Imagine a world where wholesalers required anyone selling them loans, to be a member of a professional organization in order to have access to their products, and encouraged and supported mortgage loan originator (MLO) education. Ever notice how many nationally-recognized designations are available for Realtors? “If the biggest problem lenders What would wholesalers gain? A betface today is repurchases, maybe ter educated and more accountable broit’s time to consider prevention ker base. Imagine a world where an eduinstead of punishment.” cational advisory committee was comprised of wholesalers who were continually providing input on current issues and what education was needed with one constant goal: Quality originations. If the biggest problem lenders face today is repurchases, maybe it’s time to consider prevention instead of punishment. The quality of loans is still not where it needs to be. Originators submit poorly structured loans, loans that are non-compliant, or worse, loans that are fraudulent. The solution is easy … the implementation is challenging at best, but not insurmountable. According to FraudBlogger.com,2 fraud is up 55 percent from the first quarter of 2010 to the second quarter of 2010 … an interesting fact if true, now that banks are originating the lion’s share of the business. “The government’s push to bring mortgage fraudsters to justice is certainly welcome, but the cases brought to date represent only the tip of the iceberg in terms of how much fraud was actually committed during the real estate boom,” said Ann Fulmer, vice president business relations at Interthinx. “It’s sobering to know that only a small minority of cases are ever prosecuted, and it ought to serve as a reminder that the industry must protect itself by focusing on prevention.” Prevention starts with awareness. Codes of ethics, professional mindsets, education and ongoing learning, is what it takes to originate quality loans. I may be going out on a limb here, but maybe individuals who want to fly under the radar, not participate in industry efforts and only take the bare minimum to get by may be the ones that wholesalers have the trouble with. Can investing time and money to belong to an association be indicative of a propensity toward compliance and ethical behavior? Joining state and national associations in and of itself is only a start and does not guarantee the existence of ethical behavior. However, it’s a good place to start. To encourage participation, wholesalers could strongly suggest that they want brokers who demonstrate professionalism. The more brokers, the more the associations can protect the broker channel. While we have taken the brunt of it all over the last year or two, as long as we are still here, we should try new strategies and make a concerted effort to change our thinking to match what is happening in our industry. For mortgage brokers who are viewed as scapegoats, wouldn’t it have been great if everyone had been a member of the National Association of Mortgage Brokers (NAMB)? Wouldn’t it have been great if we were all members of a strong trade association that could have had more resources to protect the brokers and originators who are now fighting the fight of their lives? Would it have been a wise thing to support an association like NAMB that had hundreds of members fighting for the benefit of non-members? Oh, and the cost … simply one processing fee every year! We are under attack because originators making hundreds of thousands of dollars per year, wouldn’t part with just $350. Who do we have to blame, really?
Footnotes 1-National Association of Realtors, Aug. 31, 2010, Monthly Membership Report. 2-Web site: www.fraudblogger.com/PressRelease082310.asp.
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Deb Killian, CRMS of Charter Oak Lending Group, LLC is a member of the National Association of Mortgage Brokers board of directors. She may be reached by phone at (203) 778-9999, ext. 103 or e-mail debkillian@snet.net.
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