A new year lies ahead as we close the book on 2012. We in the industry have weathered unimaginable change over the past four years. As a result, we have emerged smaller, but stronger. The year 2013 promises more change, and as before, the strong and wise shall thrive. Our firm believes that three trends will play out in the mortgage industry in 2013.
These trends are:
1. HARP 3.0 will come to fruition, allowing millions more homeowners to benefit from refinancing and allowing the refinance-domination of the industry to continue for another year.
2. Preferred vendor relationships will become the norm in the industry as lenders seek to maintain quality standards throughout the lending process.
3. The wholesale channel will continue to reclaim market share lost in the aftermath of the mortgage meltdown and housing crash as quality origination will combine with maximized consumer choice and professional flexibility.
Let’s take a look at this third trend in the next few paragraphs—the continued resurgence of the wholesale channel—and examine why this is simply a part of crafting the New Mortgage Industry (NMI).
The NMI is simply the combined structural, operational and regulatory changes that are being put in place in the aftermath of the mortgage system collapse and housing bubble. One of the emerging themes of the NMI is the potential risk for lenders for all activities from first customer contact through their final mortgage payment. While this may be a dose of hyperbole, in reality, the unknowns regarding the final composition of the NMI make it imperative for lenders to have visibility and confidence in all aspects of the mortgage process or risk substantial regulatory and financial consequences.
This potential risk requires that lenders follow three hard and fast rules:
1. Know, approve and review all partner procedures
2. Maintain vigilant QC procedures
3. Maintain a zero-tolerance policy for violators of established guidelines or procedures
While on one hand, we are all working to build the dreams of our customers, on the other hand, we are manufacturing a financial product for the markets. The NMI requires that mortgage products be 100 percent defect free. Wholesale lending—lending through mortgage brokers—can deliver on that requirement. Why? Wholesale lenders, including 360 Mortgage Group, have every incentive to be extremely careful in broker approval, generous in broker resource development, training and oversight, and unrelenting in standards adherence. Since this is our sole business, we have no other choice but to give investors what they are demanding. Brokers likewise depend on effective and efficient wholesalers to provide the products and service their customers demand. This produces a self-supporting cycle of quality throughout the wholesale lending channel.
The working relationship between regional wholesale mortgage bankers and brokers is aided by proximity as well as intensity. There are numerous communication channels, but the key to the success of the relationship is the wholesale account executive. Not only is the wholesale account executive in close physical proximity to the brokers with whom they work with, but they play the important roles as teacher, intermediary and advocate. The wholesale account executive is the key differentiator that makes the wholesale channel the most reliable source of quality loans in the NMI.
The year 2013 will continue to see significant and industry-altering changes. Yet the role of the broker, the account executive and the wholesale mortgage banker will continue to ascend as it is further proven that this team produces the highest quality loans.
Al Crisanty is vice president of national wholesale production for 360 Mortgage Group and is responsible for overseeing regional sales managers as the company seeks to expand operations to all 50 states. Formerly the national wholesale director for Caliber Funding, Al was responsible for the development and expansion of Caliber’s wholesale production channel. Additionally, Al served as executive vice president of national production for American Home Mortgage, successfully transitioning the 500-member production team from Capital Commerce Mortgage Company. Al may be reached by phone at (916) 761-1624 or e-mail
[email protected].
