October 2016 - Changing of the Guard

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22 | TH E M R EP O RT COVER STORY an interest-rate discount if they complete an education program. The education is optional, but Wells Fargo Home Lending thinks it could go a long way toward making a difference, especially if survey results are any indication. According to Wells Fargo's own third annual "How America Views Homeownership" survey, which Ipsos Public Affairs conducted with 3,400 respondents, 40 percent of respondents held the mispercep - tion that a 20 percent down pay- ment was needed to buy a home. This belief was most prevalent in black and Hispanic communities. Sixty-two percent of respondents also believed that a very good credit score is needed to buy a home, and 43 percent said they consider a "good credit score" to be between 721 and 780. Thirty-two percent believed a score between 661 to 720 was needed, and 28 percent said "not sure." "We want to make sure anyone who wants to be a homeowner is aware of what it takes," Codel says. Something else that might help bridge these divides: free FICO scores. The Wall Street Journal re - ported in August that Wells Fargo plans to provide 30 million of its customers with access to their credit scores in a partnership with Fair Isaac Corp., creator of the FICO score. Codel has also made clear that he wants to digitalize Wells Fargo's lending process, incor - porating capabilities like eSign and advancing a mobile banking platform for customers. "In the mortgage marketplace, we've migrated to a server-based digital platform that we lay on top of our e-lending capabilities," he says. Perry Hilzendeger, head of Wells Fargo's Home Lending Servicing, gives testament to that desire for a more digital experience. According to Hilzendeger, Wells Fargo's online chats number more than 2,000 each month for mortgage and home equity col - lections. A smartphone-accessible Customer Resource Center also averages more than 100,000 unique visitors every month. "Having an engaged a com - mitted team that responds to our customers with either guidance or information is a testament to our culture," Hilzendeger says. Like other systemically impor - tant financial-services companies, Wells Fargo also has to contend with the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010 to curb some of the reckless and risky lending behaviors that precipitated the Great Recession. The financial crisis was deadly in its scope, wiping off more than $14 trillion in wealth in the United States, according to the Federal Reserve Bank of Dallas. The British Journal of Psychiatry found a steeper cost, as more than 10,000 people committed suicide as a result of the global reces - sion in Canada, Europe, and the United States. With more rules still expected under Dodd-Frank as a result, the head of home lending says he's been busy with regulators from agencies like the Consumer Financial Protection Bureau, Federal Reserve, and FDIC. On his radar: the ability-to-repay rule and Home Mortgage Disclosure Act. "We want to make sure regula - tions are well employed," Codel says. "We do that in a way that makes sense for the customers." And those settlements? He took a breath before addressing the $1.2 billion FHA settlement, the larg - est in that agency's history. "I'm happy to get that matter behind us," he says. "There's a situation where settling is the best thing." What Leadership Looks Like C odel's team has nothing but praise for him. Brad Blackwell, Wells Fargo Home Lending's head of portfolio lending, says that Codel has been able to put the focus on home - ownership and customer experi- ence after the financial crisis. "The strong difference is the environment, which [Heid and Codel] led through," Blackwell says, "He's been providing a framework and strategy," to show how to execute their vision. Kathy Gray, Wells Fargo Home Lending's head of business capa - bility development, puts Codel's leadership abilities in more practi- cal terms. The head of lending, Gray says, makes sure "we are all march- ing on the same path together, constantly recalibrating what we're working on." "Leadership transitions can be rocky," Coffin adds. "This one [the transition from Heid to Codel] was smooth as glass in my opinion. It's a function of how well the planning and how effec - tive our activities are." Interestingly, many with the home lending team—or at least those we interviewed—started their careers under Heid himself. Gray had been with Wells Fargo for 23 years before Codel took over from Heid, and Coffin for 18 years. Blackwell counts 15 years with Wells Fargo, and another, Peter Diliberti, head of capital markets, 14 years with the finan - cial-services company. Another of their colleagues, Michael DeVito, head of home lending production, had been with Wells Fargo for 19 years and Hilzendeger for 25. Which begs the question: What has changed at Wells Fargo Home Lending since the financial crash? It's an important question. Many leadership books dwell on where the buck should stop in a crisis and what meaningful institutional change looks like. Codel himself hints at Dodd- Frank and reforms under - taken since the recession, saying, "There's no doubt that the mort- gage finance system is safer than it was in 2006." Maybe he could write a book about it sometime soon—as much as one about his own leadership style. It'd likely be a bestseller. RYAN SCHUETTE is a journalist, cartoonist, and social entrepreneur. Originally from Texas, he has lived and reported in Uganda, Tanzania, and Washington, D.C. He has reported for National Public Radio, Al Jazeera America, Mic, and other news outlets, and his beats range from American politics to mortgage finance and foreign aid. He holds a master of arts in journalism and public affairs from American University. To learn more about Schuette, visit "We want to make sure anyone who wants to be a homeowner is aware of what it takes."

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