Lately, with each subsequent passing of the gavel of National Association of Mortgage Brokers (NAMB) leadership, it could be equated to a grown up’s version of the game Hot Potato. Legislation, proposed regulations, a downsizing and consolidating industry, attacks from the media, public scrutiny … the list of cons related to the broker industry seems to outweigh the list of pros for each successive NAMB president of late. As Marc Savitt inherited before him, Texan Jim Pair has been handed the golden key of the NAMB presidency at a time of great wonder about the role of the broker in the current state of the U.S. housing finance market. Despite all the negative vibes, Jim is confident that the future of the truly professional mortgage broker remains positive.
A wealth of industry experience
Pair got started in the mortgage banking industry in 1961 as a loan originator after a stint in the U.S. military. He served as a senior officer of a mortgage banker, and five years as the president of two savings and loan associations in Texas in the late 1970s/early 1980s. In 1992, Jim founded Mortgage Associates Corpus Christi (MACC), serving as president. MAAC focuses primarily on the origination of conventional single-family loans.
“I’ve seen a lot of different things happen in this industry over the years, but nothing quite as severe as what has been going on the past few years,” said Pair.
In 1994, MAAC was approved to originate Veterans Affairs (VA) loans, and in 2001, was approved to originate Federal Housing Administration (FHA) loans. MAAC continues to be a top mortgage shop in the Corpus Christi area, having been honored four times with the “Best of the Best Award for Mortgage Lending in Corpus Christi,” as bestowed by the readers of the Corpus Christi Caller Times.
Giving back to the profession
Jim became involved with industry trade associations in 1992 when he first founded his company. Taking the advice from friends in Houston who were members of the Texas Association of Mortgage Brokers (TAMB), now the Texas Association of Mortgage Professionals (TAMP), he approached the Texas affiliate of NAMB about forming a chapter in Corpus Christi. They agreed and Jim spearheaded the launch of TAMP’s Corpus Christi Chapter, serving as the chapter’s first-ever president and as a member of the TAMP statewide board of directors.
As he became more active on the state level with TAMP, Jim became involved with the legislative affairs of the association and became a mainstay at the Capitol in Austin, educating state senators and representatives on the role of the mortgage broker in the housing finance industry. His statewide involvement with TAMP eventually led to Jim taking the reins of association leadership as a statewide president in 2000-2001.
He became involved nationally with NAMB, serving as chair of both the Membership Committee and the Education Committee. He eventually found himself on the NAMB board of directors which led to his recent election as president of NAMB.
“Nothing was done by design,” said Pair. “I always felt that the industry had been good to me, and I wanted to give something back to show my appreciation. I had no thoughts of ever becoming NAMB president, but I’m sure glad that I now am.”
Solidifying the foundation
Two of Jim’s primary goals over the next year as NAMB president are to increase revenue and bolster the ranks of membership. One of NAMB’s financial lifelines for so many years was its strong ties to its Industry Partner Program. With the downsizing of so many wholesalers, one of NAMB’s primary lifelines has been tightly constricted, thus greatly impacting the financials of the association.
“In the past, we relied heavily on our Industry Partners to fund our operations and we realize that stream is drying up, so we need to look for more sources of revenue elsewhere,” said Pair. “We are actively pursuing new sources so that we can fund what we want and need to do.”
According to Jim, a number of factors will play into the opportunity to build membership over the next year. Regulatory concerns, along with licensing and education requirements mandated by the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) are strong considerations to align one’s business with NAMB according to Pair. In addition, the Obama Administration’s proposed Consumer Financial Protection Agency Act of 2009 (CFPA) will yield even more authority over the broker community. The CFPA calls for the formation of an agency with the authority to prescribe rules regarding disclosures, sales practices, minimum operational standards and requirements to offer standard products and services. This agency would be authorized to prohibit pre-dispute arbitration, propose model mortgage loan disclosure language, and require disclosure allowing consumers to compare financial products or services. Provisions of the SAFE Act require that all loan originators be subject to a national registry.
“With the SAFE Act and proposed legislation, the interests of the small mortgage banker and mortgage broker will be more common than ever,” said Pair. “Through the relationship NAMB has with AllRegs, we will be able to offer education to those originators to get them licensed and also have the opportunity to recruit them as members of NAMB.”
NAMB recently rolled out a new membership category, the Corporate Membership. The new category will enhance NAMB’s membership numbers as it will allow small mortgage bankers and their originators to join the association at a lower rate than if the company had joined individually.
“Building membership and finding other sources of revenue go hand in hand, and we look to continue to grow in both of those areas,” said Pair. “I think we can really accomplish those goals this year and be successful.”
Wading through the waters of legislation
In the eyes of many, the onset of the Home Valuation Code of Conduct (HVCC) has caused more harm than help since its inception. Increased consumer costs and delays in appraisal time are just two of the issues that have plagued the HVCC as issued by New York State Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac. Since the HVCC’s May 1 enforcement, NAMB has been on the frontlines of defending the stance of its membership, through an industry-wide Call to Action to let the offices of Attorney General Cuomo, Fannie Mae and Freddie Mac know, by phone and e-mail campaigns, the harmful repercussions of the HVCC.
“I firmly believe the HVCC has taken away consumer choice,” said Pair. “Not being able to be in the process, the consumer does not know who is going to make the appraisal and just how qualified that appraiser is. The process does not move in a smooth fashion, and has, in some cases, cost the consumer $150 to $200 more out-of-pocket for an appraisal. With this time delay, rate locks expire and need to be extended, resulting in yet another deep cost to the pocket of the consumer.”
In late June, Reps. Travis Childers (D-MS) and George Miller (D-CA) introduced HR 3044, a piece of legislation that is seeking an 18-month moratorium on the HVCC. NAMB issued a mid-July Call to Action to their membership urging them to contact their elected officials in Washington, D.C., discuss with them, their concerns about the HVCC and become a co-sponsor of HR 3044.
“What we need is better enforcement of the laws already on the books,” said Pair. “Our states are not well-enough-funded to regulate the laws they already have on the books. The same is true with the U.S. Department of Housing & Urban Development and the rest of the agencies. If the laws on the books had been appropriately enforced, we certainly would not be in as severe a situation as we are in now.”
Getting the word out
Another of Jim’s aims this year is to amp up the communications efforts of NAMB. Marc Savitt made countless television, print and Web media appearances over the past year during his term as NAMB president, and Jim looks to carry on that campaign of painting the picture of the importance of the broker to the American economy and its consumers.
“I don’t think that consumers have been swayed that much by the bad publicity of the mortgage broker profession,” said Pair. “One big reason we are losing more brokers is more of a reaction to what has happened in the marketplace, coupled with a tightening of credit and decrease in home values. There is an overall lack of consumer confidence in the economy as the deciding factor whether or not they should purchase a home right now.”
Relaying the benefits of using a NAMB mortgage broker to the general public is the obvious goal of NAMB, but Jim stresses that communication of the benefits of NAMB membership to non-members is another key goal that will enhance membership numbers.
“We need to build up a sense of urgency among our members and non-members to become part of something that is working really hard to protect our industry and our way of business,” said Pair. “As we communicate more as to what is happening, more people are going to be a part of NAMB.”
The road ahead
As the role of the mortgage broker continues to evolve and the industry continues its metamorphosis, the need for the mortgage broker will not diminish. Consumers still require the expertise that only a mortgage broker can bring to the table when making what is often the single largest investment in one’s life.
“There will always be a role for the mortgage broker,” said Pair. “When the market returns to normalcy, I don’t think the retail banks will be able to handle the amount of volume, and the broker will play a large role in getting products to the consumer. Brokers are patient and are willing to make the investment in great personal customer service and get that referral.”
As the year advances toward the next, the seat currently held by Jim Pair will evolve as well. Jim will lead an industry in a state of flux, in a time of a great economic shift. The housing market will help shape that great shift and an NAMB mortgage broker will have a lead role on the stage of economic change.
“I want everyone to know that they cannot do it individually,” said Pair. “We have to do it collectively as a group and everyone has to be involved in the fight. To remain brokers today, we have to be true and dedicated professionals to survive what we’ve already experienced as we move onward into the future.”