Can the Mortgage Industry Provide Good Customer Service?

I was at the NAMB conference for Mortgage Professionals this past weekend in Las Vegas and in between sessions, I stopped in for a quick bite at The Burger Bar at Mandalay Place (great sweet potato fries!). I sat at the bar and had an interesting conversation with the gentleman who sat to my right. We quickly identified that we were both in town for professional conferences. He lives in Maryland and is a consultant for government affairs. Part of his duties include auditing banks, and as such he is limited to where he can choose to make mortgage loan application as there can be no appearance of influence.

He began sharing with me his current saga in dealing with one of the big three.  I of course, was fascinated to hear about the challenges he is facing.  He selected this particular lender because he is cost driven.  He had initially approached his former mortgage banker with whom his prior transactions had gone smoothly – including construction financing – but decided not to proceed with him on this new loan because he was able to “secure” financing at a .125% reduction with one of the big three. He quickly told me how his credit score is over 780, its a jumbo loan, both he and his wife are employed and how he expected the process to go smoothly.

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10 Key Attributes of Trustworthy Loan Officers

At some point in our lives, each of us must make application for a home loan. This once cumbersome process has become further complicated by new laws that are affecting every facet of mortgage banking. With the January 2014 rollout of the Qualified Mortgage rule, some lender’s restrict their borrower’s to a maximum debt-to-income (DTI) ratio of 43%, while other lenders allow their borrowers to have a much higher capacity for debt based on characteristics of the loan file.  Because of this and many other changes in the way mortgage loans are processed and approved, we can now officially say goodbye to the days where lender selection was based mostly on who had the lowest interest rate and costs. In today’s complex environment, an informed borrower will ask more detailed questions based on the lender’s particular eligibility standards and their ability to close the transaction within the time period as specified on the property sales contract.

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Great Things Happen When the CFPB, the OFR and Loan Officer’s Unite.

cfpb, ofr

I just wrapped up a few days of learning and connecting at the Florida Association of Mortgage Professionals Expo in Orlando and I have to say…what a GREAT experience this was. It’s invigorating to see mortgage professionals gathering together, at their own expense, for continuous education on the many changes impacting our industry.

Here are a few of my takeaways…

Loan Officers are Trusted Financial Advisors.
In my home state of Florida, the Bureau of Enforcement within the Office of Financial Regulation who conduct examinations on licensees, continue to do a great job in quickly identifying the bad apples and bringing them to justice while at the same time, reporting on the successes of the majority of industry professionals who hold themselves to a high standard of integrity. In today’s highly regulated environment, nationally registered and state licensed mortgage loan originators are mostly competent, educated, and informed professionals who are empowered with the right tools and governance to deliver quality loan files for quick decisioning. If you still have your doubts, check out this article about how easily our skill set transfers to another highly regarded profession: The Skills Mortgage Brokers and Loan Officers Can Transfer Into a Career as a CPA

Loan Officers carry the responsibility of knowing the regulations that guide us.
At lunch, I was chatting with an industry colleague who had a concern over an unusual request she had just received from her employer’s Compliance dept. They’d sent mandatory instructions to change the email address registered on the National Mortgage Licensing System & Registry (NMLS) to match her business email address, as provided by her employer. While this didn’t make sense to either one of us, because the NMLS is the central control point over all licensing issues – irrelevant of where loan officers work – I encouraged her to communicate directly with the NMLS for clarity. One quick phone call and she was directed to the landing page of Account Management where she found the below posted under Update Profile:

The Email Address listed in this section will be the email address that you will receive all NMLS system generated notifications regarding your license. The email address should be a personal and accessible email address.

Knowledge of the law is on us, not on Compliance. Which leads me to….

The CFPB is our friend.
I must admit that since its inception, it seemed to me and many other mortgage professionals, that the Consumer Financial Protection Bureau (CFPB) was against our industry, and that’s simply not the case. While their main goal is to protect the consumer, they rely on us individuals to let them know when something doesn’t seem right. Yes, it remains frustrating to mortgage professionals who contact the bureau seeking a better understanding of the new laws, that we are responded to with these instructions:

You can contact our Office of Regulations to receive informal guidance from a staff attorney about the Bureau’s regulations at (202) 435-7700. Any such informal guidance would not constitute an official interpretation or legal advice.

Because I was able to engage with humans at the Expo, I learned that as it stands, the CFPB is not funded to directly educate mortgage professionals about the many laws it governs and its staff attorney’s represent the CFPB – not the consumer and not mortgage professionals.   The bureau relies on privately funded organizations such as the Mortgage Bankers Association (MBA) and their subchapters, the National Association of Mortgage Bankers (NAMB),  state associations and private attorney’s, to interpret the law, provide opinions and educate the industry based on those opinions.

In the CFPB’s efforts to improve clarity of the many regulations that are impacting our industry, they have increased their efforts on community outreach and have updated their website with materials intended to provide guidance to the industry.

Additionally, we are now given the opportunity to sign-up to receive Mortgage Rule Updates by registering on the mortgage specific CFPB newsletter.

(Note to CFPB…It would be nice to see the landing page highlight anything other than Submit a Complaint. Why not initially direct your audience to the positive changes within the industries you regulate and the many successes the bureau has accomplished? Just a thought.)

Ignorance is not Bliss.
Mortgage professionals who are not active in the associations that represent our profession are providing a real disservice to themselves, to our profession and to the clients we serve. If there’s something you don’t like, tell someone who can actually do something about it. You aren’t connected to anyone who can do something about it? Seek these people out by attending conferences. Invest in your education. There are too many changes happening at the same time to be complacent about learning the facts.

The NAMB National Convention is coming up next week. Have you registered? I’ll be there.

The MBA’s Annual Convention & Expo is being held October 19-22nd. Have you registered? I’ll be there.

Can’t go to both? Choose one. It doesn’t matter whether you work for a wholesaler, a correspondent, or a lender – seek education and make the connections with those empowered to affect change. Can’t go to any this year? Search and find your local chapters, become active members and attend the monthly activities. If you live in South Florida, join me at Hotel Intercontinental in Doral (our new meeting venue) for the Mortgage Bankers Association of South Florida monthly luncheon on September 11th where Florida State Congressman Ritch Workman will be presenting on mortgage industry regulation. Come prepared with a question for him.

Get involved, do something.

Know Your Market
I had the pleasure of meeting mortgage industry news commentator Rob Chrisman, who provides the community with his candid remarks about the goings on of Mortgage through emails touching us on average 5-6 times per week. The marketplace is definitely building momentum with the launch of non-QM products. Learn what your competitors are offering.

Acknowledge and Appreciate
Many thanks to those who lent me an ear during the event and who candidly, and thoughtfully, answered my many questions to the best of their abilities. These include but most certainly are not limited to: John Councilman – NAMB President, Don Frommeyer – NAMB CEO, Valerie Saunders -Board Member NAMB and FAMP Past President, David Schroeder – Director, Marketing and Training, QuickenLoans, Ginger Bell – Education and Compliance Specialist, Go2Comply and the team from the Florida Office of Financial Regulation led by Director Greg Oaks, Bureau Chief’s Andy Grosmaire and Jason Booth and Financial Administrator Paul Rhoades.

A special thank you to Jim Dunkerley, President and CEO of Fir$t Funding for bringing us the CFPB and fostering a discussion on the ABC’s of mini-correspondents, to Robert Villalon, President MBA-SFL for lending me a chair at his Mortgage Information Services booth in between the many events and to Brian Webster, Originations Program Manager of the Consumer Financial Protection Bureau for allowing me to express my concerns over the lack of specific guidance regarding documentation and usability of foreign earned income for non-permanent residents of the US and its effects on the industry’s lending abilities to the consumer.

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