December 21, 2020|Fair Lending, Mortgage Industry, Recruiting, RESPA, Virus Response
You know that favorite uncle who puts his arm around your 20-something year old shoulder at a wedding bar and asks, “Brian[1], have you ever had a martini?” No, I hadn’t had a martini when my uncle Peter[2]first asked me that question at my brother’s wedding nor had I ever heard of the mortgage banking business. Today, I am quite familiar with martinis. I know why it is better to use 007’s advice to shake vodka, and the science behind why you must stir gin[3]. As noted in previous Musings, I have also learned how to make hand-stuffed blue cheese olives. I also now might know something about mortgage banking. It all started with Peter Hess.
My uncle Peter was a prominent Chicago real estate attorney and bon vivant who frequently confided to me that he wanted me to come join him and eventually take over his legal practice when he retired[4]. Peter was also the General Counsel to the Illinois Mortgage Bankers Association and frequently urged me to get involved with the IMBA because, he said, “mortgage bankers are a great source of business, but even more so because they are just the best, fun, great group of people to be with”. Sadly, I didn’t take his advice[5]in the 5 years I worked at the big Chicago law firm where I started after law school doing commercial real estate. Peter died suddenly at age 60, shortly after I took a job (working for another uncle) as GC of a bank in Wisconsin that had several national mortgage banking companies. Different route and uncle, but got to the same destination.
Mortgage Bankers are the Best
I bring this up because Peter was right: even though I’ve called them “junkies” (e.g., here and here) mortgage bankers are truly a great group of people to be with. I also said back in March that the industry could be heroes in how it responds to the challenges of the COVID-19 virus. Coincidentally, the leading industry pundit echoed my hero sentiments in his daily email[6].
Mortgage banking culture is typically a lot more casual and social than traditional banking or any other financial service business. Mortgage companies (at least retail mortgage lenders) tend to be led by salespeople who thrive on being outgoing, affable and caring; people who are accustomed to interacting with realtors and other salespeople operating in positions requiring similar extroverted social skills. The typical financial service businessperson, by contrast, tends to be more numbers and efficiency focused: handshakes preferred over hugs[7]. For example, in perhaps the busiest December closing period ever, it’s hard to imagine a bank CEO who would seek to overrule Parker’s Law by writing a Dickens reference-laden email to all employees offering an extra day off, asking everyone just to work that much harder on other days to close December’s loans a day earlier.[8]
Downsides to culture
That kind of culture, however, can cause trouble for growing companies as it becomes harder to sustain the same kind of collegiality as you expand. Emphasizing cultural harmony can allow inefficiencies to creep up, unless you are constantly minding costs and revenues and innovating.[9] Also, sometimes people can get way too collegial and forget about professionalism entirely. Additionally, we need to remind ourselves that even though our efforts closing loans have been heroic in the face of the Pandemic, the racial gap in lending has only worsened during this period. New ideas are needed, and we should support the efforts of minority industry leaders like Ben Slayton and his Legacy Home Loan Division of Panorama Mortgage Group[10], to grow African American lending and homeownership and better enable diverse groups of customers to enjoy the party.
Phil Schulman
Meanwhile, I recently had the honor, pleasure and all around great time of doing a “Brady Bunch” Zoom call on Content Beacon’s 3 Guys and iPad with a Dean Martin celebrity roast-worthy roster of attorneys and other RESPA geeks to celebrate Phil Schulman’s retirement. I mentioned Schulman in an earlier Musings. Phil is such an authority on RESPA that I have actually seen crackpot claims in writing claiming credibility and approval by the well-known attorney, “Phis Shoolman”, to support a blatantly illegal scheme to avoid RESPA. I was surprised Marx Sterbcow[11]didn’t mention that true story on the show. Anyway, check out the show link for a taste of the kind of good-natured ribbing coupled with genuine respect present in the industry as this legend embarks on his new career…, in the Catskills?
Happy Holidays and New Year
During the course of this Pandemic it has also been particularly tough to maintain that collegial culture due to social distancing and work from home. Everyone is doing their best to keep their sanity and desire for socialization with Zoom calls like the one I have every couple weeks with that leading industry blogger Rob Chrisman, Saturday Cup of Joe from Detroit author, Jeremy Potter, and an occasional guest or two. The pull to connect in person, however, is strong. I truly missed seeing everyone at the Holiday parties, conferences and office visits that were skipped in 2020, but look forward to the promise of vaccines and a new year in 2021.
Have a very Merry Christmas and Happy New Year. I appreciate you all and I’m sure the first big in person conference next year is going to be one heck of a party.
[1] I realize most readers have another first name.
[2] Not Peter Graves.
[3] Why people ask for “dry martinis” is beyond me. Just ask for a shot if that’s what you want. The vermouth is key. Do you “dry martini” people eat green vegetables without salt? Actually, saltiness explains what olives add to a martini.
[4]This was a secret at the time and is now the first time this story has seen the light of day.
[5]Peter also advised me while I was in college at Illinois that I should take classes for credit to get a pilot’s license. I didn’t and now wish I had.
[6] I have forgiven Mr. Chrisman for any plagiarism concerns because imitation is the sincerest form of flattery.
[7] COVID-19 may change the hugging thing forever, but #Metoo had a big impact on it too.
[8] I am unable to comment on any legal counsel I may or may not have provided on the wage/hour implications of a Dickens-inspired employment communication.
[9] Call Mike McCauley and Joe Garrett if you’re a mortgage banker who needs help to get more efficient (even if you don’t think you do). Regardless, sign up for their free newsletter if you like eclectic topics such as baseball statistics, old bank/regulator “war” stories, the Berkeley concert scene circa 1968, Eastern Europe, or (my personal fave) Hayekian economics/political science.
[10] Speaking of great, fun people to be with, Panorama also owns Alterra Home Loans. Alterra was started by Jason Madiedo and Miguel Narvaez and is focused on the Hispanic community.
[11] Please congratulate attorney Marx Sterbcow (
https://www.respaattorneys.com/
) on his first footnote reference in the Musings.