DS News

62 WHERE WE STAND e increased attention to diversity and inclusion efforts in the mortgage industry in recent years has been very apparent, and indeed, progress has been made when it comes to organizations becoming more diverse. In the C-suites, however, the needle hasn't moved very much, if at all. Unfortunately, there are no hard numbers showing how diverse or non-diverse the mortgage servicing industry is. But we can draw some conclusions based on data about the financial services industry as a whole. Earlier this year, the House Financial Services Committee held a hearing in which members reviewed data on diversity and inclusion efforts among financial services companies. ere were some positives among the data. For example, the staffs at 44 banks that were included in the research were 58% white in 2018, compared to 63% of the national population. African Americans made up 12% of the banking workforce, which is roughly their same percentage of the U.S. population. However, these numbers were not the same for positions of leadership. According to the report, senior-level employees were 81% white, compared to 63% of the national population. For some banking institutions, the number of minorities in senior leadership positions was in the single digits. One of the obstacles in determining the true level of diversity in our industry is that a lot of the reporting by banks is voluntary. In their annual Office of Minority and Women Inclusion (OMWI) reports, the FDIC, the Office of the Comptroller of the Currency, and the Federal Reserve Board of Governors all reported that the response rates in their diversity surveys was 16.7% or less. From my own experiences and observations, I can say emphatically that the overall diversity among senior leaders in the mortgage servicing industry is on par with what these numbers tell us. For proof, one needs only to look at the leadership teams for most servicing organizations, which are mostly comprised of white men. ey are also in line with what we know about the U.S. business world in general. According to a 2019 analysis by the Center for Talent Innovation, a New York-based workplace think tank, African Americans accounted for just 3.2% of senior leadership positions at large U.S. companies, and just 0.8% of all Fortune 500 CEOs. A GREATER NEED FOR DIVERSITY THAN EVER While diversity has always been important, there is a particular need for servicers to ramp up their diversity and inclusion efforts now. To be sure, the mortgage servicing industry has never experienced a crisis like the one we face today. Millions of borrowers are facing financial hardships and job loss as a result of the COVID-19 pandemic and are looking to their servicers for help. at is placing enormous demands on servicers to operate more efficiently while giving every borrower the relief they so desperately need. is challenge is being magnified by the reality that most servicers were ill-prepared to transition their organizations to remote work environments. If this obstacle was not difficult enough, servicers that outsourced forbearance requests and loss mitigation processes to third parties overseas have found these providers were also ill-equipped to continue operating during the pandemic. As far as the pandemic and the financial crisis goes, we really don't know where things are going to end up. We only know that at some point, the number of relief options will end, and we will experience an upswing in loan delinquencies and defaults of unknown size. When the pandemic fades into history, our industry is going to be graded on how well we were able to help borrowers at their greatest time of need, and whether we did all we could. More than ever, mortgage servicers need the kind of outside-the-box thinking that diverse organizations are better able to provide. In fact, organizations with diverse leadership are often those that are better able to innovate and create better ideas When the pandemic fades into history, our industry is going to be graded on how well we were able to help borrowers at their greatest time of need, and whether we did all we could. Diversity Section By: Allen Price

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