What is Right About the Mortgage Industry?

I have probably drafted around 15 different articles for a Community Commentary since the beginning of the year, but chose not to post them because for the most part they were rants about the absurdity of RESPA, the idiocy of HVCC, the impotence of the CFPA.  But as I read each draft, I felt I was simply regurgitating everything that is negative, feeding on the energy of discontent that anyone crazy enough to still be originating mortgage loans for a living is already experiencing.

Instead, I asked myself what is right about the mortgage industry? What can we take away as positives in this community? Rays of light that can been seen as a hopeful sign of good things to come, rather than evidence of another hurtling train coming to decimate what is left of the non-big bank mortgage lending community.

The most positive thing I can see is an unprecedented opportunity for us to restructure the entire home buying paradigm. We can raise the bar on the quality of originators who have contact with consumers. I don’t want this to come off "preachy" or imply I am telling other originators what to do, so I think I'll just share my own experience.

I have become a better originator as a result of participating in this community. I think the leaders of our industry are emerging from the RESPA induced fog with a renewed sense of urgency to provide a new level of service, and a new level of integrity to the home buying community.

I cannot in good conscience tell a client “sorry, we missed the lock window”, because I truly have the tools to lock my client in before financial damage is done. I can’t in good conscience tell a client that “now is the best time to buy” just because prices are low. I can’t tell a distressed homeowner who is considering a short sale “to just sell before prices go lower”.  Instead I provide them with extensive data, which is at my fingertips every single day as result of the tireless educational efforts of those who contribute to this community.  I talk about their "payment comfort threshold", discuss their financial goals, and we draft up a borrower benefit letter for every transaction outlining the cost benefits of the mortgage loan we are discussing. I educate and empower them while at the same time deepening my relationship with them as a trusted adviser.

And you know what?  It’s working.  I have virtually no client fall out.  If a client even suggests they are shopping my rate, I show them my War Room charts so they can see where the mortgage-backed security prices have been and where they could go. With data to support it from the plethora of information posted on Mortgage News Daily. Then I ask them if the other loan officer they are talking to has shown them any of this information.   Generally their answer is NO. Conversation is over, loan gets locked, closed, and funded.

If I have a scenario I’m not sure how to handle, I can usually find a similar scenario in the forums, or follow the chats to get real time answers. I spend precious little time placing loans that have what appears to be no chance of getting done, because there are hundreds of originators who can help me evaluate the time value of that pursuit in the course of daily posting and chatting.

I have even seen chats where originators grapple with the value of selling an ARM over a fixed rate, arguing the cost/benefit of a mortgage to a borrower or railing against an obviously unethical competitor or warning against another loan mod/foreclosure prevention scam—in other words, peer driven self-regulation in action.

The knowledge and confidence I’ve gained here has given me the inspiration to try to regain the trust of local government housing entities by partnering with them to provide joint mortgage education programs—a preventative measure against future home buying abuses. These relationships are leading to opportunities to talk to local public officials. These public officials are in regular contact with legislators, who are becoming interested in this new synergy between nonprofit and for profit housing entities.

Perhaps this will translate to a new view of the mortgage industry and redefine our role and image as more than just rate and fee quoters of whatever mortgage bank product is stuck in front of us.  We can and should be participants in the building of our neighborhoods and communities by doing everything we can to ensure our clients are financially successful in their home buying and homeownership efforts.

The future could even hold a day when we become influential in drafting new, more consumer friendly mortgage legislation, that comes from a new partnership of trust between for profit and non profit working in the best interest of their home buying/owning constituencies.

That is something that can only be right for the mortgage industry going forward.

And it’s just the beginning of what is possible if the rest of this community will begin to share their own ideas for the “what can be right” in the mortgage industry.