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   ARTICLE   |   From Scotsman Guide Residential Edition   |   May 2018

Viewpoint: We Need More Women Executives

The mortgage industry must work harder to address gender disparity

 

Key Points

The mortgage industry needs more female leadership

  • Women play a major growing role in the home-buying market.
  • There is a shortage of women in leadership positions at mortgage companies.
  • Mortgage companies need to recruit more female executives for existing openings.
  • Mortgage companies should develop more internal leadership pathways for women.
  • More female-focused mentoring programs and opportunities should be developed.

Mortgage lending, historically, has been a male-driven industry. Men occupied the seats of power. Men ran the companies. Men originated the loans. It stayed that way for years.

Now, however, a shift in the industry is underway. More women are entering the lending arena. Women are running companies. Federal legislation, such as the Fair Housing Act, has empowered women to chart their own path to homeownership.

That means it’s critical that mortgage companies hire more female loan originators and provide them a path to the executive ranks, given women have a deeper understanding and can better address the unique needs of the female borrowers who are taking the housing market by storm. Unfortunately, despite the increasing need for more female mortgage originators and executives, there’s still a lot of progress to be made.

Wide Gap

Women are sorely underrepresented in the mortgage industry at the executive level in particular. While the industry has made progress over the last few decades, the leadership gap between men and women in mortgage finance is still quite wide.

Here’s why that’s problematic: Women play a critical role in homebuying today and drive the industry’s purchasing trends. Data cited in the Harvard Business Review shows that women make the purchase decisions for 91 percent of the homes sold in the U.S.

Single women, in particular, are a formidable force in the housing industry, having outpaced single men in purchasing homes for the last 35 years. In 2017, for instance, 18 percent of homebuyers were single women while just 7 percent were single men, according to the National Association of Realtors.

Plus, women are more likely than men to pay their mortgages, even though they make less money, provide larger downpayments and, on average, receive more costly mortgages than their male counterparts, according to a 2016 study by the Urban Institute’s Housing Finance Policy Center. Yet, among the companies selling these women their mortgages, only 2 percent have women CEOs, and just over 28 percent of women at those companies are executives or senior-level managers, according to Mortgage Women Magazine.

Providing space

There are efforts to curb this troubling trend of a lack of women leadership in the mortgage industry. The National Association of Minority Mortgage Bankers of America (NAMMBA) has partnered with the Mortgage Bankers Association’s mPower initiative to offer women an outlet to discuss, explore and work to resolve the inclusion issues they face in the industry.

During NAMMBA’s Connect conference this year, women attendees were invited to take part in ForHer, a women’s empowerment event where they heard from some of the best and brightest women in the industry, expanded their networks and learned about the resources and tools to promote gender inclusion in their respective workplaces.

Providing space for women to grow professionally is critical. Still, more needs to be done. Companies must take responsibility for encouraging gender equity on their executive teams, if they hope to remain relevant and relatable to consumers.

The payback from such efforts promises to be beneficial. Another study published in the Harvard Business Review shows that women executives outperformed men in 12 of 16 competencies associated with outstanding leadership. That includes traits traditionally considered male strengths, such as taking initiative and driving results. A 2015 study from Quantopian, a Boston-based trading platform, showed that Fortune 1,000 companies with women CEOs performed three times better than S&P 500 companies led by men.

Promoting change

The takeaway from the Quantopian study: Women are natural-born leaders who excel in the pilot’s seat and are equipped to do much more than fill the stereotypical role of nurturer. So, now that the problem is diagnosed, what’s the solution?

Here are three things mortgage companies can do today to promote gender inclusion within their workforce.

  1. Hire more women in leadership positions. Mortgage lenders should be proactive in recruiting and retaining women in executive roles within their organizations. Lenders, take a look at your C-suite and question its gender makeup. If you find it’s lacking a suitable female presence, consider actively pursuing qualified women candidates to fill open positions. 
  2. Create more opportunities for advancement. In financial services, women often work lower-paid, lower-skilled jobs. This crimps their efforts to move up the corporate ladder because they’re relegated to lower-level positions. Mortgage companies should invest in creating more internal pathways to promotion for women who demonstrate exceptional leadership skills and the desire to move up.
  3. Develop mentorship programs. Women leaders can help to develop more women leaders, whether through example or mere proximity. Develop mentorship programs that allow women to learn from female leadership and boost their confidence about pursuing managerial opportunities.

•  •  •

Women are the heartbeat of the mortgage business, from the originators to the people running the companies and providing executive oversight. Lenders must find the value in hiring women in all aspects of the mortgage transaction process and invest in programs and opportunities that will grow them into capable leaders in the industry.


 


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