The mortgage industry has seen an influx of new players in the last several years, including startups run by Silicon Valley alums eager to apply lessons learned in those tech-rich environments to the mortgage space.
Often they aim to upend the traditional (paper) mortgage process with streamlined systems that meet consumer demand for self service options on mobile, or leverage data to gain better outcomes in everything from lending to field services.
The mortgage industry needs these innovations. We need people willing to dissect the mortgage process like Cold War kids took apart radios — people who will examine how all the pieces fit together and eventually shrink that refrigerator-sized console onto a silicon wafer.
Let’s replace fax machines with imaging tech that grabs information off source documents, and throw out (I mean recycle) every hand-written, illegible form on the planet.
Let’s do that and more.
But let’s resist the dark, soul-killing parts of Silicon Valley culture that could accompany these innovations. These are the unintended consequences that arrive with little fanfare but deadly results — the business equivalent of ships docking with exotic goods, but also rats, fleas and plague.
At the top of that list? The way Silicon Valley companies treat employees.
Yes, the typical tech startup offers many perks — gourmet cafeterias, massage rooms and lessons in standup comedy (seriously). But the price to play is steep and usually involves marathon work hours.
You can joke about banker’s hours, but our industry already knows the dangers of the wage-slave mentality from Wall Street. A number of high-profile banker suicides starting in 2014 brought attention to the issue of the incredible pressure bankers face at Wall Street firms.
A New York Times piece by William Cohan after the suicides of several young bankers found that they had been working 72 hours straight, something that turned out to be standard practice. Trying to relieve some of that pressure, Wall Street firms came up with these remedies, according to the same article:
Goldman Sachs mandated that interns leave the office before midnight each day and told junior bankers to stay out of the office from 9 pm Friday night to 9 am Sunday morning.
Barclays analysts were forbidden from working more than 12 days in a row.
JP Morgan Chase gave analysts the option of one weekend off a month, if scheduled in advance.
Bank of America now requires its employees to take off 4 weekend days a month.
Those are the remedies? Wow, how generous. I mean those JP Morgan analysts are probably still trying to figure out what new hobbies they can come up with to fill those two whole days a month that they aren’t working, or at least aren’t working in the office. And leaving at midnight as an intern? With that kind of pampering it’s no wonder these Millennials feel entitled.
But, you argue, Wall Street firms and tech startups have preposterous deadline stress because they have deals to make and products to launch. That kind of expectation would never seep into the mortgage space, right? I mean, no one expects to get underwriting done at midnight on a Saturday night.
Or do they?
The solutions that offer so much promise also open up the possibility of 24/7 availability. The mission of many in our industry is satisfying consumer demand, and understandably so. But we should be careful. Sometimes consumers are ridiculous and unreasonable. Sometimes meeting their demands comes at too high a price.
Mortgage servicers know these expectations all too well, and often use remote staff to ensure constant communication with customers. As Mark Rodgers, director of Citi Public Affairs, told HousingWire this spring, “As a global company, we leverage resources in multiple locations in the U.S. and abroad to best address business and client needs and provide consistent, around-the-clock customer service.”
Remote outsourcing is better than expecting people to work non-stop, but not every mortgage shop is going to have the means to do it — in fact, most won’t. Which could mean crazy hours for mortgage professionals.
The problem is that for people in the tech space, crazy hours feel normal. They may have never worked for a company that valued the reasoned decision-making of people who have a good night’s sleep, or the creativity that comes from doing something outside of work that sparks new ideas and solutions.
After Amazon came under fire for the stressful conditions employees work under, a number of articles were published quoting people throughout the tech space who basically advised people to suck it up, or find work elsewhere. An article from ComputerWorld quoting Bill Reynolds, research director of an IT workforce research firm, was typical of that sentiment:
Like stock traders working under extreme pressure on Wall Street or medical interns working 36-hour shifts, the tech industry is a high-stress environment — one that’s not suited to every worker.
“If you can’t live with that pressure, you should go somewhere else,” said Reynolds. “For people in Silicon Valley, it’s who they are. It’s the kind of person they are.”
If we’re not careful, it could become the kind of person mortgage companies want to hire. One of my coworkers had a friend who recently applied for a job at a mortgage startup aiming to make the mortgage process much easier for borrowers.
Ads for the company, which just started serving our area, emphasize the calm, easy nature of the transaction. But what was the result for employees? This man was told to expect to work 80 hours a week, including weekends and holidays.
Is that really where we want the mortgage industry to go?
The tech pressure-cooker culture has another result — it discourages employment of anyone who wants to be a parent, especially women.
“Working marathon hours is part of Silicon Valley’s DNA. The drive, excitement, and intensity of startup culture, and indeed much of tech in general, draw me, and many others, to this industry. The problem, however, is that this narrow focus of work-as-life unto itself favors the young, especially young men—and disadvantages ambitious women who want to have children,” wrote Joscelin Cooper on Forbes.com.
Lack of diversity has been a challenge for our industry for decades. In the past it contributed to overt discrimination based on race and gender (see our feature story on page 38 for an update on gender equality in our industry). This kind of discrimination was corrected by changing the law, but subtler biases remain, and the best way to address those biases is to infuse the workplace with exactly the type of people who might be discriminated against.
Our industry understands this, with some companies now going to great lengths to hire people who mirror the borrower population. We cannot afford to go backward in any way in this area. A culture that attracts only a select demographic — of any type — is exactly the opposite of what the mortgage industry needs.
Contrast this with some of the examples of work-life balance cropping up more and more in our space. United Shore Financial Services instituted a “Firm 40” policy last year that requires employees to shut it off after 40 hours a week — no nights, no weekends.
The company, which is the No. 1 wholesale lender in the country, has seen productivity increase since the change, and is slated to fund $13 billion in loans this year, according to CNBC.
United Shore even hosted a “Moms back in business” career fair in May to recruit mothers who wanted to re-enter the workforce after time off with kids, or moms already working who want to join a company that has parent-friendly hours. This kind of action demonstrates the true value United Shore places on its employees, a point that is surely not lost on them.
Innovation is critical to the survival of our industry. As borrower expectations change, so should our delivery. But mortgage companies who can integrate Silicon Valley-inspired tech into their processes while still valuing employees will win over the long haul. We all will.