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Shuffling the Deck: Staying Ahead of the Housing Recovery


In the housing industry, the only constant is change. In an economy that is still on the road to housing recovery and an industry that is still in a period of consolidation after the biggest financial downturn since the Great Depression, the best in the business are nimble on their feet and adaptable to the set of circumstances that is presented. Employee migration is a greater reality now than ever before; whether the move is made in response to a new opportunity or due to displacement after a merger or other external pressure, the key to long-term survival in the industry is the ability to be open-minded and play the hand that is dealt.


When Opportunity Knocks, Open the Door

Being adaptable to the ebb and flow of the industry is all about taking advantage of opportunities as they present themselves. When JPMorgan Chase began downsizing its REO division, Bill Carr, who was then serving as VP, distressed properties manager, could see the writing on the wall. He started putting out feelers through the network of business relationships he had developed through the years.

As word got around that he was looking for another job, he was recruited for several positions. One recruiter tipped him off to a mid-size mortgage company that was positioned to grow, called the KM Mortgage Group. He was impressed with what he saw and eventually chose the company to be his new home. He recently became the national director of business development for the company, and doesn’t regret his decision.

“After meeting with these young and energetic owners, I could see that they were positioned for unlimited growth,” Carr said. “When I interviewed with them and the team members, I could tell that everyone felt like they were working in a family, and that means a lot. So, I decided this was a place I could build a team and something I could put my name on.” Carr believes that when one door closes, another opens, and he felt that this was the opportunity he had been seeking.

“In our industry today, you’re going to see a mass migration due to changes in company direction and mergers,” Carr explained. “Most organizations already have plans in place for layoffs when they take over other companies. When they lay people off, unfortunately, they only see people as numbers, not realizing they will lose the knowledge and business relationships those people have developed.”

However, Carr urges people not to be discouraged and not to be hesitant in seeking opportunities in smaller to mid-size organizations. “Some people hesitate to work for a smaller company because they don’t welcome a cut in salary,” he explained. “Although you may not have the mega salary you had with a larger institution, if you go with a small to mid-tier company and build on the opportunities there, you will eventually make more money and be compensated for your performance.” Carr said. “I took a salary cut, but I think I just gave myself a raise. I am confident in my ability to build incredible teams to do an exceptional job and have the compensation to go with it. As we start to grow, it’s fun to watch.”

Despite his enthusiasm for his job and the company he represents, Carr is not sugarcoating anything. “Let’s be honest,” he said. “We’re in a very tough economy, and I think you’re going to see a lot more layoffs. As we transition from refinancing to a purchase market, it’s even more crucial for agents to position themselves with partners for growth.”

Just as in any other industry, relationships are paramount. “A lot of loan officers have been sitting in branch offices forever, and have lost the skill of getting out to build relationships with real estate agents,” he explained. “If you don’t have the confidence to build relationships, you’re going to die on the vine.”


Mergers and Acquisitions Are Changing the Way Business is Done

There’s turmoil in the housing industry at the present time, because mergers and acquisitions are occurring at an ever increasing rate, according to Tami Coffey, president at Mortgage Search & Acquisition (MSA). “Sixty percent of displacement for executives occurs when there has been an acquisition or a merger,” she explained. “When a merger or acquisition occurs, there is often a duplication of the executive team, and it’s the ones with the least tenure or lesser skill sets who are displaced.”

Relying on past experience, Coffey forecasts that the current trend is just another phase in the overall picture of employment. During her 30 years as an executive recruiter for the mortgage industry, Coffey said she has observed that displacements occur in waves. “There will seem to be a lot of unemployed executives for awhile, and then that will level off,” she said. “At times, you can’t recruit a good senior servicing manager for almost any amount of money. Then six months later, there will be several on the market.”

However, it’s a different story when talking about servicing executives. Although the number of available jobs in operations seems to fluctuate, Coffey says that servicing is a consistent arm of the industry. “I don’t see a lot of servicing people flooding the market right now,” she explained. “We get our share of resumes, from servicing professionals, but overall, servicing seems to have a more stable track record with respect to employment.”

She predicts that the housing industry is poised for growth and housing recovery, stating her belief that “the market is stabilizing and has recovered from 2008 and 2009.” She goes on to elaborate, saying “Things are not great, but they’re not bad, either. I think the future looks good.”


Change is the New Normal

Adapting to change is the key for companies to survive in the housing industry, says Mike Hardwick, president of Churchill Mortgage in Brentwood, Tennessee, and the adaptability he speaks of includes increasing and decreasing personnel as necessary. “This is true for any business,” he said. “There will always be up and down periods, and you have to right-size your company to stay in business.”

He referred to the major downswing in the housing industry caused by the financial crisis in 2007 – 2012, followed by an increase in business for about a year and a half, fueled by consumers refinancing their homes. “This resulted in many jobs being created to take care of the increase in mortgage applications,” he said. “However, as interest rates increased in the second quarter of last year, refinancing was reduced to almost nothing, and this is yet another cause of a reduction in the workforce at many companies.”

Hardwick contends that the statistics back up his premise. “The mortgage industry used to do $3 to $4 trillion in volume, but in 2013, it was reduced to only $1.8 trillion. This year, sales have continued to fall and predictions are that it will be only be $1.1 to 1.2 trillion in volume. This has been one of the factors that caused a tremendous move of talent completely out of the industry.”

However, despite the fluctuation of the mortgage and real estate markets, Hardwick said that his company is growing and has opened three new branches this year, making a total of 18 branches in 10 states.

Hardwick’s company has been hiring in many areas of the country, seeking out those with valuable skills who were laid off in the downturn. According to Hardwick, “Many changes in the market affected the size of our staffing. We went through four or five years of hiring, and then last year, due to the decrease in refinancing, we had to lay off some people.” Despite this, the market is returning to a point where larger employee rosters are valuable again.

In the near term, Hardwick can see stability in the cards. “I think interest rates will remain stable for the next 6 to 12 months, and I think our volumes will be fairly stable. Our goal is to prepare for a purchase-driven economy, and I think the outlook is fairly good.”

But he did have one caveat to add, addressing an issue with inadequate labor programs across the nation: “Until our government gets serious about creating new, good-paying jobs, people cannot buy homes, and that will make it hard for the mortgage and real estate industries to thrive.”


Keeping an Open Mind is Key

When starting out in any industry, most employees make plans and have a desired trajectory that they believe will lead to a fulfilling career. But plans change, and sometimes it is necessary to maintain one or more fail-safes to fend off unforeseen circumstances.

Ron Anderson, a former banker at Quicken Loans in Detroit, believes that it is best to be prepared for changes and to have a backup plan. “You have to understand that the real estate market is cyclical, and that there are bad times as well as good times,” he explained.

When his job of four years at Quicken Loans ended, Anderson said he was prepared. During the time he worked at Quicken, he also worked as a self-employed real estate investor, buying REOs, repairing them, and then offering them for rent. Eventually, he owned 25 such properties, both single-family and duplexes, which provided him with a substantial income. “When I was laid off, there was not much change in my finances,” he explained. “I was making more money from my real estate properties than I made at Quicken.”

He believes that anyone working in the housing industry, even in servicing, needs to have a backup plan and the possibility for multiple sources of income.

Instead of being distressed at the loss of his job, Anderson said he felt that this was a good opportunity to re-evaluate the course of his career and begin the next step. He decided to sell all of his properties in Detroit, coincidentally doing so “just before the bottom fell out.” He also assessed his skills and compared them to the requirements for other industries, eventually deciding that helping financial firms accomplish their public relations goals was a chance for him to apply the experience he already possessed to new purposes.

But he realized that accomplishing his new goal would require a greater degree of education, so he went back to school. Surely enough, he was able to obtain a position with a public relations firm at the end of his scholarly endeavors, representing several companies in the mortgage banking industry.

Anderson believes that anyone who is successful in the housing industry has flexible and dynamic characteristics. “Those same skills that make someone a good loan officer can help that person get another job,” he explained. “These skills can be transferred to other careers.” He said that he learned the value of building relationships, and that these skills enable him to be an effective public relations representative. “What we do in the agency world is to build relationships, and this is critical. I use that skill in PR on a daily basis with the media and with clients,” he explained.

When he started pitching media, Anderson said that skill paid off in spades. “Every time I picked up the phone to call someone in the media, I focused on what I could give them,” he said. “Finding out what their interests are and consistently delivering that to them guarantees success.”

Another skill that Anderson acquired in the industry is developing a results-oriented mindset. He explained that in a sales environment, he had to deliver on a consistent basis and focus on producing. “That’s what I brought to my present job, and that’s what my clients expect me to deliver,” he said.

Whatever the cause, increased migration at all levels of the industry is a trend likely to continue for the foreseeable future. Industry leaders are wrestling with the steps required to draw and maintain the best talent and to develop the strategies that will move their businesses forward in the next phase of this recovery. For those contemplating a move, the prospect of starting over can be daunting, but the evolving industry in times like these is a place wherein we adapt or die. It may take some creativity, but the housing industry still offers plenty of opportunities to those willing to seize them. As Bill Carr put it: “If you’ve built relationships, there is always opportunity out there, but you’ve got to go out and make it happen.”

This Select Print Feature, originally appeared in the September, 2014 issue of DS News magazine.


About Author: Sandra Lane

Sandra Lane has extensive experience covering the default servicing industry. She contributed regularly to DS News' predecessor, REO Magazine, from 2004 to 2006, covering local market trends, the effects of macroeconomic shifts on market conditions, and "big-picture" analyses of industry-driving indicators. But her understanding of the mortgage and real estate business extends even beyond those pre-crisis days. She is a former real estate broker and grew up in what she calls "a real estate family." A journalism graduate of the University of North Texas, she has written articles for various newspapers and trade journals, as well as company communications for several major corporations.

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