Senior Executive Vice President & Chief Financial Officer, Flagstar Financial
Search every verified Lee Smith interview, podcast appearance, and on-the-record quote — each transcript cross-checked by AI and human review to confirm speaker identity. Lee Smith, president of mortgage at Flagstar Bank, discussed the company's strategy for 2024 in a September 2024 interview. He stated that Flagstar, following its merger with New York Community Bank and acquisition of Signature Bank, has become a $110 billion bank with increased scale and capital. Smith described the company's approach as focusing on being a "one-stop shop" for the full mortgage lifecycle, including origination, servicing, subservicing, and warehouse lending. He noted that Flagstar has reduced its cost infrastructure by 65% from its 2021 peak to adapt to market conditions, and said the company aims to grow market share in a "safe and sound manner" rather than pursuing rapid expansion. Smith rejected the phrase "survive until 25," asserting that Flagstar has been in the mortgage industry for 35 years and will continue serving customers. In earlier appearances, Smith emphasized the importance of customer service, trust, and creative thinking in competing with larger banks. He highlighted Flagstar's diversified mortgage model, which includes a balance sheet and RMBS program, as an advantage in navigating market shifts from refinancing to purchase mortgages. Smith also discussed the company's growth in warehouse lending, reaching $10 billion in commitments in 2021, and its ability to fill gaps created by regulatory changes. He attributed successful leadership to accountability, teamwork, and avoiding ego, and stressed the value of empowering employees and maintaining work-life balance.
“Flagstar is now part of a $110 billion bank following the merger with New York Community Bank in December of 2022 and the acquisition of Signature in March of 2023, giving us tremendous scale, a bigger balance sheet, more capital, more liquidity, and more firepower to do more from a mortgage point of view.”
“We describe ourselves as a One-Stop shop for the full mortgage life cycle, able to buy and sell loans and MSRs, do our own RMBS securitizations, provide subservicing, and offer financing solutions through warehouse lending, MSR lending, and now cash and treasury management services.”
“Our strategy is to be the preeminent name in the mortgage industry by offering a diversified business model as a bank, which allows us to lend, provide cash and treasury management expertise, and benefit from deposit funding, unlike non-bank competitors.”
“Right now, you don't need to pay M&A premiums to grow; there are many opportunities in the market to grow through lift-outs or hiring good people, especially given the dislocation that is enabling certain mortgage businesses to grow without paying premiums.”
“We've taken 65% of our cost infrastructure out from the high point in 2021 to right size our cost structure to the size of the market, focusing on profitability rather than market share, especially since the Fed has said rates will be higher for longer making 2024 a tough year.”
“Our diversified mortgage model helps us navigate the tough origination business because our servicing and subservicing business is doing very well, the MSR asset is worth more in a rising rate environment, and our mortgage finance and cash and treasury management parts are performing nicely.”
“I don't like the expression 'survive until 25' because it ignores the important growth and market share that we can take in 2024; Flagstar has been in the mortgage industry for 35 years and is not going anywhere—we will be around in 24, 25, and beyond to serve our customers.”
“You will see further consolidation and dislocation in the mortgage market, and when those opportunities present themselves and make sense, we will look to take advantage of them as part of our prudent growth strategy.”
“At Flagstar, we don't have the money that a JP Morgan Chase or a Wells Fargo or a Bank of America has, so we've got to think a little differently. If you're prepared to think outside the box and think more creatively, you can still be competitive and move boundaries.”
“Big organizations can be constrained because they're too rigid, with too much protocol, red tape, and bureaucracy everywhere. We always say make the customer experience your point of difference; go the extra mile to make the customer happy because if the customer has a good experience, they're going to keep coming back...”
“If you don't have trust in a business or personal relationship, you don't have anything. But if you've got service and trust, now you're seen as a valued business advisor and people seek out your opinion and want you to have a seat at the table.”
“Leadership is about accountability. Good people make good decisions when given the tools and authority. If you empower your team, combined with trust and service, you have something very powerful.”
“Most common failure in companies is leadership with too much ego. They think they walk on water, don't operate as a team, don't listen, and push down. Teamwork is about collaboration, communication in all directions, and transparency.”
“If the only leadership style you have is to threaten and bully, you won't have a team for long because people won't respect that style and will leave. You must know your team's personalities and motivate them differently.”
“You have to be the best you can be every day because the only person that controls your destiny is you, and we only get one shot at life, so make the most of it.”
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