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News from NAMB

National Mortgage Professional
Nov 19, 2006

Kellum's korner: A matter of trustAnthony O. Kellumtrust, relationships with clients You have them, I have them and our parents relied on them. We stake our health and wealth on their input and expertise. Maybe it's the doctor you speed dial when your son has the flu, who immediately calls back with advice. It could be the accountant who not only takes the time and trouble to go through your messy shoebox of receipts at tax time, but also gives you the heads up on new deductions. It might be your stockbroker, who smoothes your feathers every time you get a whiff of market trouble. Whoever they are, your life doesn't fire on all cylinders without those trusted advisors. They are your lifeline between complex advice and your personal prosperity, and we count on them to have specialized knowledge and interpret their expertise to fit our situation for our benefit. And of course, we as brokers serve as trusted advisors to our clients. We navigate not only our clients' financial terrain, but their emotional terrain as well. Hopes and dreams hinge on calculations that are routine to us and momentous to them. Our specialized knowledge of our clients, their demographics, our marketplaces and industry trends means that we go beyond pencil-pushing application takers to full-service real estate consultants. For this reason, you can imagine my devastation when a few years ago, the Detroit mortgage community came under close scrutiny due to the nationwide increase of mortgage fraud. Michigan was named as one of the FBI's top 10 hot spots for mortgage fraud in 2003, and Detroit, as the largest city in the state, was placed under a microscope. Of course, more people equals more crime, and a housing market that was beginning to show the first signs of steady appreciation in years meant unscrupulous people flocked to take advantage. Inflated appraisals to obtain higher loans, falsification of documents to qualify for properties otherwise out of reach and double-sold loans meant that the brokers were in a bad place. Lenders began to turn their backs on me as a broker because of the types of loans I made and the properties many of my clients wanted to purchase. So clients like Larry and Linda, whom I knew to be honest first-time homebuyers with a modest income, were stereotyped as unemployed con men trying to buy an overvalued home to take out phantom equity and quickly let the property lapse into foreclosure. Worse still, suspicion fell on the broker community as the FBI indicted brokers who were assisting in false verification of employment, income and residence schemes. Like most of you, my roots go deep in my community. We would not be successful without the respect and repeat business of people who trust us and our ability to make money for lenders. My community efforts, like sponsoring home giveaways, holding educational seminars and my past presidency of the Michigan Association of Mortgage Brokers (which advocates internal policing and credentialing of the industry), were overlooked or ignored; and both my clients and I suffered. I wanted to tell the individual stories of the families we had placed in homes, trying to better their lives and improve their stake in the American dream. But instead, loans out of this area and the brokers trying to push them through were painted with the broad brush of ill intent and blacklisted. Fortunately, we can't paint all lenders with the same brush either. Wells Fargo Home Mortgage has partnered with the Kellum Group to establish the community-rooted type of branch that shows its commitment to helping Detroiters become homeowners. Despite the backdrop of mortgage fraud, Wells Fargo took the time to examine the landscape and seek out someone who had an understanding of the market, the consumer and the unique circumstances they bring. Teaming my grassroots knowledge and experience with such a large-capacity lender makes our branch more sensitive to the challenges of lending in a distressed community. This partnership led to us putting our heads together to develop new products for the market allowing us access to more clients through more solutions. In this capacity, I am allowed to tell Larry and Linda's story without suspicion and with encouragement. So I say that we return to the trusted advisor concept in business. We provide full-service solutions for our clients and specialized information to our lenders that is unique and valuable. Just like you can't paint all doctors, stockbrokers or accountants with the same brush, a few stand out from the crowd. And those are the ones we keep on speed dial - just as we hope our clients do to us. Anthony O. Kellum is a past president of the Michigan Association of Mortgage Brokers, as well as a speaker on a variety of topics regarding the mortgage industry. He may be reached at (248) 866-9292 or e-mail [email protected].
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