Newbold: Capitalizing on a Strong Foundation

Pictured above: Newbold partners Terry Couto, Robert Simpson, Tim Gaven, Dan Reiman, and Michael Wade

This is the second of three articles in Newbold’s Fifteenth Anniversary Series by the company’s founding partners.

Newbold had two objectives from Day One:

  1. Become a trusted advisor to our clients.
  2. Always do the right thing for our clients and employees, regardless of Newbold profitability considerations.

Since our founding 15 years ago—and even after hiring thousands of people over those years—we continue to refer to those guiding principles and remain committed to them today.

We had evolved from a startup asking for clients to give us a chance to prove ourselves, into an organization with proven results and hundreds of employees. After doubling revenues for several years, Newbold hit an inflection point in 2010. We had successfully led or assisted with mission-critical projects at many of the largest banks, mortgage companies and GSEs. We had built a good reputation and clients were asking for more and more assistance. Our clients desperately needed mortgage subject matter experts to work on strategic transformation efforts. They also needed hundreds of operational staff to help comply with an unprecedented level of new mortgage laws and regulations. As a result, Newbold ramped up its infrastructure and assumed more risk from both client-service and back-office perspectives.

A Different Approach to Sales

Newbold’s sales approach has been and is quite different from many other firms. We rarely show up to a client meeting attempting to sell a particular solution. Rather, we listen to a client’s needs and problems, and start consulting in the first meeting. We give independent feedback based on what we are seeing in the market or what we’ve accomplished for other clients. We simply make the client aware of our capabilities and hope that they call us when needs arise. When a client engages us, we react quickly and decisively.

Newbold’s team regularly finds itself working on the most challenging issues in the mortgage industry. Due to our exposure to a diverse group of clients (i.e., large and small banks, mortgage companies and credit unions; mortgage government-sponsored entities; mortgage insurance companies; and mortgage technology vendors), Newbold has been able to identify trends early. We saw the mortgage crisis coming in 2008, as clients struggled with loan salability, delinquencies and escalating costs. We positioned Newbold to meet our clients’ needs, particularly servicers, as they struggled with growth in loss mitigation volumes, regulatory intervention and remediation efforts.

Shoring Up Resources

To improve our client services, we hired four managing directors and two partners in 2011 to lead client engagements. We also leased a facility in the Dallas area with office space for up to 200 in the hopes of winning bids for large operational projects. Newbold took a big risk in adding a lot of fixed costs, but we knew the big banks needed people and did not have room for them at their existing facilities. The risk paid off. We won several large engagements and soon leased a second Dallas-area facility with office space for up to 325 additional people.

In early 2011, our 400 employees were supported by only eight back-office employees. Those back-office superstars, led by CFO Shari Harrison, worked tirelessly for years to manage client contracts and oversight, onboard consultants, perform background checks, manage timesheets, prepare invoices and prepare financial statements. As we continued to expand, we hired additional back-office staff and deployed new technology to help keep up with our explosive growth. We also formalized additional policies and procedures our clients required due to new vendor management guidelines implemented during the financial crisis. Like our clients during those crazy years, we felt like we were changing tires on a moving vehicle!

Our Own Tech Boom

In 2012, we started focusing on the technology trend—something we remain focused on today. Technology platforms at virtually all company levels—originations, secondary marketing, loan boarding, servicing, due diligence, risk management and accounting systems—quickly age out and require replacement. Mortgage companies, especially large non-bank and smaller privately held mortgage companies, are faced with new technology installations and implementations to a higher degree than ever. A client’s technology efforts can easily lead to evolution as industry leader … or extinction. Clients often want outside help from companies who have successful implementation experience.

Newbold has supported our clients’ technology needs primarily by providing teams to lead or assist with large-scale system conversion and implementation projects. We also have supported technology needs through our staffing division, which now makes up one third of our revenue.

The key to Newbold’s success has been the team effort among partners, managing directors, directors, back-office employees and consultants. In reflecting on Newbold’s first 15 years, I am the proudest of our team and that we have all made so many deep-lasting relationships with each other and with our clients. I look forward to continuing the journey!

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