Wow. What a whirlwind of a month! As we wrap up this month, our Agenda needs to include: paying attention to details, looking around you and seeing what needs to be improved, and asking “what can I do to make a difference?”

We’ve been through 30 days of new system installation, loss of our primary production lines, changes in investor guidelines, and decreased numbers. We were profitable last month and expect to be slightly profitable this month. One month ago we were drowning in post-funding guideline changes and it was scary. Yet, we kept on keeping on. We put our heads down, took personal accountability and behaved our way out of a literal mess. Let’s recognize that the mess was two fold; ours and the industry changes.

May will bring about a lot of changes; auditors – new processes – more AUS training – new product mixes – new underwriting methods – new pricing models – new strategies – heightened need for people performance. Again, let’s recognize how overwhelming this can be and decide now how to respond.

I’ve very Purposefully picked this time to bring QBQ and Personal Accountability back to the forefront and hope that everyone embraces this tool. We have come a long way and our survival depends upon our ability to behave well. Behavior is 100% your responsibility; not blame, but leading and influencing. It is your personal choice as to how you behave. My door, email, and phone is open for questions, concerns, and discussion; seek clarity.

We'll continue to focus on the 3 processes of People, Strategy, and Operations; an important part of this is how well we perform and how we gauge our performance. We'll talk a bit about this in the 1006 meeting today.

Thank Don and Betsy for the meal today. Every month you bring us lunch on the last day of the month and I appreciate it (even when it’s girl food!) Thanks Don…and thanks Betsy for putting up with us!

Danny

As you might know, I read quite a bit, but most of it just goes by the wayside unless I read it again and again. But! Every once in a while I’ll breeze through something (you know, there’s so much to read and so little time)…I’ll have a drifting thought specific to an article, or a piece of an article. This article has been the subject of that drift many times the past 3 weeks.

The following are excerpts from that article on Performance Appraisals.

"Performance evaluations are about as much fun as an annual physical exam for a fifty-year old male. At least the physical exam is useful!Few business activities create more havoc in the workplace than the "how are you doing" sessions most companies require their managers to foist on their workers. Managers hate to complete them, workers hate to receive them, and even the best of them tend to produce friction between the firm and the worker more often than they produce results. Still, this pivotal ritual in employee relations continues unabated, with companies trying out new systems hoping to discover one that works across the board."

"Beneath the surface of the evaluations, another problem erupts. In a culture where many of us define our worth by our jobs, the performance evaluation strikes at the core of our being."

For the complete article, go to http://www.hcbcworklife.com/ and click on Viewpoint on left navbar.

Danny

In case you did not get the announcement I left hanging on Friday’s Focus, we had a couple of days where our Underwriting Received numbers jumped to 25+ loans per day and well over half were “AUS APPROVED” loans. That is good, really really really good. This is a direct result of our increased emphasis on turning these files around faster in underwriting; initial file and conditions. We haven’t arrived, yet, but it is an incredibly good sign of future victories.

My focus for this week will be on…

Past and future Performance Results; we will be pulling a lot of reports and numbers and building new “dashboards.” These dashboards will consist of numbers/dates/data.
My direct reports will be working on lists of numbers/dates/data they pay attention to and what reports they pull to review those numbers/dates/data. We will also want to know what benchmarks the numbers/dates/data is being compared against.
We’ll be discussing this week in how well we are performing in all aspects of our business processes; hiring, originating, processing, underwriting, closing, funding, shipping, investor relations, finance and accounting, profitability, warehouse line management….everything.
Processes; Systems, Strategies, and People. If you have not read the attachment I sent last week on this subject, please do so.

Roy asked me to pass on this information: The Fletcher, Mary Ellen file funded on Monday the 21st and was purchased on Friday the 25th; it was a “First Touch Purchase” The file was conventional and AUS-approved. The LO was Jayne Herrera, Kim Odom processed (YO! - KIM), the underwriter was Mike, Carmen drew the docs, and if I remember right, Isabel funded the file. John "the Man" Harris shipped the file.

Now, I don’t care who you are (as Chas would say), that’s GREAT PERFORMANCE RESULTS. Thanks everyone.

Oh….who shipped that file? And who Processed it?

The daily 2pm AUS meetings are proceeding very well and should be bringing everyone together. It has amazed most of us as to how many ways the AUS findings can be read and interpreted, thus, the reason we will meet about this process everyday for weeks. Please remember that all underwriters and others in the office and field are in this meeting from 2 to 3pm everyday. Beginning today, I will attempt to log these discussions for future benefit.


To that end, Thanks for the hard work,


Danny

Focusing and reflecting is a tough thing for me some, much, most, of the time. I’m not the type to focus very well. I love that red block; be quick, be prepared, be gone! “Back-in-the-day” when I was still agile and willing to suffer more self-inflicted pain than I am today, I loved barefoot waterskiing….still do, but the pain out-weighs the urge. I’d be scurrying along, no skis, at 47 mph rope and have some of the strangest thoughts. My ability to focus was pathetic and thus, I took some incredibly hard falls. What was possibly the last of such falls was 3, maybe 4 years ago. Cathy saw it (I was wanting to show off for my woman!!! :-). Literally, I thought I’d broken both arms and my face. These falls are so fast you can’t even close your eyes and your eyelids get rolled back to the point you have to reach up and fix them.

Obviously, I should have been paying attention to keeping my toes pointed up, and my knees bent, and my eyes on the top of the windshield…but nope, I was thinking about people watching and I needed to look good. And it was an incredible fall. I understand the sound, when my hands, forearms, and face slapped the water, was like a rifle shot. It was incredible. But then….you can’t waste a crowd! Right??!!

(Ok…deep breath. Whoa! Did I just hear a barefooter on the water?…wow, no wind, there’s dust on the water!!)

(Focus..deep breaths.)

(Ok, I’m fine, for now…concentrate) Today and tomorrow, I need to be sure I’m focusing on what is important and not on looking good. I understand that “looking good” can be the result of the importance, and can even drive us to do the basics well, but style points only represent 20% of the score and without the basics, we don’t get the style, and looking good is way too temporal.

I’m continuing to focus on our Mission and our Values. I’m focusing on how we live those out through people, systems, and strategies. This has been my focus for months, even years, and I am hopefully learning how to live this out better than before. If I appear intense, that’s why. Everything I do is directed towards that purpose.

Ok, new thought. Bryon shared some great news with me yesterday afternoon. I was in the rear kitchen…needing coffee (I quit the Crown a few years ago). And there was no coffee, I was feeling incredibly irritable, Paul was trying to talk to me about something, I was silently praying that I could pay attention, and Mr. Cunningham popped his head in. If you don’t know Bryon very well, he’s a reporter and I can tell when he has something good to talk about. There’s a certain skip and sway. He was looking good! And I forgot about the coffee….

Don’t miss the 1006,

Toes up, knees bent, eyes on top of the windshield…


Danny

Isn’t it interesting as to how we absently come to focus on certain things. And how that focus can drive our emotions for a period of time. This thought came to me while reviewing the warehouse line status report Roy so diligently sends out each morning. While the report doesn’t tell the entire story, it sure gives a snapshot and begins to set-up some of my behavior for the day. It can quickly put a frown or smile on one’s face.

This morning, upon reading the report, I had thoughts of;

Wow, we’ve only been using GMAC’s line again for 10 days or so and it has come down by 400k. Good turnover
Good deal….the NattyMac line is increasing; this means we are funding some AUS/BBT loans. I’m glad it’s not all GMAC product right now.
Wow, the 1st Star line has come down almost 3 million the past.
This means we are getting really good turnover. Thanks Kandy.

I smiled. But then I wondered….”what else is going on?”

We’ve behaved our way very well these past few weeks. It was refreshing to get MaryR’s email on Friday about all the loans being purchased.. Everyone, please, give Kandy a big hi-five for a great job she is doing.

Over the past few days, setting through my class, I’ve thought a lot about how we’ve come through some tough times the past few months. That’s not to say that we haven’t come through others over the past 10 years, because we have. What has been particularly gratifying is how much better we lived out our Mission and Values this time; or, at least I want to say we have; we include each of you…how have you lived out our corporate values?

Speaking of values and behavior…We invested almost $10,000 of direct cost in the QBQ classes last year. The further investment of your participation time puts the price tag up close to $20,000. Personal accountability is at the core of the QBQ classes and accepting personal accountability is at the core of how well we’ve behaved these past few months. It is not an accident that our behavior has improved over the last year. Our improved behavior is a direct result of that investment last year and that was money well spent. In part, I bring this up because we circle back around to our QBQ classes beginning today. Those that are not in the classes need to be aware the classes are going on and who is in the classes. And the refocus on what and how questions that begin with I and causes action. I look forward to the continued improvement in our performance and behavior as a direct result of participation in these classes.

I’ve attached a paper to this email. Though a bit daunting, this paper is an easier read than the entire book of which the paper is a summary of. For a look into part of the madness behind my methods, review this paper. It will give you a bit of a look into what I am focusing on as we work through these next few days and weeks. Without doubt, changes are in the wind and I want you all to be aware as to how all encompassing these changes need to be. We will have changes in each of the 3 process; people, operations, and strategy. We must be purposeful about the changes. Or they will, again, be imposed on us.

As I mentioned in a couple of meetings yesterday, I’m thinking about June, concerned about the volumes (or lack of) and thinking about what I’d be thinking; I’d be thinking…”what could I have done back in April to have caused business to be better?”

When you see me walking around the office and wonder what I’m up to, that’s it…thinking what can I do now to not be thinking in June about what I could have been doing back on April 24th to not have to have been have this thought in June. In short, I’m thinking about performance, behavior, creativity, personal accountability, mission statements, values, and doing things because they are the right thing to do.

And how do I get everyone to engage. Oh yea, clarity. I’ve got to be clear…


With humility…..as mud,


Danny

Good Morning: Thanks again Jason and Curtis for the job you’ve done.

Thinking back about yesterday I remember evaluating forward on regular intervals and I’ll spare you the replay of the mental gymnastics, yet, I want you to know I can’t get a good picture of how well we stick the landing. And I just realized I can’t get “that” picture, because it is in the future and as I evaluate forward I do so based upon the results of the past and our past does not show that we change well.

The “forward” is our mortgage business, our type of business, without what has been our typical 1st time homebuyer. Forward is the world of automated underwriting. If it wasn’t so serious, this would be a bit humorous because the world of AUS is where we transitioned from! A place we did not think we could compete well. So, here we are again. Can we compete well? Can we change whereas we can compete well?

To evaluate forward we do so on a foundation of the results of our history and how well we believe we can change based upon the people and systems we have. How Well we can learn to operate out of the box with the boxes we have, or change boxes. What am I so concerned about? Engaging? Empowering? Persistence? Performance? Results? Fun? Mission Statements? Values? Yes, yes, yes, yes, yes, yes, and more yeses. But what scares me is Change. I’m concerned about changing. I’m concerned about how well you can change. I fearful about the results of not changing Well.

And change we must. Change you must.

But not from manual underwrites to AUS. Not from one system to another. Not from one process to another process.

You must change in the area of Trust, and Conflict, and Accountability. You must come to accept that you have to learn how to work together. The key word here is learn. Learn. Learn. You must accept that you have not arrived. You must accept that you influence others and that your influence either lifts others up or puts others down. You must come to accept that this is not about YOU. Hmmm….maybe the key is accept, not learn. But both you must do.

This isn’t about just underwriters, closers, account executives, processors, managers, loan officers, supervisors, teams, and a CEO changing. This is about Alethes changing. This is about every person, every position, the entire org chart. Chas and JohnG can talk till they are blue in their face about Together Everyone can Achieve More (T.E.A.M.) but until You decide to change You, good teamwork will never happen. We aren’t born with the ability to be good team players. We WORK and LEARN to be good team players.

Change is about reaching down inside of yourself and becoming something you have not been before. I know there is a better you. My bible tells me there is and that is the premise that drives me everyday. You are important. Your job is important. The person you stand behind at the copier is important. The person on the other end of the email is important. Look around the office…right now…every person you see is important. Every person that sets in every chair and walks those isles is important. Their jobs are important. Look at them. They are important. The job they do is important.

How important is their job? Your job depends upon how important they accept the importance of their job.

Is your job important enough to influence others well? As I evaluate forward, can I depend upon you to change so that we can achieve better results than we’ve had in the past?

My focus today is about change and I pray that you take this very personal. I’m writing to you personally asking you to change.


Sincerely yours,


Danny

I believe it was in Joy at Work, where I learned the term “evaluating forward.” As I evaluate this remainder of this month forward, the words people, process, clarity, consistence, performance, engaging, empowering, persistence, and continuity jump immediately to mind. Now, continuity is not a word I normally use, or even think, so I just looked it up and it means performance, stability, link, connection. The opposite of continuity is interruption. Interruption draws me to diversion, which brings me to “what not to be diverted from?”

Our pipeline, our task-at-hand: Jason has broken down our locked pipeline, expiring between 4/15 - 5/9, as follows:

Locked
209
$24,094,723.13
51.16%

In Underwriting
27
$3,316,313.00
7.04%

Suspended
39
$4,670,261.00
9.92%

Approved
105
$11,885,353.00
25.24%

Docs
26
$3,129,627.00
6.65%

Total
406
$47,096,277.13
100.00%

Thanks Jason, those words I mentioned above all come to mind as I think about closing this pipeline out Well.

I Pray that everyone thinks about what I said yesterday about Meaningfulness. This pipeline can be either staggering or uplifting; how do you look at it? How do you think about your task at hand; your job? Do you believe it is important? How will you respond to this challenge? Undoubtedly, a portion of this will fall out, yet each of these 406 loans represents someone wanting a home. Each loans represents a task/a job that needs to be performed well. Each loan represents a paycheck, a car payment. Each loan that funds represents an immediate purchase or an exception to purchase. Each loan represents……

You play an important role in making this happen. The person next to you, across the room, and on the other end of the phone and email, play an important part.

I want to take this time to thank Jason and Curtis on a marvelous job they did getting this pipeline locked. At one point, with the locks still coming in, Curtis told me it would take him 34 hours to get the loans locked and in the systems. When I inquired with Jason he mentioned that the locks were coming in like rain, acid rain. I decided that the best I could do to help them was to shut-up, leave them alone, and pray.

If Jason and Curtis did not think their job was meaningful and worthwhile we would have a mess on our hands. If Jason and Curtis had not realized how important their job was and hunkered down we would not have this pipeline. Many of you, most of you, and not just in prod/ops, would be without a job today. Do you think their job is meaningful?

Take time to thank Jason and Curtis today.


Thank each other also.


Danny