TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1481918
24 | M R EP O RT COVER STORY and that we win their business every day through great customer service, a great overall mortgage experience, and a relationship that builds trust. It's broader than the transaction of the mortgage, be- cause as the largest servicer in the country, we just entered a 30-year relationship with our customers, so thinking about it as a relation- ship, we get to understand their financial needs and help meet those needs through their home lending experience. Before Wells Fargo, you were at Flagstar, and you also worked at Fannie Mae, and, going back to the beginning of your career, you were with PepsiCo. That's an interesting path. What did you learn from those different organizations and positions that prepared you to lead Wells Fargo Home Lending during such an unprecedented time? I definitely had a non-traditional path into mortgage banking. I started my career in health care, went into consumer products, and have been in financial services now for the better part of 20 years. The consistency through- out those different industries has been my deep understanding of the customer. At every company, there was a customer, whether it was an internal or an external customer, that had needs to be met. So I worked hard to under- stand the person, their motiva- tions: how to create a product, solution, or experience, that allowed us to meet the needs of the customer in a way that would maximize our business objectives. That's been the consistency throughout my career: tapping into what makes people click, and then figuring out how to get the best out of them in service of an end customer. Being able to meet core customer needs has been at the heart of everything I've done. I'm very fortunate to be in Home Lending and to have been able to do that now for the last 20 years. The notion of helping people achieve the American dream of homeownership is an extraordinary privilege. With American homebuyers facing challenges ranging from affordability and inflation to ongoing supply-chain and personnel issues hampering the building sector, what are the primary issues you and your team are focused on as we head into 2023? T he velocity with which we shifted from the incredible low interest rates and record origination environment over the last two years, into this smaller origination market with a higher interest rate environment, is what's stunning to people. Basically, in a quarter, we flipped from a strong refinance market to a purchase market. So, the primary challenge is right-sizing the capacity of our business to the market going forward, and doing so in a thoughtful and intentional way that still allows us to provide a great customer experience without sitting on excess costs. The second issue is dealing with the supply and affordabil- ity challenges in this purchase market. While home prices have come down year-over-year na- tionally, the appreciation over the last two years have priced some people out of the market. And the rising interest rates from the Federal Reserve are only making affordability worse. You pair this with the significant supply chal- lenges that are a result of lack of new home construction from the last crisis and you have people sitting on the sidelines. These factors create a small- er, more competitive mortgage market. The Mortgage Bankers Association reported that net pro- duction profits in Q2 dropped to its lowest level since Q 4 2018. Along those lines, Bloomberg reported in August that Wells Fargo had plans to scale back its mortgage business, reportedly in response to the shifting market as well as previous scandals the bank had been navigating in recent years. Could you comment on those changes? T here's no doubt today's market is creating headwinds for companies across the housing finance sector. But Wells Fargo is committed to supporting our cus- tomers and communities through our Home Lending Business. Like others in the industry, we're evaluating the size of our mortgage business to adapt to a dramatically smaller originations market. And as we do that, we're going to con- tinue to look across the company to prioritize and best position us to serve our customers broadly. These efforts are consistent with our deep belief in the dream of homeownership and the role Wells Fargo plays in helping to make that dream a reality for the mil- lions of customers we serve. In your opinion, what are the most important qualities of leadership when facing headwinds like the industry is weathering right now? How do you motivate and guide people through those storms? O ne of my favorite books is Good to Great. In the book, Jim Collins talks about the Stockdale Paradox. Admiral James Stockdale was a prisoner of war [during the Vietnam War]. The Stockdale Paradox was about confronting the brutal facts and reality of your current situation but maintaining this unwavering confidence that you can and will prevail in the end. That's how I approach life so I think that's why it resonates with me so much. I engage and motivate my team going back to our core mission, "I'm very fortunate to be in Home Lending and to have been able to do that now for the last 20 years. This whole notion of helping people achieve the American Dream of homeownership is an extraordinary privilege."