The Burgeoning BrokerJohanna Maherevolving mortgage broker, credit counselors, financial analysts,
There was a time when mortgage brokers were the people whom
consumers turned to solely for the purpose of buying a home. Today,
they wear many hats, having evolved into financial professionals
who provide credit and debt counseling; they have evolved into
legislative experts who have the nuances of an ever-changing
regulatory market at their fingertips; they have evolved into
astute marketers who must know how to reach out to and serve an
increasingly diverse population.
Today's mortgage brokers do this in a sophisticated marketplace
where ethical practices, fair lending laws and the fine points of
truth-in-advertising are important components of their business.
And they still serve that fundamental role: helping people fulfill
the American dream of homeownership. In short, mortgage brokers are
becoming the full-service industry professionals who consumers rely
upon.
Mortgage brokerages typically lack internal departments to
provide updates on legislation, develop expanding market sectors or
create continuing education programs. Thus, seminars, online
classes, newsletters and other forms of professional development
assistance can be invaluable to brokers who seek professional
development.
This critical continuing education is available from a wide
range of sources. Some lenders have already created ways to help
mortgage brokers improve their ability to build their businesses.
Argent Mortgage Company, for example, has developed tools to help
mortgage brokers stay on top of industry developments through
newsletters and seminars, among other things. Organizations such as
the National Association of Mortgage
Brokers also are working to take professionalism to the next
level. NAMB encourages states to adopt continuing education
requirements. The organization also has developed a set of Best
Practices for brokers. NAMB believes that an increased emphasis on
continuing education and Best Practices will help protect consumers
and ensure originator competency to everyone's benefit.
Mortgage brokers who want to embrace these efforts can benefit
from developing their own Best Practices, using samples set forth
by professional organizations or actual Best Practices from the
industrys top lenders. Best Practices help brokers adhere to fair
lending laws and set forth clear guidelines that will help them
comply with future legislation. Best Practices may also help them
differentiate themselves in the marketplace and illustrate their
commitment to fair and equitable mortgage loans.
All of this has come about due to a rapidly changing market that
puts pressure on brokers to understand and respond to emerging
trends. The hot real estate market of recent years brought many new
people into the business who learned on the run from others in
their office or from friends in the industry. As a result, they may
have missed out on the nuances of new legislation or learning about
the growth potential of various market sectors.
A decade ago, brokers facilitated mostly mainstream, conforming
loans. Consumers either qualified or they didn't, and on-the-job
training was generally sufficient. Today, however, brokers
increasingly look to the more complex issues of non-prime lending,
which requires them to know how to evaluate loan applications,
conform to fair lending practices and work with lenders who can
provide efficient and complete loan services in a short amount of
time in order to satisfy today's demanding customer. It also means
that brokers must understand the potential of growing market
segments important to the development of future non-prime
business.
Through non-prime loans, brokers provide a service for diverse
consumer groups, as well as for entrepreneurs and others who cannot
get a conforming loan from large lending institutions. But
non-prime loans also provide a lifeline to homeowners who find
themselves facing financial challenges that require tapping into
their home equity for cash, often on more than one occasion.
This is a new market for many brokers, and there's the rub. To
fully understand how they can help a homeowner find the best way to
tap home equity, brokers must learn the ropes of non-prime lending
through continuing educationsomething that many brokers missed out
on during the refi boom.
State and national organizations have started to address the
issue. An expanding selection of NAMB classes reaches out to
brokers exploring the non-prime market. New offerings include how
to work with diverse populations and sub-prime lending. Online
classes are also available to learn about credit scoring, ethics
and fair lending. Such classes underscore the need for brokers to
be knowledgeable in broader financial areas.
This is a step in the right direction, but not all brokers
belong to industry associations. Membership is not required in most
states, so non-member brokers must look to other sources for
professional developmentsuch as lender-sponsored
seminarsparticularly in the rapidly changing world of non-prime
lending.
Mortgage brokers might also want to work closely with lenders
who are willing to help brokers deliver the customer service that
consumers seek. Argent Mortgage has found that brokers welcome
assistance in the form of quick turnarounds for loan requests and
online loan tracking that helps them keep consumers informed.
Don Exley, president of the Mortgage Training
Institute, said the basic challenge faced by brokers remains
fairly constant: to assess the needs of the borrower and place that
borrower with the best-suited mortgage product. It's finding the
right product that's the challenge today, he said.
"With the sea of available products and their particular
nuances, finding the right program can be a challenge," said Exley.
"As the market continues to change, loan officers will need to
focus their time and attention to developing a marketing strategy
more consistent to a narrowed market and an absence of
refinancing."
According to NAMB, mortgage brokers originate two-thirds of the
country's residential loans. The organization says that consumers
who choose to work with independent brokers typically believe the
brokers offer a competitive advantage, offer loans from multiple
lenders and deliver on their promises in the interest of future
business.
Providing services and tools to mortgage brokers is a win-win
situation for everyone. And with lenders, associations and the
mortgage broker community working to take professionalism to the
next level, a stronger partnership for the future can be forged to
the benefit of everyone involved.
Johanna Maher is vice president of channel services for
Irvine, Calif.-based Argent
Mortgage Company. She may be reached by e-mail at
[email protected].
