Before Washington Mutual Inc. opens a home-loan center in a new area - even before it leases space - it tries to hire local managers away from competitors, its new head of retail origination says.
Those managers can then draw on their local contacts to recruit experienced loan officers and other employees, Greg Sayegh said in an interview last week.
"The preference would be to hire someone within the market" from "a top-tier competitor" - someone with access to a pool of potential recruits - said Mr. Sayegh, whose promotion was announced at the National Association of Realtors annual convention last week.
Wamu begins by identifying opportunities in sizable, fragmented markets near big cities, he said - for example, the Denver suburb of Fort Collins, Colo., where it plans to open a home-loan center next month.
Then it typically recruits a branch manager from an established local rival. (Occasionally it puts a current Wamu employee in charge, Mr. Sayegh said. "If we have the right manager willing to relocate, that's a win for us also.")
Next, Wamu hires loan officers and other staff while renting "incubator" space in executive suites. This makes more sense than "having a manager and one support person sitting in a 30,000-foot space with no loan consultants," he said.
The staff starts originating loans while in the temporary space. When the number of employees outgrows the space, they move into a leased office, he said.
Wamu expects to have added 70 home-loan centers nationwide this year. In new markets, it often sets up these mortgage sales offices as beachheads before opening bank branches.
Though Wamu has not said how many home-loan centers it plans to open next year, it has said it expects to open 250 bank branches - the same number as this year. In the second quarter it was the third-largest mortgage originator, and the second-largest at the retail level, according to National Mortgage News.
By next year, Mr. Sayegh said, Wamu will have in place a strategy to ensure that all of its home-loan centers can originate home equity loans, taking advantage of a cross-selling opportunity it has often missed.
Mr. Sayegh joined the company in 1996, when it acquired American Savings Bank of Irvine, Calif., where he was the director of wholesale lending. Before his latest promotion - he succeeded Lori Bella, who a spokesman said retired over the summer - Mr. Sayegh was the mortgage sales manager for the Southwest.
The promotion followed a September reshuffling of Wamu's top mortgage ranks. Craig Davis, the longtime mortgage head, abruptly retired; retail banking chief Deanna W. Oppenheimer assumed responsibility for mortgages (and insurance as well). Eric Spence, who headed mortgage production, resigned; Tony Meola, the former executive vice president of service delivery for home lending, was promoted to oversee most production operations.
(Kathy Jacobs, Thom Palmer, and John Schleck, the senior vice presidents in charge of the wholesale, correspondent, and direct-to-consumer channels, respectively, kept their jobs.)
Though Wamu may be hurting competitors by hiring their managers, Mr. Sayegh said that despite "some really crazy pricing" right now it would not resort to undercutting them to win business. "It's not a strategy we've really utilized in any market," he said.
Some mortgage executives, including Countrywide Financial Corp.'s chairman, Angelo Mozilo, have predicted that price competition will be less fierce during this mortgage slump, because a handful of large, sophisticated companies have a bigger share of the origination market.
Mr. Sayegh said big lenders have kept their pricing rational so far. Competing on price is "never completely out of the question," he conceded, but Wamu emphasizes product options and service and focuses on intermediaries, such as real estate agents, who have sway over homebuyers
At this point, Mr. Sayegh said, Wamu's retail mortgage business has laid off only temporary or contract employees. "We have an aggressive production target for 2004" and so will need to maintain the current level of regular staff, Mr. Sayegh said.
Kerry Killinger, Wamu's chief executive, said during its earnings conference call in October that it could eliminate the equivalent of 4,000 full-time mortgage jobs without reducing its regular staff. However, this month the company announced plans to trim more than 450 non-temporary jobs in California in January, a spokesman said.
