As a very close-knit company, it was just bizarre not being able to see each other in the office. The OVER communication that we mandated was truly a lifesaver for morale. I highly encourage all business leaders to get in the weeds with how each manager communicates with their team and make sure that it is more than would be expected in any normal business situation.
Fiscal Freeze
As if going remote was not bad enough, the very next week the pandemic caused a complete freeze of the capital markets as it relates to the securitization of our two main loan products -- both the short-term bridge and the long-term rental. In layman’s terms, our ability to be able to sell our closed loans to access the long-term debt markets was completely cut off. Yes, we have warehouse lines supplemented by a great deal of our own equity but this was uncharted territory. By the end of March, like many other private lenders in our space, we made the very difficult decision to pause all origination of loan products.
The next lesson, which is a good lesson for all leaders, was that RCN benefited from the ultra-transparent communication we had with our customers, brokers, and correspondent lenders as to exactly what was happening.
Yes, we told them we were not funding and why we were doing exactly that. Many folks in the lending industry chose a different path of pretending to be lending when there were not, but we as a company generated a tremendous amount of goodwill with our partners by being transparent. That lesson, while hard to execute at the time, is one that every leader can use for future challenges in the marketplace.
Internally we decided from day one in the pause in lending to double down on not only our core company mission but our employees as a whole. The employees were scared, heck we were all scared at the time. The key, as I look back at it was an unwavering belief that if we kept the employees, and I mean all the employees, working on our process as a company so that when we resumed lending we would be stronger than ever.