Open Mortgage president exits, company remains bullish about reverse mortgage business

Joe Stephenson, appointed at the end of 2021 to serve in the newly-created role of president at multi-channel lender Open Mortgage, left the company this week, RMD has learned. The exit largely came about from a perceived clash of management styles, though the parting was amicable according to Founder and CEO Scott Gordon based on an interview with RMD.

There has also been some turnover with some staff in departments dedicated to traditional mortgage operations, but growth continues in the reverse mortgage segment and the company remains bullish and optimistic about the prospects to be found on the reverse mortgage side of the business according to Gordon.

The exit of the president and the need for the position

When asked about the exit of Stephenson from the company, Gordon told RMD that he was pleased with his performance and collaboration but simply noticed a clash of styles.

“Joe was a great team member, and he helped move the company forward,” Gordon says. “But you and I have talked before about how I care a lot about management style and culture. We’ve frequently — especially in the last year — among senior staff use this mantra of ‘people over profit’ to remind ourselves that we really want to build a great company where people like to come to work every day.”

Scott Gordon, founder and CEO of Open Mortgage
Scott Gordon

This isn’t to dismiss the need for profit since it’s a necessary and needed attribute for any business to have, but Gordon describes the mantra as being one primarily about emphasis for Open Mortgage’s operations.

“For all the experience and good things Joe brought, I had to make the decision that he wasn’t the best fit for our management style collaboration, and the way I wanted to run the company,” he explains. “So I have to say, it’s probably one of the most difficult changes I’ve ever made, because I like Joe, and there was a lot of good from and about him. I’m just trying to achieve whatever it is I’m trying to achieve with our culture and how we interact.”

One of the things that comes with this transition is a realization on the part of Open Mortgage that the recently-established position of president is not one that is needed at the current moment, Gordon explains. Because of that, a replacement is not currently being sought out.

“It’s kind of interesting. For a year-and-a-half or two years, we have continued to improve the executive leadership team and senior staff,” Gordon says. “And I’m so happy with the team we have together right now, I have no plans to look for another president. I feel like everyone is so strong that we don’t need that role right now. Next year is another year, and the world will change — hopefully it will be better than 2022 — and maybe I’ll have a different attitude then. But right now, all the goals we had in place at the beginning of the year or two weeks ago, they’re all still in place. Our attitude about the outlook is the same.”

Forward business challenges, reverse business growth

When speaking about the current dynamics at Open Mortgage, Gordon mentions that the company recently executed a reduction in force (RIF) of 14 employees primarily tied to the lender’s forward mortgage operations. For Gordon, it was interesting to observe the divide this illustrates between the company’s forward and reverse businesses.

“They were 14 people, almost all from operations, and it was that classic thing where we just had more capacity than we needed,” Gordon said. “Interestingly, though, it was on the traditional side. Right now, of course, rates are up. Our traditional loan officers, their biggest problem is they have borrowers who can’t find a house. So our average number of loans per loan officer is down on the traditional side, but the reverse side is still growing.”

One of the ways that the reverse mortgage business growth has manifested, by necessity, is in the reassignment of traditional operations employees to the reverse side of the house to keep up with the division’s growth, he explains. This has led to a generally positive outlook for the company in a year of general challenge for the broader mortgage industry, he says.

“2022 isn’t a great year for any mortgage company just by the general nature of the market, but we feel like we’re pretty well-positioned,” Gordon says. “It’s great to have traditional and reverse. I joke that it’s like having twins; they’re each they’re own individuals and we love them both. But aside from the macroeconomics that hurt margins for all mortgage companies, we feel pretty excited about where things are going and how it’s progressing. And I’m no less dedicated to reverse than I ever have been.”

New reverse resources, division leaders at Open Mortgage

When asked about his own perspectives on the recently-appointed reverse mortgage division co-leaders — Charith Rodrigo and Patty Wills — Gordon says that they each bring their own individual strengths to an increasingly strong segment of the business.

“The combination of the two of them is really good for us in terms of the coverage we can get and the way they both can help bring people to the table and help loan officers and branches grow their own business,” Gordon says. “Every one of our branches is an entity in itself, and every loan officer should think of themselves as kind of a miniature company, a business operation. So I like the way Rodrigo and Patty both come to it and help. Some of our growth won’t just be adding new people, but it’s helping people grow their businesses.”

While reverse is a clear strength for the company going forward, Gordon remains sober in his assessment of the current mortgage climate while also remaining focused on the future, he says.

“We had a couple of crazy years in the market,” he says. “And we knew when they went away, there would be a hangover year. It’s clearly a hangover year, but we feel pretty good about how we’re positioned. We just look to the future.”

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