Opportunities
44
There is tremendous “Opportunity� to affect change in the mortgage banking industry. Successful mortgage bankers will strive to increase the efficiency of the way they do business with back to basic principles. Current housing market conditions support a conservative and balanced system of revenue sharing with loss participation in transactional agreements. Establishing a strong foundation of transparency and accountability from loan origination application process to closing and then to the sale of the asset makes sense for long-term sustainability. A transformation project plan for successful mortgage bankers can capitalize on opportunities by aligning the business needs and requirements with the technology and the trifecta: To incorporate a robust risk and fraud mitigation program. Successful mortgage bankers will adapt to the President’s jobs plan, debt ceiling extension issue and proposed Dodd-Frank
transformation and modernization initiatives. The success of a mortgage banking business forward plan can be threatened by the sustainability of fiscal backing. The structure of organizational charts that exist in financial institutions is unpredictable. Volatility in the marketplace, loss of subject matter expertise through natural attrition, reorganizations, changes to senior management and to the business plan can impact the success the mortgage banker. If the leadership of a given organization is inconsistent, so is the message which will impair embedding change in the culture. Will legacy credit losses ever sunset? The lack of clarity around liability and the cost of time-consuming litigation spent determining such liability will continue to stress the industry. If the determination of who should bears the credit loss lacks clarity, the perpetuation of legacy loss is an Threats The final step is to identify the “Threats� to ongoing threat. Dodd-Frank calls for establishing threshsuccess. Process snags, human capital and budget will impact the success of business olds of credit risk retention (skin in the legislative requirements by clearly establishing the roles, responsibilities and liabilities of the originators, sellers and servicers. The opportunity to evolve industry best practices in this arena exist, it is the fiduciary responsibility of mortgage bankers to take part in solutions going forward. Modernization through technology bears mentioning one more time. The successful mortgage banker should align the appropriate subject matter expertise to address the notoriously paper-laden industry. This can promote an improved best practices approach for the reduction of manual and duplicative processes and for the quality of data available for analysis. These goals should incorporate business intelligence tools to promote robust reporting capabilities.
game) and for the modification of underwriting standards that will disqualify certain mortgages from risk retention exemptions The proposed levels of five percent will ultimately be passed on to the consumer. In conclusion, the SWOT analysis can be a powerful brainstorming exercise to foster change in the mortgage banking industry. The identification of the “Strengths� and “Opportunities� can become the foundation for the next step: Establishing a business plan, obtaining stakeholder buy-in, procuring funding, and engaging subject matter expertise to deploy results. Debra Gaveglio is a senior consultant at Actualize Consulting, has managed a variety of derivative and structured fixed-income debt products during her 25 years of experience in the mortgage industry. She may be reached by phone at (267) 760-1396 or email dgaveglio@actualizeconsulting.com.
OCTOBER 2011
KANSAS MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
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