Paul Gigliotti: Benefits of Cross-Training and Hiring Outside the Industry

Paul Gigliotti is COO of Pinnacle Home Loans, Novato, Calif. He also serves as a board member of the California Mortgage Bankers Association.

MBA NEWSLINK: How are mortgage lenders responding to the extraordinary demand created as a result of the current wave of refinances?

PAUL GIGLIOTTI: Mortgage lenders are under high stress right now, and most are suffering from a lack of trained personnel and substandard processes, which create bottlenecks that perpetuate the stress. At the same time, during these times of extraordinary demand, we have an opportunity to evolve as an industry. The key is to look at the roles and functions of every team and department in your organization and start thinking about cross-department training. This is something you should be doing all the time, not just when demand is high, or the industry is impacted by a major event or crisis. Making this adjustment will allow you to be prepared to leverage the skills and knowledge of your team when obstacles arise. It will also give you the ability to support individual functions where bottlenecks are created. Outsourcing to a third-party solution provider is also another great option for eliminating bottlenecks.

NEWSLINK: What are some of the pitfalls that lenders have experienced as a result of this very robust market?

GIGLIOTTI: Not implementing cross-training as a business practice can leave your team crippled and your organization will be unable to take advantage of soaring demand. Also, because you’re not allowing a large portion of your workforce to participate in overcoming the barriers you face, your team won’t be able to level up to their fullest potential. From a culture standpoint, that’s a big risk, too.

NEWSLINK: What outside-the-box steps can mortgage lenders take to better meet demand?

GIGLIOTTI: Creativity and innovation build success. Try adopting a cultural mindset of curiosity, openness, and evolution among your individual team members, and developing an environment of optimism and solution-based thinking. Understand that you can use technology to inform and empower, while also leveraging the skills and knowledge of your cross-trained team members. In addition to providing relief when the loan flow becomes bottlenecked, such as strategy alleviates stress and prevents burnout from happening.

NEWSLINK: Do these steps require capital investments?

GIGLIOTTI: If market conditions continue to trend in a positive direction, a small cash investment for additional technology and an increase in headcount would be wise. But really, unleashing creativity and innovation within your organization only requires an investment in people, training, and updated process flow.

NEWSLINK: Who are some players that have done an exceptional job meeting current mortgage demands?

GIGLIOTTI: There are quite a few examples out there. Home Point Financial, for example, is a newer company that continues to achieve record growth even during very volatile market conditions and economic uncertainty. Home Point views technology as an innovation tool, and is constantly improving regardless of market conditions. Another example is Equity Prime Mortgage (EPM), which continues to elevate and lift its team members. They really understand the importance of empowering your team to grow and learn the full scope of the business. Ultimately, empowered and educated team members contribute to a better company culture.

NEWSLINK: Lenders often complain that there are no employees available to recruit right now, what have you seen?

GIGLIOTTI: I think the problem is that our industry is focused on letting new people in. We are always looking for the same people to fill the positions we need. If a lender is looking for a new operations team member, the first question often asked is, “how many years of experience does that person have?” As an industry, we need to open the door and expand opportunities to people who could provide amazing, efficient work based on their past experience, no matter what industry they come from. I feel we also need to provide more educational training as an industry. Not just video tutorials, but actual education that explains mortgages from A to Z, and then concentrates on the detailed efforts of a variety of functions.

NEWSLINK: Some lenders are reportedly paying huge signing bonuses and oversized salaries for loan underwriters, what has your experience been?

GIGLIOTTI: I see this all the time at my company, Pinnacle Home Loans. Larger lenders are constantly trying to recruit our operations team members with huge sign-on bonuses and larger salaries.  Ultimately, this is going to create problems, including higher per loan costs. It’s also going to hurt the people who are taking larger salaries, as they may be the first to be let go of when the market starts to flatten out.

NEWSLINK: Are there other positions in addition to underwriters with a shortage of recruiting prospects?

GIGLIOTTI: I don’t think the shortage of prospects is limited to underwriters. There is also a high demand to fulfil processing and closing functions. The shortage of qualified mortgage professionals points to the fact that our industry doesn’t place an emphasis on recruiting fresh minds and isn’t providing education-based training.

NEWSLINK: Assuming that a lender has already made the production process as efficient as possible, what are some outside-the-box ways to attract new employees?

GIGLIOTTI: Again, it’s time for lenders to not only think outside the box but outside the industry. There’s so much to gain by being more diverse and inclusive of people who are trainable, teachable, and willing to participate in reshaping how our industry functions. But there is a difference between taking individuals who want to create a career in our industry and providing them with an in-depth education versus training people to simply fulfil a function. Only the first approach will foster a company culture that is proactive and empowered to create results no matter the market conditions.

NEWSLINK: Are you going outside the industry to fill positions? 

GIGLIOTTI: Absolutely. We’re in constant need of new ideas, new perspectives, and new approaches to ensure we continue to create companies that are able to thrive in a competitive industry. The main problem I am interested in solving is one of creating cross-industry function training and education. That’s really the key to success in any market.  

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)