Mortgage originators are casting a wary eye toward what is happening in terms of regulation as they await the definition of a “qualified mortgage” under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
At the same time, as attendees at the Northeast Conference of Mortgage Brokers in Atlantic City, N.J., learned, the Consumer Financial Protection Bureau has been out and about, not only with its auditors, but its attorneys as well.
The legal professionals are only supposed be accompanying examiners so that they can get a handle on the mortgage business.
The industry has obviously cast a wary eye on that as well.
Origination News managing editor Brad Finkelstein met with representatives of the state mortgage banker and mortgage broker groups in New Jersey.
In the following portion of the conversation, the discussion suddenly shifted from how to get new, younger people into the mortgage business to what the situation is and could be when it comes to reestablishment of the non-conforming market.
Finkelstein spoke with John Amrhein, the past president of the Mortgage Bankers Association; Joseph Heisler Jr., president of the New Jersey Association of Mortgage Brokers; and E. Robert Levy, executive director of the Mortgage Bankers Association of New Jersey/New Jersey Association of Mortgage Brokers and counsel to their Pennsylvania counterparts.
Also participating in another portion of the discussion was Paul Logan, president of the Pennsylvania Association of Mortgage Brokers, who commented on the departure of big depositories from the wholesale market and the influx of smaller mortgage bankers that have moved in as the larger players have moved out.
The New Jersey Association of Mortgage Brokers and the Pennsylvania Association of Mortgage Brokers co-sponsored the Northeast Conference of Mortgage Brokers along with the Maryland Association of Mortgage Brokers.
During the show, Levy announced the creation of a regional trade group through a merger of Pennsylvania Association of Mortgage Brokers, the New Jersey Association of Mortgage Brokers and the Mortgage Bankers Association of New Jersey, to be called the Mid-Atlantic Association of Mortgage Bankers and Professionals.)
FINKELSTEIN: You speak about your long-term experience in your markets and that brings up another point. This industry has gotten older. The fallout from the boom into bust has resulted in a lot of those who came into the industry in the early 2000s no longer in it. Plus the reputation problem has made it harder to recruit younger people right now. Are you seeing that in your trade groups? And some companies are trying recruiting recent college graduates. Can that work?
LOGAN: I will try to address that a little differently than how you approached it. The large megabanks who were wholesalers have abandoned the market. They had their business reasons to do so. However, there are more and more small mortgage bankers who are wholesalers entering the market today than ever before. So they would not come into the market if they felt the market wasn’t growing. And the market is growing and they are filling the void of the megabanks who have left the wholesale channel. In that sense there is growth there. I think brokers are looking for alternatives to fit their needs. The next wave might be if we can come up with a way to come back to the people who were severely damaged in the recession with their credit and get them back into the market to buy homes. That part is blue sky, but I will tell you without hesitation with every month that goes by, two more wholesalers that come into the market.
AMRHEIN: From the standpoint of an individual loan officer situation, we do it more difficult to get loan officers out of college and into the business. First of all, a college graduate is not equipped to be a loan officer. It is a significant expense on behalf of companies to recruit and train individuals to be a loan officer. Even a newly licensed loan officer, just because they passed that test, they may not have every skill they need to transact business on a daily basis. There is a phase in time. There clearly is an age gap right now in the mortgage origination business.
HEISLER: And you will see that tomorrow at the general session when you look around the room. I know I’ve seen that the last several years—70% to 80% of the originators in New Jersey are no longer here. All of what this is doing, from I what I see after five years of listening to “the broker is dead,” everybody is going to come back to the same point we’ve known all of these years, that the most efficient delivery channel in the system is the mortgage broker. Banks are going to have problems recruiting on a retail basis and if they want mortgages, they are going end up going back to the most efficient delivery channel that exists, which is the mortgage broker. The mortgage brokers have the same challenge. It’s hard to bring younger people in the industry; it is the same whether you are a mortgage broker or a mortgage banker—good quality people who believe that there is a future in this industry.