Broker extinction! That was the caption of a classified ad that appeared in an industry publication on the first of the year. Is it true? Not on your life. Business may be off for brokers, but we are far from a postscript in an industry that led America to its highest rate of homeownership ever. Don't believe what you hear or read because there are those who have pronounced the demise of our industry almost from its very beginning, and time and time again, they have been proven wrong.
Clearly, this will be a watershed year for Mortgage Brokers, and frankly, there are many people who got into this business for the wrong reasons, and they will disappear—and I say to them, "Good riddance."
The marketplace is going through a period of readjustment, and Wall Street is paying for its infatuation with yields that were unsustainable with billion dollar write-downs of assets. Real estate agents have seen their markets disappear in the face of falling values and the demise of innovative mortgage products. And Mortgage Brokers wait on the sidelines, unable to help customers refinance because of low appraisal values and new state laws that deny credit to deserving borrowers.
It seems that every time you see a report or read a newspaper, the media is trying to lay the problem at the feet of the Mortgage Broker industry. The National Association of Mortgage Brokers leadership has made itself available for broadcast and print interviews and have given countless hours of their time in an effort to set the record straight, but it is difficult to get your point across when the story is already written and the reporter is just looking for a sound bite to give the appearance of fair coverage. NAMB President George Hanzimanolis, CRMS, President-Elect Marc Savitt, CRMS and Vice President Jim Pair, CMC have been on the forefront in getting the message out, and the association has made inroads. We should give thanks and acknowledge many of you who have been active in your local states, both with the media and legislators. The Government Affairs team is helping Congress to understand that, to the extent that loans are part of the problem, it is an all-originator problem, not just brokers.
Like it or not, Mortgage Brokers are the face of this industry. When you originate 70 percent of all mortgage loans, you become a pretty big target. However, the media is not interested in those who sit down with a customer to help them to find a solution to their borrowing needs. They never cover the ones who wake up with one goal in mind—to make a difference in the life of their borrowers. It is the broker outside of our organization that captures the spotlight with their incompetence and sometimes outright fraud. If you are not a member of NAMB, you are not part of the solution.
However, the professional brokers, NAMB members, are in the enviable position of controlling their own destiny. Why?—because you do things right. You provide the customer with choices so they are able to make decisions that best suit their needs and goals. You are a professional whose knowledge and understanding of products provides an invaluable service to borrowers who are looking for someone ethical to trust with the most important financial decision of their life.
While, clearly, we have no real control over the macro issues like value and demand, the professional Mortgage Broker community must focus on those things that they do control. Things like practical activity—getting in front of potential buyers, borrowers and referral sources. While you may have some time available, what are doing to raise your level of personal development? Just because your state requires only eight hours of education, it does not mean that you can't get more. Is this the time to work on your General Mortgage Associate (GMA), Certified Residential Mortgage Specialist (CRMS) and Certified Mortgage Consultant (CMC) designation?
Over the years, the professional broker community has earned the trust and confidence of the borrowing public. This loyalty did not come about because you over-price or over-sell, but because you worked hard to build a relationship based on mutual respect and understanding. The relationship between the originator and borrower is what must be preserved. On average, most broker offices are small, which creates nimbleness and adaptability that promotes continuity and endurance.
You are not going to go away! There is real value in your office and the service you provide. That's the reason you get paid! It is your ability to deliver a quality product at a fair price that sets you apart. Whether they know it or not, the regulators, legislators and consumer advocates have a vested interest in our success. As time passes, they will come to realize that if 70 percent of the origination channel disappears, who will fill that niche? Word will quickly reach the ear of the representative of a rural district whose constituent, a single mom, just got thrown out of the bank's office because she did not have perfect credit or 20 percent downpayment.
Is it reasonable to expect that "Big Bank USA" is going to commit the resources to establish a sticks and bricks mortgage production office where professional brokers once thrived? No! As an example, imagine that Congress decided to close down all the independent gas stations around the country because they were buying fuel at wholesale prices from big oil companies, then adding a profit and selling it to "unsuspecting" motorists around the country. I wouldn't be surprised to see a bill that called for these stations to sell gasoline at par, or cost, with the driver paying an up-front fee for the privilege of filling up. Let's say 70 percent of the independents closed down. Then we would be left with only the big oil company stations selling fuel. What would happen to fuel prices and service?
NAMB brokers fill a vital and essential role in the mortgage process; don't let anyone convince you otherwise. The association is committed to the survival of its members, and I would like to encourage you to continue to do those things that have brought you success in the past and also to become active in NAMB. Attend the conferences and take home cutting-edge ideas and opportunities that you can use everyday. Meet your sponsors and learn about what products and services they are providing to make you more helpful, efficient and profitable. Most of all, remember you are a professional and you stand head and shoulders above the competition, regardless of its source.