In February, Finance of America CEO Patti Cook announced her retirement after a successful career in finance that spanned 45 years. HousingWire sat down with this Woman of Influence winner to find out some of the important lessons she learned along the way.
HousingWire: One of your first jobs in the industry was at Salomon Brothers, starting in 1979. What part of that job did you love?
Patti Cook: When I look back on my time at Salomon Brothers, what drew me to that work and kept me there was the innovation coming to the fixed-income markets during that decade. When you look at how fixed-income developed, mortgage-backed securities were brand new at the time and I was right at the forefront of that work. CMOs or collateralized mortgage obligations were developed.
Then, that led to REMICs — real estate mortgage investment conduits — and the market really took off from there. Salomon Brothers was at the epicenter of the innovation taking place in fixed-income and I really loved that firsthand experience working with mortgage-backed securities, CMOs, REMICs and securitization more broadly.
HW: You worked at Salomon Brothers when it was rare to see women on Wall Street. What did you take away from that experience that has shaped the roles you’ve had since then?
Patti Cook: My experience there really led me to my “excellence every day” mantra. When you commit to excellence every day, it gets rewarded. For me, I wasn’t focused on women being unique in the workplace or having a bigger mountain to climb or anything like that. I genuinely feel I was lucky to have that job and I demonstrated that in my approach to work.
I put my head down, worked hard every day, and I was rewarded for it. That commitment to excellence and working hard — even on the days when you might not feel up to it — really shaped my outlook and has been a key driver in my success.
HW: From 2004-2008 — at the height of the financial crisis — you served as EVP and chief business officer at Freddie Mac. What was it like to be there as it went into conservatorship?
Patti Cook: That was certainly quite the experience. I can say that there is no playbook for a situation like that. There was no safety net. We were working with some of the smartest people in the room — leaders from the Fed, Treasury and at the highest levels of government — to develop a response and sort out the right solution. Our focus was on calming the markets and ensuring stability. In some ways, when I look back at that time, it was like we all had a front row view of history in the making.
HW: Was there any thought then that conservatorship would last so long?
Patti Cook: At the time, we were singularly focused on fixing the situation and bringing stability to the markets. We weren’t concerned with the long-term view of how they get out of conservatorship. During that time, that wasn’t the focus of our work. We were focused on shoring up the markets.
HW: Working at lenders, financial firms and Freddie Mac, how do you think about the consumer, the borrower, today?
Patti Cook: I think it’s all about empowerment for the customer. If you consider the last few decades and how the industry’s view of the customer has evolved, it is all about putting power in the hands of the customer. I don’t think we talked about the customer in that way 20 years ago.
What we’ve evolved to is a model where we provide customers with the tools and expert guidance they need to help enable them to make better financial decisions. That also leads me to how we approach our business today at FOA. We strive to offer the widest breadth of products and services, so we can help our customers at whatever stage of life they’re in. Our No. 1 priority and focus today is on the customer and putting them first.
HW: You’ve held the top leadership role at some of the largest companies in our industry. What is one key to your success?
Patti Cook: My guiding principle has always been to work very hard while always treating all people with respect. This approach has helped me build trust and knowledge, which I’ve accumulated throughout my career and which, in turn, has made me a better and more effective and compassionate leader. I feel very fortunate to be able to look back on a long career that has been filled with such rewarding experiences.
HW: Who have been some of your mentors?
Patti Cook: I view mentors as those in life who motivate you along the way. The truth is that for me this has and will always be my family. Everything that I’ve done throughout my career — all of the hard work and nights and weekends at the office — have been driven by my desire to provide for my family and help ensure that they were well educated and had everything they needed to be successful. I wanted them to be proud of me. That’s what motivated me. It’s still what motivates me.
HW: What are some of the qualities you can identify early on in a junior team member that are great predictors of success?
Patti Cook: One of the things I believe I am really good at is identifying young talent and then doing what I can to help nurture those careers. This means making myself available to impart wisdom and counsel and helping to ensure that they have access to the tools and resources to facilitate their professional development. I always assume people are smart enough, but I think the best predictor of success is one’s work ethic and desire to learn. Where someone went to school is much less important to me than their willingness to raise their hands, roll up their sleeves and just work hard. I am not the product of Ivy League schooling. I ascribe so much of my success to my relentless desire to learn and stay ahead of the industry. When I see similar qualities in individuals, I will naturally gravitate to them.
HW: Was it one of your personal goals to take a company public during your career?
Patti Cook: The short answer is not in my wildest dreams. I’d actually go so far to say that being the CEO of a company was never one of my goals. Not because I didn’t dream big, but because when you look at my career path and where I started, corporate life was not on my road map until later on in my career and even then not until the last few years. The lesson there is that it’s very hard to forecast your career. Your path emerges over time and if you work hard and treat people with respect during that journey, I believe that you are presented with opportunities that perhaps weren’t there just a few years or even months before. It’s really remarkable.
HW: A purchase market presents unique challenges for lenders. How is Finance of America approaching what could be a difficult year for originators?
Patti Cook: Finance of America was built purposefully different. Our continued success is a direct result of our unique business model that has helped us maintain operating profitability despite the mortgage market evolution. The mortgage industry is currently facing a tough environment and the demand for refinancing has dramatically decreased from the highs of 2020 as rates have increased. These macro conditions have led to a shift from refinancing to home purchase.
We believe Finance of America is well-positioned to take advantage of the expected growth in the purchase and non-agency market while still remaining able to leverage the episodic refinance opportunities as we did in 2020. Additionally, we will continue to see significant growth in our Specialty Finance and Services or SF&S segment.
This segment includes our reverse mortgage business, our commercial fix-and-flip business, our home improvement business, and our lender services and capital markets businesses. In the fourth quarter of 2021, SF&S accounted for more than 50 percent of our revenue and the bulk of our adjusted net income. We expect SF&S to be the main driver of growth and profitability in the foreseeable future.
This was originally featured in the April Issue of HousingWire Magazine. To read the full issue, click here.