Mallory Garner never expected to have a career as a mortgage banking lawyer. She spent ten years as a litigator in private practice before transitioning to an in-house position with Countrywide Financial, where she focused on mortgage loan servicing.
Countrywide was one of the few mortgage companies where the legal department focused on default servicing well before the financial crisis hit in 2007. As a result, Garner was well positioned to handle the crisis-related issues that had a direct impact on her clients. This was especially important as Countrywide was one of the companies blamed for the downturn of the housing market.
“People were often critical when they learned you worked at Countrywide, but we were all dedicated to working hard for our customers,” Garner says.
When Bank of America bought Countrywide a year later, Garner became part of a larger organization, but one that was accustomed to working with a much smaller mortgage portfolio and had less experience servicing non-performing loans. This presented new opportunities for her that ranged from working with the US Treasury Department to helping develop its Home Affordable Modification Program to working on proprietary modification programs to assisting customers avoid foreclosure. She also worked with the Mortgage Bankers Association to help educate the mortgage industry about foreclosure prevention opportunities.
All of these were positive professional developments, but the bank’s mortgage servicing staff and Garner’s legal team were working up to fifteen-hour days in the midst of the ongoing crisis. By late 2010, she decided she needed a change that would set forth new priorities to encompass her professional responsibilities and restore balance to her work and family life.
In early 2011, Garner joined PennyMac, which had been founded three years earlier with a specialized mission to service a smaller portfolio of non-performing loans and to develop more customized programs in order to assist struggling homeowners.
Garner, who is managing director and the general counsel of mortgage operations, remembers the culture shock she felt after joining the company. She found herself participating in meetings with senior management to discuss a handful of loans, rather than the thousands that were typically at issue in similar meetings at Bank of America.
“At PennyMac, we created specialized teams that work closely with distressed homeowners to remove the fear of dealing with their lender and to find ways to help families stay in their homes,” she says. “When that’s not possible, we offer additional options for a more dignified transition to a new living situation.”
In addition to modifying more than 17,500 loans, PennyMac also originates loans throughout the United States. It has worked with more than 900,000 customers to become the fourth-largest loan originator, eleventh-largest loan servicer, and second largest correspondent aggregator in the country.
According to Garner, the spirit of helping distressed homeowners extends to PennyMac’s overall business culture, which stresses the core values of being accountable, reliable, and ethical. For example, the company has developed robustly structured processes for identifying, tracking, and resolving consumer complaints to ensure that they are addressed appropriately and in a timely fashion. To that end, Garner helped create and co-chairs a PennyMac committee responsible for managing the consumer complaint process. She points out that among other responsibilities, the committee is dedicated to identifying the root causes of complaints, directly addressing them, and ensuring they will not happen again.
If issues begin escalating toward litigation, the company’s first step is to launch an internal examination.
“Many companies immediately go into defensive mode, but we research to see if we made a mistake that we can resolve,” Garner says. “Even if we were not at fault, we try to identify the customer’s real motivation since it is not uncommon for some to pursue legal avenues when they do not get their desired result. Why generate significant legal fees if we can resolve the situation amicably for both parties? It’s often the right thing for both the customer and for the business.”
In an industry where laws and regulations are constantly evolving and can vary from state to state, one element that has remained consistent is Garner’s close relationship with her business partners.
In fact, rather than being located in PennyMac’s corporate headquarters, Garner’s office is located with senior management on the business side. There, she can stay up to date on new initiatives and be involved on a daily basis to point out potential risks or legal and regulatory issues as they arise.
“My team is embedded with the business so that we’re ‘in the room’ to offer support, provide advice, and solutions that are appropriate and easy to implement,” Garner explains. “We work hard to make sure there’s never a negative connotation to saying, ‘We have to get legal involved.’”
Garner adds that she’s happy with the unexpected direction her career path took.
“Initially, I was worried my job would just be foreclosing people out of their homes,” she says. “Instead, I’ve had chances to get personally involved, working with customers to overcome their fear of foreclosure, and successfully creating affordable resolutions they can live with to stay in their homes. It’s really very rewarding to everyone.”