Drawing Inspiration from Industry Conferences

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The U.S. mortgage lending industry will descend upon Las Vegas next week for what promises to be a very big show featuring some very big stars.

Yes, I'm on the agenda, but I'm not actually talking about myself this time (at least not until paragraph 5) I'm talking about some inspiring speakers and songwriters that together might make this one of the most star-studded Mortgage Bankers Association annual conventions we've seen in many years.

After a long night of gambling, the event will begin with mortgage bankers leaping out of bed early to hear award-winning actor Kevin Spacey give a keynote address.

I suspect he will draw some parallels between our industry's political challenges and those faced by the characters in his Netflix television political thriller "House of Cards."

Spacey tends to play characters that know how to get the job done, regardless of what it is. Whether he's playing a political powerhouse in Washington or the dreaded Keyser Soze, his characters are difficult to oppose.

I'm looking forward to hearing what he will tell us about dealing with the tough political and regulatory climate we find ourselves in today.

On Tuesday morning, the great author Michael Lewis will take the stage. He's famous for "Liar's Poker" and "The Big Short," two books that had much to say about our industry.

Our industry has provided a lot of good fodder to writers over the past decade or so, so it's nice to see one of them willing to say some things to our faces.

But all of this leads up to the big Wednesday a.m. session, featuring Garth Graham (me!) who is going to try to wake up the bleary-eyed crowd while moderating a session about how important mortgage satisfaction will be to our industry and how to deal with the CFPB complaint database.

As you know, the CFPB's public database has made it very easy for any consumer to anonymously complain about our industry — in very explicit terms.

Any company that has not prepared a viable response to this will find themselves at the mercy of the mob. This is one reason I know my session will be well attended, despite the common wisdom that tells us that speaking on the last day of a conference is about as popular as sunlight in a casino.

Some might say it will be even more difficult for me, given that Concert MBA on Tuesday night features the big-time rockers Hall and Oates.

Now, anyone who grew up in the '80s knows this duo dominated the airwaves with major rock hits — well, actually some of them were sort of soul songs, or pretty pop hits, and maybe rock 'n' roll is not what you think of when you hear one of their chart topping ditties.

But they are now members of the Rock and Roll Hall of Fame, so that makes them rock royalty. A worthy show, and also worthy of this column's effort to try and weave as many Hall and Oates song titles into references to our industry.

I think the speakers at this event will clearly relate to our industry, but I doubt that Darryl Hall will introduce his greatest hits with comments about compliance, production margins or market share.

So, let me do that for him as I relate several topics that I am interested in learning more about at this year's MBA conference to songs made famous by Hall and Oates.

First, I would like to learn how lenders are dealing with the demographic challenges of the industry, specifically the challenge of getting first time home buyers to come back into the market.

It's as if we are "Out of Touch" with what this group wants, and the question for industry participants is whether some lenders will be "Out Of Time" before we figure out how to bring them back into the market.

I am also interested in whether the promise of the electronically delivered mortgage is in our near future.

The cost of originating a loan continues to climb (above $5,000 per loan in figures I recently reviewed) and at some point the industry will need to create a process that eliminates many of these costs, and drives down the average processing time.

I think the new homebuyers, and the profitable mortgage companies both want to say that they "Did It in a Minute" when talking about the mortgage process.

Of course, we also have the issue of compliance and regulation, which certainly is driving the cost of origination higher.

Some industry participants happily sang "She's Gone" when Elizabeth Warren left the CFPB, but the fast pace of new regulation has continued. It's as if the regulators are saying "I Can't Go for That, No Can Do" as the industry tries to swing the pendulum of regulation back closer to pre-crisis levels.

I am sure that MBA President David Stevens will have something to say about that, although I doubt he will do it with a song.

I especially want to talk to those lenders who have successfully weathered the storm and have maintained margins this year.

These are the folks for whom the "KISS Is on the List" of their most important items for success. I am not referring to the kiss made famous in the pop song, but rather by the smart executive who is Keeping It Simple when driving for success, by recruiting and retaining the best employees and supporting them to be successful.

At Stratmor, we've observed LO attrition rates of over 50%, and at some point it's not simple at all if we keep replacing half of our staff every year.

Ultimately, attending these shows is about learning more, about receiving some "Adult Education" in our pursuit of being well rounded professionals.

Just be careful of the "Maneaters" that are ever present at the gambling tables. After all, those "Private Eyes Are Watching You, Watching Your Every Move." And try to get up in the a.m. for the morning session, at least for mine.

Meanwhile, I'll be looking forward to some "One On One" time with old friends in the industry. See you there.

Garth Graham is a partner with Stratmor Group and has over 25 years of mortgage experience.

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