|
Jul. 6, 2011: Why Borrowing is a Privilege and Not a Right
Rob Chrisman
[I am
away from the computer on a daily basis, and my access to e-mail
is sporadic and not timely. In my place are daily commentaries
from a series of very knowledgeable mortgage industry people
with different backgrounds, and they have been given very little
direction about what to write about – the latest is below. Our
views may or may not coincide, but I thank them for their time
in volunteering and helping out.]
In mortgage lending,
we have come back to the days where buying & borrowing for a
home is actually a privilege, not a right. Is the public aware?
Do the Realtors care? Are the loan officers prepared?
All the press, licensing requirements and regulations point in
this direction, yet still, we are faced with the ever present;
"but this is a good deal". Of course it is, and we all want them
to fund, but can they? Not in this back to the '80's culture
swing to underwriting requirements with the
2011 rules and regulations. Attorney's breathing down our
throats at every turn, looking for any minute error, risk of
holding assets to cover every loan funded in case good borrowers
go bad; how can we be expected to turn a blind eye? It's not
that your loan professional is nit picking, your lender is
difficult to work with, or the process takes too long. It is
what it is and we had better get used to it.
Otherwise, good loans are going bad before they ever had a
chance...for as little as a simple disclosure mistake. Bottom
line, it's a mistake that we just can't risk the ramification of
ignoring.
Real people are doing
hard time; Borrowers for lying on loan applications, Loan
Professionals for omitting information, Brokers for paying
referral fees, CEO's of lenders for all of the above and more.
Massive fines are being levied for as much as using the wrong
word in an advertisement or incorrect disclosure (there's that
word again)...The salt in the wound? True mortgage industry
leaders are leaving as the risk is just too high. And we
shouldn't be risking the lively hood of the rest by asking them
to ignore a 'simple mistake'.
Processes are put in
place to protect us all. Granted some very over bearing, but the
more we fight the more processes are devised. We've seen it in
the late '80's again mid '90's and now (2010-2011 gave us some
dozzies).
However, if we don't get on board / work to make it better, it
won’t get better.
Compliance with the
SAFE act, while painful, is a reality. Of course it’s utter
nonsense that the major bank loan officers are not subject to
the same testing and scrutiny that the broker community is. Work
with the professional associations that are advocates for the
level playing field. Write your elected officials about the
disparity put in place as a result of the Dodd-Frank Bill.
Silence on these critical issues by the majority will only
exacerbate the problem
Further, the
interpretation of these rules and regulations have been
interpreted in a variety of ways, further lending to the
confusion about what is and is not correct when disclosing. The
current environment does lend itself to the application of
common sense. Check with each reputable wholesaler and you will
find little nuances in each firm’s compliance department that
make the overall process hardly uniform. Sadly it’s a reality
that will not easily go away.
In the meantime,
investigate how loans were packaged and underwritten in the
“good old days”.
With the Lender comp
confusion (who pays for lock extensions or added charges that
more often than not arise); could it be another nail in the
coffin of YSP and the no point, no fee loan? Word is; it is
beginning to hit the lenders bottom line, and could prove to be
significant enough while in this declining rate environment.
Added to the pain, lenders are seeing their performing loan
servicing portfolio bleeding off to a lower rate refi’s, along
with new locked loan pull through being dismal
as borrowers and brokers alike, move willy nilly for as little
as .125%. Writing may be on the wall, time to sell points...
Remember the phrase:
Lord please give me another refi boom, this time I promise to
not "flush" it away? Well, isn't that what we are beginning to
see, again!? I'm hearing a lot of chatter from people getting
back in the business to "take advantage of the refi market".
With many saying: "what's NMLS"? It's going to get brutal when
these former brokers get back in and put a spoke in the wheels,
both your production and your lenders processes.
The professionals
need to get out there and market themselves! How will you manage
it, especially when we know we need to be concentrating on
helping your allies build the purchase pipeline? Sounds like we
all need to get with the program and work within the old or what
ever technology, and not complain about what takes cash to fix,
until we show profits to begin re investing in the
infrastructure. It’s not going to change by yelling but if we
work what once worked, surely we can come out on the other end
profitable and with good business/ relationships to show for it.
As far as motivation and organization? There are many tools
available through the good old personal coach to group time
management classes etc. But the bottom line, we are all working
harder for less, but more is out there, so let's go make it
happen!
And lest we forget:
borrowing is a privilege not a right and we are mortgage lending
professionals.
"We must reject the
idea that every time a law's broken, society is guilty rather
than the law breaker. It is time to restore the American precept
that each Individual is accountable for their actions" - Ronald
Regan
"We're in the
business of compliance and occasionally fund loans" Seasoned
mortgage professional
Respectfully
submitted by:
Andrea Redfield
Happily supporting
the Residential Mortgage Broker Community for more than 20 years
|
