Millennials, Modernization and Technology: A Recipe for Success at Village Mortgage

Laurel Caliendo, President and CEO of Connecticut-based Village Mortgage, is a force of nature.

A roll-up-your-sleeves, let’s-get-it-done type of person, Laurel started her mortgage industry career in the early 1990s—shortly after her second child was born—with the goal of becoming a Freddie and Fannie mortgage lender and servicer to her New England community.

What began as a fledgling mortgage brokerage business run from Laurel’s home (essentially, a backroom for banking institutions in the area), Village Mortgage is now a thriving mortgage bank and a premier lender in New England—20 branches strong—that recently extended its reach with wholesale operations in Nevada and Florida.

After two decades, Laurel Caliendo’s commitment to providing every person who walks through the door a personalized mortgage experience has never been stronger.

And, equally as strong is Laurel’s commitment to modernizing and advancing the mortgage industry, both through an innovative use of technology across her firm and by hiring the best and brightest of the mortgage industry’s next generation of professionals.

Blending experience with enthusiasm

Village’s bustling Avon, Connecticut headquarters—complete with mounted TV screens streaming real-time operational stats 24/7 to inspire teams—buzzes with collaborative camaraderie in a setting that blends years of mortgage experience with millennial enthusiasm.

“We look for ways to attract young innovators to Village Mortgage,” Laurel says. “Our industry—the mortgage industry—really needs that infusion of fresh ideas and talent.”

“Millennials are the future of this business,” she continues, “and technology is what they’ve known all their lives—they can’t fathom having to write anything down like we did in the old days,” she says with a smile, “that’s not how they operate. So we have to give them the appropriate resources and technology, because that’s how they know how to work—and keeping the technology current keeps them engaged and excited.”

 Technology—the path forward

A strong proponent of technology adoption, Laurel keeps her eye on the future, always looking at the road ahead to innovations that will help Village improve efficiencies and allow Laurel to keep her finger on the pulse of the business to better manage risk and make more money.

The Challenge: Growing the Business to Maximum Profitability

“In one of my early meetings with Michele (McGovern, Alight’s CEO), she asked me what keeps me awake at night,” Laurel says, “well, when growing a business—any business, as any CEO will tell you—profitability, liquidity and cash flow are always top of mind.”

Driving volume and profitability

Laurel says that one of her top priorities for 2018 is driving more volume and profitability out of several of her New England retail branches while growing business in the new wholesale channel—challenging in an industry marked by changing market conditions and demand fluctuations that complicate management’s ability to cost-effectively manage staffing levels or meet cash requirements on warehouse lines.

Justin Girolimon, Village CFO adds, “We have a set target for earnings on originations, so if we see that we’re not going to hit that, we need to look at taking some kind of alternative action—whether it’s cost cutting or increasing margins—immediately.”

To facilitate cost cutting and grow the top line, Laurel and the team need to quickly find answers to questions like:

• How will volume changes affect margins?


• How will cash flow be impacted 30, 60 or 90 days out?


• Will staffing need to change?


• How much are branches discounting?


• What happens to P&L and cash flow if volumes drop and market bids for MSRs are trading lower?


• What is the impact on future margins, cash flow, gain on sale, cost to close?


• What effect will changes have on servicing and warehouse credit?

Spreadsheets time consuming

The finance team was running scenarios in Excel, but the process was time consuming and typically only done when evaluating new retail branches. Further, branches supplied corporate only with their yearly business plans—management had no ability to monitor and project financials on a more regular basis.

Village management needed a technology solution that would help them see the financial impact of operational changes across the enterprise and provide greater visibility into the production costs and profitability of branches.

And Laurel needed to have her finger on the financial pulse of the enterprise from anywhere at any time.

The Solution:Visibility into Future Financials with Alight Mortgage Lending™

With Alight Mortgage Lending, Laurel, Justin and senior executives are integrating operational and financial data and running financial scenarios in real time to streamline decision making.

User permissions allow branch managers and other team leaders to access data relevant to their piece of the business so they can update financials. Analysis is visualized through Alight Enterprise dashboard views for senior management.

The Result:Anytime, Anywhere Access to Financials—24/7

At the end of the day, Laurel Caliendo couldn’t be more excited about what she and Alight have accomplished—and what’s to come.

“Alight is now providing us all our financial data,” Laurel says, “I can view financials—including cash flow—and run my own volume scenarios from anywhere, at any time. And everybody in accounting gets excited now, too, because they’re really using it to forecast and run their own what-if scenarios.”

Branches collaborate in planning

Now each branch manager provides monthly volume numbers that are incorporated into Alight forecasts to help management gain visibility into expected profits for every branch, each month. “Alight helped us identify what was driving branch profitability down and what we needed to do to improve our overall margins,” Justin said.

The management team can now review actuals—including branch production costs—and projections relative to both company and branch goals in Alight-generated reports—streamlining meetings and decision making.

“Alight has taken decision making to a whole new level for us,” Justin adds. The team is now able to forecast at branch level and at company level, looking at different business channels like—retail or wholesale—and analyze expected volume, and then run scenarios upwards or downwards to see how changes could affect bottom line. “With Alight, we can lock down a pro-forma P&L out for a year, make constant revisions and run scenarios quickly,” Justin concludes.

Village results at a glance

• Laurel has anytime, anywhere access to financials and cash flow projections


• Clearer visibility into the branch pipeline


• A bird’s-eye view of financials across the entire enterprise


• Ability to identify margin erosion—quickly


• Daily analysis of the impact of interest rates and volume changes on future financials


• Forecasting of optimal headcount based on rate and volume scenarios


• Capacity planning scenario analysis (should we hire new FTEs or pay overtime?)

Future:

Enterprise-Wide Access and Tackling Leakage

Laurel plans to roll Alight out to the senior management team so they can run their own scenarios in real time. And branch managers will have permissioned access to view and manage their financials in Alight.

But the biggest change is on the horizon.

Soon, capital markets data will be integrated via Alight to provide Laurel pull through rates and volume at each branch, helping the team pinpoint fallout costs and more closely monitor, identify and correct leakage.

“We pull in data now through our capital markets provider but we’re going to take it a step further with Alight and really look at pricing and margins for all of our retail branches,” Laurel says. Alight-streamed data from Village’s capital markets provider will help the team set tiered pricing. “We’ll run volume and margin scenarios in Alight,” Justin adds. “So we can look at a bunch of different options with margins and pricing to directly impact profitability on a branch-by-branch basis.”

Just the beginning

Laurel excitedly summed it all up. “We’re just getting started with Alight,” Laurel says, “being able to run my business like an investment portfolio—managing assets and cash through real-time scenario analysis and being able to more closely predict financial outcomes—is a game changer. With Alight, we’re guaranteed to hit our near- and long-term goals.”