The APM Story: Respect, Transparency and Scrappy

American Pacific Mortgage, a top-10 retail lender based in Roseville, California, is now licensed in 32 states, making its way east in a bid to become a player on a national, 50-state level. The company weathered the 2008 downturn born of the housing crisis, and the dip the industry saw last year and in the first quarter of 2019. What keeps APM moving forward?

Bill Lowman, president of the company since 2004, says it’s a commitment to three core values at the heart of the company’s culture — respect, transparency and “scrappy” — and building strategies that flow out of each of these values. He spoke with Mortgage Media’s Tom Wilkins about how that works during the recent California Mortgage Bankers Association Secondary Market Conference in San Francisco.

Having been asked during a CEO panel at the conference about what threats keep him up at night, Lowman told Wilkins, “It gave me an opportunity. I talked about the fact that, really, I think threats are opportunities masked, and I view everything that I see as a threat as ‘Where does the opportunity lie in that?’”

That would be where “scrappy” comes in.

Scrappiness — combined with a common-sense, conservative approach — helped APM make it through the mid-‘00s crisis, he noted: 

“One of our core values is ‘scrappy,’ and we had to be as scrappy as heck to survive that. I think probably a key decision, a fork-in-the-road decision, that American Pacific Mortgage made, going back in ’05, ’06, leading up to the meltdown, was the conscious decision not to fund the products that frankly got our industry in trouble — the option arms and the all-days. … We stayed away from that and we focused more on either the conforming product or brokering certain loans that we didn’t want on our warehouse lines. And I think then when the stuff hit the fan we were on the sidelines, so that got us out of harm’s way. And then as we emerged in 2009, in 2010, we really started gaining market share, frankly, while others were fighting off recourse. We didn’t have that so we’re able to focus on growing the business, and I think that was really key to why we’re here today.”

Surviving, and thriving: By the end of the year, Lowman said he expects American Pacific Mortgage to be licensed in 40 states, with an aim toward operating in 48 to 50 states. “And we’re well on our way,” he said.

One key to success — and one that will become increasingly important — is a focus on diversity, which Lowman said follows from the “respect” core value. It also follows from a simple look at what transactions are being made, and who’s making them: 55 percent of purchased transactions currently are to first-time home buyers — and those buyers, increasingly, are younger (with millennials entering the market) and, particularly in key growing markets, nonwhite. Fewer buyers fit the description of a white male over 50 — the description of most of the people running the companies, Lowman noted, himself included. 

“I think there’s just an opportunity to make your company better and to expand where you’re lending and who you’re lending to by approaching it with more diversity. And I think that’s incumbent upon the industry to do that,” he said. “… You figure out diversity, you figure our affordable lending, and those are going to be the lenders that I think are going to thrive in the coming years. And frankly, at American Pacific Mortgage we expect to do that.” 

He said the company hired a diversity officer to help advance some of its diversity initiatives, which he described as wide-ranging: “It’s around who we employ, who we promote,” he said. It also involves approaching the GSEs, aggregators, mortgage insurance companies and the like to take about affordable-housing opportunities to serve a more diverse lending market. Earlier in the day, he said, they finalized plans with Freddie Mac for a diversity/affordability seminar in Oregon for branch managers, loan officers, real estate agents, etc. — showing the company’s commitment to the cause and partnering with key people in the industry to advance it.

“Our employment base and our lending base needs to be more reflective of the demographics of the United States today,” Lowman said. “And I think if you were to ask any other mortgage company leader, that they would … if they were to answer honestly, they would say, ‘You know what, we’re not quite there yet.’ And so you have to be brutally honest with yourself it you’re going to make the changes that you feel your organization needs to be made, and we’re prepared to do that.”

Asked for advice for industry leaders — or those looking to grow into leadership positions, including your people looking to get into the industry — Lowman hearkened to the third of his company’s core values, transparency, noting it helped APM weather Q4 2018 and A1 2019. While acknowledging there are some difficult, sensitive issues that require discretion, he said, “Your employees, your producers, they want to hear from leadership. They want to know the truth. They deserve the truth. They deserve transparency. And I think if you do that and you treat them with that kind of respect in letting them know what you’re doing, letting them know why you’re doing it, you are going to retain employees and your employee satisfaction is going to go through the roof.”

As we’ve turned the calendar page from July to August, what are some top issues Lowman sees as facing the industry during the second half of 2019?

First and foremost, capacity, he said, noting that by May APM had doubled its volume from June — his company, and all throughout the industry need to make sure the capacity is there to serve the consumers and the company’s branches and loan officers. Secondly, there’s the changing nature of “the race to the consumer” as fintechs emerge bringing the promise of AI, blockchain, data access and the like.

“I think the race to the consumer is changing. And how do you get to that consumer first? How do you beat those companies that have the data, that maybe have a different model than ours?” he said. “Because at American Pacific Mortgage we are 100 percent committed to supporting our loan officers, and we feel that having a distributed retail model with loan officers in the communities that they serve, being face-to-face with borrowers — especially when 55 percent of them are first-time home buyers — we think that’s crucial to the home-buying experience and to create an experience that matters for each of our consumers.”  

Also crucial is the knowledge that borrowers aren’t cookie-cutter in their needs and expectations. Some are happy with a mostly or totally digital/online process; others want the reassurance of human contact and expertise.

“We need to customize that experience to what the borrower’s looking for,” he said. “We want to treat the borrower the way they want to be treated, not the way we want to treat them. And to some borrowers, they might want extreme handholding throughout the entire process.  Some borrowers might want a more digital experience, but when I have a question I want to be able to get ahold of you. Whatever it is, to win in 2019, 2020 and beyond, we feel like we’ve got to give the consumer what they’re looking for, which is a custom, amazing experience.”

On a personal level, speaking of amazing experiences, Lowman was preparing to vacation in Hawaii with his wife — and hoping for a better experience than a trip last year when a hurricane hit when they were in Maui, keeping them indoors. Outside of work, Lowman spends as much time as possible with his family — his wife, three sons, two daughters-in-law and three young grandchildren all under 2 1/2.

“And every possible moment I can spend with them I do because since they’ve come into my life they’re game-changers,” he said. “So that’s what I do.”