Vendor Sees Need for Vendor Friendly Approach to Services
The government and the mortgage banking industry may need to revisit how they dealing with third-party service providers. New government regulations focus on banks, not the mortgage servicing community as a whole, says Denis Brosnan, CEO of Atlanta-based Prommis Solutions, and that approach is particularly obvious at the annual Mortgage Bankers Association gatherings.
Even though the MBA is a trade organization and many of its members are the so-called financial service vendors, he argues, “there is very little, or scan attention being paid to that community of interests,” since MBA’s concerns mostly relate to the banks themselves.
Vendors are present in the marketplace and sponsoring most of the events, Brosnan says, vendor-friendly mortgage banking industry events can help improve communication and mortgage market efficiencies.
In his view, a conference where the MBA pays more attention to what vendors could bring to the table would benefit everyone. Despite their specialties, bankers, lenders, servicers, lawyers, technology vendors, nonprofits, the trade media, all are important parts of the financial services industry.
It is a services business, he says. "We do a terrible job as an industry at recognizing that we are in a servicing business, that we are in a community.” It is time for everyone to look at their business practices and recognize who their customers are and what is the most effective way to serve them.
During his many years in the business he has seen default managers give their business to the lawyers who take them to the best golf course, without screening the quality of their services, even if "the efficiency of their technology is not as good as that of another business.” Likewise: Is it right for these providers to complain about how regulatory compliance is cutting their margins?
It is a free market and “there’ll always be winners and losers,” he agrees. “But we better have some behavioral norms and expectations in mortgage banking where people need to compete on the basis of quality…and responsibility towards borrowers.”
Brosnan is looking forward to this year’s MBA conference in Chicago and speakers’ insights on mortgage market changes beyond the cyclical switch of focus from originations to servicing and loss mitigation in the past couple of years and regulatory and compliance pressures.
He will keep an eye on the sessions about the regulatory environment and all the related “technical, process operations issues that need to be discussed,” along with “some of the more strategic” issues such as the future of mortgage servicing and housing development.
Conversations about change between the industry, lawmakers and economists are open still, “but I don’t think we have seen a lot of evolution in the industry,” he says. “A lot of the things that we continue to do today are set up from a business model that is antiquated and needs to evolve.”
At conferences one sees “the same old crowd,” saying more of the same as the industry tries to guard and evolve to the next level of mortgage quality of service.
One example is the discussion about mortgage servicing standards. It is out of context, he says, because in reality “a lot of” what mortgage servicers offer are tasks executed by third-party service providers who carry on the cost and quality of service burdens in today’s mortgage servicing marketplace. Often the talk about reaching out to borrowers “is self-promotional and disingenuous.”
His biggest concern? The debate over the future health of mortgage lending and servicing will remain out of context unless the expanded financial services community is included in it and the role of each of its parts is taken into consideration.