In this episode, David Lykken interviews Steve Majerus, CEO of Synergy One Lending, who shares his journey of leading a management buyout during the pandemic and how he has navigated the challenges of the mortgage industry with a focus on strategic vision, innovation, and authentic leadership. Steve discusses the importance of adaptability, building a strong team, and embracing technology to stay competitive in a rapidly changing market. His leadership, characterized by humility and transparency, has not only guided Synergy One through turbulent times but also positioned the company for future growth by fostering a culture of resilience and innovation.
[David] Listeners you’re in for a real treat today. We’ve got Steve Majerus, who is the CEO of Synergy One Lending located in San Diego. Steve led in April of 2020, a management buyout of the company from Mutual of Omaha. Steve, I’m really interested in that part of your story. I want to get into that but Steve has also focused on strategic vision for the company. And you’re going to hear how he thinks about that and that’s one of the many reasons I wanted to invite Steve to the podcast, because listeners, there’s something about this man that grabbed my attention. He’s a leader and the way he leads is as much what grabbed my attention. But then there’s a level of humility that comes out. That’s just so delightful. So, Steve, welcome to the podcast. So excited to have you here, [Steve] David, Thank you very much. I appreciate those kind words. And it’s great being here. [David] Another reason for everyone to go to the Total Expert Accelerate Conferences that they have each year is they have outstanding speakers. Steve was one of them and he was featured on some things and I go, I need to get to know that man and it’s been a real honor to get to know you It’s a new beginning friendship and I hope it’s one that lasts longer, especially knowing that you have family that lives in my area. We’ll be hopefully seeing more of you. I want to get into sharing our listeners for those that don’t know you, Steve, I think it’d be valuable for them to just take us through your journey, to get you to where you’re at today as the CEO of Synergy One Lending. [Steve] Yeah, I’ve having been in the industry for a long time. Obviously I’ve been exposed and had great opportunities presented to me over those years and I think one of the benefits and challenges of longevity in the business is you get exposed to a lot of personalities, a lot of different cycles in our in our industry that seemed to be always in the extreme and over time I’ve learned that the ability to adapt to those situations and learn from others along the way and ultimately thrive, I think are our key components, at least for, as long as I’ve been able to do this around 30 years and still standing. [David] I have a bunch of other things I want to talk about, but when I read your bio and I heard that you led a management buyout, there’s so many companies that are people throwing in the towel, wanting exiting out and I am a real big fan of employees buying out. ESOPs, basically. I really am a fan of that exit strategy for owners. I think it’s a great thing. It honors the people that got the company to where it’s at and it really creates a wealth opportunity for all involved. Those exiting usually get a little bit better room, a better multiple typically, and those that are coming in have an upside and what they’ve already been working on. Tell me a little bit about that story and how that came about. [Steve] It is a very interesting one especially around the timing. We were fortunate enough to enjoy with former owners of Synergy One, and we had sold the company to Mutual of Omaha, and we were presented with an opportunity during that time period to take our retail division and all of our branches and in a really amicable way exit and so the strategy really turned out to be, to your point, really advantageous for us because it gave us an opportunity to invest alongside with many of our employees that were with us at Mutual of Omaha and when Aaron Niemec, our President and main partner in the business with me decided that we were going to do this and we provided that opportunity to many in the company. It’s very humbling to have people physically write checks to invest right alongside with you because implicit in that or explicitly, they’re putting their bet on you and themselves at the same time and that alignment obviously is priceless in creating not only the vision for the company, but the execution of that vision together. And obviously it. It has been challenging since then in many ways but the undying support that our employee investors and owners along with us during that time period has been just amazing because there have been a lot of pivot points and challenges obviously between the day we bought the company and brings us to today. [David] I want to dive more into that story, but there’s so much about what I experienced when I met you that I want to share with our listeners. We may hit some mountain tops, we may not come back and dive into that one because there are a lot of people looking for an exit strategy that have been in the business done well, and they’re looking for the best one. And I think that one, again, is my favorite solution because everyone usually wins in those deals. Guild is a great story right there in your hometown, know those guys really well and I love those kinds of stories, but given the length of diversity you have experienced in the industry, what would you say are the most meaningful catalysts that have helped you form your vision for Synergy One today? [Steve] I t’s always evolving but, as I pointed out earlier having been in the industry for 30 some years, I would point to a couple of things specifically, one is, My very first job in mortgage was to start a mortgage brokerage company in Los Angeles. The entrepreneurial bug a bit me early and Los Angeles where I grew up and so entrepreneurship and the challenges and the learnings that you get as a result of that obviously forms a basis for a lot of things as you continue to evolve, get older in life and get exposure to additional opportunities, that provided a great foundation, I think for a lot of things that came afterwards. I would say also that taking advantage of opportunities that you’re given. Making the most of each opportunity along the way to do the most with it i think is a key characteristic for anybody. Because it’s one thing to be provided the opportunity. It’s really taking advantage of those opportunities and doing the most with it and when you have people believing in you enough to give you those opportunities. You need to do right by them and follow through and take advantage of those things. I will tell you probably as well I joined a company called E-loan during the dot com boom and that was an eye opening experience as well because it was a very heady time, a very frothy time. I think they called it then, but again, the company went public, I got to participate in a senior level position in that. And again not all the learning was great, but it was learning nonetheless, that exposure, frankly, planted seeds for me about what technology could do in the early days of the internet, and how that would eventually evolve into consumer adoption of options on the internet. And obviously who knew what was to come much much later as the internet’s evolved in e-commerce and things like that, but that experience really planted a seed around technology for me because I hadn’t been exposed to it before then. [David] It’s really true that technology is changing our landscape at a rate that’s just extraordinary. I tell everybody to read the book, The Coming Wave, my listeners are going to get tired of me, but until I know that they’ve read it, I’ll hound on that issue because AI and everything that’s fast evolving, we’re not going to recognize our world and we need to adapt and you clearly have that strategy, but the thing that has impressed me the most before I met you, I’ve had numerous conversations with different ones in your company. Some senior executives reached out to me. Getting my opinions on things and thoughts on things and I was so impressed with the caliber and the quality of the people that you have around you. Now I’m starting to get some more insights as to how you have been able to attract that, but what are the factors that go into attracting an amazing team like this? [Steve] Again, I’ve been fortunate to having worked in Aaron Nemec in particular, Aaron and I worked together at a previous company and so we were able to establish a real foundation and mutual respect about our complimentary skill sets. I think people, when they know, if they know Aaron and they know me, I really draft on Aaron skillset around so many things because he’s just one of the most, if not the most transparent person that I’ve met in my life, much less in business and he and I have been able to not only cement that in our partnership with Synergy One, but also other previous experience with people has really when we’ve been together, been able to attract them and again, standing for something specific as a company and setting a clear direction so the people that they were getting into when they signed up with us is really important because if they buy it, if they understand it in the beginning, we articulate it correctly in the beginning. There’s no surprises once that honeymoon phase is over and it’s down to business and I think that you can lean on that during difficult times because you’ve established a great foundation of trust and whatever happens, you can see your way through it. [David] I think the key word is authenticity. Transparency bring in along with authenticity brings a level of trust that, money can’t buy that. You can have all the great programs in the world, but if you lack the authenticity and transparency. You’re not going to have the level of trust that is really needed, especially to go through the times, but when you look at when you bought the company in early 2020, when you led this management buyout, I don’t really want to get insights of how you scaled it to meet the opportunities that came at you in the next couple of years, and then also, how did you pivot as quickly as you did. Everything was changing, the environment is changing. The technology is coming on it so much change. So talk about that. [Steve] As a new company, we were all together at mutual Omaha, as you pointed out, but pivoting to a new company, moving 350 employees over to our new platform and then quickly scaling to your point, making sure we were creating new systems, new processes, et cetera, et cetera. We clearly had a team that was focused and knew what they were doing, but in, in order to keep up with the opportunities and take advantage of the market as we did, it really came down to the individuals on our team and really thinking, being able to think in real time, which is critical with solutions around how to scale the business really keeping our head on straight about what was important during those time periods and what was not important during those time periods in order to serve our teammates and serve our clients and then to your point as fast as we went up which was quite a ride it as always happens, it seems in our business everything fell off a cliff and again, we have to rely on our life experience to be able to lead through that because that was obviously a series of months and months that was continual discomfort and I think [David] Discomfort is probably the nicest way you can say it. It is just sleepless nights. [Steve] It just never seen an end and so a lot of those things as those are obviously hard conversations, as rapid as the changes where it’s very difficult for people to keep up and process what’s happening around them and you don’t try to keep the franchise intact and the value propositions and the core values we hold dear as a company at the same time, being able to adopt new processes and technology as you said and continue to innovate through a down cycle takes a lot to resolve and the ability for our team together really work through those challenges and over and over again and as many times as it took to deal with the realities of the market and the challenges with profitability and everything that went along with that and maintaining a culture that ultimately prove that we will see the other side of this if we follow this path as hard as it’s going to be different people view those things different ways and they accept things at different times. Not everybody accepts things at the same pace of others. That was a very challenging time. [David] When you’re working with people that move at different speeds, my wife and I’m a guy, I see it. I want it. I go, I drive for it. My wife is a processor. She has to process, not a loan processor, but she’s a one that has to think and digest this for a little bit. And there’s times when you’re in a burning building, if the industry was on fire, it was burning. It felt like it was burning to the ground at times. How do you navigate that? [Steve] I think more than anything else, I relied on the relationships that we had as a leadership team and everybody in the company to try and communicate consistently, which we didn’t always do well, but we tried. Try and be transparent as possible because nothing is ever perfect even during good times and just rely on those relationships so that ultimately, if you have that level of trust and people see that you’re trying to work through things in the right way and again, there were some days that we were not very graceful at it but we were trying and hopefully that was evident. [David] But you had a mission and a strategy to go for that. Yeah. We can try, I’d rather try and fail and get up and try again, fail forward as they say and that’s what it looks like, it’s translated. I want to get into that and listeners, I’m going to be inviting Steve to do a licking on leadership interview where we’re going to really dive into that one component, a lot, the leadership that you brought to your company and how you’ve surrounded yourself and raised up so many excellent leaders inside of your company. So I’m really looking forward to getting that, we’re going to get that in your next interview that we’re going to do for the Lykken on Leadership. I’m putting a little plug in that for that interview. But when you look at how people survive, when we seen the contraction in the market that we’ve seen earlier this year, you’re looking at what’s going on. You have still had the opportunity to grow. For example, Draper and Kramer, they were bought by another company, but because of the culture, you had, a good number of them, a percentage of their originators selected to go with you and not with the company that acquired them. What was it that drew them into this? I think we’re getting insights, but how did you navigate that? I think so many people listening on the podcast right now are trying to grow through acquisition and many of them are struggling quite frankly, and here’s a company that was bought by another company and you ended up being the benefactor of that disruption that happened in there, man, a lot of stories in there. [Steve] It’s tough to recreate those circumstances because the team that is with us now, formerly at Draper and Kramer, we’re very happy at Draper and Kramer. They enjoyed their experience there. They were doing well and when it was really thrust upon them that the ownership at Draper and Kramer made the decision strategically that they did, we had a very short window in which we were introduced to Lorna Davis, the leader of that group who Lorna is just an amazing sales leader and has continued to grow even after she joined us and adding additional branches in addition to the Draper and Kramer team she brought with her. But I will tell you, Eric Colby, who runs growth for us and Aaron were referred to Lorna by credible people that long term relationships that they had in the business. And Lorna says to this day, the fact that she could, obviously a lot of people were in her ear trying to attract her team at that time. And again, they had a short window to decide whether they were going to go with the acquiring entity or on their own. But the fact that Aaron and Eric specifically had really what came through to her was the empathy that they showed during that time period in understanding the predicament she was in and obviously just genuine people that were still involved in the details of the business at Synergy One and I think that really resonated with her clearly and then ultimately additional things alignment that was great for her was our technology was really attractive to her and her team, our marketing stance being very social media forward and not only embracing that but being a leader for a company our size in that space was instant attraction on top of the leadership, Eric and Aaron had presented to her right from the jump. And like I said, she could have gone anywhere and let her team anywhere. But those were differentiators for us in that process. And, once they made that decision, we had to all act quickly and just jump in the deep end of the pool together to make it happen. And so we’re proud to say that, the retention and. Has been tremendous since they joined us and that her and her teams are absolutely thriving. But again, that started with a mindset shift for our leadership team before we even met Lorna to say at the end of 2023, we decided we were not going to look through the lens on decision making with a bias towards fear. We were going to drop and really focus on optimism about a new day, once we rallied around that thought. That really resonates with people and it continues to serve us well. It’s just such a strong principle in life, there’s an old saying that what you fear comes upon you and I believe that we draw negative things to us in fear. We can draw positive things to us if we reject that and go the direction of looking for the opportunities. Faith in yourselves, faith in what you built, faith in the vision that you have. And it really comes in there’s many components about that. I’d love to get into, but I think it’s so solid. What was the catalyst for you shifting out of fear? because everyone in the industry had a lot of opportunity to feel fear. What was that Steve? What was the thing, the one thing that really did that? [Steve] I’ll tell you we had the leadership team here in San Diego and everybody flew in from different parts of the country for meetings. And Aaron and I had decided that we were going to shuffle a couple of personnel moves, putting Eric Colby in charge of growth and being one of them and those moves led to these discussions and these discussions, we got sick and tired of our own voice talking about cost cuts or how we’re going to survive and things like that and personally, at least for me. I felt frankly, the Fed was close enough to the end of this interest rate cycle that we were in, that and we had gotten cost containment largely to where we wanted it to be so that we thought we were in a good position to go forward but going from negative to neutral is one move. Going from neutral to optimism is a whole another move. But once we decided to make that leap from negative to optimism, it really brought all of the good things that can come out of optimism and a growth mindset. It really created a momentum for us coming out of the gates in 2024, frankly. [David] And I think so much of it is, and this is what I heard you do at the Total Expert Accelerate Conference. It’s how you tell your story. I think it’s so important how we articulate having the principles. We are not going to subject ourselves to fear. We’re going to subject ourselves to optimism and looking for opportunities. That in itself is a magnet to draw people in there, but how is it that you communicate this? share some of the things that you shot. We watched that video that your son shot of you in your office. It was so powerful. Talk about the power of your story and how you have learned to tell it so effectively. [Steve] I appreciate that. I continue to think through how to best educate people and to your point, make that passion for the vision come through because the vision that we have for the company can be very uncomfortable for people. It is staying kind of middle of the road in mortgage banking is safe space, especially for somebody that’s been around as long as I have and a lot of people don’t want to upset their own ecosystem because of the risks associated with that. But from the beginning, we’ve always thought about and we talk about the modern mortgage experience we like to create that comes with baggage and you can make that an advantage or it can drag you down and when you say that you’re all about the mortgage experience, you better walk the walk. So you always have to be thinking about the right innovations about a return on investment of technology investments and not doing it because it’s the shiny new thing. There is actual tangible value to your sales force and your operations teams that are going to provide a better experience for them, which they can, in turn, create better experiences for consumers in the home buying process and so I take a personal role in driving what those solutions are and I think because it starts with me I also have to wear the failures in a lot of cases, but that’s part of the deal. And I continue to be invigorated by what’s possible, you mentioned AI earlier, we are leaning into AI in a very thoughtful way and we’re soon rolling out some solutions around that are going to make the team more effective and more productive. But again, that’s introducing something new and different people react to new things in different ways. [David] Again, those in fear are going to be resistant to it. One of those that are positive and looking to that, realizing we have got to change, are probably being more adept to embracing it. [Steve] Yeah, the story that we tell. Again, is a lot of frankly repetition to say more about where we’re going than where we are and where we’ve been frankly, we do have to have our eyes out on the horizon looking for what’s next because my thought process is I never want our team to feel like whether it’s a competitor, large or small, that we’re at a competitive disadvantage because we refuse to adapt new practices and processes and again, you’re not always going to get it right. That’s not the point. The point is, it’s an invigorating business. It’s an invigorating process to continue to evolve and always remaining and retooling and resharpening and I think that’s what this is all about and I think it, it can be very invigorating and provides a catalyst for a lot of people that demonstrates confidence in themselves, as well as the company that stands behind them. [David] That’s so true. But the key is articulating and telling that. You seem to be a natural communicator. I think it comes from what you talked about earlier is transparency and just being as real as you can about that, and which brings that authentic transparency. If you were to give tips, Steve, to someone listening to this, it goes, I want to be a better communicator. I think sometimes it’s harder to describe when something comes natural to someone and I said, I wonder if it does for you. But what would you say to someone who’s really struggling with that authentic, transparent message that they need to hear? it needs to get out to their company. [Steve] Candidly I do struggle with this myself, I’m not sure it’s a natural process for me. I have found, here’s where I’ve landed. I have to be more thoughtful about how I educate people around me if I want to influence them through that education. [David] There’s so much packed into that little statement. We could go on and do a whole podcast just around that one statement. It’s honoring the people around you is how to move them along and being intentional about is what I think I heard you say. [Steve] Yeah, and I have to stop myself because to me, if I have a solution might be obvious in my mind, I certainly have to understand that I need to explain why I think that. And I don’t always do a good job of it. But, If I make things innovation, more approachable, if I make it make sense. So there’s an understanding of why we want to do this or why we thinks it’s a good solution. I have found over time that it is a more effective way for us to get adoption inside the company, remain consistent about that messaging so that people really know this is not a fleeting moment that we really are going to be all about this. And if we could remain resolute about those things over time, people understand and they can opt in or out, but they’ll understand clearly about the direction we’re going and what this is all about as a company. [David] That’s really good. I’ve enjoyed this conversation and I can’t wait to continue it because I want to just go more. We’re going to go into the leadership on Lykken on Leadership interview, we’re going to dive into the leadership components of this, but as we wrap this up, Steve, give us some forward looking from your perspective, strategies that you’re considering, things that you feel that are going to be necessary to succeed and continue your success past 2024. [Steve] The way we’re thinking about the market right now and therefore that drives some business decision making is we think this is going to continue to be a challenging market. The growth of the overall mortgage origination market is not going to be significant in our opinion and we feel positive about our prospects in it because we’ve felt like we’ve gotten a good grip on our cost structure. Again, there’s always refinement to do, but again, that’s one of those things that you try and control and get your arms around. We feel good about where we’re at. Now for us, the opportunities for growth and therefore scale are really driving a lot of what we’re thinking about these days, and we think those opportunities are out there. We think they exist now, and they’re going to for a while and, whether it’s personnels, whether it’s processing systems whether it’s new avenues of business that we’ve amplified like home equity lines of credit, where we’re an early adopter there. That is one example of how we’re diversifying revenue streams so that we can provide the best and deepest foundation for the company. Given the market is probably not going to grow, maybe 2025 is a $2 trillion market. Maybe that’s not, it’s better, but it’s not huge and so we really have to be very specific about the opportunities we want to take on, but we do think they’re going to be there. And as you pointed out earlier, we have a very savvy team in assessing opportunities, getting access to those opportunities and so therefore we’re reasonably optimistic. [David] That’s really good. I think it is also what brought about the relationship where The Draper and Kramer folks moved over to you instead of going with where the company was sold to was the relationships that were already in place and establishing those, because I agree with you. I think the ground game is going to be not so much that we’re going to have a massive growth in this industry. I can’t look forward to those days although those are present another set of circumstances. These are the kinds of times where you really find out who’s really good and who really has a vision it’s going to be capturing or market share that is moving around. We’re looking at a lot of people going out of business and a good number of them. That is going to be then capturing them as you did with the Draper and Kramer folks. Steve, this has just been delightful. I’m just so grateful for you to take time to be here with me today and share this. Any final thoughts that you say to the audience we have, what were the parting words of wisdom. [Steve] Thank you, David. Thank you very much for the time. The invite to share time with you today is humbling by itself and so being able to spend time with you is very much appreciated and I certainly look forward to more. I would just say, I think perseverance and discipline is going to be rewarded. I encourage competitors, colleagues alike that through all of that, I think innovation is going to be a necessary component, not an option. And I think that the more leaders in companies stay tuned to that and take their opportunities to improve their overall value proposition. They’re going to bias their success versus others, as we all move forward and always adapt to new things, I obviously want to wish everybody the best of luck as we pull out of this, hopefully, and see better times ahead because the dream of home ownership is not going anywhere. [David] That is not going away. It’s exactly right. That is going to be staying here and unless there’s a massive wealth transfer, people are going to be needing financing. Our industry is looking from a fundamentals underneath is we’re on solid foundation. It’s how to execute on the strategy, which is something you’re doing extremely well. Congratulations on your success. Congratulations to your team. Just really looking forward to getting to know you better, Steve. Thank you so much for your time today. [Steve] Thank you, David. Appreciate it.Important Links
Steve Majerus is the CEO of Synergy One Lending, Inc. In April of 2020, Steve led a management buyout of the company from Mutual of Omaha.
Steve is focused on the strategic vision of the company, which is licensed in 49 states and Washington, D.C., and has over 400 employees.
Before joining Synergy One Lending as President in March of 2017, Majerus held various leadership roles in both private and public mortgage companies ranging from capital markets to sales and operations. His experience has cut across multiple channels in the mortgage space, most notably in a senior role with internet lending pioneer, Eloan, from 1997-2003 and as Regional Executive of the largest region in the US with the joint venture between PHH and Realogy (now Guaranteed Rate Affinity).