Gaining the
Slight Edge
in the Southeast
Jennifer Massey, Highland Commercial Mortgage
Carolyn Whatley, Beech Street Capital
“If you see a light at the end
of the tunnel, it’s the light of
an oncoming train”.
--Robert Lowell
Now we know….
HUD RESTRUCTURING
Reasons for restructuring:
• Sustainability of program – 60% or more eligible for
retirement;
• Inability to continually fill positions with qualified
individuals;
• Continuing record of applications received;
• Budgetary issues – maintaining 50+ Offices –
management & staff for each office; physical
infrastructure for each, etc.
HUD RESTRUCTURING
Implications & Timing:
• Reorganization will take over 2 years to implement.
• Business is business; but also very personal. 900+/- people
may be impacted. Time of mixed emotions.
• Buy-out, Early Retirement and/or Relocation.
• HUD will most likely be working with a shrinking workforce
during implementation.
• Natural to expect change in attitude by all HUD staff.
HUD RESTRUCTURING
Goals of restructuring:
• Create SUSTAINABLE STREAMLINED INFRASTRUCTURE.
• Deliver more consistent service to industry.
Now What?
Very simple….change how WE do business or reap the
consequences. What consequences?
• Delivery time will only worsen during period of
implementation.
• Fail to retain quality borrowers who have come to the
program due lack of alternate financing in recent years.
What’s The Slight Edge?
• Written by Jeff Olson.
• Impact of doing little things consistently; and
• Impact of not doing little things consistently
• Slow down to go fast.
If you didn’t have time to do
it right the first time, when will you have time to
do it over?
• Creates a ripple effect – for better or worse.
7 SLIGHT EDGE PRINCIPLES
• Show up – Attend training & share knowledge.
• Be consistent – Consistency yields results.
• Have a good attitude – Every truth passes through 3 stages
before it is recognized. Ridiculed; Opposed; Self-evident. –
Arthur Schopenhauer.
• Be committed for a long period of time.
• Have Faith and a Burning Desire
• Be willing to pay the price.
• Practice Slight Edge Integrity – What you do when no one is
watching.
SLOW DOWN TO GO FAST
Slow & Steady Wins The Race. Not really.
Steady wins the race.
Slow will only make
everyone mad.
ACTIONS BECOME HABITS
Source: The Slight Edge, Jeff Olson
FIRST A RIPPLE, THEN A WAVE
1
2
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26
27
28
29
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31
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
0.01
0.02
0.04
0.08
0.16
0.32
0.64
1.28
2.56
5.12
10.24
20.48
40.96
81.92
163.84
327.68
655.36
1,310.72
2,621.44
5,242.88
10,485.76
20,971.52
41,943.04
83,886.08
167,772.16
335,544.32
671,088.64
1,342,177.28
2,684,354.56
5,368,709.12
10,737,418.24
$12,000,000.00
$10,000,000.00
$8,000,000.00
$6,000,000.00
$4,000,000.00
Days
Compounded
$2,000,000.00
$0.00
1 2 3 4
5 6 7 8
9 10 11
12 13 14 15
16 17 18
19 20 21
22 23 24
25 26 27
28 29 30
31
Source: The Slight Edge, Jeff Olson
What are you willing to do?
• Originators
• Underwriters, Analysts, & Processors
• Market Analysts
• Appraisers
• Environmental Firms
• AEC Firms
• Closers
• Lender’s Counsel
• Borrower’s Counsel
SMAC Community Covenant
What are we willing to do?
•
Personal & professional growth – Training & share with others.
•
Lessons Learned – quantify time impact; quantify cost impact.
•
Format of Reports - carry-over data does not remain.
•
Automate Reports - adjustments among unit types are consistent.
•
Lender’s Counsel – MUST review closing package exhibits prior to submitting.
Meeting a submission deadline only to cause weeks of delay is
counterproductive.
•
Implement & enforce a quality control plan.
SMAC Community Covenant
What will we ask HUD to do?
• What’s Working and What’s Not?
• Suggestions & issues to be discussed with HUD –
establish “parking lot” of issues to address with HUD.
FUTURE OF FHA PROGRAMS
• FHA Programs vital to multifamily and healthcare
industries.
• Consistently there during times of financial crisis when
other lenders fled the landscape.
• Restructuring is necessary to ensure the future.
LENDER’S FUTURE
• HUD likely moving to structure of approving lenders,
rather than underwriters.
• Accountability.
• Poor quality – face limitations in program participation
and higher level of scrutiny.
• Better quality – rewarded with faster processing.
Take Away Points….
• Don’t complain about what you allow or cause.
• Kaizen – Plan, Do, Review (Ready, Fire, Aim) = Continuous
Improvement.
• A simple positive action.
A simple error in judgment.
Either way, it’s the Slight Edge at work - working for you
or working against you.
• Leadership grows organically out of the natural rhythm of
learning.
RESULTS OF HABITS
Source: The Slight Edge, Jeff Olson
COMING SOON…..