Like many of you in this time of unprecedented financial turmoil for our industry, I have wondered whether or not we as mortgage brokers will survive. And, if we do, what does our future hold? My answer to the first question is a resounding, “Yes!” There are many reasons that the mortgage broker will survive. First and foremost, the mortgage broker fills an important role that the consumer does not receive from any other channel of distribution. The mortgage broker develops a unique relationship with the consumer, while other channels of distribution are more interested in producing a volume of loans each month and will not (or cannot) take the time to listen and work with the consumer to achieve their dream of homeownership. The mortgage broker is willing to spend the time necessary to work closely with the consumer who may have credit issues, or perhaps suggest what steps they can take to accumulate the necessary funds to purchase a home. The mortgage broker is available to the consumer seven days a week, 24 hours a day … a service other channels of distribution do not provide.
Mortgage brokers are innovative and creative entrepreneurs. We are the ones who began pre-qualifying and pre-approving the consumer in an effort to speed up the process of shopping and purchasing a home. This saves the consumer time and allows the consumer to receive preferential treatment from the seller. A real estate agent or builder is now able to spend more quality time with a consumer knowing what price range in which they are qualified to buy. This is an extremely valuable service for the consumer, the real estate agent and the builder that was not being provided by other channels of distribution.
The mortgage brokers who has survived the last few years and are members of their state and national association are the true professionals in our industry. These professional brokers subscribe to a code of ethics and best business practices. Many of them have obtained their certification and promote the National Association of Mortgage Brokers Lending Integrity Seal of Approval. All of this sets us apart from other originators and gives the consumer the confidence to work with a mortgage broker.
Another question many of you are asking is, “How will we be compensated in the future?” I believe our association will be able to protect the way in which we are compensated. We will still be able to assist the consumer with their upfront costs and be fairly compensated for the services we provide. If, for some reason, we are unsuccessful in protecting the way brokers are currently compensated, there are options open to us. One option would be to become a creditor. As a creditor, brokers would be entitled to indirect compensation just as other creditors. If you choose this option, it would mean added responsibility. You may have to establish a warehouse line or find a wholesale lender who will provide with that line. This is just one option and I feel certain there will be several others.
As I mentioned earlier, mortgage brokers are innovative and creative. There is a sailor's saying that goes like this, “We cannot direct the wind, but we can adjust the sails.” That is who we are and what we do and the main reason the mortgage broker will be here in the future.
I want to wish you and your family a very merry happy holiday season and a prosperous New Year. Thank you for the support you give to your state and national association. The year 2010 will be a better year for us all.
We will weather this storm.
Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of the National Association of Mortgage Brokers.