Years ago, looking out across the competitive mortgage lending industry landscape, Bill Cosgrove foresaw certain competitors growing to a scale at which they would likely capture more than half of the market. As a result, Cosgrove, president and CEO of Union Home Mortgage, felt it was critical to position his company to compete at such a scale.
Through his high-level involvement in a number of industry associations, he has found himself in rooms with executives from the largest lenders in the United States. What he discovered through those experiences was eye-opening.
“As I began to know these executives and get to know their companies a little better, I realized that our problems were the same, our opportunities where the same,” he says. “And so, in my mind, serving the industry taught me a valuable lesson. It taught me that none of these companies or banks were better than Union Home. They were just bigger.”
So Cosgrove focused on aggressively scaling the business, with a particular focus on three areas: technology, marketing and branding, and people.
“I had to double down, triple down on growth, not compromising our integrity, not compromising our code of conduct, not cutting corners on who we hire, but truly believe that we had a world-class opportunity, we had a wonderful story to tell and that we were as good as anybody else,” he says.
With the advent of credit scores, technology became a factor in mortgage lending that couldn’t be ignored. Once credit score measuring came to the industry, and Fannie Mae and Freddie Mac adopted it, the approval process became more technology-based than human-based. It was a huge turning point.
“Over the last 20 years, there have been continual advances in technology in the mortgage business,” Cosgrove says. “I see it as two buckets. The first is to help the manufacturing of mortgage loans — meaning the processing, the underwriting, the closing of mortgage loans. And the second would be obtaining customers and how a company would interface in a sales way with consumers.”
Cosgrove recognized that, to survive, Union Home Mortgage needed to advance its technology. But to do that, he’d have to bring expertise in-house to execute on something that he didn’t necessarily understand.
“Anytime as a CEO you’re out of your swimming lane, hiring in those departments and those leaders becomes more difficult,” he says. “It was difficult for us to find our CFO, difficult to find our chief marketing person and difficult to find our chief technologist. Quite frankly, in some of those positions, we swung and missed a couple times.”
To help in that regard, Cosgrove created an advisory board of people he trusted, not only professionally but personally. They had core competencies in technology and could lead the company to the talent it needed.
Union Home Mortgage brought in a high-ranking technologist from a well-known Cleveland organization. It also hired a group of former Ohio Savings Bank technologists who, in their time in the mortgage space, were highly advanced. They understood the mortgage technology, which fueled Union Home Mortgage’s growth in that area. Then, through its recruiting, the company began to compete for young people right out of college.
“We thought that we had a great story to tell and there were a lot of mentors in place,” Cosgrove says. “As you bring that talent to the table, it’s the old adage: Quality attracts quality, talent attracts talent. If you give them compelling work, if you give them a compelling story and you shoot for the stars and you give them an aggressive budget to become world class, putting that all together is a pretty good recipe.”
The company’s technology push has produced results. As recently as eight years ago, Cosgrove says, Union Home Mortgage was closing 8,000 transactions a year. This year, facilitated in part by its improved technology, it expects to close between 40,000 and 50,000 transactions across the country.
Technology has also helped satisfy consumers’ expectation of speed. Cosgrove recalls that when he started in the industry, if someone closed a mortgage loan and bought a house in 60 days, that was acceptable. Now anything more than 30 days is unacceptable. The rules and regulations are the same. The complexity still exists. But the speed — from closing mortgage loans in 60 days to fewer than 30, and from closing 8,000 mortgage loans a year to over 50,000 — is much, much faster.
“And the only way you can do that is by continuing to invest in technology and moving the ball forward on a daily basis,” Cosgrove says.
Cosgrove noticed another trend —young people seemed to trust brands as much, and sometimes more, than they trusted people to inform their buying decisions.
“You have got to have a quality salesperson that’s honest, has integrity and is very good at what they do,” Cosgrove says. “You’ve got to have honest, world-class people. But moving consumers and getting attention from consumers today is more about brand than ever before. And I think that is the evolution that has taken place in the last decade in mortgage lending.”
In his first years leading Union Home Mortgage, Cosgrove says he spent no money on marketing or branding because the company had great salespeople, and their reputation and relationships with past customers were essentially its marketing. Today, that’s changed dramatically, as Union Home Mortgage ramped up its branding and marketing effort much the same way it did its technology, by inviting marketing and branding executives onto the advisory board. Starting at zero when Cosgrove took over, Union Home Mortgage now has nearly 70 people in its marketing department.
The third critical element of Union Home Mortgage’s competitiveness is its people. Much like with the other two areas, the company has built up its internal resources from scratch. Cosgrove says seven years ago, Union Home Mortgage had no internal recruiters. Today it has 12, who spend their days searching for talent across the country for every position in the organization. Further, the company’s intern program is hosting 113 interns, and three of its recruiters are dedicated to recruiting interns.
The company has also undertaken other initiatives to build its people pipeline in an effort to recruit and retain talent. There is its partnership with Baldwin-Wallace University to develop the Union Home Mortgage Career Studio. The company’s L.E.A.D. internship program gives rising talent exposure to every aspect of the business, and it employs a vice president of Partner Education and Training who oversees the development and execution of training programs. And its Career Explorer tool helps employees discover career paths within the company, while its UHM Connect Team identifies, trains and mentors future senior loan officers. Additionally, the expansion of Union Home Mortgage’s Strongsville campus is expected to set the company up to add 450 jobs.
“Everyone talks growth because it’s natural at the C-suite to talk about it. But few actually look deep into their organization to really change the culture and truly be a world-class growth organization,” Cosgrove says. “In most cases, what C-suite executives think it takes to grow their business, they’re generally short by about 300 percent the amount of resources it takes and the all-in approach it takes to truly be a growth organization.”
He says business leaders who succeed are able to play the scale game and hire game-changers all around them to catapult the business to the next level. But there are some who couldn’t get there because they hesitated to hire key executives, balking at the salaries out of fear that it might not pay off.
“If you don’t change the dynamic of your leadership or management team, five years later, you go visit that organization … their growth hasn’t changed,” he says. “Their opportunities are not there, their problems are the same, and they’re stuck in the mud. The building of the executive team and management team is the ticket to growth and success.”
Knowing he needed to hire a lot of people with a lot of talent, Cosgrove had to create a framework for them to have an impact. To achieve that, he created a nonnegotiable code of conduct that sets the culture, the company’s identity. While a lot has changed, the code of conduct is among the fundamentals that have not changed over the last 20 years.
Cosgrove says the company is expecting to write $13.3 billion in loans this year and is estimating that in 2022, that number will be closer to $17.5 billion, with 2023 closing in on $25 billion. In his first year owning the company, it wrote $57 million in loans each year. Now, it produces that in two and a half weeks.
“It’s crazy,” he says. “But it just goes to show you that nothing gets built overnight, just brick by brick. If you just wake up every day doing the right thing and trying to get better every day and keep putting better people around you, and you keep a commitment and a passion to each other, you could build something really cool and special over time.”
- Grow with the times.
- Bring in outside expertise to fill knowledge gaps.
- Build brick by brick, one day at a time.