Leading through massive change

“You usually don’t have a choice. It becomes easier to do when you think about the fact your options are limited: you’re either going to move forward, or you’re going to disappear. So, you better do a good job of it.”

The 17th annual National Settlement Services Summit kicked off its second day with a keynote address from Middleman, who spoke about the challenges of leading through a once-in-a-generation pandemic, putting the health and safety of customers and staff first, and what’s next on the horizon.

The discussion was broken down into two distinct parts: what the industry has seen in terms of challenges and how the financial industry has had to deal with customers and process changes, and what is next.

Middleman’s experience showed how quickly our lives changed at the beginning of the pandemic. Remembering back to March 2020, Middleman said he and his team had a meeting, “business as usual,” on a Thursday, where the topic of discussion was COVID-19, the pandemic, and how Freedom Mortgage was going to address it. While no real conclusion was reached, by the next Tuesday – just five days later – 98 percent of his working population was remote.

“We took the position, that the most important thing was the health and safety of our personnel,” Middleman said. “First and foremost, the customer and the people that worked with us had to be healthy and safe. And everything we did, we built in response to that. I think that was probably the appropriate course of action to take.”

His team responded really well to this mindset, as Freedom Mortgage had a playbook for disaster recovery. Middleman said his company also had an insightful facilities and technology group who rose to the occasion. In months prior to the pandemic, his team had already started to move away from desktops and toward laptops and other equipment needed to work remotely and had begun “stockpiling” equipment. This proved to be beneficial as business activity picked up substantially during the pandemic, especially for refinances.

In order to keep up with the challenges of COVID-19 and increased activity, Middleman said he arranged a daily morning meeting with the top 30 or 40 people in the company to ensure everything was lined up. He also sent out a weekly company-wide video to reinforce a simple message: “You’re a hero, and you’re making a difference in people’s lives.”

Middleman said after so many months working from home and with so much business coming in – he mentioned the number of originations pretty much tripled during this time – he became concerned about his employees’ mental and physical health.

“Condoleezza Rice was on a Zoom meeting that I attended, and she made the comment, ‘I’m not sure whether I work from home, or live at work,’ Middleman said. “I think there were a lot of people that had that feeling. They just worked all the time, and there was so much work to do.”

Middleman used the weekly videos he had been sending to his employees to encourage them to engage in selfcare. He advised them to keep structure in their day, to have set time for physical activities, to take breaks from work, and to have a certain time to end work each day.

“It was important to let people know it was okay, that you don’t just tie yourself to the computer and be locked in on what you’re doing every minute of every day,” he said.

After the hurdle of transitioning to a remote workforce during a pandemic, last summer also gave rise to a lot of social unrest. With a diverse work population of almost 15,000, Middleman said once again it was important to deliver a pertinent message to his company. This time, it was the golden rule: treat others as you wish to be treated. His goal was to promote harmony in the workplace and to keep “everybody’s oar in the water, pulling at the same time.”

Leading through times like these also included actions outside of the company. Middleman said while business was great and employees were getting along and overcoming all the social unrest and personal challenges of working together, he also was aware his employees were watching the same news as he about people struggling to feed their families, or children needing to go back to school because that was the only hot meal they received during their day. So, his message changed again.

“We started talking about philanthropy, and we donated huge sums of money and had big rallies and virtual town halls to raise money for Feeding America,” he said. “As a result of that, we were able to donate well over a million dollars through the work and the people that were involved.”

On top of all of the good such donations do for the public, Middleman said he had a business purpose as well. One of his responsibilities as a leader, he explained, is to help the people he works with develop purpose in their lives and to have a reason to get out of bed in the morning and work, especially in an abnormal environment. Moreover, Freedom Mortgage is the largest government lender for the Federal Housing Administration, the Department of Veterans Affairs, and United States Department of Agriculture loans, as well as Fannie Mae, meaning it touched a lot of loans taken by those people who may have been struggling.

“We have a big responsibility to our society,” he said. “And that became part of our purpose: to help people own and leverage their homes and stay in their homes, and we were able to tie that in with our philanthropic approaches to help provide purpose in people’s lives, so that I could genuinely look them in the eye when I spoke to them and tell them they were a hero.”

Middleman also addressed how things have changed in such a short period of time, and what it means to consumers.

All industries, not just the mortgage industry, have had to deal with how customers’ expectations have changed, and how they shop for goods and services has changed, he said. Customers want things quickly, conveniently, and their way with very little desire to compromise. This, along with the pandemic, have catapulted the industry into using technology to meet those desires.

Freedom Mortgage, Middleman said, is well on its way to having that seamless end-to-end process for mortgage origination for the consumer.

“The problem is, even in as good a job as we’ve done, and even though it covers maybe 80 percent of our transactions, there are still 20 percent that fall out and they make a lot of noise when they crash onto the floor, so we’ve got a lot of work to do,” he said. “But despite the fact that we have a lot of work to do, we’ve done so much,” he added. “One of the things that came out of this pandemic, is how far we’ve progressed with technology. We’ve made leaps technologically that we never even imagined would happen. And where we are today is so much further along than where we were two years ago.”

Middleman closed his address by talking about the impact of unemployment and the role technology has played into it. Though 10 percent of the workforce is unemployed, he said, you generally do not miss them in your day-to-day life. The mortgage industry is no different, with people buying houses after looking at them online, negotiating with a real estate agent virtually, then signing the documents remotely and going to closing. There are less and less people involved in the transaction, and the pattern is likely to continue as technology progresses.

“So, I want to leave you with one thought: that type of progress is going to continue and not just in our industry, but in all industries,” he said. “We are going to face a challenge, and a very serious challenge as a nation, and that is, what are we going to do with all these idle hands? ... My solution would be to have a higher minimum wage and have a shorter required workweek. I think that’s a good solution to that problem. But I’m going to leave you with the question: what do you think we should do?”

After the close of his address, October Research Editorial Director Mark Lowery joined Middleman for a Q&A session, where the two discussed what is needed to further accelerate the adoption of e-closings in an environment where there are different and, at times, inconsistent laws and regulations, the future vision of the seamless mortgage experience, and whether the time-to-close could be trimmed further down.

One person from the audience asked Middleman his thoughts on how the myriad of forbearance policies were implemented and how things will go as consumers exit forbearance in the coming months.

Middleman said he could not be prouder of the servicers who fielded the phone calls and placed people who wanted to be in forbearance into those programs, and in such a short period of time. Now that the time has come to getting consumers out of forbearance, it is not about the content of the rules. Instead, he said, it is about just determining where that hoop is, because the industry does a great job performing within the rules, they just need to be clear and well-defined.

When it came to cybersecurity, Middleman went over what Freedom Mortgage does to combat what is a growing threat in the industry. The company’s preparations include conducting quarterly dry runs on what to do should the organization be shut down by cybercriminals. It also has a dedicated team of employees and negotiators as part of its disaster recovery plan, as well as insurance plans.

“When I think about all the things that we’ve been through, and all the challenges that we faced, I’m pretty happy with the way it turned out,” Middleman said. “And I want to salute you for a job well done. Because without the work of all the folks in our industry, doing all the work that they did, because it wasn’t just for your mortgage, it was everybody. And I think we just did an excellent job. And I really appreciate all the efforts all of you made to make that possible.”