Mortgage advisory firm takes a page from Maslow to advise lenders on strategy in an uncertain market
January 25, 2024 – DENVER, Colo., – In STRATMOR Group’s January Insights Report, Senior Partner Jim Cameron borrows from Abraham Maslow’s famed “hierarchy of needs” theory to offer mortgage lenders a real-world approach to shaping their strategies in 2024.
In his 1943 paper, “A Theory of Human Motivation,” Maslow identified five levels of human needs, from the most basic to the most advanced. Cameron’s InFocus article, “Maslow and Mortgages – The Path to Actualization in Today’s Market,” outlines a similar hierarchy that recommends lenders get back to consistent profits before embarking on their longer-term strategic goals.
Cameron poses a question to the industry: Can a hierarchy similar to Maslow’s human needs define the stages of need in today’s mortgage lending space? He then outlines his “Mortgage Lending Hierarchy,” a transformative, five-stage journey towards self-actualization for lenders to fulfill their vision, mission and purpose.
In order of priority, here are the “needs” Cameron envisions for mortgage lenders:
- Scrutinize Cash – Because “cash is king,” clearly understand and closely manage cash flows, which are the lifeblood of any company and foundational to survival.
- Surgically Repair – Do what it takes to break even to build a sense of safety and security in the company’s financial position.
- Stabilize – Achieve a reasonable level of recurring profit and build your team connections and culture to create a sense of connection and stability.
- Strategize – Engage in robust long-term planning, earn the respect of others, and clearly identify the company’s unique value proposition to build esteem and recognition as an industry leader.
- Self-Actualize – Fulfill the vision, mission, and purpose of the company.
“In today’s environment, lenders that are losing money on production must first focus on shorter-term tactical measures,” Cameron writes, “Once lenders have demonstrated that they are squarely in the black, generating consistently positive cash flows, then they can identify and execute longer-term strategies.”
STRATMOR’s outlook for 2024 is cautiously optimistic, according to Cameron. “We see the pace of consolidation quickening in the first and second quarters, followed by a modest rebound in profits during the spring and summer,” he writes.
Read more of Cameron’s advice in this month’s InFocus article.
In a second article in this month’s report, STRATMOR Customer Experience Director Mike Seminari asks, “What new things can lenders and loan originators try to change up their results in 2024?”
Seminari then identifies social media strategy, AI applications, and borrower-centric processes as key. “In today’s market, the lenders who are intentional about creating a positive customer experience will be the ones that grow the fastest, protect their margins and gain coveted market share,” according to Seminari.
Get Seminari’s recommendations in this month’s CX Tip, “Fresh Ideas for LOs Looking for Better Results in 2024.”
Click here to read the January 2024 edition of STRATMOR’s Insights Report.
About STRATMOR Group
STRATMOR Group is a leading mortgage industry advisory firm that provides a range of programs and services designed to counsel lender CEOs and senior executives. STRATMOR serves more than 250 companies annually, providing strategies that increase growth and improve profitability in sales, marketing, technology, operations and mergers and acquisitions. The company leverages comprehensive, propriety data and key insights gained through extensive experience in the mortgage industry. STRATMOR is well known for its financial models and its collaboration with the Mortgage Bankers Association in the PGR: MBA and STRATMOR Peer Group Roundtables Program. Find out more about STRATMOR on its website at www.stratmorgroup.com.