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The Discipline of Consistency

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This piece originally appeared in the February 2022 edition of MReport magazine, online now.

Stephen Covey, American educator, businessman, keynote speaker, and author of The 7 Habits of Highly Effective People, once said, “Every human has four endowments—self-awareness, conscience, independent will, and creative imagination.”

Susan B. Anthony, American social reformer and women’s rights activist who played a pivotal role in the women’s suffrage movement, once commented that “Independence is happiness.”

The freedom to be independent and practice the entrepreneurial spirit runs deeply in Steve Jacobson, Founder and CEO of Fairway Independent Mortgage Corporation, a Madison, Wisconsin-based mortgage lender founded in 1996. Jacobson recently sat down with MReport for a sprawling interview looking back over his career, his priorities at Fairway, and why that independent mindset is at heart of it all.

An Employee-First Mindset
Fairway Independent Mortgage Corporation, the firm Jacobson founded 25+ years ago, today continues its tradition of exercising its independence, having never gone public. In the years since those origins, Fairway has grown to employ more than 10,000 team members nationwide, across 700 branch and satellite locations.

“We like the freedom of doing what we love,” Jacobson said. “We never know what’s around the corner … none of us do in life. We must take life one day at a time and never know what that next step may be.”

Unlike many other companies operating in the mortgage space, Fairway is privately held and is an employee stock ownership plan (ESOP) firm. ESOPs are an employee benefit plan that give workers ownership interest in the company; this interest takes the form of shares of stock. This allows Fairway to truly put employees first, which goes hand-in-hand with the company’s positive and inviting company culture.

“People have asked, why don’t you go public? Many of our competitors have,” Jacobson said. “There’s no right or wrong, and we’re surely not judging anyone that does; we just have had a different view.”

Fairway—which closed in excess of $71 billion in 2021—was recently named the number one “Workplace in the USA 2021” by Energage, a cloud-based employee engagement platform that caters to businesses across various industry verticals. And even with the pandemic playing a role on both sides of the industry, the customer base, and those who serve them, Fairway has been able to continue operations and the recruitment of staff who align with Fairway’s goals and values.

“We want humble, hungry, and smart people who have humility about them,” said Jacobson on the recruitment of Fairway employees. “You’re not going to recruit everybody, and you’re not going to keep everybody. You have to know, when you have 10,000+ people, it’s impossible to keep everybody and recruit everybody you see … you must pick your spots.”

When the World Health Organization (WHO) declared COVID-19 a pandemic on March 11, 2020, Jacobson and the Fairway Independent team acted immediately, swiftly implementing a work-from-home policy. While each industry organization is approaching the ongoing challenges of the pandemic in different ways, Fairway is erring on the side of being mindful of team member needs and comfort levels.

Julie Fry, Fairway’s Chief Human Resources Officer, said, “We’ve continued to assure our teammates that the decision to return to the office is theirs and theirs alone.”

With the continued rollout of vaccinations and the nation improving its grip on the pandemic, more than 80% of Fairway’s staff currently continues to work from home.

In an effort to prioritize its employees’ safety and health, Fairway made pro-grade exercise machines available to employees with more than a year of service, enabling them to work out at home. The company distributed more than 5,800 machines, at a cost of $19.6 million. In addition, Fairway offers virtual fitness classes for employees and their families, as well as parenting webinars and mental health resources.

“The flexibility that Fairway has shown in allowing employees to return to the office or remain at home has greatly reduced stress,” said Amy Slotnick, SVP at Fairway Independent Mortgage Corporation. “Knowing that going back to the office was my choice, and not a forced mandate, gave me the freedom to decide what was best for me and my family. From the start of the pandemic, Fairway has supported its employees’ health, both physical and mental, above all else.”

Throughout the pandemic, Fairway offered members of its team extra personal time off to deal with pandemic-related challenges.

Anticipating its employees would want additional information about COVID-19 and the company’s response, throughout the pandemic Jacobson sent out daily messages of encouragement to all employees, and Fairway holds regular COVID-19 update calls, including special guest experts offering advice. Fairway also maintains a dedicated email address employees can use to ask COVID-19-specific questions.

“When you have 10,000 members of your team, you have to challenge [team members] to work from home,” Jacobson said. “It was important that people stay physically active, so we rolled out this program and it has become a pretty cool program for everybody involved.”

In speaking of Fairway’s commitment to an employee-first mentality, Jacobson took a moment to read a private text from a person who had hired him back in 1984, now retired, and who had sent thanks and kind words about the benefits provided by Fairway’s annuity benefits.

After reading it to us, Jacobson smiled and said, “It’s always about the relationships.”

Overseeing a Shifting Marketplace
Like all others in the mortgage space, Fairway too has been forced to adjust on the fly and adapt to a sometimes-unpredictable marketplace. Accommodating and keeping its workforce content is one thing, but the barrage of curveballs thrown by the market have kept Jacobson and the Fairway team on its toes.

After a boom in refis in 2021, the market is forecast to move back to a push on the originations side, the sort of shift that Jacobson spotlights as one key reason why proper staffing strategy is critical for mortgage-industry success.

“You constantly have to make quick adjustments,” Jacobson said. “The industry teaches us that as everybody had to make quick adjustments over the past few years, and it required the proper staffing to do so.”

Regardless of the hurdles the industry may throw in its path, Jacobson and Fairway never lose sight of the type of clientele it wants to do business with.

“You want to work with people that are humble, good, unpretentious, sharp, and smart,” Jacobson said. “If somebody is going to scream and yell, let the competition work with them. You are actually picking your teammates in terms of who you want to work with. If it takes four to six touches to start a relationship, you’ll get a sense of if you want to work with each other. You don’t have to work with everybody!”

Branching Out to Embrace Change
In addition to launching Fairway Independent Mortgage, Jacobson also launched Frisco Lender Service LLC (FLS), a company specializing in residential appraisals, as well as Fairway Ignite, a coaching division of Fairway that provides mentorship and growth opportunities to originators and corporate employees. FLS was started as a reaction to the Interagency Appraisal and Evaluation Guidelines in December 2010, when it was ordered that appraisals must be performed by third parties. Jacobson decided to start his own appraisal company.

“It’s still one of our biggest advantages,” noted Jacobson of having FLS. “It’s a huge competitive advantage for us to have our own appraisal management company because we can call that person in the branch and can talk through any issues. It prevents us from dealing with a whole bunch of people in the process.”

Fairway Ignite—under the direction of COO Kevin McGovern and CEO Sarah Middleton—offers coaching, education, and training for Fairway employees, producers, and managers. Ignite offers one-to-one coaching and group coaching, aimed at focus on individual goals, proper planning, positive thought processes, and the execution of business strategy.

“We started Fairway Ignite more than five years ago, with separate leadership,” Jacobson said. “Presently, 1,800+ in our company are being coached and trained through Ignite. There are some really good people involved in our operations and sales who have a great deal to share.”

Beyond the Mortgage
The clear-cut goal of any mortgage company is to put Americans into the homes of their dreams. Through trust and guidance, handing over the keys to a new home is the end game for all Fairway employees. Through the company’s charitable initiatives, the American Warrior Initiative (AWI), and Fairway Cares, employees can support the people within the Fairway community and beyond, giving back more than simply the American Dream of homeownership.

Each year, Fairway employees are offered 16 charity volunteer hours that can be used during the work week. In 2020, Fairway employees used more than 431 hours to volunteer at charitable organizations nationwide.

AWI is a nonprofit organization backed by Fairway whose mission is to educate, encourage, and inspire Americans to give back to our nation’s military. Since 2016, AWI has provided more than 150 service dogs to U.S. veterans; has provided veterans with financial assistance, home repairs, small business grants, and more; has raised awareness and masks for frontline workers needing supplies to combat the pandemic; has distributed gift cards for veterans to assist during the pandemic; and has provided food and meals for first responders.

Late last year, AWI delivered 16 service dogs to 16 military servicemembers. Service dogs were presented in honor of each of the 13 fallen servicemembers killed on August 26, 2021, in Afghanistan, and the remaining three dogs were presented to honor servicemembers who served in Iraq, Afghanistan, and Korea.

“What an honor and privilege it was to grant 16 service dogs to 16 veterans in a timespan of less than one hour,” said Louise Thaxton, AWI Director and Co-Founder, and a Fairway Branch Manager. “We were able to fund 101 service dogs in 2021.”

Fairway Cares is the charitable arm of Fairway Independent Mortgage Corporation, providing care packages and the support of financial assistance for those in need. Since 2017, Fairway Cares has provided more than 3,500 care packages nationwide; and has approved nearly 800 financial grants. In November, Fairway Cares raised in excess of $95,000 via its “Looking Forward” virtual auction.

“We have all been blessed, and part of our job is to give the blessings back humbly, quietly,” Jacobson said.

The More Things Change, the More They Stay the Same
As the mortgage market continues to evolve, leaders in the space including Steve Jacobson and the Fairway Independent Mortgage continue to weather the storm. Braving the elements, Fairway successfully pivoted during the pandemic and continues to operate on all cylinders as the firm heads into 2022.

“What you learn over the years is that growth is not easy,” Jacobson said. “If you’re going to have adversity, you lean into the adversity, don’t run from it; you’re going to have tough stuff happen. That first year may be Nirvana because everything is wonderful, but sometimes things happen, and you need to keep playing. You learn through perseverance. You learn that you have to be scrappy and display resilience.”

Driving home the credo that technology can exist along with the human touch, Jacobson realizes that today’s tech tools are ideal to enhance operational efficiency, but never remove from the mortgage process or that element of trust in your mortgage lender.

“I think the biggest change overall in this industry has been the depth of the technology and just how much information is available to all of us,” Jacobson said. “You have to create that trust with the client and that depth of the relationship must be stronger now than ever before.”

Relying 100% on tech is not what makes Fairway Independent Mortgage tick. It is finding that fine line between utilizing technology to enhance the lending process that has helped Jacobson lay the foundation for what his company is today.

“It doesn’t matter the industry, you still need to provide amazing customer service,” Jacobson said. “We all would like to process mortgages the fastest, but the process still needs to be run by humans. Someone must still pick up the phone and call people. At the end of the day, you want to talk to someone you know, and you want to talk to them fast. You must continually perform, and people will leave companies that don’t perform.”

Even with technology helping to streamline and expedite many aspects of the mortgage process, at the end of the day, Jacobson says that the borrower is mainly going to care about the aspects of performance that they see or are impacted by directly.

“You can have all these bells and whistles, but if you don’t get the docs to closing in a timely fashion, you will have some upset clients,” he explained. “It’s still the discipline of consistency that can make or break you.”

Second to keeping pace with advances in tech, the Fairway team—through its participation in programs including its coaching arm with Fairway Ignite—is at the forefront of educating themselves on the latest industry offerings, as well as sharpening their business acumen and skill set in an ever-changing market.

“We got to keep playing, and keep being aggressive,” Jacobson said. “We got to keep giving things … opportunities, as people need opportunities.”