As our editor Rick Grant often reminds us, the first job of a writer is to elicit a response. Sometimes, when those responses are evoked they prompt a memory or an idea. Sometimes, those resulting ideas provoke a secondary response. That’s what my recent HW blog post, The Most Awfullest Time of the Year, did for one particular reader.
“It’s callous,” was this readers comment. Callous because it seemed I was making light of the potential for mass layoffs in the mortgage industry.
Which is odd. Odd because my post addresses this directly:
Lest you think this is callous and me uncaring, consider this: early in my career I participated in laying off about 100 mortgage professionals as the December holidays began. It was neither fun, nor funny. Quite the opposite, actually. The memory of it left an indelible mark on me and the way I worked with teammates from then on. While it’s easy to say the industry will have 100,000 fewer employees at the end of 2022 it has to be just as easy to remember these are individual, talented people. And people are this industry’s most important and valuable asset.
Perhaps I wasn’t clear. The point of my post is that the process of laying people off often treats those affected in a callous and uncaring way. What provoked my post was the early, first round of industry layoffs that took place right before the December holidays. What happened was so graceless it made the New York Times. As our CEO says, “My first mentor told me to NEVER do anything that will put you in the New York Times.” Pretty. Darned. Good. Advice.
And to be clearer still: people are the most important asset in every mortgage operation. People make mortgage lending personal. Consumers who need a mortgage want the personal touch. While the push in the industry over the past five or so years has been toward newer technology that often pinpoints discrete, even arcane tasks in the origination cycle, the same emphasis has not been placed on people.
Layoffs this year are inevitable. Rates are increasing, knocking on 4.00%. If you’ve paid any attention to mortgage industry financials during 2020 and 2021 you know that a significant portion of the high levels of revenue were a result of secondary market gains. It’s a lot harder, by the way, to achieve secondary market gains in a rising rate environment. So where will profits come from this year and in the years to come?
Profits will come from leveraging mortgage industry professionals: their industry and process knowledge. We need them – not more technology – to adapt and improve processes for the purchase market. If we thoughtlessly and shortsightedly furlough them we lose all chance of staving off another inevitable outcome: long-term, pathetically poor performance.
I’ll be sharing my thoughts on industry financial performance soon. In the meantime, give serious thought to how you’ll staff for this year’s purchase market. We can help. The BlackFin Group is a team of mortgage industry professionals who are all from the industry and who have all made loans. We’ve done lots of other cool, groovy stuff in this industry too. Get our perspective. Give us a call.