Movers and Shakers: Sue Allon, CEO and Founder, Allonhill

By Melissa J. Anderson (New York City)

According to Sue Allon, CEO and Founder of Allonhill, a mortgage due diligence and credit risk management firm, one of the most important things people can do when they are building their own companies is speak up, and showcase their thought leadership.

“When Allonhill was founded in 2008, I couldn’t imagine that the financial crisis would get worse. At the time, Wall Street couldn’t speak for itself,” she said. “It was being indicted and servicers were being indicted. But a statement had to be made: mortgages were still a good investment.”

She continued, “Many people felt they couldn’t talk, but I felt I could speak for the industry. There were flaws that needed to be corrected, but I didn’t feel there were problems with mortgage securitizations as a product. So I embarked on a press campaign to talk about mortgage securities.”

It was risky, she continued, but worth it. “It was such a wonderful boost for my company. I was jettisoned to a highly recognized position in the industry. And even when there was no market, we became the number one firm.”

Career in Mortgage Securities

After studying Economics at Colorado College, Allon began her career as an auditor for Arthur Young. She explained that auditing wasn’t her passion, but she felt working for an audit firm would position her career for success. “I wanted the broad business exposure that one of the top accounting firms could give me,” she explained. “I’ll be honest. I wasn’t great at debits and credits,” she said with a laugh. “But I did love meeting clients.”

One of Allon’s first clients was Pulte, a homebuilding corporation with a large financial services division. “It was one of the first issuers of private securitizations. I loved this work, being on the phone with attorneys and investment bankers in New York. Right out of graduate school I decided to devote myself to mortgage securitization.”

For the next few years, she did just that, and then decided she wanted to get an MBA and move into business development. She graduated from the Tuck School of Business at Dartmouth – in the spring of 1987. “It was right after Black Monday. The markets were terrible,” she recalled. Rather than a banking job, she took a role at PriceWaterhouse, and then moved to Coopers & Lybrand.

Next, Allon spent the next five years building asset management contracts for RTC (Resolution Trust Corporation), and following a national bail out of savings and loan institutions, she got to help build the business from the ground up. “Next I worked for a private investor in mortgage securities and got to learn the buy-side,” she continued.

“And then, I got the truly inspired – or nuts – idea to start my own business,” Allon said.

“That’s my advice – to pick what you love and stick with it. Otherwise you’ll never get to experience that feeling of being the expert,” she explained.

“Holding Your Breath and Willing Yourself”

Allon says striking out on her own and starting a business is her proudest professional achievement. “It was my first time, and you only get to do that once,” she explained, describing the rush of “holding your breath and willing yourself, letting go with your back foot and not knowing if you’re on a solid path or stepping off a ledge.”

Not only was she striking out on her own with her first company Murrayhill, but six months later, she had a baby. “It was so scary,” she said. While a lot of new moms would be occupied by worrying about their child, she recalled, she was also kept up at night worrying about her employees.

“But it was a stunning success,” she said. “We introduced the concept of investors paying us to oversee mortgage securitization. And I took my baby with me on the road once or twice a month for the first four years.”

In 2004, Allon sold the business. “On 88% of subprime mortgages introduced that year, we didn’t just introduce it, we owned it.” Murrayhill merged with Clayton, a due diligence firm. “It looked at a loan and told investors what’s inside of it. These loans are 400 pages long in some cases.”

Sitting on the board of Clayton, Allon saw another business opportunity. “I just thought there should be a company that does that due diligence piece, but my company would be truly independent of banks or investors. We would tell people if what they said you should be getting is really what you’re getting.”

Her company Allonhill was founded in the fall of 2008 – just as TARP was being passed. “Our mission was to restore investors’ confidence in market securitization. We’re telling Wall Street – big banks, rating agencies, investors – if we’ve been hired, that the due diligence on your loans is going to be independent and trustworthy.”

Currently Allon said the evolution of the industry is particularly interesting to her. “There are a handful of fundamental, simplistic changes to be made that would make all the difference. But instead, we see small intricate stabs.”

One such change, she suggested, would be having one set of foreclosure laws for the US – rather than 52 sets (for the states, DC, and Puerto Rico). “We need to bring this up to a visionary level, rather than stay down in the weeds,” she explained.

Women in Financial Services

“Early in my career, I had the opportunity to join women’s organizations, I had the opportunity to be outspoken about women’s rights, and I had the opportunity to defend myself and push hard. And I didn’t really step up to that,” Allon said. “I had an easy time – I worked for accounting firms and business was booming. They really valued their employees and I just didn’t feel there was a challenge for women.”

“I wish I had known then what I know now,” she said.

“In my early and mid 30s, I started realizing it. I had been made an offer that was significantly less than a guy who didn’t know as much as me,” she said. She recalled being passed up for promotion because a man on her team wanted the title even though she was more qualified. “Later on, I realized this was worth fighting for. My daughter is going to be 15 this year and she’s going to face many of the same challenges. I wish I had worked harder, earlier.”

“And even now, at Allonhill, people still call and ask to speak to ‘Mr. Hill,’” she said with a laugh.

But, she continued, “I think the industry is now more receptive and open than ever to women being successful. I think it’s our job to groom women, so they can be prepared for those challenges. We need younger women to beat everyone’s – including women’s – expectations.”

She added, “It’s our job to insist those doors stay open.”

“Maybe younger women need to be more confident, is the advice I would give,” she continued. “I just want to see young women be more willing than anyone else to take on the toughest, most demanding jobs, rather than going after what are perceived as the more accepted jobs for women.”

“I want to see women apply for lead technical analyst at my company, rather than support or training roles. It’s important to be a team player, but I see women gravitating toward more helpful roles, rather than the toughest role of solving clients’ problems.”

As a senior woman in the industry, she continued, “One of the things I’m enjoying these days is recognizing that we have an opportunity to lead or mentor and be part of our organizations’ diversity programs. Personally, I’m excited about doing more of that – understanding the issues and finding solutions. Mentoring and grooming young women, I see it as my calling.”

In Her Personal Time

Allon spends a significant amount of time supporting the schools she attended and serving on their boards and committees.

“I also want to see more philanthropy in the workplace. It gives you a sense of community and gives employees a reason to feel good about coming into work.” She recalled how during a challenging time for one of her employees last year, the employee said that she was ready to resign, except for the impact it would have on the child she tutored. “That volunteer work kept her on the staff – I think it’s so important,” she added.