Rain City Guide

1. Comment from EconE
Time April 21, 2007 at 5:26 pm

yup…friday sure was a busy day for the webmaster over at…

http://www.ml-implode.com

sometimes he even gets the scoop before it hits the MSM.

2. Comment from Jillayne Schlicke
Time April 21, 2007 at 5:53 pm

Hi EconE,

His site is so well known now that people are probably sending him an email as soon as something breaks. Not quite F**ked Company for the mortgage side, but an interesting daily read.

What’s distressing is the growing number of laid off mortgage workers. Where will the lower-level employees find re-employment?

I’m trying to put myself in the shoes of a lower-level employee at a subprime wholesale lender or a retail lender engaging in mostly subprime and I think if I were in their shoes, I’d be trying like hell to find another job.

3. Comment from Rhonda Porter
Time April 21, 2007 at 6:04 pm

Somehow I managed to never work with MILA. Our Homecomings rep was in this week…and that is an Alt-A/Subprime company that I will work with since they are dependable and do “common sense” loans. He affirmed that 660 is the min. for zero down loans at Homecomings (a GMAC company) and that reserves (borrowers having somes savings in the bank after closing) will be required on more (not all) loans. When I see the subprime/alt a reps that I work with, I am surveying them on “how low they will go” for current loans.

The market will continue to be very interesting and full of changing guidelines (unless the client has 700 scores and 20% down with a 30 year fixed rate). It really makes a Mortgage Professional have to be extra sharp to keep up with all of these changes.

4. Comment from Jillayne Schlicke
Time April 21, 2007 at 6:06 pm

In the late 1980s when banks started to merge, I shifted from a job as a retail mortgage loan underwriter to a job in that same company’s foreclosure division, which was a longer commute, but I was reimbursed for travel expenses. This was a fascinating job; you can learn a lot about human nature when working in a foreclosure department of a national mortgage lender.

A quick search on Monster.com (if you want to do a search, make sure to click “no thank you.” You don’t have to go into their dbase in order to surf their site) shows plenty of job openings in foreclosures, but not many in WA state because most of the servicing centers are all in other states.

EconE, today was the first time I went deeper into ML-implode and read through some of the discussion forums. There’s a message on there from a guy who said none of the recruiters will touch anyone who came from a subprime company. That sounds rather harsh. What do you think?

5. Comment from Jillayne Schlicke
Time April 21, 2007 at 6:17 pm

Hi Rhonda,

Happy Saturday Night. I have four 13-year old’s jumping on the trampoline in my backyard tonight, what do you have going on?

Q: Looking for a barometer: For first-time homebuyers with a credit score over 700, can they still buy with zero down, no cash reserves?

I was just talking to someone on Friday who fit that profile.

6. Comment from Rhonda Porter
Time April 21, 2007 at 6:29 pm

Jillayne, I’m feeling like a very lucky Mom…my husband took his 13 y.o. son to a baseball tourney and my 14 y.o. son opted to go with (must be a girl there…) and his 15 y.o. daughter is at the movie’s w/girl friends… ahhh… the house is all mine…and what am I doing???
It’s very exciting so I hope you’re sitting down…I’m backing up my laptop to a portable disk drive we just got at Costco (I believe this was from a recommendation from one of Ardell’s posts). What a life!
My lap top is starting to give me some major warning signs so it’s time to take action….

700 score, zero down and no reserves…is probably a fine loan (assuming job stability and decent debt to income ratio). I did a post on Mortgage Porter comparing the strength of borrowers scenario to legs of a chair. If we’re missing or shy on one leg (reserves) we should still be okay. And, if your friend has a 401k or some sort of retirement account, that can be considered “reserves” even though you hope they never need to pull it out for a mortgage payment.

Tonight is a nice evening for bouncing around the backyard! With the 15 y.o. daughter out w/friends…if she doesn’t wind up staying over w/one of her girlfriends…they’ll all wind up here!

7. Comment from EconE
Time April 21, 2007 at 6:54 pm

Jillayne…let’s touch on a couple different subjects.

You first showed your concern regarding the employees that lost their job. I can understand and I too do not like news like this. The question that you pose regarding where the low level employees will find work is the 64 Trillion dollar question.

Had you asked me 19 years ago when I was first studying international trade and development it would have been easy to say where an entry level employee could work…jobs were plentiful. I would also have told them to learn a trade…as in working with your hands. Nobody should be afraid of work nor look down on tradework. I’ve done plenty of it myself throughout life.

Now…with globalization…more and more of these “entry level” jobs are easily outsourced for a fraction of the cost of doing them here. Hence…the proliferation of what has been referred to as “McJobs”. We have become a service economy and now with technology even that can be outsourced. I’m sure that you heard about Circuit City laying off 3000+ workers only to let them re-apply for their jobs at lower wages. Of course…to the general public that reads about this there is a “twinge” that we all feel as we know that those could be our friends neighbors family etc. I look even further than that. I start asking myself things like…”when will those jobs become irrelevant and replaced by technology”.

Efficiency is a double edged sword IMO. Think about all the things that make life more “efficient”…like Rhondas laptop. And then think about how much more complicated our lives have become over the last 15 years due to all these new objects intended to create “efficiency”.

Anyhow…if someone were to ask me what career they should pursue today…I would recommend being a plumber. I say this in all seriousness. For “entry level” professional jobs…I don’t know. Maybe something in India or SE Asia?

As to why the recruiters wont touch someone from a subprime company…I guess you’ll have to ask the specific recruiter as I can’t pretend to speak for them. I can however say that I myself feel that many of the loans were based on flawed mathematical principals that should have been obvious to most people but I understand that many people never get the opportunity to receive a quality education. I know this from experience as I worked as a substitute teacher in MO for a couple years and was afforded a glimpse inside our educational system and also into the lives of people in different socioeconomic classes that most people never get to see.

8. Comment from Jillayne Schlicke
Time April 21, 2007 at 7:06 pm

EconE,

I also use to work for a large, national (well, international) title company. First their production jobs were shifted from Everett to Tacoma. Then each county around the state shifted production from their local hub city to Tacoma. Then production was shifted overseas to Mexico, the Philippines, and India. Finally, all the remaining Tacoma jobs were sent to California. The lower-level workers went on to other local jobs, at the entry or mid level. Some sold their services back to the company as an independent contractor. They charged a higher hourly rate and did all kinds of different types of jobs in a more efficient way because they already knew the company’s system.

By the way, I have a leaky faucet and I also have a toilet tank flusher thingy that needs to be fixed, but I hate having to schedule a plumber because I’ll need to set aside a wide block of time that I do not have. A plumber who arrives at the appointed time would be a VERY efficient use of my time: I would pay MORE for this service.

9. Comment from Jillayne Schlicke
Time April 21, 2007 at 7:07 pm

Okay, let’s put out an APB (all points bulletin) for any recruiter (or anyone!) out there: Would you hire a laid-off subprime worker?

If yes, why?
If no, why not?

10. Comment from Rhonda Porter
Time April 21, 2007 at 7:48 pm

Jillayne, an inhouse customer service rep for New Century Mortgage was recently hired to be a title rep…. A few weeks ago at Nordstrom when I was buying something at the Mac counter…I overheard two employees discussing underwriting and other mortgage talk…turns out they are former New Century employees too.

Shoot, I wound up in title insurance (which led me to mortgage) from a job placement company, Business Careers.
I would think that if the individual interviews well and has a good job performance, the subprime stigma shouldn’t hurt them (if they don’t let it).

If someone does have a tough time landing a job, I would recommend utilizing a company such as Business Careers, Volt or Apple One. They may have to “temp” it for a while…the employment industry has not only changed with outsourcing, but also by temp agencies. They entry level job I had to “get in” to title insurance no longer uses a “full time” employee…it’s temp (if it’s not outsourced).

11. Comment from Rhonda Porter
Time April 21, 2007 at 7:50 pm

“Efficiency is a double edged sword IMO. Think about all the things that make life more “efficient”…like Rhondas laptop. And then think about how much more complicated our lives have become over the last 15 years due to all these new objects intended to create “efficiency”.”

I agree, EconE. I’m still watching my new hard drive copy stuff over and hoping I can figure out how to use it…no real manuals with this thing!

12. Comment from Morgan
Time April 21, 2007 at 11:12 pm

I’ll chime in on the hiring of subprime workers:

I don’t think anyone who is a quality person, who did quality work should be turned down from anywhere. I would hire a great subprime processor or underwriter in a heart beat; just as I would hire a great hard money underwriter. I don’t think the previous employer is the problem.

We posted a listing for a processor a few weeks back and in 7 days I had over 300 resumes on my desk for one position. I ended up with over 500. There were underwriters, jr. processors, sr. processors, loan officers wanting to get in to processing (and our job posting was thorough mind you), etc. We were overwhelmed.

The operations jobs just aren’t there right now. When times get tough people cut overhead - they don’t cut sales. I know account reps from New Century and Fremont who were gobbled up in minutes. I also know New Century ops people with amazing resumes that can’t find a job for half of what they were making.

So I would hire a person from subprime absolutely. In fact, I would probably hire a subprime operations person ahead of a prime operations person. Prime has a very “order taker” mentality and the people that tend to work in it tend to share that sentiment. I would rather have a subprime person who understands a wide range of product guidelines than someone who is only used to looking at square pegs in square holes. For the record my company does about 65% prime and 35% subprime production.

13. Comment from Jillayne Schlicke
Time April 22, 2007 at 10:08 am

Hi Morgan,

500 applicants for a single processing job; That blows me away. How the heck did you sort through them all to pick the top candidates to interview?

I remember the layoffs in the early 1990s. I was in production. I remember thinking; I’m going to shift from production to sales because management always sides with the salespeople when there’s a conflict and salespeople rarely get laid off.

If I was interviewing today, one of the reasons I might prioritize a prime job candidate over a subprime candidate is because often (not always) the folks who work for a bank will have received ongoing formal training in mortgage lending fundamentals. Products come and go and can be easily learned. A foundational understanding of RESPA and Truth-in-Lending, ECOA, state laws governing mortgage lending, and so forth, are more valuable to me as a business owner.

If I were interviewing a subprime candidate, I would ask the question “what did you learn from working in subprime?”

There could be hundreds of different ways to answer that question.

14. Comment from Tim
Time April 22, 2007 at 10:13 am

Re MILA:

“They kept telling us it was a computer glitch.” (I presume referencing the loans that were in line to close but didn’t fund).

This is exactly what our escrow office heard from two or three lenders when we were trying to close transactions weeks ago, including New Century.

Just last night, I was at a family function and there was a loan officer there who said, “MILA was too big to close.”

15. Comment from Jillayne Schlicke
Time April 22, 2007 at 10:35 am

Hi Tim,

Thanks; Now we know one of the possible warning signs (computer glitch).

Are there any other wholesale lenders who are currently experiencing computer glitches? I’m sure the employees would prefer more than a 15 minute warning.

16. Comment from Tim
Time April 22, 2007 at 10:46 am

Lynlee’s chiming in here (in my ear) that escrow companies that were ready to close with any of MILA’s loans are probably furious if MILA released escrow to record a transaction (which is what happened to us with another case) and then didn’t fund the loan.

17. Comment from Jillayne Schlicke
Time April 22, 2007 at 10:54 am

Hi Tim and Lynlee,

Assuming that might have happened, what would happen next?

18. Comment from Morgan
Time April 22, 2007 at 11:18 am

Hi Jillayne,

I agree - it was a monumentous task. We sorted by a few ways. First we went back and asked everyone for salary requirements. We took everyone who was in our range or +/- 10K. We then had 3 people scan all of the resumes; myself, my business partner and our VP of Operations. We all came up with our A, B and C lists. We then conducted phone interviews and then scheduled personal interviews. It was a long process. There were so many good people that we met and talked to.

I agree that many people that work in subprime got thrown in to their role as processor or other and didn’t really have the proper fundamental understanding of prime mortgage underwriting principles, etc. I guess I would revise my answer to say that while we would never not choose someone just for working at a subprime shop we would definitely want to understand their grasp of sound loan making principles.

Cheers!

19. Comment from Jillayne Schlicke
Time April 22, 2007 at 11:43 am

Hi Morgan,

and I DO understand the picture you paint of the “order taker” mentality that comes from working in an environment where the ability to work this way is/was valued and rewarded.

So did you go with a candidate from subprime or prime?

20. Comment from Morgan
Time April 22, 2007 at 3:34 pm

We went with two! One from Alt-A and one from prime One is now our VP of Ops and the other didn’t work out after a 90-day introductory period.

21. Comment from EconE
Time April 23, 2007 at 12:23 am

Morgan said…

“We then had 3 people scan all of the resumes; myself, my business partner and our VP of Operations”

and then he said…

“We went with two! One from Alt-A and one from prime One is now our VP of Ops”

so…what happened to the VP of Ops that scanned all the resumes?

Why on earth would a VP be doing clerical work (scanning resumes) in the first place?

So…two people hired…one didn’t work out…one fills a position that “seemed” to be already filled.

hmm.

22. Comment from Alex Albergo
Time April 23, 2007 at 10:19 am

Where to start, well I was affected by MILA’s closing as I am an Account Executive in Illinois and have been with MILA for over 4 years now. The company was going to be bought out by a foreign investor, that decided at the last minute to pull out since the whole mortgage industry in the United States is “lower” than normal. What people need to realize is this all has to do with Wall Street. Sub prime loans are still very profitbale now even more if your one of those ass***** from Wall Street. They made all these companies buyback loans for first payment defaults……this has been going on for years now all of the sudden Wall Street wants to enforce buybacks…..open your eyes they bought some big subprime lenders like First Franklin, Encore, and Saxon to name a few. Think about it now they do not have to pay a middle man like MILA for the loan instead they can make more money. The government should be eyeing Wall Street and their practices they are the ones to blame for this implode!!!!!

Alex

23. Comment from Jillayne Schlicke
Time April 23, 2007 at 11:47 am

Hi EconE,

Could be a small but growing company. When a company is small, everyone pitches in where needed.

Could be that there are now two VPs.

24. Comment from Jillayne Schlicke
Time April 23, 2007 at 12:03 pm

Hi Alex,

Thanks for stopping by RCG and sharing your experience. I feel empathy for all the folks nationwide who are losing their jobs with little or in some cases no advance warning (unless you call 15 minutes advance warning.)

I believe focusing in only on one segment of the subprime problem is not going to help the industry move forward. There are a wide number of factors contributing to the subprime lender shutdowns that we are now experiencing.

Yes, Wall Street investors made good money. So did the subprime lenders, the account execs, the smalller mortgage companies who brokered the loans, and all the retail mortgage salespeople. But let’s not stop there, title, escrow, appraisal, and credit companies also raked in the profits. Let’s continue. Real estate agents, home inspectors, home builders, and so forth, plus any of us who had money invested in mortgage backed securities also made money.

Now it’s time for a market correction.

I hope, as you very aptly point out, that moving forward in time, the industry also looks at the Wall Street side of the picture as well as what’s currently being examined in DC, namely predatory lending legislation.

My question for anyone interested in joining the dialogue is as follows:

Do you as an individual (or institutional investor) want to know if mortgage loans that you invest in, were originated using predatory lending tactics? If we can somehow get the people on the money-making side connect the money they’re making back down to the homebuyer or refinancing homeowner who ended up with a mortgage loan from hell, I think we’ll be on a good path.

If nobody cares, then we’re left with a socio-cultural problem that cannot be solved by bloggers in this lifetime. (Reminds me of a Green Day song, “I Don’t Care.”) I have blogged about this extensively. Click on my picture and scroll down to part one of the subprime meltdown series of blog articles. It’s called “Winds of Change.”

I believe there are enough people who care.

I hope you stop back again and tell us how you’re doing and how the job search is going. I wish you well.

I know a mortgage business owner in Chicago named Jim Campanella. Drop my name if he’s hiring.

25. Comment from Missy Mo
Time April 23, 2007 at 1:43 pm

I WAS a MILA employee and was laid off on the 2nd of 3 lay offs.It was the best thing that could ever happen to me. The third set of lay offs was when they closed their doors on Friday. When our group was laid off in October I found a job 3 days later. I did not have a hard time at all finding a job, and people in the industry knew at that time MILA was a sinking ship. Jillayne Schlicke - Why wouldn’t someone who has been laid off be hired by another company? I am a quality worker and actually had 3 companies trying to have me work for them. Someone also mentioned that the people at MILA were low level employees, which I beg to differ. I have 2 degrees and have been working in the mortgage industry for more then 8 years. I was on the operations side of MILA and by no way a low level employee.

MILA was a terrible company to work for, I still wonder why I stayed as long as I did. It was obvious things were looking bad for the company when you would sit at your desk surfing the net all day because there were no loans. They treated their employees like dirt and believe it or not Layne the owner of the company informed his employees that the doors were closing via email from the comfort of his own home. All the executives were also MIA on Friday. I wonder what he has done with his 24million dollar yacht? NO severance packages were offered to group #1 or #3 and MILA was in the process of being sued as they did not follow proper lay off requirements when they laid off more then approx 1/4 of the company in Feb 06. MILA was also hit hard with the amount of loans the investors were requiring to be repurchased because of default and when I left MILA in October they lost a lot of ties with their investors because they refused to repurchase them (Meryl Lynch is a prime example). The loans they were selling on the secondary market were being sold at a loss because they were not underwritten to proper guidelines and were failing MAJOR compliance tests. MILA lived by the phrase “lets push that loan through get it funded” which is they could get a full loan submission funded within 4 hours.

I feel bad for the people who lost their jobs and wish them luck finding something new with the way the market is now. I am GLAD this did happen to Layne he had it coming to him and did not know how to run a company and got a little too excited by buying the CRS building to move some of the staff when the main building was not full and it wasn’t even busy enough to have 2 buildings.

26. Comment from Jillayne Schlicke
Time April 23, 2007 at 2:20 pm

Hi Missy Mo,

When I referred to “lower level employees” in comment number 2, I meant people in the entry level jobs and front line workers. I was trying to differentiate this from management. Thank you for bringing this to my attention, and I hope that clarifies the meaning of my words.

“Jillayne Schlicke - Why wouldn’t someone who has been laid off be hired by another company?”

Actually, I didn’t say this. I read it on another blog. That writer indicated that a headhunter told him that resumes coming in from candidates who had previously been with a subprime lender were being screened out.

My question to the general readership here, restated from comment #9 is:

Would you hire a laid-off subprime worker?

If yes, why?
If no, why not?

I would want to know what a job candidate learned from their experience working in subprime.

Missy, it sounds like you’ve learned alot! I hope you are happy and successful in your new job; thanks for visiting RCG to share your experience.

27. Comment from Jillayne Schlicke
Time April 23, 2007 at 2:26 pm

I wonder if MILA will be asking mortgage brokers to repurchase the loans brokered TO them that defaulted early. I guess it all depends on what’s in the contract between wholesale lender and broker.

Mortgage brokers: check your lender contracts on buyback agreements!

28. Comment from Alex Albergo
Time April 23, 2007 at 2:37 pm

Actually Jillayne MILA is one of the few lenders that never made our customers buyback a loan….As Far as Missys comments, Layne was a great owner to work for and her comments are obviously fueled by her getting laid off, maybe Missy if you worked instead of surfed the net you wouldn’t have been laid off. Don’t be crzy to think if you made the money Layne did during the last several years you wouldn’t by a boat. As far as severance packages go, how many people get those no matter what field they are…..you obviously were never on the “right” side with MILA.

29. Comment from Alex Albergo
Time April 23, 2007 at 2:39 pm

Jim works at First Choice I believe in Schaumburg…..

30. Comment from Jillayne Schlicke
Time April 23, 2007 at 2:51 pm

Hi Alex,

It will be interesting to see if this is still the case when all is said and done. If MILA has to buy them back, then if there is a buyback provision in the lender-broker contract, how can MILA NOT move towards enforcing the buyback provision?

Alex, on RCG, we attack issues and not people.

I can remember sitting at my desk in the underwriting department and looking around at my fellow underwriters. One was playing solitare with a real deck of cards (this was B4 we were all using computers at our desks) another underwriter was chain smoking, another one was doing her holiday greeting cards…..we KNEW that layoffs were imminent and we were all speculating who would be next.

We were all hard-working; slow downs on the operations/production side can happen at any time in any mortgage company.

It doesn’t matter what side of the business people were on with MILA, right, wrong, or somewhere in between. When only a few people are laid off, yes those layoffs can be political. When the masses are laid off due to a sudden closure, everyone ends up with the short end of the stick, no matter how they played office politics.

Alex, I agree with you that corporate CEOs can and do purchase yachts for many reasons, including tax reasons as well as for fun.

I predict right here and now that Layne Sapp will definitely make a comeback.

31. Comment from Jillayne Schlicke
Time April 23, 2007 at 2:54 pm

Hi Alex,

Yes, I visited Schamburg for the NAPMW (Nat’l Assoc of Prof Mortgage Women) convention several years ago. What fun town. I had not ever been to the Windy City. At that convention, the presidents from Region One shaved my head in a bet I made with them; I was on the Nat’l Board and those who made their membership goals had the opp to shave my head. It was a very cool way to remember Chicago.

Alex, what do you think of the proposed national predatory lending laws that congress is talking about enacting?

32. Comment from Missy Mo
Time April 23, 2007 at 2:59 pm

I actually did get a severance package MILA learned from their mistakes. There is a WA law that requires companies to pay a severance package when a certain % of their employees have been laid off.
Ha, I am glad I was laid off. Layne, well lets see where can I start.. I have many personal and business stories that I could share that would not paint a nice picture. Alex, were you a BDM/inside sales? I assume so, because he thought the sales people were gold and did speak well of them. I really doubt you worked closely with Layne and interacted with him on a daily basis as my department did.
For the record, I am not bitter I am making 3 times the salary as I did with MILA. I will admit that their salaries were competitive and they did treat their employees well in that aspect, but I don’t think I will go beyond that. Like I mentioned before I don’t know why I stayed as long as I did, perhaps naive? I honestly thought that American companies treated their employees this way. I am from the UK and never worked for a company that was like this. I now know that there are decent employers out there!

No doubt Layne should have purchased the yacht and that was great for him to be able to afford it I would have if my company was funding over a billion dollars a year. I should have elaborated a bit, I was curious to know about his nice yacht and if he still had that.. one would think if you were trying hard to save your company a large item like this might help!?! Am I wrong to think that?

33. Comment from Missy Mo
Time April 23, 2007 at 3:02 pm

“It doesn’t matter what side of the business people were on with MILA, right, wrong, or somewhere in between. When only a few people are laid off, yes those layoffs can be political. When the masses are laid off due to a sudden closure, everyone ends up with the short end of the stick, no matter how they played office politics.”

The first lay off were based on dead weight and high salaries, and based on the room that contained the 2nd set of lay offs I really think they were high salary workers as well. I am not saying this because I was also one of the ones in the room either! There were some top names in that room and many many highly respected people who were let go.

34. Comment from Jillayne Schlicke
Time April 23, 2007 at 3:25 pm

When the cuts are deep, this is often a sign to the remaining people to start polishing their resumes just in case.

I wonder then, if I should be so bold in asking if 15 minutes was or wasn’t enough notice.

The remaining folks…..had lots of notice to some extent.

Missy, your insights are interesting in that now I understand why employers lay people off in small batches.

35. Comment from Tim
Time April 23, 2007 at 3:28 pm

Some questions remain:

1) The big one: Why were buybacks necessary?
2) Was there mismanagement? Did management ever anticipate a slowdown? If so, was the exit strategy to essentially layoff every last staff member because cash on hand was nill.
3) Was the local market or national market a contributor to the demise?
4) Did MILA have a heavy local origination presence or was it largely outside of Washington?

5) If seasoned companies like Golf Savings and Pacific Crest sold out last year, didn’t that show that these seasoned players anticipated local/regional slowdowns? Was anyone, anyone, paying attention to these local players?

36. Comment from Missy Mo
Time April 23, 2007 at 3:49 pm

“I wonder then, if I should be so bold in asking if 15 minutes was or wasn’t enough notice”

They were generous with 15minutes!! The second layoffs you came to work, they escorted to the boardroom, they had “sessions” depending on when your start time was. Needless to say if you worked the late shift they already heard the rumours and were prepared.. HR gave a speech and then your box of your personal belongings were there waiting for you. The first time, everyone was told to go next door to the hotel for a meeting via email. They were told NOT TO go to work the next day and go straight to the hotel. Some people went to work because they started 6am, 7am and they were turned away at the door and were told to go to the hotel at that same time management was busy packing up boxes and everyone’s belongings were shipping out via UPS or you could come pick it up. Layne was involved with the first layoff but took a back seat on the 2nd and 3rd.

I know there probably isn’t an easy way to do this, and people will pick it apart any way you try to lay off people! I know other people in the industry who were given notice of the lay offs.. so they were prepared!

37. Comment from Missy Mo
Time April 23, 2007 at 3:50 pm

1) The big one: Why were buybacks necessary?

The borrowers were not making their mortgage payments. Big surprise when you lend money to someone who has a mid score in the 500’s and have had many BKs in the past!

38. Comment from EconE
Time April 23, 2007 at 4:32 pm

Off topic.

24M Yacht?

Lay down the hard figures for me. CEO salary vs. Avg Worker Salary

5 year historical period would be great.

400x?
500x?
1000x?

Just want to get an idea as executive pay has been a hot topic for a long time.

Not so concerned with the how/why/when/where that people were laid off…I wouldn’t expect much more in our society these days.

I’m sure that the Execs of most…if not all of the defunct lenders who laid off the workforces are *quite* comfortable right now…unless of course they are being investigated.

39. Comment from Jillayne Schlicke
Time April 23, 2007 at 10:02 pm

Hi EconE,

I found some interesting data.

http://www.marketwatch.com/news/story/median-ceo-pay-rises-93/story.aspx?guid=%7BC9796CB0-09AA-4961-BAED-D45F017D2FC0%7D

The following report says MILA’s 2005 earnings were 126 million. It had to have been higher in 2006.

http://columbus.bizjournals.com/columbus/othercities/seattle/stories/2007/04/16/daily41.html?b=1176696000%5E1451166

Here’s the 2006 SEC filing:
http://www.secinfo.com/dqTm6.z1y8.htm

Well THIS is interesting. From the Consumer Protection Laws section.

“In addition to the Homeownership Act, a number of legislative proposals have been introduced at the federal, state and local level that are designed to discourage predatory lending practices. Some states have enacted, or may enact, laws or regulations that prohibit inclusion of some provisions in mortgage loans that have interest rates or origination costs in excess of prescribed levels, and require that borrowers be given certain disclosures prior to the consummation of the mortgage loans. In some cases, state or local law may impose requirements and restrictions greater than those in the Homeownership Act. An originators’ failure to comply with these laws could subject the trust (and other assignees of the mortgage loans) to monetary penalties and could result in the borrowers rescinding the mortgage loans against either the trust or
subsequent holders of the mortgage loans.”

40. Comment from Brian
Time April 24, 2007 at 7:58 am

I know this is a bit OT, but I’m still interested in Morgan’s answers to the questions EconE posed in comment #21…!!

On another note I worked with MILA for 2-3 years at the product level when the programs were expanding at an insane pace. The company I worked for did their closing documents for TX. Like other Lenders, MILA came out with very aggressive and IMHO risky mortgage products. The way they pushed their Hybrid Payment Option ARM you would have thought it was the best program out there! In reality, those programs are extremely dangerous! I wish negative amortization didn’t exist, because in the land of flattening values, I would oh-so-love to owe more on my note than my home is worth.. NOT!

41. Comment from Jillayne Schlicke
Time April 24, 2007 at 8:43 am

Hi Brian,

I guessed at the answers but will hunt Morgan down for us to come on back and join the blog party here.

Since hindsight is 2020, what did you learn from working at/for a subprime company?

Thanks for visiting RCG and I’m looking forward to learning something from your insights.

42. Comment from Morgan
Time April 24, 2007 at 9:56 am

EconE said ““We went with two! One from Alt-A and one from prime One is now our VP of Ops”

so…what happened to the VP of Ops that scanned all the resumes?

Why on earth would a VP be doing clerical work (scanning resumes) in the first place?

So…two people hired…one didn’t work out…one fills a position that “seemed” to be already filled.

hmm. ”

Easy - we’re a small company and we keep our overhead low. So myself, my business partner and our VP of Operations review all of the resumes. My mom owns a personnel agency and taught me at a young age to get involved in reviewing resumes - so that is how we do it here. I don’t think scanning resumes is clerical at all - in fact I think that handing them off to someone who is in a clerical role, even for the first pass, is jepordizing your chances at finding who you are looking for.

Second part, our original VP of Operations was pregnant and went on materinty leave and decided that she was going to be a stay-at-home mom and we wish her the best and would welcome her back at any time if we had room for her. So yes, our VP of Operations helped hire the person who was amazingly competent and proficient who became our current VP of Ops.

On the one that didn’t work out. We take our 90-day evaluation period very seriously and are big fans of “hire slow, fire fast” mentality. The woman we hired was extremely qualified, but just wasn’t a fit for our organization. I don’t want to get in to details as to why that was but needless to say we came to an agreement that she wasn’t the best fit for our company.

43. Comment from Barbara Hawkyard
Time April 24, 2007 at 3:23 pm

How does a potential employer track down these folks who were let go? Normally with the small layoffs the HR dept is happy to assist those laid off, but when 300 go in a swoop how do the former employees even get the word out that they are available and how do employers find them when the company is gone.

44. Comment from Morgan
Time April 24, 2007 at 3:46 pm

Hi Barbara,

I know that New Century held a job fair at their facility for a couple of days after they shut down. NCen invited all the big boys like Countrywide, Wells, WaMu, IndyMac. I here there were a lot of lookers but the companies were mostly looking for sales positions.

45. Comment from Jillayne Schlicke
Time April 24, 2007 at 3:49 pm

Hi Barbara,

It’s mostly word of mouth. Post what you’re looking for and in what cities and maybe our former MILA employees who are visting this blog will be able to contact you directly.

46. Comment from Rhonda Porter
Time April 24, 2007 at 3:56 pm

Jillayne, does organizations like APMW still help employers and employees connect? (It’s been ion’s since I’ve participated in an organization like that).

47. Comment from Jillayne Schlicke
Time April 24, 2007 at 5:28 pm

Hi Rhonda, I just sent an email to the Exec Director over at NAPMW (Nat’l Assoc of Professional Mortgage Women). They do have a job bank where employers can post ads.

Here’s a website that’s been around for awhile. it encompasses more than just lending, they also advertise for title and escrow jobs on their partner site.

http://www.mortgageboard.net/

Although I would ignore listings from a company called TheRealEstateArena.com To me it looks like they have posted a huge number of job openings, 100% commission of course, only to try and snare people into becoming property flippers.

The Mortgage Board is tied to this site:
http://www.titleboard.net/

48. Comment from Formermilaunderwriter
Time April 25, 2007 at 8:19 am

I am a former MILA underwriter. I agree 100% with Missy. Alex, you & I worked together & we met a few times. I also know that Layne did treat the BDM’s well & I think that since you were not in Mountlake Terrace you really cannot grasp how the employees there were treated. Being called into a meeting & having your desk packed up while you were in there. They treated people that were getting laid off like common criminals. I watched it happen over & over. People that had been there 7 years plus.
I was laid off in Oct, same situation as Missy- I quickly found a job & am making over $1500 more & it is STABLE.

Layne Sapp is a snake. He is getting exactly what he deserves. He is irresponsible & has left numerous employees & customers in the lurch. I hope that man is never allowed to come near a mortgage again. But with all his $ I am left to bet that he will go back to how he started “hard money lending from his garage”.

The thing is that since he put the company in BK, he will keep his yacht, the million dollar house. Mark & Sara will keep the his & hers Range Rovers that they got for Christmas (about a month before 40 ppl were laid off).

Karma is a b*tch. I can only hope that they get theirs. Every since person that was forced out of MILA on Friday is better off, including you Alex, you just cannot see it. BTW, did you hear that Jeanette Cline passed away Friday night. Drunk driving the night of the layoffs, Hmm. Hope Layne is sleeping well at night.

49. Comment from Jillayne Schlicke
Time April 25, 2007 at 9:14 am

Good Morning FormerMilaUnderwriter,

I am sorry to hear of Jeanette’s death after the MILA layoffs; what a tragedy for her family and all those that knew her. Although I did not know her, it sounds like she was a very helpful MILA employee.

There is a lot of unresolved sadness and anger surrounding the sudden closure. Comments are being directed at Layne. I do not know Layne.

What I do know, is that anytime there is a large and unanticipated layoff, there is always going to be a fair amount of emotion that comes with the experience.

Research has been done in this area.

The psychological impacts are similar to experiencing a trauma. Workers and Americans in general (I am admittingly stereotyping Americans) are known to place a good amount of self-identity within their job role. “What do you do for a living?” is a common phrase we all hear when meeting someone for the first time.

When a part of who we are is suddenly gone, the impacts can be grave. Workers feel:

Betrayed
Angry
Sad
Enraged
Scared
Because of the loyalty they gave the company day in and day out.

Because of the hard work and stress they endured, and the loss of any rewards promised or hoped for in exchange for their hard work.

Because they are mad at themselves for not seeing it coming, not planning, not networking (like they had always wanted to).

Because of the sudden loss of a good income and all the stress and pain that comes with re-adjusting.

Because they feel like they were treated as an object, a THING at the end. De-personified; disposable. The worker gets a glimpse of a horrific reality in that all along, they always had been an object inside a corporate machine. This is too much to bear and it results in a huge amount of anger that MUST be projected outward and onto something else.

So some folks lash out at the CEO or upper management. Surely I have been guilty of reacting this way myself in the past.

That is why it is important for companies to handle layoffs ethically to help ensure the emotional, psychological, physiological and personal well-being of employees. Research shows that workers want to be treated with dignity and respect.

Most prefer to know WAY in advance of the layoff, in order to give them time to cope with the change.

Anyone who wishes to read more about this can do a google search on the keywords
psychological
emotional
impact
layoffs

FormerMilaUnderwriter, Thank you for visiting RCG this morning and posting a comment. I wish you well.

50. Comment from Formermilaunderwriter
Time April 25, 2007 at 9:33 am

Jillayne Schlicke, thank you for your analysis. It is pretty right on, but I also want to point out while my posting admittely is prabably about 50% pissed off rant, there is truth there. I DO know Layne. I was not laid off recently & I am much better off for it.

There is a right way & a wrong way to live your life. There were many of the higher ups at MILA that went about things the wrong way & I wholeheartedly beleive that this is why MILA did not survive.

I appreciate you cutting & pasting all that, but I know these people & I also know what day to day life was like at MILA for the last 3 years. I also have been in the industry over 6 years & know that things shouldn’t have been the way that they were.

I wish good luck to everyone that got laid off.

51. Comment from Jillayne Schlicke
Time April 25, 2007 at 9:58 am

Cutting and pasting what? I am a psych graduate major.
I’m working at the intersection of three areas: moral psychology, philosophy, and business ethics, and I’ve been in the mortgage and real estate industry for over 20 years.

Right and wrong, should and shouldn’t are subjective.

Everyone has to follow the law, but beyond that you’re talking the language of ethics.

A corporation has one purpose: to make a profit within the bounds of the law. We’re not just talking about MILA now, this is capitalism. As long as MILA decision makers followed the law, “right and wrong,” “should and shouldn’t” are just subjective opinions.

It sounds like you experiened a corporate culture that did not match your own sense of morality.

I have had experiences like that too, and I was in a position to quit my job. Not every worker is able to just up and quit. I’ve blogged about this extensively here:

http://www.raincityguide.com/2007/04/13/this-just-in-zero-interest-loans-at-a-cost-of-zero-with-a-monthly-payment-of-zero-apr-0/

and here:

http://www.raincityguide.com/2007/03/20/winds-of-change-the-rise-and-fall-of-the-subprime-market/

I am hopeful that the subprime problems will have a positive impact on the mortgage lending industry. I am hopeful that the industry will chose to move away from the “all profit, all the time, at any cost” mentality and move towards elevating standards of practice, including ethics.

52. Comment from Formermilaunderwriter
Time April 25, 2007 at 10:38 am

“I appreciate you cutting & pasting all that”
You write well. I wasn’t being rude, I thought you might have gotten it from an article.

I would love to elaborate, but I am at work & I am actually busy (underwriting again) so I don’t have the energy or time to type out all of what I am trying to say.

You didn’t spend 3 years at MILA. You can offer your thoughts on what people are going through, but I guess that the point that I am trying to get across is that there was a lot more going on with the fall of MILA that what is happening in the subprime market.

53. Comment from Jillayne Schlicke
Time April 25, 2007 at 11:07 am

Hi FormerMilaUnderwriter,

Yes, you are absolutely correct. I didn’t live through the same experiences you all lived through.

I read a lot of assigned textbooks but our professors also assign plenty of academic journal articles, non-fiction, and general literature. I subscribe to a publication called Ethix which is published here locally and has some fantastic business interviews and insights. I also read internet articles! So much good stuff is available for free on the web that it’s worth a look for anyone wanting to learn more.

I would like to encourage you to write at length about your experience at MILA. I care; I am interested in learning more about what happened and why, and I’m certain others are as well.

I am sure a publisher would pick up your article. Inman news is an independent real estate publisher; their editor Jessica Swesey might be interested in an opinion piece.
http://inman.com/contact.aspx

The Scotsman Guide is published here locally and is read nationwide by mortgage brokers. Ivanna Sukkar is my contact there.
http://www.scotsmanguide.com/default.asp?ID=1

If we can help the industry LEARN from what happened, it is worth our time.

You are welcome to comment here anytime!

54. Comment from Missy Mo
Time April 25, 2007 at 7:17 pm

I have been thinking over the past few days on what Layne is going to do now. I know MILA shut their doors, but how about NEXT? This is their technology department that runs under another entity. One think MILA had going for them was their technology. As much as I do not like the company, they had NEXT/Accesspoint which was one of the best in the industry. I heard once that he had seperated this company years ago so he could eventually sell his software to other morgage companies. I wonder if the company went under with MILA? If not, I would bet this is his next business venture!

55. Comment from Jillayne Schlicke
Time April 25, 2007 at 10:18 pm

The parent company of MILA is named “Washington Consumer Loan Company”

Whether or not the software was parcelled out into a separate company remains to be seen. If you do a random business license search on the DOL wesite, you will see many, many business licenses issued to Layne Sapp. One is for a company called Next Online Mortgage Technologies.

Interesting observation!

Here’s the DOL link
https://fortress.wa.gov/dol/dolprod/bpdLicenseQuery/

56. Comment from MILABDMnot
Time April 30, 2007 at 4:08 pm

What can I say. What comes around goes around. Or at MILA we said, ‘It is what it is!” I was a BDM for nearly ten years at MILA.

Right you were Layne treated his BDM’s right. Tide changed when Mark Hikel came aboard. He had no sense in how to treat people. Still doesn’t unfortunately. Mark Hikel is probably more responsible for the demise of MILA and their employees than the secondary market.

Layne plans to adopt Jeanette’s youngest as she had been part of his family for nearly 5 years as his nanny. That is stepping up. For those who feel he should have, “blood on his hands,” or should not, “sleep well.” That is absurd. This company was his baby and I am sure he is traumatized as well. Mark and Sarah had less to lose.

Working there for so long I can say that they were never great at handling terminations or setbacks in the industry. They fired long-term Regional Managers without just cause or notice. That put a sour taste in many.

They had a great thing going until they put the blinders on and blamed sales for their woes. Mark was not a tactful motivating kind of guy. His style was less than desirable and no Area Manager or Regional liked him or respected Mark. He just did not know how to deal with people.

This is the fourth company that has tanked under his expert leadership and talent. He is 4 for 4. That is a 100% and the other three were not in tough times. He will leave WA and go back East where he thinks no one will remember MILA or one of the states they did not lend in.

Layne wanted to be more involved in Product and Secondary marketing and left Mark the Captain. Unfortunately Mr. Hikel sold Layne an awesome reporting micro managing spreadsheet. That Layne was impressed with.

Layne had surrounded himself with liabiliies in terms of employees in the past. He bought them out or terminated long term relationships with them. Unfortunately, he should have terminated Hikel and MILA may still be around today and maybe Jeanette Cline as well.

Layne will end up on his feet gain. But hopefully learned a valuable lesson in who he trusts in the future. Mark nobody will miss you or your attitude towards human beings. You are not a God in any stretch of the imaination. Maybe yours??? Alex you go boy!

NEXT is separate but only had one customer, MILA. Should sell AccessPoint and make some coin!

57. Comment from Formermilaunderwriter
Time May 2, 2007 at 12:46 pm

MILABDMnot
Thanks for the post, and you are probably right. I was venting on Layne from the Admin side & what we saw, but everyone has their own perspective & I really appreciate you sharing yours!

I pray for Jeanette’s family & heck even Layne (although I still standby that he is not fully innocent here). I hope that you all move on to bigger & better things. The tough part is that there were so many good, quality, talented people at MILA that really cared about the company & tried to pull together & make it work. I hope that employers out there know that they will be lucky if they are able to get some of these people.

58. Comment from FormerMILAMan
Time May 3, 2007 at 4:36 pm

Hmm, where to begin? I was on the 4th (executive) floor at MILA on the day the company went under. I first want to set the record straight: Layne Sapp did not send the “we’re closing” email from his home; he was in the building, as were all executives. Layne called all executives and managers into the boardroom to make the announcement, then sent his email about 5 minutes later. Working on the 4th floor as I did, I was lucky enough to get the explanation directly from Sarah, rather than from an email, like the rest of the company. I feel truly sorry for the folks who worked on the 3rd floor and at the other building - to be told of the company’s demise via email before their managers could return from the boardroom to advise them in person.

I agree completely with some of the earlier posts: MILA never did handle terminations well. The round of layoffs conducted at the hotel next door was one of the most unprofessional things I’ve ever seen, and in the case of the company closing, we had literally 15 minutes to pack up and leave. The IT system was shut down almost immediately after Layne’s email was sent, so many of us lost e-address books and other information that we were unable to forward to another address.
And, yes, Layne did treat his salespeople very well (remember renting out the EMP for the Sales Conference in 2005?), especially compared to the operations staff, who were underpaid by industry standards (myself included, I am now learning).

And, I also have to agree with MILABDMnot: Mark Hikel’s people and admin skills left something to be desired. MILA had a very specific, effective sales strategy, based on building relationships and helping a broker grow their business, rather than chasing the individual loan transaction. Unfortunately, Mark’s methods of implementing this strategy were blunt and inefficient - like watering your garden with a high-pressure firehose. It worked well when the market was booming, but when loan volume began to taper off, his approach failed to continue to be successful. In my 10 years in mortgage, I have never seen a CEO adapt to the market the way Layne Sapp did; he had a clarivoyant view of the way things were going. Mr. Hikel did not possess the same adaptablity. Is Mark totally to blame? No; neither is Layne completely to blame. They both did play a part in MILA’s demise, however.

The most frustrating part of this has been touched on, but I’ll reiterate, for the sake of venting: no severance, or even payout of unused vacation hours, for those of us not fortunate enough to be the Sapps or the Hikels. Having built their fortunes ($24 mil yachts, his n’ her LandRovers, etc.), these folks will indeed land on their feet, and probably start new, prosperous business ventures in the near future. The rest of us? Well, we’re stuck on unemployment, having to restrict spending and put plans on hold, while we find something new in a shrinking mortgage market. My wife and I were planning to buy a house this summer, and those plans are now on hold indefinitely. I know of two MILA employees with weddings in the coming months; who knows what will happen to those plans? And, several MILA employees had spouses who were also MILA employees - imagine having both sources of income cut off with mortgage payments and grocery bills in the offing. Meanwhile, the executives will go on without too much of a bump in the road

One last thing I’d like to mention: Jeanette’s death was a tragedy, but I won’t buy into the idea that it was directly caused by MILA’s closing. Jeanette wasn’t the only one of us who had too much to drink on Friday after the company closed, but she was the one who made the decision to drive. Again, my heart goes out to her family, but we should all remember that decision was hers, and not a direct result of MILA’s demise.

Best of luck to everyone in their job search!

59. Comment from Jillayne Schlicke
Time May 3, 2007 at 5:12 pm

MILABDMnot
Formermilaunderwriter
FormerMILAMan

Thank you for visiting raincityguide and contributing your stories.

Here are some questions I have. These are mostly just questions I would ask in classroom, using MILA as a business ethics case study. Everyone (all readers) feel free to answer

1) Business owners need to hire managers to oversee labor and production. Business owners need to allow managers room to do their job without having the executives micro-managing every task. Managers need room to assert their own leadership style, they need to be held accountable for profit goals, and they need direction from the executives.

What could the business owner in this case have done differently to tap into the undercurrent of negative emotion directed towards the manager, coming from the sales and production staff?

2) How can business owners give adequate notice (say, 30, 60 or 90 days) that lower-level workers will be losing their jobs, without also de-motivating its workforce? Labor unions require this for their workers to some extent. Since there is no labor union in mortgage lending (that I’m aware of) would you guys all have been able to keep working hard if you had 30/60/90 days notice? I think managers reading this blog would appreciate hearing your comments.

3) How can a business owner reap the reward$ that come along with being the one who took many risks in growing the business, in a way that is discreet and graceful? Any of us might spend our wealth in many ways if it was ours to spend. So if you are the business owner, what might you do differently? Perhaps there would be more discretion. However, that goes against American culture.

4) Is it the responsibility of a corporation to assure that all employees who were laid off, are emotionally stable enough to send home after a massive round of layoffs? This brings to mind the event of Richard Plath’s suicide after his layoff from First American Title in Thurston County many years ago. The remaining employees were pretty traumatized, as was the surrounding real estate community, for many years following.

If your answer is yes, how might a corporation go about doing that?

If your answer is no, would a corporation assume any liability for events thereafter?

My answer to question 4 would be a tentative yes, because I believe all employees deserve to be treated with dignity and respect. In the event of impending massive layoffs, counselors could be readily available. If management has knowledge of employees who will probably be taking the news especially hard, extra attention could be given to assure that person does NOT end up in a bar and then getting into a car. But that’s just my opinion. I’d like to hear yours, readers.

60. Comment from Jillayne Schlicke
Time May 3, 2007 at 5:28 pm

Well I no sooner hit “post” than this crosses my desk:

“Financially strapped subprime mortgage lender New Century Financial failed to receive any bids for its mortgage loan origination business, forcing it to shut down the unit and lay off around 2,000 employees, the company told employees Thursday.”

They will lose their jobs tomorrow morning. They received 1 day’s notice.

61. Comment from Jillayne Schlicke
Time May 4, 2007 at 7:46 am

Hey, former MILA employees,

One of my readers just sent me this link. At the bottom of the Forbes article, they reference a federal law designed to motivate companies to give workers more notice of massive layoffs.

http://www.forbes.com/feeds/ap/2007/05/02/ap3678207.html

62. Comment from Lance McDaniel
Time May 4, 2007 at 7:52 am

Jillayne,

Lance here..

What got me was the following:

In court papers filed Tuesday evening, New Century sketched out a revised scheme for bankruptcy bonuses for 34 high-ranking executives, one that replaces a package of executive rewards that drew criticism from U.S. Trustee Kelly Beaudin Stapleton.

Chief Executive Brad Morrice, who was in the original bonus plan, does not appear to be on the extra-pay list in the revised version. However, people named by Morrice or New Century’s board to policy-making positions are still in the company’s bankruptcy bonus pool. . . .

New Century, which hasn’t yet revealed what it paid top executives in 2006, says it won’t reveal the names or bonuses for the policy-making leaders it wants to pay extra. Meola, Theologides and two other upper-echelon leaders were named in court papers

63. Comment from MILABDMnot
Time May 4, 2007 at 8:36 am

I honestly believe that almost all executives were in the building with the exception of BC. He was not there. Additionally, I think Mark and Layne never thought they would have to close the doors at MFC. They did rely heavily and felt pretty positive that the merger was going to take place. After talking to many Area managers that were at MILA most are relieved that they no longer had to take the abuse from Hikel on his Monday morning conference calls. With his profane name calling and constant insults. Maybe one day he can be in the field and see what it is like.

All companies have responsibilities. Layne was good at them when he ran the show. Again when Mark came on board his lack of profesionalism, decency with sales staff, and overall inability to listen to others was and will be his downfall in life.

For all MILA employees I suggest that you call payroll and HR and get you money out of te 401K plan and get your 2007 w-2 asap or you may never get them.

Layne had decency and did go to Jeanette’s memorial service. Unlike the Hikel’s who probably had a vacation scheduled or something more pressing than to mourn an employee that gave more tenure than both Hikel’s combined. What a shame but proves that Mark contniues to mismanage things!

64. Comment from Tim
Time May 4, 2007 at 9:32 am

Regarding New Century:

“Kathleen Allen, a regional operations manager who is being let go after 11 years with the lender, said she held out hope that part of the company could be salvaged until yesterday’s call. ‘It’s hard to understand how we were number two in the nation and now we are nothing,’ Allen said.”

It’s hard to understand how anyone could not see beyond the intoxicating rewards of massive profits and forcasting the fallout from providing tens of thousands of sub-prime loans across the country to credit suspect borrowers— leading to massive speculation and unsustainable run up in housing prices.

Regarding MILA:

“With his profane name calling and constant insults. Maybe one day he can be in the field and see what it is like.”
- MILBDnot

To me it appears that the corporate culture here was accepting of this type of communication.

65. Comment from FormerMILAMan
Time May 4, 2007 at 12:09 pm

Jillayne, regarding your four questions:
1. (Also addressing comments from MILABDMNot and Tim): The easiest solution would be for the business owner to foster more open communication with him/herself. In MILA’s case, the buck often stopped at Mark Hikel, who, as president of the company, was head of the entire sales division. There was an unspoken “understanding” that Mark had Layne’s blessing to proceed as he saw fit. Anything relating to how the sales division was run went through Mark. And if anyone had an issue with Mark’s management style, it had better be a big enough issue, with documentation to support the issue, to take over Mark’s head to Layne. This is not to say that Layne was unapproachable, but he was rather aloof when dealing with the how the sales division was run. Unless you had a solid reason to challenge Mark’s management style, chances are he would side with Mark on the issue, making going to the top with your problems a risky proposition at best. Improved communication with the owner may have gone a long way to prevent this problem.

2. If an employer gave notice of an impending layoff or closure, I believe the resulting decline in motivation and production is the price the employer pays for professional courtesy. If MILA had told me that they were closing in 30 days, I can tell you that while I wouldn’t exactly be giving 110% at the office every day, I would continue to do my job, to earn that 30 days worth of pay, while I began to prepare for unemployment. That 30 days would allow me to begin a job search and make any necessary changes to my current financial situation. And it would help me feel that the organization DID have some idea about how its actions affect those who have worked so hard to make the organization what was. That sense of caring is really what upsets me the most, and it slightly informs my answer to numbers 3 and 4:

3. Discretion should definitely be exercised when a business owner spends his or her wealth. He or she is absolutely allowed to spend their wealth on anything they please; after all, they have earned it. However, common sense should be used here, because the morale and motivation of your workforce is at stake. I once worked for a company whose owner spent weekends at his $4million villa in Palm Springs (and used his private jet to get there). He would email photos of himself out on the golf course or sipping drinks on his deck to the entire company. Meanwhile, the company did not have a dental or vision plan, and had the most stripped-down, rudimentary health plan available. How do you think that made my coworkers and I feel about giving our all to the company? This is what I mean by using common sense. If you are laying off a large portion of your workforce, it might behoove you as a business owner to look at how your wealth is demonstrated to those around you at the time. When you pull up in your Bentley to announce a layoff to cut costs, it sends a mixed message to the remaining employees, beyond the usual fear that they will be next under the axe. It also makes them question their loyalty to, and motivation to work hard for, the company in question.

Finally, #4. While I agree with Jillayne that employees deserve to be treated with dignity and respect, I’m honestly not sure how far an employer’s responsibility for laid-off employees extends. It is a very gray area. I think, Jillayne, that you make a great point about having counselors available for distraught employees; even a discharge package containing contact information for counselors or other assistance, in addition to unemployment insurance information and the like, would help. Again, it goes back to the question of how much the organization values the well-being of their employees. MILA simply cut off its employees without anything more than an FAQ document telling them when to expect their final paycheck and that Washington Mutual was hiring. Providing more helpful information, including counseling help and career direction, may go a long way to prevent self-destructive behavior from disgruntled former employees.

MILABDMNot: you are correct, BC was not in the building at the time of the closure. In fact, many of us were concerned for him as no one had heard from him at all that day. Do you have any news?

66. Comment from ARDELL
Time May 4, 2007 at 12:35 pm

Back in the 80s when big Banks were taking over little Banks by the dozens, we tried various methods of assisting the “displaced and replaced”.

We tried firing and giving the fired person use of their office and free support from a “headhunter” service and counseling during the paid “severence” time. But it was like “dead man walking”, and as grief turned to anger, it was not working at all. The morale of those around that office was terrible, and the production of EVERYONE went down while the fired person was still in the building.

We tried giving everyone notice, but then the best people found jobs immediately and we didn’t have enough staff left to close down the department efficiently.

We tried promising everyone jobs elsewhere in the company by freezing new hires and requiring that all jobs be filled from within. That wasn’t bad. Even if a whole branch was shut down or a whole department, most people were given jobs elsewhere, some left of their own volition and very few were outright fired.

If an entire company folds, I don’t suspect there’s any good method to use.

I have had friends found in dumpsters on the Turnpike, and show up to conduct meetings in their boxer shorts during some terribly handled downsizings. We read in the newpaper on Friday that the staff would be cut by 10% and they would fire people every Monday morning for two months until they had the 10% accomplished. Talk about Monday’s being a b-tch. When they found Peter’s body in a dumpster on the Turnpike, the Company took no responsibility. When Gary showed up to conduct a meeting a half hour late in his boxer shorts, the Company took no responsibility. Every “story” for the whole two months of downsizing was treated as “coincidence”.

I’ve stayed away from this thread as it is very painful to recall these events, even though it was 20 years ago or more.

My heart goes out to all who are now suffering, their family, their co-workers and their friends.

67. Comment from MILABDMnot
Time May 4, 2007 at 1:18 pm

Well according to Grapevine on Broker Universe BC had some personal issues which prevented him from being in the office. He is fine and obviously devastated by the closing of MILA as he did love his job and putting in around twenty-years of his life and coming out of it pennyless.

Keep in mind that MILA was not the only revenue source for Layne. He was always an excellent stock speculator and made great money during the tech boom. Especially on goto.net and that is when he was in Palm Springs in the pre-jet days. His first Bentley came even when MILA was not doing that well. It was a used Bentley at that.

Layne owns a tremendous number of properties and started land contracts when he was just a young man (in his twenties) So properties, investments and shrewd investments made MILA what it became. People forget when he used to personally fund payroll when the company was not doing that well in the mid 1990’s.

So do you blame a guy for getting a Bentley, Yacht (which was a brilliant way to get an amazing tax writeoff that saved him millions of dollars and entertainedInvestors that used to buy MILA loans.

The jet was just a time-share that he needed again for expenses as MILA was then doing in excess of 250-300 million a month after AccessPoint took off. Sure it cost like $250,000 a year but that was really nothing in the whole scheme of things when MILA was getting 104.7 on their loans.

It’s easy to be a hater. Harder to look at the fact that LS worked his tail off. He used to say that he may not be the smartest man around, but nobody will out work him. He was a hard worker and was generous at the same time. Always giving to charity and to cetrain employees that had serious family crisis. Even Marty that was let go and is no longer friends will agree with this. Layne was a generous man.

Unfortunately, how much can one man do. We know that HR screwed up one year and that is why everyone’s health insurance doubled. LS had to delegate and some of these responsibilities and they were not properly handled to say the least. Some of Layne’s errors in judgement included: Mark, Holly and our Branding Queen Short Skirted Tina. Ironically, you could not wear shorts to work, but Tina could wear her crotch high skirts. But she did create Layne’s image and he was satisfied with that. Although the picture at his desk wearing his 40K watch was a bit much. But it did help him attain Entrepeneur of the Year.

It’s all water over the dam at this point. Poor Brian who never got his real payday. Plus rumor is that LS, the Hikel’s and BC are liable personally for some things still. So perhaps MH and LS will land on their feet and hopefully they will take care of BC for his quiet, unselfish loyalty and years of service.

68. Comment from mortgagegirl
Time May 18, 2007 at 3:29 pm

The close of MILA was unfortunate, I was in the first layoff, and I can tell you after nearly 5 yrs there the real fall down of the company was the lack of integrity of people like Mark and Sarah Hikel, not to exclude Holly Taylor. Mark was so self involved, and all Sarah could talk about was her cats,her sex life, and the jewelry buying sprees, sporting her 10carat diamond..the other downfall was hiring a young inexperienced recruiter, and then making her a manager. She lacked experience, morals and any inkling of compassion for friendships or co-workers. Holly slept her way through MILA, starting in sales, then to the facilities guy and finally latching into the CIO of MILA, she had fall out with girlfriends, and they ended up fired, her last 2 boyfriends, fired, she is the one who instilled the termination practice that became the norm at MILA, no wonder they got dinged with improer lay off practices, Holly was in charge! Layne did the best he could, he just neglected to surround himself with people of the same integrity he has. Layne will rebound, Sarah and Mark will be off to other things, and the people who respected him will return to support him again.

69. Comment from othermilaman
Time May 20, 2007 at 1:52 pm

I don’t think it is any secret that Mila was built on a great premise, but landed in the wrong hands of management once Layne delegated it to others he thought he could trust. I left with the last of them,and for the 7+ years I was there, the one I felt the most compassion for was Brian Carl. He worked hard and was the glue that put the company in a position to be built on. Layne listened to the Hikels whine about him, and evn let them talk him out of being at executive tables when awards were given out. B.C. was an owner of the company, along with the Hikels, but he was treated badly, and Layne allowed it.He didn’t mind using him to take his family to their vacation home though. A lot of things went wrong and alot of things went right. I got a job recently and my take away from it all is great knowledge of how things work well when management does well, and how to protect yourself professiojally when you know they are going sideways. Yes HollyTaylor was a good talker, but an ineffective HR Director, she was a rookie at best, but Sarah liked her and gave her a chance. I remember them pouring over a Tourgeon Raine catalog looking at rings she hoped the very youg CIO would buy her, it was like stopping in on a dorm room instead of a business office. It’s all over now, and the best will rise to the top once again. Layne will be fine, the Hikels will take their cats and move to another city and do the same things over again, and Holly will dream and hope Layne will hold on to her as long as she is with Luke. Who knows all this time may allow him to wise up on many levels. Let’s all move on, and concentrate on our own successes

70. Comment from MILABDMnot
Time May 20, 2007 at 2:31 pm

From a pretty reliable source. Layne is fine and closed MILA by choice as he was tired of injecting Tens of Millions of Dollars month after month on the warehouse lines. to reduce risk on what was to be sold. Rumor is that a purchaser in New York has looked at MILA to purchase their assets with Accesspoint for 15 or so Million. Nobody but Layne was injecting cash into MILA.

He will re-establish himself as an entrepeneur as he is still respected in the Financial Community and will start something else in a few months. He is well connected afterall and has ability to raise money.. MILA is open with a small staff to wrap up loose ends.

Hikels and LS may have had a falling out in the decision to shut the doors. As Hikel’s only invested about a million or so dollars for their share. Not really a surprise and one would believe that Layne has the forsight to know that MH was alot of the problem with Sales and Production.

However they still have to agree on the dissolution of the MILA assets. As the Board of Directors must agree. Plus employees that received buyouts have not been being paid for quite sometime. So a BK may be eminent unless LS decided to pay them after assets are purchased by an investor like Bear or Credit Suisse.

Time will tell and what does come around does go around. It’s Karma. MILA was a great place to work and had a great family like feel until Mark ran sales. It’s time that Mark works for someone and has to answer to someone greater than himself. One thing is for sure, Mark won’t be running any finance company for a long time. If he has any balls he should open his own company instead of riding coat-tails of others.

It is time to live and let live. Not necessary to dwell on the past but appreciate the experience we all got at MILA and allowed us to get rehired at other lenders that still have a future, Nobody likes change. But I have to agree with Layne. It is truly opportunity day! (for all former MILA employees!)

71. Comment from Formermilaunderwriter
Time May 21, 2007 at 12:29 pm

“But I have to agree with Layne. It is truly opportunity day! (for all former MILA employees!)”

Gag..

72. Comment from PayOptionArmy of Darkness
Time May 25, 2007 at 9:54 am

Ok, people from MILA…I hope you are all moving on with your lives. I worked there for a long while and left on my own terms long before it closed. My opinions…

Layne Sapp is a great visionary. Like most business owners, he couldn’t stay on top forever in a changing market. His only fault was not getting out sooner as the company had many offers for purchase over the years. He kept on for various reasons including personal drive, pride, and loyalty to his employees. So what, he had alot of toys. He earned them, plus he employed hundred of people over the years. That’s alot more than most of us can say.

Hikels. Good for them, they were a husband-wife team who helped MILA ride the wave a few years. MILA never had the level of conflict between Sales and Ops that most companies have becasue they worked together toward and common goal. Although, the down side was obviously a lack of checks and balances. Still, it provided for a better work environment. Yes, they were tough, but only on slackers and non-performers.

Brian Carl. He’s a loyal guy and helped Layne out way back when. Every company has a legacy executive sitting in an office surfing the net….there’s nothing unusal about that. Who can blame him for staying until the end….it was a great run for him.

My main criticism is toward the head of HR. I have never seen an HR director who had as much power and so few skills. This combined with a lack of professionalism was a deadly combination. It is very sad that no one received any information regarding grief or crisis counselling (even a phone number) upon their release. It was gross incompetence and neglect on the part of HR.

Laid off employees. Quit complaining. Everyone in this business should know that mortgages are cyclical. There are waves and troughs; booms and busts. The key is to know when to move on and spot the signs of a company’s demise. I’ve been laid off when younger and learned to be independent. It’s just a job….pick yourself up and move on. The diversity of working at different places will only help you become more marketable and increase your skill sets. Remain positive and don’t get caught up in the moaning.

Businesses fail all the time, it’s just part of Capitalism’s circle of life…my only beef is that it’s up to HR to ensure that the little social safety net mandated by the state is in place. This failure is what saddens me the most.

I wish everyone the best.

73. Comment from Jillayne Schlicke
Time May 25, 2007 at 10:40 am

Hi PayOptionArmyofDarkness,

Thanks for stopping by and for your best wishes to everyone.

Former Mila Employees:

How are you doing in your job search?

Who has landed where?

As the mortgage market continues to change, what’s different for you now as compared with MILA?

Some folks have expressed their frustration and anger with some management behavior. Follow up question: At your new job, what did you do to make sure you were going to work for a company with a management team that held different values?

74. Comment from mortgagegirl
Time May 25, 2007 at 4:06 pm

PayOptionArmy of Darkness-
You articulated it all very well,hitting on all points, especially all the power and lack of skills in the HR department. The Hikels,”good for them” is true, but Sarah as the COO played a huge part in how much power was excercised by HR, Holly Taylor reported to her, and she did not do a good job keeping her in check, and accredting her as a HR manager until 3 years after they hired her! The responsibilities lies with the executives to keep their reports in line with the mission statement of the company. I think HR/Holly Taylor took every day to be “opprotunity day” doing whatever she felt, to whomever she chose. Sarah Hikel allowed the terminations to take the direction they did, with no exit interviews, no check point for following state requirements for lay off procedures. Sarah was busy daydreaming in her office wishing she could be home with her cats, she was disengaged, and professionally unavailable to any of the people who reported to her on her best day. In my new position I asked all the right questions before I accepted this job. MILA had no vested interest in employee rention, and that showed a lack of respect for the people they hired and trained. Thanks for the clarifications, and you’re right we need to all move on and just get over it!

75. Comment from othermilaman
Time May 25, 2007 at 8:46 pm

Blame whoever you want, good leadership could have saved a lot of us our jobs. The market was obvious, they did not plan well, and Mark Hikel’s decison on products to sell caused the demise of it all. Ther was no decison made with out all of the executives buying off on it all. It was clearly at the hands of all the powers to be.How are we all dong? Well we too trusted the wrong people who held our jobs and futures in their hands…learning well is what we can do..no brainer, we just don’t have yachts to sell. Who has landed where? What values do we hold in our next job? Isn’t it obvious? How are we doing? You tell me.