Lee Smith on cost management
From Lee Smith talks about Flagstar's growth strategy for 2024 · · HousingWire
“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.”
On , Lee Smith, Senior Executive Vice President & Chief Financial Officer at FLAGSTAR FINANCIAL INC, spoke about cost management during Lee Smith talks about Flagstar's growth strategy for 2024 on HousingWire.
About Lee Smith
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.