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What Mortgage Companies Can Learn from Airlines in Social Media Crisis Responses

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The blizzard of bad press after United Airlines ejected a boarded passenger has died down, but if airlines were people (and had obituaries), United’s would surely include the April 9, 2017 episode. The outrage was immediate and international, but outrage wasn’t the only consequence. United was vilified on social media, mocked on national TV and on the web, threatened with a Congressional investigation and consumer boycotts, and criticized by everyone from bloggers to the president. The press reported that United’s stock took a $1.4 billion hit the day after Dr. Dao was violently dispossessed of his seat. That plunge was short-lived, but there are only a handful of large airlines in the United States, so flyers have limited choices. On the other hand, there are thousands of mortgage providers. In an industry as competitive as mortgage lending, a calamity as big as United’s could mean game-over.

So what can mortgage companies learn from United about how to handle social media meltdowns?

The lesson can be summed up briefly: acknowledge, apologize, ameliorate and amend.

Acknowledge. Everyone makes mistakes. And with universal real-time social media connections, mistakes are visible virtually everywhere, virtually instantly. The old saying, “pictures speak louder than words” rang true when we saw the bleeding doctor being dragged down the airplane aisle. Anyone would look at those images and say simply, “That’s wrong.” Speaking up about what’s wrong: acknowledgment.

Apologize. When mistakes happen, an apology is in order. United eventually got around to apologizing to its passenger, but not before the CEO blamed the victim, calling him “defiant” and claiming he tried to strike officers sent to unseat him. Later, United blamed the police officers. Its eventual apology rang hollow with a lot of people. Dr. Dao’s settlement figure is undisclosed, but as a lawyer I can’t help thinking it would have been lower had the words “we’re sorry and we’ll make this right” been the first words from United, not the last.

Ameliorate. Long word, simple meaning. Ameliorate means “make it better.” Postponing the decision to make something better often means the situation worsens in the meantime. Think putting off regular visits to the dentist, ignoring mold in the shower enclosure, or failing to take out the garbage for two days after a shrimp dinner. So many things just get worse while we’re waiting to decide how (or if) to make them better. Waiting is risky; public opinion hardens, the injured party digs in, and if the story is big enough (like United’s), the press keeps picking at the wound.

Amend. The last lesson is to amend the pattern, culture, procedures or whatever led to the problem. To its credit, United did this. It eventually announced changes prompted by the April 9 incident. Its CEO said the airline “can never apologize enough” and United changed its involuntary denied boarding process, vowed not to use law enforcement to deplane passengers, said it would not require boarded passengers to disembark, and would increase compensation for voluntary denied boarding. It will set up a customer solutions team, train its agents more, and reduce overbooking. These are significant amendments to its pre-April 9 operation.

The home mortgage industry has had plenty of United moments. Remember robo-signing? ARM-resets? Teaser rates? 125% LTVs? “No docs” underwriting? Appraisal collusion? Dual tracking of foreclosure and loan modification? The loan servicing settlement? The list could go on … but my point is that these situations could have turned out better for the industry, with fewer expensive settlements and less regulatory backlash if problems had been addressed with a view to acknowledge, apologize, ameliorate and amend. The consumer financial industry depends on trust. Treating customers right is obviously the best way to earn and keep trust – but when things go wrong, making it right again is the best way to rebuild broken trust. And that’s what the mortgage business can learn from United.


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Andrea Lee Negroni, JD

Attorney Andrea "Lee" Negroni is a nationally known expert on residential mortgage banking and author of several books on regulation of the home mortgage lending industry. She was in private practice in Washington DC for 25 years. Lee is on the faculty of American University's Washington College of Law, where she teaches consumer financial services law. She is a Fellow of the American College of Consumer Financial Services Lawyers. She graduated from Emory University and Columbia Law School.