Is it worth it for lenders to reopen physical offices?

As cities all over the country see a surge in COVID-19 cases, many companies are re-evaluating plans to reopen their offices.

On July 1, tech giant Google announced it was delaying the reopening of its U.S. offices by about two months – until at least Sept.7 – due to a surge in the number of coronavirus cases in some states. In May, social media platform Twitter said it would allow its employees to work from home “forever” if they so wish.

This got us thinking. What are the mortgage industry’s plans when it comes to re-entry? No doubt that the sector is one that is built on relationships. Still, many in the industry believe that increased digitization of the industry lends itself well (pun intended) to remote work.

Technological advances have made it far easier to go remote as an industry than say 15 or even just 10 years ago.

Nick Joutz, founder and principal at Watermark Home Loans in Southern California, said his team had a relatively smooth transition to having most of its staff work remotely after California Gov. Gavin Newsom issued shelter-in-place orders in March.

“Like many businesses, we had recently started to transition some of our team back to the office with significant safety modifications,” he told HousingWire. “The recent resurgence of COVID-19 has led us to reverse course and return to a mostly remote workplace.”

But, Joutz did share a few examples of steps Watermark had in place in preparation for reopening and in accordance with CDC guidelines:

• Taking each team member’s temperature every day
• Closing the office to the public
• Every other work station unused; no two people sit across from each other (desk partitions already were in place)
• “Hands-free” restroom doors, towels and sink
• Providing disinfectant wipes and hand sanitizer
• Removed communal tables and closed the conference room
• Removed most high-touch appliances
• Provided two reusable and washable face coverings to each employee who comes to office
• Level III Enhanced Cleaning with Electrostatic Spraying of all areas
• Lobby and building doors remain propped open all day

For the remainder of 2020, Joutz said Watermark will closely monitor guidance from state and county health officials.

Cherry Creek Mortgage Company has over 70 locations, including its corporate office in Greenwood Village, Colorado.  It allows each branch to monitor their own attendance since each area of the country is different, according to David Arnett, Cherry Creek’s vice president of marketing & communications.  The company is at about 10% capacity at its corporate office, with all other corporate employees working from home. At the branch level, 65% of employees are currently working remotely.

Each of the company’s building facilities have their own deep cleaning protocols. 

“We’ve left doors open for less surface contact, masks are worn at various times, and enacted social distancing protocols for any meetings,” Arnett told HousingWire. “We’re requiring anyone not feeling well to stay at home.”

Currently, Cherry Creek does not have a date for re-entry but says it is checking on its staff periodically and ensuring “they have everything they need to perform their responsibilities.” It has sent out surveys to its employees asking about their WFH experience and received feedback from 80% of them. 

“This was valuable knowledge for forecasting and meeting our team’s needs,” Arnett said.

Looking ahead, he predicts that some of Cherry Creek’s staff will continue to work from home. Some departments will develop a hybrid model with two to three days in the office and possibly offer other solutions. 

“Our number one priority is the safety of our staff and so from time to time, we might need to adjust our strategy,” Arnett said.

But so far, having so many remote workers has actually resulted in improved productivity, he added.

“Productivity is at an all time high.  The human spirit is strong,” Arnett told HousingWire. “We adapted quickly and well.  We’re very thankful.”

Kevin Peranio, chief lending officer in the Newport Beach, California-based office of PRMG, said his company is encouraging people to “stay home” although many offices are open at this time.

PRMG has 170 different locations around the country, and as Peranio notes, “every state is different” in terms of its mandates and approaches around the coronavirus pandemic.

Those that are open are “following state specific guidelines,” he said, which included measures such as temperature checks, required masks, and social distancing policies.

Many employees working in fulfillment, however, continue to stay at home, Peranio told HousingWire.

“We’re setting records as a company even from home, so we don’t necessarily need them to come in,” he said. 

In fact, PRMG is even considering not renewing a lease for at least one fulfillment center, in addition to not signing a lease on a planned center.

In the case of the existing center, Peranio said “there’s hardly anybody in there now,” and it’s still performing well.

Not renewing the lease would save the company about $10,000 a month, or $120,000 a year, he said. Delaying opening on another planned center would also save the company around the same amount.

“So that’s about $20,000 a month in savings we’ve identified,” Peranio said.

HousingWire data analyst and columnist Logan Mohtashami recently retired as senior loan officer of Orange County-based AMC Lending Group. He noted that in 2006, the company paid cash for a commercial office in Irvine, California.

But by 2011, they realized the need for physical space was simply not as great, so they rented out the space for three years before selling the building in 2014.

“It was a very nice office, and big, but it just got to the point that we realized we could do everything from home and we realized, ‘we really don’t need this,’” he recalled. “Over the years, productivity has really changed in the mortgage industry.”

Anything a lender needs to do can technically be done online, Mohtashami maintains. Add the lack of commute, which in places like Southern California can be as long as 60 to 90 minutes one way, and a remote staff makes even more sense.

Dan Green, founder and CEO of personalized mortgage lending startup Homebuyer, is yet another lender opting to go remote. Green was planning to relocate his company to Austin from Cincinnati, Ohio, around mid-March upon the conclusion of the Techstars Austin program. But then the coronavirus pandemic hit, and everything changed.

Green and his executive team began making suggestions to staff during the first week of March. Work from home went mandatory March 22 by order of Ohio Governor DeWine.

That hasn’t stopped the company from continuing to hire. 

“We have interviewed loan officers, software engineers, and operations personnel,” Green told HousingWire. “We’re giving every new employee the option to work from home for the first twelve months, at least.”

To help make working from home as comfortable as possible, Homebuyer is providing its employees with a work-from-home allowance so they can buy things such as a desk, an ergonomic chair, proper lighting, and hardware and software tools required for job performance. 

“I don’t expect our loan officers to return to a physical office space — maybe ever,” Green said.

For those employees who do go into the office, they will be following shared office guidelines with another building tenant. Those include measures such as:

• When AC is working properly, all internal doors should be propped open by the first employee that arrives to the office each day.
• All external doors will continue to remain locked.
• Utilize one-directional walking flows when moving between floors. The front stairwell will be used to access higher floors, and the back stairwell will be used to access lower floors.
• Limit access to one person per floor on the stairs at one time if possible.
• If touched, sanitize any door handles associated with shared spaces
• Employee desks are to remain six feet apart and employees will clean and sanitize work stations at the end of each day.
• No team meetings are recommended in confined spaces.
• Temperate checks and wellness forms must be recorded every day before entering the office.

Still, Jonathan Wasserstrum, founder and CEO of office space marketplace SquareFoot, believes the majority of companies ultimately want people back in the office. Of course, he admits an obvious bias considering the nature of his company.

“Professionally, I think there’s no substitute for the office environment,” Wasserstrum told HousingWire. “That doesn’t mean remote work is bad. The question is, ‘Is it ideal?’”

To Wasserstrum, industries like mortgage that are built on relationships especially benefit from in-person contact.

“When relationships matter, they get better face-to-face,” he said. “Not Zoom face-to-face, but real in-person interaction. That’s not going anywhere anytime soon.”