Trusting God to See Us through Failures


A Massive Opportunity

In the mid-1990s, New York Life became aware of an opportunity at the Federal National Mortgage Association (Fannie Mae). With more than $1 trillion in assets, it was the largest financial institution in the world, and we had the chance to offer life insurance to millions of consumers who had obtained mortgages through this agency.

The greatest source of financial risk to the corporate profits of Fannie Mae occurred when the primary income producer in the household died and the mortgage went unpaid. To protect against this risk and dramatically diminish expected losses, Fannie Mae decided to offer a life insurance program to the homeowners (i.e., the mortgagors), which thereby would result in the dual benefit of lower-cost mortgages for all of the homeowners and greater profitability for Fannie Mae.

Under this program, Fannie Mae would pay the entire insurance premium. There would be no added cost to the homeowner. At the time of death of the homeowner, the death benefit payment from the insurance company would be made directly to the Fannie Mae organization thereby paying off the outstanding loan balance. To make this particularly attractive to consumers, additional levels of insurance coverage were available, and any death benefits in excess of the outstanding loan balance would be paid to the beneficiary designated by the borrower—in most cases a spouse and/or other family members.

It was a win-win situation. It was a phenomenal benefit for consumers, offering free coverage; it provided default protection and added profits for Fannie Mae; and it had the potential of almost instantly boosting New York Life’s revenues and profits to unprecedented levels. I felt it was a true gift from God for everyone, and the sequence of events leading up to New York Life’s involvement seemed providential.

New York Life learned of this opportunity through a consultant who was aware of our reputation, product, and administrative capabilities and who had high-level contacts at Fannie Mae. He arranged for me to make a presentation in a private morning meeting with top Fannie Mae executives in Washington, D.C. Over breakfast that morning, the consultant briefed me on the scope and intent of the project and made me aware of some internal issues at Fannie Mae that were causing significant frustration among senior management. That knowledge enabled me to quickly determine the areas where New York Life provided a strong competitive edge as well as the ways in which we could instantly address many of Fannie Mae’s greatest frustrations.

Because of the strength and reputation of New York Life and its proven capability to administer a project of this magnitude, we were chosen over several competing companies to administer the entire program. Even before my visit, the Fannie Mae board of directors had approved an expenditure of nearly $5 billion in initial premiums; after my visit, administration of the project was awarded to New York Life based on our reputation and capabilities as highlighted in my presentation. In that presentation I focused not only on New York Life’s product and administrative capability but also provided a specific example of our creativity and adaptability in dealing with a large class-action lawsuit for more than 3.8 million claimants. Having promised to assign the most talented product and administrative people to this project, I immediately assembled the team and sent them to Washington the very next day.

Together, the New York Life team and the Fannie Mae team began to develop the product and implement the program on a very aggressive timetable. There was renewed energy and confidence at Fannie Mae.

To put the magnitude of this project into proper perspective, New York Life could expect an initial premium of around $2 billion and ongoing annual premiums of another $0.5 billion. This single project would roughly double the size of New York Life’s revenues from new sales and would instantly thrust the company into the number-one market share position for life insurance sales. At the time there were over 1,000 life insurance companies in the United States and to be ranked number one in new sales would have been a remarkable achievement. Over time, this deal with FNMA would also increase the overall number of customers and the overall level of total revenues by 30 to 40 percent. We stood to gain strong profitability at relatively low risk and with little competition. And consumers throughout the socio-economic spectrum would benefit greatly.

This had to be a gift from God. With His guidance in dealing with all emerging issues and obstacles, the deal was shaping up to be the most significant business arrangement in which I had ever participated. I prayed daily for the success of this venture and continuously thanked God for the opportunity to positively impact so many lives through my chosen profession.

As the project progressed, however, many challenges and difficulties surfaced. The entire deal was highly dependent on pending legislation in Congress that provided very favorable federal borrowing rates for Fannie Mae. The insurance program in particular was recognized as highly beneficial, and Congress seemed to support the pending legislation. Even though passage of the legislation seemed assured, New York Life launched an aggressive effort to lobby key members of the Senate Finance Committee and the House Ways and Means Committee. I personally visited Washington and spoke to several committee members; all of the lobbied legislators expressed support. In addition, Fannie Mae was perhaps the most powerful lobby group in Washington and always had achieved its legislative goals.

As the bill approached a vote in the Senate Finance Committee, preparation to launch the program took on epic proportions. The effort involved a very large team of people from Fannie Mae, New York Life, and several other participating companies.


Success Turned to Failure

The evening before I was to leave on vacation to Europe, the Senate Finance Committee held its final meeting on the bill. In an 11 p.m. call from New York Life’s Chief Government Affairs Officer Jessie Colgate, I was told that the bill had passed and we were “home free.” Jubilant, I praised God for facilitating this seemingly miraculous sequence of events. What a marvelous way to launch my European vacation!

But my joy was short-lived. Just thirty minutes later, Jessie called with the devastating news that the approval had been reversed. A chief staff member—one I had personally met with a few days earlier—had pleaded with the committee to retract its approval because of the perceived unfair advantage given to Fannie Mae in the federal funds borrowing rate. After a proposed amendment to remove the favored status for Fannie Mae, the committee reversed itself. Fannie Mae lost the financial proposition and the entire concept was destroyed.

Attempts to restore this provision over the next few days, while I was on vacation, failed; the project was officially on hold. For several weeks the New York Life team looked for ways to restructure the program in a way that would remain attractive to Fannie Mae and to the participating insurance companies but could come up with nothing. What appeared to be my biggest career success had become my biggest failure.

Three months later at a White House reception sponsored by Fannie Mae’s chairman, many of the key players from both New York Life and Fannie Mae discussed the unfortunate outcome of this situation. We concluded there was no way to salvage a desirable product and program without the necessary legislation.

If God’s hand was in the failure of the Fannie Mae deal, I hadn’t figured out why. It can be very difficult to understand such disappointments but I firmly believed there was a reason for what happened. I now know that He had not deserted us and, in fact, was heavily involved in the amazing events that happened next.


Trying Again in a New Market

As soon as they returned to New York, team members—discouraged but not defeated—started discussing how to take this product concept to a new market. Bob Hebron, the key New York Life architect who had worked on the Fannie Mae deal structure, had an idea. An emerging national accounting standard was surfacing that would impact banks in particular. Bob started working on a product design for life insurance to be sold on the lives of bank officers and employees; as with the Fannie Mae plan, the policies would be owned by the banks and would also name the banks as beneficiaries that would receive the death payments. Over the long term, death benefits from the plan would in effect fund the large new liability on the banks’ books. Because of the tax advantages of life insurance and the relatively small initial premiums, this was considered a highly effective means for the banks to fund the added liability that otherwise would have been much higher in current costs on their financial statements. It appeared that God was still solidly with us, inspiring this new concept. The only disappointment for me personally was that this arrangement had a far less direct impact on consumers. Only indirectly and over the long term would the benefits of this insurance purchase inure to the benefit of the banks’ customers.

In partnership with a national marketing organization, New York Life put together a plan design that was marketed to virtually every large bank in the United States and many medium and small banks over the ensuing seven or eight years. Ultimately the amount of premium revenue New York Life received from these bank-owned life insurance sales—a total of more than $4 billion—equaled or exceeded what would have been received through Fannie Mae. New York Life rapidly moved to the number-one market share position despite the failure to execute the FNMA deal.

In the end, the tremendous effort we invested in the Fannie Mae experience was not wasted, and both New York Life and the banking industry benefited enormously from working together to find and meet a market need. Under God’s guidance a great concept was conceived, and despite the disappointment of the Fannie Mae failure, His help resulted in a positive outcome that benefitted many banks and, indirectly, their large number of customers.


For Reflection

One of the largest and most exciting projects I ever worked on was the life insurance program to insure millions whose mortgages were guaranteed by Fannie Mae. After things came together in such a miraculous way, imagine my frustration when the effort was thwarted at the eleventh hour by failed legislation in Congress. I was so sure God had been in on it from the beginning—and, as it turned out, He wasn’t finished yet.

Only with His help did we ultimately achieve huge success. A creative but failed project in one design (Fannie Mae-owned life insurance) led to a repackaged and successful project in another design (bank-owned life insurance).

Have you ever prayed earnestly in your life for desired outcomes that never materialized? Have you puzzled over why God would not step in during your times of greatest need to facilitate something that seemed beneficial to all concerned—and that even seemed a means of glorifying God? Have you trusted in God only to feel He ignored or deserted you? If you have remained faithful and yet you find yourself at times feeling disappointed or abandoned, you certainly aren’t alone.

My experience encourages me and might encourage you to remain prayerful and trusting of our God. The one common denominator in all of this work was that I prayed to and relied on God in both the failed project and in the successful project. The end result was highly successful even though it wasn’t the one all of us at New York Life and Fannie Mae had envisioned.

I believe faithfulness, trust, and reliance on God were ultimately rewarded. We must always trust that the most beneficial outcome will ultimately prevail because of God’s timing and God’s faithfulness. I love the wisdom books of the Bible, particularly the succinct and wisdom-filled verses of Proverbs. As stated in Proverbs 3:5–6, we shouldn’t lean on our own understanding, but rather submit to God, who will make our paths straight.


Comments from the Original Post

Gayla Norris 11.13.13

Thanks Fred…this sounds like it was written for me. I wrote to Fred a couple of months ago, in a time of just being lost Things were just a mess every where, not necessarily my life but also my family. My granddaughter was sick and couldn’t get a dr, a longer story, my daughters employer let her and three other people go who were 40 hr enployees and the highest paid after 7 years because of Obamacare, they let go of all full time employees and it goes on, all of which I won’t bore you with. But you know I kind of threw my hand up in dispare and thought God where are you and what are you doing? Why, why would he let bad things happen, why am I being tested like this, and then the faith starts to waiver, it shouldn’t if you believe. But you still the devil working to say hey wait a mninute, and the doubts start and although you don’t want to waiver, there is that why would someone who loves us so much put us through this.

Interesting as it may be I finally just gave up. Just said I cannot fight anymore battles sit back and put it in Gods hands. Very slowly but surely things start to work out, just when you are ready to jump off a bridge. Daughter looses job due to Obamacare, but gets a new better job. She finds out her daughter has a kidney problem which no Dr would see due to insurance issues. Atter days of tying to find a local Dr. to refer her to a urologist, we made a phone call to Lansing not only did she get a Dr. she was seen within a week and is being referred to a urologist here. My daughter got a temporary job right away until the new place opens in a couple of weeks which allowed her to have the time to tend to her daughters medical needs that she wouldn’t have had. Once we gave up and put it in Gods hands we saw the plan in the works and understood why some things had happened the way they did. So my new motto is instead of loosing faith, sit back and let God work his plan. At some point he “shows his” hand you look back at it, think about it and then go DUH now I get it. God is good

Frenie Moli 7.1.13

There is this one thing that I asked of God to do to me. It a particular that will not only benefit me but many others as well. In fact, I once told Him not to show to me situations where I feel I need to help if He is also not going to provide for me a way to help them. I have waited for this for about 2 years now and I think this time God dissapointed me.

I really do not understand, coz Jesus made a promise that If we ask in faith of anything it shall be given (matthew 11:22). I do believe that I have asked many times in faith. And Ihave already exhausted my faith with it. That’s the entire faith that I know and I have given it all.Yet to no avail.

Honestly, I do not know how to make sense in all of this because this is the time where I need Him the most. And yet, I feel that He has forsaken me and became quite to my prayers. I do not know how to feel after reading this column, if I am to be renewed, assured or envious why you had that kind of positive turn of events while I found myself with none.

I could still recall how I feel to so close to God. I know I have sinned. And I have asked forgiveness of it already. And now, it seems to me that He is covering His ears in my prayers. I do not know what to believe anymore and where to turn to.

I am now starting to believe that when God decided to leave you He will not change His mind anymore and will continue to forsake you no matter how hard you confessed and asked for forgiveness, in case if it’s you who moved away from Him. I do not want to believe this way because I have known Him to be a very loving God.

But here I am now, I find myself teetering in a cliff about to fall into the deep resentments from God or be saved by anyone or anything that makes sense.

You know if I dared to asked for BIG things previously from Him, I would console myself now if He would just lightly touch my earlobes. Just to remind me that He is still there/here. Because I could not feel Him anymore in my life. I don’t want to give up on Him because that would mean I’d fall for the devil but this is just so hard.

I thank you Fred for sharing this story because this certainly reflects the kind of life that I have right now. And I could only hope that one day I will experience the kind of grace you experienced.

I pray that one day I get to read this post again, and tell to myself that I was wrong in my assumptions about God. Because as far as I know, I have already given my all. I have already exhausted my how to show my faith and still nothing works. I know I need help. I know I need God.

Dick Hanson 5.14.13

Never give up. Know that God is always in control.
Prayer in all circumstances, will see us through.

Neyda 5.14.13

Thank you Fred for sharing this story. Now a days we see so much dishonesty and greed in corporate America between top executives and hard to believe that we still have good hearted and honest men like you that have the fear of God in their lives. May God bless you always. I have to apply this principle to myself when I want things to work out for me on my time, I have to let go and let God. Blessings…Neyda

Diane Walrman 5.13.13

Good Morning Fred…It’s so true what you wrote…I can really relate in this part of my life, because instead of trusting God through all my needs, I’ve been looking at man for them…Finally it came over me this weekend, Diana, You must trust & believe in me…It’s going to be on my time, not yours…And there are so many people that put their trust in people instead of God…And I know that hurts God, for the simple fact He should always come first no matter what. Only God can open doors, put favor over your life and give you a major break-through…So as hard as it is waiting for what you think God should do for you, ask yourself what can I do for God…And soon you’ll find the answers you are looking for…What an awesome God we serve…God Bless you for sharing your story, Fred…