Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the ICE House. Our podcast from Intercontinental Exchange on Markets leadership and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICEs Exchanges and clearing houses around the world. And now, welcome inside the ICE House.
Pete Ash:
This is your host, Pete Ash. And I am back at ICE Mortgage Technology Experience 2023 in the podcast studio, conveniently located next to the dog petting station. As we continue to bring you conversations with people working in the mortgage space to improve the customer experience, reduce inefficiencies, lower costs, and streamline the process. I'm excited to be joined by someone who I saw on stage yesterday interviewing Egypt Sherrod, our guest back at 290, and now we're going to turn the table and ask her some questions. Our conversation with Laura Escobar on her career, the work she's doing with the MBA to advance, DEI in the industry, and the unique culture and business that she built at Lennar Mortgage is coming up after this brief break.
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Pete Ash:
Our guest today, Laura Escobar, is the president of Lennar Mortgage, the mortgage lending subsidiary of Lennar Corporation and NYSE: LEN. Laura joined in 2002 as a branch manager in Miami and has held a number of senior roles with the company. She currently sits on multiple advisory boards and committees, including serving as the vice chair of the Mortgages Bankers Association, this will make her the first Latina to helm the organization when she sends to the chair role in two years. Welcome Laura inside the ICE House at ICE Experience.
Laura Escobar:
Well, thanks for having me.
Pete Ash:
So I actually wanted to give you a second to start the conversation with where you actually cut it off yesterday on stage, Egypt asked you about Empower, you didn't have time to address it. So the mic is open. What is Empower and how does that play a role in what the MBA and you're doing?
Laura Escobar:
Well, I'll tell you, it was a little awkward because Empower, obviously is the women's event of MBA and Egypt confused Empower with the women's event that was happening later that afternoon. So it was really comical at the moment. But I'm really, really proud of Empower and what Marcia Davies has done, where we started with a group of 50 women, has grown into almost 500 associates coming in. And it's not just women, it's men and women. And it's empowering women to continue to grow in our industry and connecting with each other.
Pete Ash:
Talk about growing the industry. You also spoke to Egypt about the Mortgage Banking Bound Program at Barry University. What was the genesis of the program and how did the school, your company, and the MBA work together to launch it?
Laura Escobar:
Oh, you're warming my heart right now because you're talking about something that is so near and dear to not just me, but everybody in this industry. Years ago before the pandemic, I got a focus group together and said, "Guys, we cannot continue looking for people in our industry. We have to educate our associates. We have to educate people in the world of what mortgage banking is." How do we do that? How did you get in the business? How did you get in the business? And everybody turned around and said, "Well, a friend. No, a family member," and so on. And I said, "In our schools, you have doctor, lawyer, but you don't have a mortgage banker." Went to MBA and said, "Why haven't we extended our education to the world?" And MBA said, "We've been trying for so many years, the universities could not grasp what we're trying to do."
So I went to our foundation at Lennar and said, "Could you connect me with a couple of the universities where we are currently offering programs such as construction programs, nursing programs, IT programs that Lennar is sponsoring." Our first university that we visited was Barry University in Miami, and it is about a 68% minority university. So I really wanted to connect. Took this focus group and said, "We've created this curriculum. Took us about three years to create this curriculum, but guys, we can't do this alone. We need some help. Let's go to MBA and see if they're willing to support us, support the program and grow it." Went to MBA, MBA was over the top, said, "Well, we don't think it's going to happen, but let's try, and we're going to back you." Gave us all the educators, gave us funding, as did Lennar Foundation to start our first course.
Well, to make a long story short, we started our course at Berry University on January 10th. We have students from all different parts of diversity. We have students that are young, we have students that are not so young. We have finance students and we have students that don't know how to spell mortgage. So it's very, very interesting to see how we are adapting to creating this program and adapting to this environment. And MBA is doing an amazing job with the educators that they've given us and switching and adapting to what we need because the first time around, we may be a little too intense. First time around, we may ask them not to spell mortgage, but to understand capital markets. We've had to adopt the program. But I'm really excited because our members across the country are reaching out saying, "How can I be part of this? How can I have my university be part of this?"
Pete Ash:
It's a program, it's not a degree. So is there the idea of extending it to a degree? And you mentioned... Are there other universities now that are kind of hooking into this as an idea?
Laura Escobar:
Yes, yes and yes. We definitely want to make it a degree program. We are taking very, very, very baby steps because right now, it's a certificate program for a reason. It's never been done. We have to make sure that we're on the right track. We have to make sure that when these associates, or rather these students come out, that they come out ready to be an intern, ready to be a loan officer or to start taking their test ready for that next step. And I don't know that we're a hundred percent there yet, but yes, we've received lots of universities that say we want to be next. We have members that want their universities and are willing to sponsor the program, which is really interesting. We've gotten lots of calls from large entities saying, "How can we help financially?" So it is coming together nicely, but it's very much at its infant stages.
Pete Ash:
And you mentioned that you wanted to find a place with a lot of diverse candidates. And just to zoom out a bit, why is that important to make sure that the loan officers, that these people helping people buy homes look like the people buying homes?
Laura Escobar:
Well, that's exactly it. That's exactly it. When you look at... Not to mention the fact that we're aging out, not to mention the fact that I need to find my replacement now, not to mention the fact that everybody sits here and says "Appraisers, they're aging out." We bring appraisers into these classes and they explain, "Look, you can get vocational classes and become an appraiser." It's not just becoming in mortgage banking, it's what the vendor or what it looks like as our business. So I think that there's a lot of opportunity that's going to be coming out of this.
Pete Ash:
Yesterday on stage, you and Egypt both had sort of similar stories how you got into it. She tried to get far away and got roped back in and you were set to go study psychology and had to make some money, work for your mom in the business. And then to quote, you drank the Kool-Aid. Is there a connection between what a psychologist does and where your career has taken to you, where you are connecting with people and helping people really solve problems?
Laura Escobar:
What do you mean? I'm more of a psychologist than a mortgage banker. It's what you use every day. It's that tool that got me to where I am today. The fact is that if I use a little bit of psychology... And if we all did. Because we all have the ability to break it down and instead of the intellect, use your heart, use your mind to realize that we are not it. There's a lot more that we have to do. There's a lot more responsibility that I have. I have got to take that next Latina. I have got to take that next Latino and bring him up and bring her up. That is my responsibility. And I felt that Egypt had that same connection. When she has the awards that she's gotten, it's our responsibility to pay it forward.
Pete Ash:
Some of the world's best psychologists are not psychologists, they're mothers. How else did she influence you, particularly your commitment to community, which I know is very important?
Laura Escobar:
Well, you definitely hit on something with commitment to community. I am really, really big on paying it forward and giving back. It's so important to me personally because I had that opportunity. When I started as a receptionist, I thought this is just a temporary means. I need to have that income in order to get to where I want to get to, to that psychiatrist. But the positions that were offered to me, I realized that there's so much more. And I realize, "Guys, you know what we're doing? We're giving somebody the opportunity to have a home. The American dream." Not only the American dream, for me as a Latina, for a Cuban to achieve home-ownership is the highest achievement in this country. And people don't realize that, we take it for granted, that it is the highest form of achievement of, "I've made it. I gave my family this roof."
Sometimes you have 3, 4, 5 families living together to achieve that American dream. So yes, she opened that door and thought I was going to continue on with her path, which is psychologist, which by the way, I did, and I am a licensed psychologist... Back to our original conversation.
Pete Ash:
Well, and you mentioned the opportunity. So just to kind of briefly catch the audience up on your background. So you joined what was called Eagle Mortgage in 2002. How did your career develop and then how did that kind of morph into what is today Lennar Mortgage?
Laura Escobar:
It's been quite the journey for me. I joined Lennar much earlier than 2002, and I'll tell you how. I was their approved outside lender. And the only reason I was their approved outside lender was because they had no Spanish-speaking loan officers. So Laura Escobar in the background saying, "I'll do it, I'll do it, give it to me." Sat in their communities weekends that their loan officers didn't want to, had the ability to bring in the Hispanic borrower, which they didn't do. That gave me the heads-up or rather the edge that Lennar executives were then looking at me. How is this outside lender chick doing this and our people aren't? So for about five years, I got called every year from the chairman asking if I would join Lennar. And every year I would say, "Nope, nope, nope. Corporate America's not for me." Until my children wanted to move back to Miami. I was in another city. And I said, "Maybe this is the right time to do this. Maybe I should join this company. I'm doing all of their loans, that's all I'm doing. So let's join."
I joined Lennar as the division manager over just the southeast division, which was a full service division at the time. From there, was promoted to regional over half of the country, from there to executive vice president of production, from there sitting where I sit today, which never imagined my wildest dreams, I would be president of Lennar Mortgage.
Pete Ash:
I was reading about when you first came president, one of the things you did is you sat down your team and you told them, "Let's pretend we're starting a new mortgage business today." Why did Lennar need to reimagine itself?
Laura Escobar:
First and foremost, I've always had in the back of my mind our chairman's philosophy, that we are a technology company that happens to build homes. So I had to adopt that theory and I had to adopt that mentality and that mindset, really, connect... And I don't mean to throw ICE on into it, but connect with companies like ICE and say, "How do we automate everything automatable? How do we change this process?" And as that came into effect, we also had... We owned Realty. We own the retail part. And I said, "We don't need retail. We need to focus on our home builder and our technology." So we sold off retail, which was a big chunk of our business to Movement Mortgage, and we kept the home building and went in headfirst to make sure that we were being the technology company that happened to finance homes.
Pete Ash:
Lennar Corporation, the para company is actually one of the very few companies to ever list for 50 years consecutively in the New York Stock Exchange, this very long legacy, how did you get from sort of Leonard Miller and Arnold Rosen's idea of a home builder to what you have today, which is this... You said a tech company that builds homes and does mortgages and all these other opportunities.
Laura Escobar:
The only way you do it is with a chairman like ours, Stuart Miller, that pushes and pushes and pushes us to continue to drive forward. And I'll give you an example. In today's environment, a lot of our home building peers have stopped starts." They said, "There's no reason to start right now in certain areas, Texas, for example, let's hold off on starts." Our chairman is pushing us, pushing us, pushing us, more starts, more volume, more deliveries. How we get there is up to us. So when you have somebody in the background driving you at that level, you either perform or you don't.
Pete Ash:
So as we head into the break, you've studied adaptability as sort of a critical skill to becoming a leader. How has that skill helped you over your career and then also helped you lead a company through turbulent times?
Laura Escobar:
I wasn't always adaptable. I wasn't always adaptable. One of the things that taught me to be adaptable in addition to our chairman, in addition to all of our hard knocks at Lennar is COVID. COVID taught us, "Either you adapt or you die." And at this point, just with the thought of COVID happening, I got into an elevator with our CIO and I said, "Hey, we need to move quickly on this, go order 500 laptops." And he turned around and says, "We're not there yet. What if we don't need to?" And I said, "We need to. If this happens the way we think is going to happen, we can't afford not to." So it was definitely a home run because within three days there were no more laptops. Not to mention a week later they were doubled in price. So adaptable means intentionally listening to what is out there happening in the environment, and then reacting to it quickly. Quickly.
Pete Ash:
After the break, Laura Escobar, president of Lennar Mortgage and I will discuss how the industry is using technology without losing the human touch to accomplish best results for all, that's coming up after the break.
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Pete Ash:
Welcome back. Before the break, I was talking to Laura Escobar about her career and the evolution of Lennar Mortgage under her leadership. Lennar Mortgage has been aggressive, and to use a phrase from your website, automate the mundane. What are your principles for transformation?
Laura Escobar:
Transform, transform, and transform again. The vision is... And nobody wants to hear this, nobody wants to be part of... And everybody's talking about how we bring down the spend this year, and I think we need to take up the spend on technology and find out what's out there and continue to evolve. My mission this year is to push, push, push technology. When I say push technology is the [inaudible 00:16:57], it's continually to fight Congress, continually to say, "We've got to have every state," and we're getting there. We're almost there. Available to give our consumer the ability to be able to, from A to Z, take an application on a cell phone and close on their cell phone in the privacy of their home. This is one of the tiny little things that we can be doing in our industry that's available to us today. It's going to involve technology, it's going to involve spend, but just think of what we're doing for that end consumer and how we're making an evolving this tedious process that we've created.
Pete Ash:
On stage actually yesterday, ICE Mortgage Technology President, Tim Bowler kind of laid out his vision and he used the term which I love, instead of return on investment, return on invested time. And it sounds similar to what you're saying here, will that return on invested time? Will this investing in technology, whether ICE or others help Lennar do the mortgage, basically as you stated, a goal, making Lennar Mortgage the simplest in the world.
Laura Escobar:
One of the things that I have our CIO do is everything that he gives to me on an ROI, every project, every initiative, tell me how much time we're saving, how much time is that processor... No, wait a minute. How much time is that pre-processor saving? Then the processor and so on and so forth. How much time is that underwriter saving? And I look at minutes, I look at everything by minutes and how we're evolving the process. And before you know it, it is a process that went from an hour to minutes and continuing to evolve. Those are the technology stacks that I'm looking for.
Pete Ash:
This morning, Kemprani was talking about the need to use technology, basically to make sure you're being quick but compliant. How are you looking at compliancy and the role of technology and making sure that one, you follow all the rules, but also you follow them very quickly?
Laura Escobar:
Technology is what's going to make us compliant. Technology is what's going to keep us compliant. Not to bring blockchain into this, which is going to be completely compliant, right? But let's just talk about what... We're doing something called task-based workflow and segmented processing. And what that's doing is taking, instead of a processor handling a file from A to Z, which all of a sudden they're out on vacation and now is stopped, the process stops, we're giving them specific tasks to do, and that's what they will do every single day. Creating efficiencies, creating compliance. Everything that we do with technology, I honestly believe keeps us closer and closer to perfection.
Pete Ash:
There also is a risk though, right? Because you said there used to be one processor who would take their client from, "Hello, my name is," through, "Congratulations. We've closed the mortgage." And now there are multiple processes. How are you making sure not to lose that human touch and make sure that customer service is the north star of everything you're doing?
Laura Escobar:
You make sure... And we've been working at this for two years, you make sure not to roll it out quickly. You make sure that you have what's called a consumer advocate role, which you have worked with, which you have trained. You make sure that the one that is communicating with the customer is the highest and best juice. So that's the rockstar processor that has communication skills, that has follow up skills and so on and so forth. While everybody else is continuing the conveyor belt, if you will, to keep going.
Pete Ash:
I want to talk about the people running that conveyor belts a little bit. I was listening to your recent appearance on Inside the Mortgage Mind Podcast, and if someone listened to the answer of what the culture was like at your company, they would think you were talking about Google or a Silicon Valley tech startup. Can you talk about that culture that you've built and why it's important when you're on a Book of the Month Club call that you're just Laura, not president?
Laura Escobar:
It all stems back to who I am and what I believe, and I believe it's all about the people. I believe that people first. So my associates, to me, come first. Everything that I put forward, I put with complete transparency. I run the company with a group completely transparent and I make sure that our associates know what I'm thinking, what's coming next, and how they play a role in what's coming next. So yeah, we do town halls, we do video series. Some of the video series are a little wacky. Sometimes we act a little silly, but we're continuing informing our associates that, "Hey, we're in this together." And it's worked out really nicely. Our retention continues to year after year after year grow and we continue to grow the company. We now have people wanting to come into the company as a result of the amount of culture that we have and the fact that we care for each other so very much.
Pete Ash:
I attended the executive summit on Monday. There's a lot of conversation about making sure your culture goes across the sort of decentralized remote workspace. Are you seeing that impact that the culture is helping drive the work across?
Laura Escobar:
Absolutely, because people will talk to other people and that's just... It's common human nature. I'd much rather somebody say, "She's a nut, but you can ask her anything. You can call her, she'll answer. You can email. It's not a big deal. Or if you have a concern." I had a processor email me the day before yesterday or last week asking me if I could help her with her benefits, with insurance, because you're so outreach and you're so accessible,
Pete Ash:
How are you looking at the future of work for the company? When your management team sits down, are they sitting down in person or are they remote?
Laura Escobar:
Both. Both. I still believe that hybrid is the way to go, but I also believe that there's a lot of roles that do not have to be in the office every day. What happens is that I am going to continue to insist on the human touch, continue to insist that we hug one another, that we appreciate one another, face-to-face, not just on that Zoom or Teams. But I'll tell you, if you talk to some of the people in our company on things that we do on Teams and on Zoom, you think we don't need to do anything in person because we have a lot of fun.
Pete Ash:
Well, speaking of fun, bringing in the next generation. We talked earlier about the mortgage banking career track. Lennar also has its own program, what is NextGen and how is that... To use your own phrase, "Making sure you bring in the people who will one day take your job."
Laura Escobar:
Exactly it. NextGen was born about seven years ago. About seven years ago, we said, "How do we continue to grow, not just from everybody applying for a job that's been in the job, creating the job, and how do we get the people that look like me and speak like me to get involved?" So we started a program called the NextGen program where we went out to universities and colleges and we recruited. We did everything just as everything else. Microsoft was out there next to us recruiting. We recruit aggressively and tell people what Lennar stands for and what it's all about. Nobody understands mortgage banking. That's where the other mortgage banking bound was born. We really learned that lesson from the NextGen. You do what? I thought you just made a lot of money originating loans. So NextGen has been in probably... We have about two to three sessions a year, and we try to keep it under 20 students, so we can have a lot of hands on.
And what we do is we bring every department head to speak to the class and tell them what they do. What is capital markets? We actually have a live trade in front of them. We have underwriting management, risk management, quality control production. We wet their appetite on what this industry can offer them. Then we open the door and say, "Where do you want to be when you grow up?" Notwithstanding that you may change that track along the way if you find, "I don't really want to be in operations, I want to be in legal." So we've found that we have a lot of cross collaboration among our NextGeners, but we have a real successful program.
Pete Ash:
Why do you think it's so difficult for most of you to understand the mortgage process and is that just a lack of being out there explaining it, or is it really that complex?
Laura Escobar:
It's probably both. But more importantly, it's lack of education. And remember, we have... What is an underwriter? And an underwriter is a subjective person. You can have two underwriters in one room and they're going to look at a file differently and they're going to give you a different outcome. How wild is that to a consumer? That's not even normal. So thank goodness for AUS, right? But at the same time, how much do we use it? Then an underwriter comes behind it and changes AUS, and changes their mind. So can you imagine what we're telling our consumers that we do? It's not education. It's not enough out there. We don't tell each other the right story. Then you have somebody telling you, "You have to give 20% down." What does the consumer in another state here? 20% down, that's all we know. The myths are out of control because we don't have a formal education, a platform to speak from.
Pete Ash:
One of the things that that platform is going to have to be built on is data. Are you able to produce the sort of data reports that show this is what a buyer looks like. It's not actually 20%, it's this percentage, if you could do FAHA, and how are you using data to tell that story?
Laura Escobar:
We are big, big, big on data. We do everything with data. All of my reports have to be data driven, no opinions, no subjectivity, you have to give me what it looks like, what demographics look like, what does our borrower look like, who's purchasing, who are we walking away from? We look at data to see who we are denying and why. So I would think that everybody needs to be working off of data and talking this Talk.
Pete Ash:
Steve Young today was talking about the fact that a lot of the people he works with, younger people, haven't seen conditions as we have it today. Looking at the market, a lot of kind of echoes of past marketing condition as supply and demand continue to try to find each other. What is your outlook for the mortgage market and the industry that supports it?
Laura Escobar:
Well, I was really surprised when he said they had been working with him for 15 years and they had never seen a downturn. So that was a little surprising. But I agree that in the last five years we've had a lot of new blood come into our industry. We've created mortgage loan officers within the last year that are completely dumbfounded with what to do with right now, with the interest rate environment. And it's really funny because I remember interest rates at 18% and we were closing homes. We were closing homes, and we're going to continue to do that. Shelter is a necessity. It's going to continue to be a necessity, but I think that we need to... Back to my point of education, what I would do with all of those associates that have not been in a downturn is I would put them in a class and I would teach.
And I would teach them, "This is what's going to happen and this is what you're going to expect." So they're not out there creating these myths because our own people do this because they don't understand. Right now, loan officers that are new within the last five years are terrified. They're scared to be in their own skin. They're scared to speak to customers, and they don't know how to overcome these objections. So I just keep coming back to education, education, education. That's what I'm going to be doing this year.
Pete Ash:
I've read you spent, at times, four months straight on the road. My internal clock is not as quick to adapt as I'm sure yours is. So even though it's a little bit earlier here in Las Vegas, my New York clock is telling me that it's cafecito time.
Laura Escobar:
Yes.
Pete Ash:
So as we wrap up, is there anything we haven't covered you want the audience to take away?
Laura Escobar:
Well, I just think it's... Remember people come first and if you remember that, you will succeed. Don't worry about interest rates, don't worry about what's happening in the environment. Stay forward-thinking with your people and with technology and we're all going to be very successful, and education.
Pete Ash:
As you continue your working education, as you continue to lead Lennar Mortgage and the industry into the future, what are you looking forward to and when you come back, when you are the first Latina MBA chair and talk about it with us in a couple years?
Laura Escobar:
Absolutely. There's one thing that I'm really, really excited about is I have somebody really, really special next to me that is documenting the journey because I take this so very, very, very serious and I am so proud to be the first Latina to be doing this. So I will be more than happy to share with you how it went along the way.
Pete Ash:
Perfect. Well, we'll have you back in a couple years. Thanks so much for joining us inside the ICE House.
Laura Escobar:
Appreciate you.
Pete Ash:
That's our conversation for this week. Our guest was Laura Escobar, president of Lennar Mortgage, the mortgage lending subsidiary of Lennar Corporation, NYSE: LEN. If you like what you heard, please rate us on iTunes so other folks know where to find us. Got a comment or question you'd like one of our experts to tackle on a future show, email us a [email protected] or tweet at us @icehousepodcast. I'm Pete Ash, your host, signing off from the podcast studio in the middle of ICE Experience 2023. Thanks for listening. Talk to you next time.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.
