How did you get your start in the mortgage industry?
I graduated from the University of Colorado Boulder in 1980 with a political science degree. I worked in political policy, for a Ralph Nader organization, and on congressional and presidential campaigns, but I wasn’t making a lot of money doing it. A friend of mine – Brad Blackwell, now Executive VP of Housing Policy and Homeownership Growth Strategies at Wells Fargo – suggested I join the mortgage industry. At that time, there was much more money to be made there than in politics. So in 1983 I joined the mortgage industry, somewhat by accident.
I spent 17 years with my first company. In the very beginning, I was a loan officer and worked my way up to a national sales manager role. The Savings & Loan I was working for was expanding and I was tasked with building our branches across the country. Toward the end I was running all of their production, when Freddie Mac offered me a position as Senior Vice President in charge of the single family business.
Being a top sales representative was very rewarding. It gave me a certain happiness.
I also found a great mentor in Jim Judd, the president of the S&L. He was one of several mentors who helped mold and shape me to become who I am today. Jim’s philosophy was to take top sales people and have them try new things, taking on different roles within the company. It was a valuable experience for me. I gained life-long skills that help me even now, years later, at the Mortgage Bankers Association.
If you could offer your younger self some advice for the future, what would it be? What lessons have you learned?
If I could offer advice to my younger self, it would be very straightforward. What I’ve learned over the years is that companies seem universally afraid of change. This apprehension to change, the fear of it, is what holds them back.
Some of the best advice I can offer is this: You need to be able to look ahead at what’s coming and embrace the change, so you can become a more effective leader. Disruptors are inevitable to any industry – the mortgage industry included. Being able to anticipate and pivot is key to being effective.
“You need to be able to look ahead at what’s coming and embrace the change.”
For example, the advent of the Internet helped shape my perspective and process. I saw clearly an opportunity to change the way we had always done things, and go out and create an Internet sales force within the mortgage industry. I created a small team at first in order to prove whether we could better serve and grow our business by leveraging the Internet. At the time, few lenders had an Internet sales team. We were somewhat cutting edge for the time.
It’s also important not only to embrace change, but also to test it. See what works and what doesn’t. That can only happen if you are ok with failure and walking away. Failure can make you a better, stronger employee.
What I’ve witnessed over the years is a lot of what determines success for loan officers is their ability to adapt to change. Specifically, going from a refi market to a purchase market as we are doing now.
Loan officers who are able to recognize the shift in the industry will modify their approach to business and hustle harder to adapt to this dynamic change. For example, they’ll develop referral relationships to gain exposure to more consumers, and work to improve time management skills so that their time is well spent on items that will see a return.
Name some accomplishments you’re proudest of, personally and professionally.
I’m very proud of making President’s Club my first full year as a loan officer in 1984.
From a professional side, I would have to say being appointed by President Obama to be the Assistant Secretary and Federal Housing Commissioner at HUD. To be part of that administration during a difficult time in the mortgage industry and to make positive change for the country, and ultimately becoming a trusted advisor on housing policy issues to Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers – and to the President himself – was very rewarding to me.
As far as business accomplishments, something that sticks out was recognizing as a new manager in 1985 that I was failing miserably. I was unhappy with my sales team because they didn’t have my same sales skills and my more aggressive style. My boss came to me and said, “Dave, you’re failing at this.” He taught me how to use a combination of situational leadership and the management process to help recognize the different strengths each employee possessed and play to those strengths. I was able to develop a variety of skill-sets within my team. So being able to fail in business and then learn and grow from it has helped me tremendously, and I am proud of that.
How has the value of loan officers evolved over time?
Indeed, loan officers’ value has evolved quite a bit from when I first started in the business. However, their value is not lost. It’s true: they’ll have to work harder to make the value connection between themselves and consumers. In that respect, it may be more difficult for them going forward.
But the relationship between loan officers and real estate agents is still a key one that can work to increase mortgage business and loan officers’ value. Quality real estate agents need to hear from their loan officers so they are educated and informed about changes occurring in the industry. Loan officers need to understand it does not come down to just price with real estate agents. If it does, then they don’t need you.
Real estate agents know consumers will shop rates. At the time of purchase, real estate agents prefer to control the process. They want borrowers to lean on a lender who will get the deal done. That said, with the advent of Millennial consumers (and others) who are technology-driven, there seems to be a tipping point coming.
It’s easy to envision a centralized platform where consumers can go through all the mortgage process steps and shop rates without ever engaging a loan officer. So we have to ask ourselves, where does human intervention come into play in that scenario? Where is the value of the real estate agent, and what is the role of the loan officer? The value of human intervention within the mortgage process may become optional in the future.
We anticipate a great purchase market over the next decade, based on demographics. But who wins and who loses? It comes down to the loan officer’s or the mortgage company’s ability to establish value in their part of the process. A loan officer can possess a wealth of knowledge that needs to be shared with potential borrowers, so they can be the trusted source for both their referral business partners and their consumers. This will create more opportunities for them going forward.
What would you say to young mortgage professionals getting into the industry today?
I came into the mortgage industry as a loan officer. I stayed many years at my first job, partly because of all the opportunities and challenges it provided. Interest in being challenged still exists among younger loan officers today. Successful people want to be challenged and want to learn.
When I first started out in 1983, there were a lot of tired loan officers who were worn down from the recession and its impact on the business. They relied on refinances and didn’t have the drive or hustle to learn new skills or try new things. As someone new to the business, I simply didn’t know any better, so I would go out and call on real estate agents. I’d make friends with others in the industry. I tried to be adaptable to my working environment, which meant learning to sell and to find leads.
“To be successful you have to want to go out and chase it every day.”
We all know we’re sized up in the first few minutes of meeting someone new. I’ve found that wearing a suit every day, always looking professional, has been valuable in helping me be successful.
Millennials are primed to finally buy homes. By most estimates, we’re going to see between 12 million to 14 million new homeowners in the next decade. This is a similar growth pattern to the Baby Boom generation which my career was mostly built on.
Leadership matters, and if your employer won’t support training, you need to go out and find it on your own. Just because you know the product doesn’t mean you can successfully sell it. Younger loan officers should focus on a few strategies to help them secure more business. There’s huge value in being able to communicate effectively. Learn public speaking; take classes if you have to. Get sales training and become an expert in your field. Talk with experts in different areas of the mortgage process at your company.
I used to meet with head of Capital Markets after work several times per week. I’d learn everything I could. The key is to learn all areas of the business, become the expert, and you will be a better sales person as a result.
Mentors can make the difference. Consider finding a mentor to help you better understand the business from a different perspective.
Some keys to business growth for me are having an appetite for knowledge, investing in your business and being a true professional about your job. Most important, you need to be able to rise above the people who have a negative attitude. Do not surround yourself with negative people. Stay positive and your business will be better for it.
Can you recommend any organizations young mortgage professionals should consider joining, and why?
Well, this won’t come as a surprise to anyone, but joining state Mortgage Bankers Association chapters is a great first step. Go to their conferences – there are so many people who care deeply for this industry, whom you can learn so much from. I became a CMB (certified mortgage banker) in 2015. There are less than 2,000 nationwide. I recommend everyone shoot to achieve that pinnacle of excellence.
We are excited about our new mPact initiative. It’s the Mortgage Bankers Association’s network for young mortgage professionals. It’s so worth checking out.
And always find time to network. Meet the people in this industry and connect with them – they can become referral options and good friends. If you’re in this industry, you can’t be in it half way – or you won’t get good outcomes.
What gaps do you see in the mortgage industry landscape today that are barriers to future growth?
We’ve come off the worst recession ever – I think people underestimate how bad it really was. As a result, all the regulation that was born from that was done to correct – in my view overcorrect – what caused the housing crash in the first place.
The unfortunate thing about our industry is there will always be some company somewhere that will adversely select against whatever opportunity they have. It only takes a couple of bad apples to take down the industry. Lack of regulations is what led to the collapse. So in today’s regime of excessive regulation, we have real gaps in being able to fulfill the needs of our communities, our borrowers and real estate agents.
We have to work through those barriers and provide more ways to provide sustainable credit to borrowers, of course with appropriate disclosures and recognition. No single product is going to work for everybody. But I think, for example, there are ways to modify the Qualified Mortgage rules to give us the ability to use more judgment when we are making a loan decision – without going back to the way it was before.
There’s going to be huge focus on this. It will resolve itself, because it’s a supply-and-demand variable, and there are profits in meeting that demand.
The greatest barrier for future growth for many of our lending firms is going to be their ability to stay current with financial technology companies entering the market. Because the more you use technology to bring efficiencies to the consumer experience and to shorten the loan lifecycle, the more you’ll make that whole experience change. For some, that’s problematic.
Where should new mortgage professionals go to gain deeper insight into the industry? What resources are available to them?
As I mentioned earlier, leadership matters. Looking back at some of the great companies I’ve worked at, there’s always someone there you can admire and learn from. For me it was the few mentors who helped me early in my career in the mortgage industry. My mentors had been brought into my company to develop and instill a sales culture that doesn’t exist at most banks. I truly benefited from it.
If your company isn’t a leader in offering training or resources, you can always gain knowledge from others in the industry by joining your local chapter of the Mortgage Bankers Association. Our members are passionate about the business. Our speakers are highly educated and love to share their insights. It’s a great way to gain that deep knowledge about the mortgage business.
How do you plan to spend your time, once you’ve retired from your position at the Mortgage Bankers Association?
Given everything that has happened recently in my life with cancer, I plan to spend a lot of time with my family and enjoy life’s moments. I love the Mortgage Bankers Association. I love this business. I’ve had a great career. But I want to be with the ones I love most. Your next day is never guaranteed.
I don’t think I’ll completely disappear, but I won’t have a traditional job, per se. I may consider joining a board or two. I hope to provide advice and input to D.C. policymakers through non-profit organizations in Washington.
Can you share a final piece of advice?
Loan officers need to remember they should strive to be a wealth of knowledge and to share their insights with potential borrowers and referral partners. Don’t look at the mortgage industry through a rearview mirror. You need fresh perspective and a positive attitude to grow your business forward.