Loan Think

I watched the State of the Union speech Tuesday and came away thinking no real "mortgage" surprises tonight except for two: Obama not using the word "mortgage broker" once, and the formation of the DOJ fraud task force on securitizing loans. But what about the "The State of the Mortgage Union"?

Compliance and documentation go together like education and success. And, the latter is even more determined today by finding the missing pieces in the transaction chain.

The answer to the above question is yes. But the qualifying question is: when? Indeed, there is a nascent hard money market out there run by mom and pop firms that are making loans at 8% to 12% using money given to them by wealthy investors.

Companies have increasingly become reliant on bonuses to provide a portion of compensation to employees. Unfortunately, the use (or misuse) of a "bonus" often creates problems for employers.

Fannie Mae's latest housing forecast is in, and it predicts a stagnant mortgage market for the next two years, at about $1 trillion in originations for each of 2012 and 2013. Not what industry officials want to hear, especially after five rocky years starting in 2007.

Most persons responsible for a selling function can usually quote some technique they've heard which will increase their closing ratio. More discouraging, to a coach and trainer like myself, is when a sales coach and/or trainer present these techniques.

The value at risk metric employed by every major banking institution offered the appearance of safety until taxpayer bailouts were the only option to save the financial system. Today, regulators are examining historical factors to determine what defines a "safe" mortgage in order to calculate capital adequacy and risk retention requirements.

A while back I read a story about people who have won the lottery twice and three times. Some play the same numbers. Some invested tens of thousands of dollars. One couple won twice in one day. Could you imagine? Imagine winning just once, then having your numbers called the second time, only to have them put back because the person reading the numbers decided the prize should go to someone who had never won before.

If there is one thing that has been lacking over the years for many mortgage originators, it is customer loyalty. And it is a two-way street—both sides have tended to treat the transaction as a one-off deal.

President Obama Tuesday night made a few specific references to the mortgage industry in his State of the Union speech, but never did he once use the phrase "loan broker" or try to paint these third-part salesmen as the evildoers of the housing crisis (as he has in the past.)