Restrictions related to the coronavirus outbreak has hurt employment for people with hospitality jobs, and online mortgage lender Better.com sees that as a hiring opportunity.
This strategy of bringing in workers from non-mortgage backgrounds may seem outside of the box on its face, but it's not the first time the company has done something like this.
"Our general strategy is to hire people on the basis of values and abilities over skills," Arthur Matuszewski, vice president of talent at Better.com, said in an interview. "We've already been investing in hiring veterans, parents returning to the workforce, people without traditional college degrees. This isn't as much of a stretch of that as it is just looking at another category of potential employee and thinking how we can best leverage broad capabilities into producing business results for our borrowers."
Sales and operations make up 80% of Better's current workforce and people who lack traditional mortgage industry backgrounds make up 80% of that.
To keep up with demand, Better plans to bring in an additional 150 people per month for the rest of 2020 spread across its New York, Charlotte, N.C., and Irvine, Calif., offices. The openings will mostly be sales and mortgage operations roles. With the country practicing social distancing in light of the coronavirus response, the company expects the onboarding process will take place completely virtually over the course of six weeks.
The bureau said it began developing the standards before the coronavirus pandemic. But more transfers may occur as some servicers struggle to meet their obligations during the economic downturn.
The central bank said customers will be able to make more transfers and withdrawals "at a time when financial events associated with the coronavirus pandemic have made such access more urgent."
More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.
The decision to move forward with this plan now came from places of need on both sides.
"Everyone's struggling trying to figure out these uncertain times," Matuszewski said. "We feel a tremendous position of fortune in continuing to be mostly inversely correlated to the situation. We've had massive borrower demand. It's a good time to be in a business where our model is to get away from the warm handshake … and do it online."
Whether former hospitality employees will stay beyond the quarantine when restaurants and hotels open back up remains to be seen.
Better is in the process of trying to figure that out for when the time comes. Ideally, the company wants to maintain dynamism and agility so it can create places for employees to stay over the long run, not just the coronavirus times.
In the meantime, the company has to make sure it can continue addressing its own industry’s challenges related to the virus, such as margin calls related to derivatives used to hedge pipelines and rate-locks.
Better.com is in a relatively good position to address this concern, said Emanuel Santa-Donato, director, capital markets.
"There might be lenders out there that might be thinly capitalized that it could be a concern for. We feel it is manageable," he said. "It's definitely something to keep an eye on and to see where this takes government policy."
While the price spike in to-be-announced securities due to additional Federal Reserve support for the market last week hurt the short-position derivative hedges that lenders use, it still improved lending conditions in the big picture, Santa-Donato said.
"It's overall a net positive," he said. "I would take last week … over the week before. But the next couple of days are going to be fairly critical for lenders. If TBAs stay where they are there will be yet another round of margin calls coming tomorrow."
Only time will tell whether those margin calls could be absorbed by consolidation where larger stronger players acquire the operations of weaker ones, or whether government intervention might come into play.
The next big challenge for the mortgage industry will be how to handle servicing advances with widespread forbearance in place.
"It does look like the government is mobilizing to create some kind of answer there," Santa-Donato said.
