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On the Feb. 22 episode of my Lykken on Lending Internet radio broadcast, we had the privilege of discussing the mortgage industry with David Gansberg of Arch MI. Throughout the course of our conversation on everything from mobile technology to Millennial homebuyers, David shared an interesting story about how borrowers might perceive the mortgage industry.
At one point, David had sought to secure a loan with two different mortgage originators. One originator refused to even give him a pre-approval. Another, however, helped him close on a mortgage within 30 days. Two companies with the same information produced dramatically different results.
One important takeaway from this is that the lack of standardization in approval criteria confuses consumers. It seems like there is a lack of clarity from regulators such that different criteria are used by different organizations for different markets. For consumers, this discontinuity reduces trust and increases reluctance. And, this isn't just a regulation issue—it's also an industry issue. We need to agree on a more standardized set of criteria amongst ourselves if we want to rebuild trust with the public. Of course, we still want to be able to maintain a competitive edge. But, if we want consumers to trust the industry, we've got to make it easier for them to make apples-to-apples comparisons. Trust is everything.
David Lykken, a 43-year veteran of the mortgage industry, is president of Transformational Mortgage Solutions (TMS), a management consulting firm that provides transformative business strategies to owners and “C-Level” executives via consulting, executive coaching and various communications strategies. He is a frequent guest on FOX Business News and hosts his own weekly podcast called “Lykken On Lending” heard Monday’s at 1:00 p.m. ET at LykkenOnLending.com. David’s phone number is (512) 759-0999 and his e-mail is [email protected].