back end. What a ton of mortgage executives miss is the front piece of the process, origination.”
- “What Home Equity Mortgage is about is finding the right path and being nimble enough to go down that path.”
- “I strongly suggest to leaders of other mortgage companies that they take a ride as a customer. How many times has a CEO who is 11 layers removed from the front lines taken a ride as a customer or employee? A lot of times they are ignorant to the fact their system is inefficient, and that’s something we test as Ditech. Is it aesthetically pleasing? Is it simple? Does it look like someone we want to do business with?”
- “In response to the ultimatum, we went with UWM and dropped Quicken Loans. Overall, what they did was bad for the industry, but there is nobody better than the UWM wholesale channel.”
- “For our borrowers, the cost matters a lot. So when we work with mortgage lenders and wholesale lenders we like to have a good price. I don’t care for all the bells and whistles that come with it. I just need an efficient process with on-demand disclosures for a good price. Also, interaction with a portal should be done with speed and ease.”
See the full conversation between Pieklo and Berman below.
See all the interviews from the Mortgage Leadership Outlook series on its YouTube channel.
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