After spending 19 years as a mortgage lender, it’s been a fascinating experience for me to spend this last year interacting with our members and other mortgage lenders all across America on a daily basis. From our perspective, here’s what we find mortgage lenders talking about most these days.
The Race to Scale - Never before has there been more of a fervor to grow in this business, for all the reasons you see below.
Consolidation - Very hard to find anyone in this business not expecting record levels of consolidation and M&A these next 2-3 years. Many companies are looking to acquire or be acquired.
Operating Efficiency - Aggressive regulatory reform has led to increased operating costs, which results in higher rates and fees to borrowers and higher costs to originate for lenders.
Emerging Technology - Whether its “Rocket Mortgage-esque” consumer-direct online application products, e-closings, or other tech products - lenders are trying to make sense of what technology will be needed for their firms to continue to thrive.
Honorable Mention - TRID adjustments & the grey areas of regulation, Non QM, the vendor management process, opportunities with new/emerging demographics.
HUD allows loan officers to have other employment including self-employment.
HUD Handbook 4000.1 eff 9/14/15: I A. 3 (iv) Dual Employment: “The Mortgagee must require its employees to be its employees exclusively, unless the Mortgagee has determined that the employee’s other outside employment, including any self-employment, does not create a prohibited conflict of interest” The CFPB, state regulators and the Company are concerned about potential “reputation and brand risk”. Regulations potentially violated include: RESPA; TILA ; Loan Officer Compensation rules as well as others.
Some thoughts for Company policies: Outside employment/self-employment can benefit both the Company as well as the loan officer but can lead to serious compliance problems. The Company should institute a written policy for additional employment/self-employment which should include:
Michael J. Wallace, Esq.
There are doctors, lawyers and accountants; M.D.; Esq., and CPA. These are clear, concise and denote an attained level of education and experience as well as a fiduciary relationship to the public and society itself.
What about the title of the employee who originates residential mortgage loans?
Here are some titles we have found: Loan Officer, Loan Advisor, Senior Loan Advisor, Mortgage Banker, Branch Partner; Mortgage Expert Loan Consultant, Loan Planner, Financial Planner, Mortgage Consultant, Mortgage Advisor, Mortgage Planner, Branch Manager, Area Manager, Vice President, Production Assistant, Professional Mortgage Consultant, Loan Specialist,
You can also add: Senior; Registered; Licensed; and/or Certified to these titles.
We have also found: Business Development Guru, Mortgage Geek, Mortgage Samurai, Mortgage Guru, Certified Divorce Lending Professional; Director of First Impressions, Native American Lending Specialist, The Loan Arranger; Financial Mentor as well as Queen and King of Mortgages.
Sometimes there are letters or certifications added after the title: CMP or Five Star Professional.
All of these folks have identical credentials and perform the same function…they are licensed (registered) to originate residential mortgage loans.
The CFPB Examination Procedures, January 2014, Module 2 – Advertising and Marketing directs the Regulator to:
“8. Determine whether advertisements and promotional materials for mortgage loan products contain misleading representations that a lender or broker is acting in a fiduciary capacity or in the consumer’s best interest, if in fact, the lender or broker has no fiduciary duty.”
Titles do matter and can create the perception of fiduciary relationship where it does not exist or constitute a UDAAP violation subjecting the Company to reputation and regulatory risk.
To make sure your firm and your loan originators are compliant on email, in their sig lines, out on the web, and in social media ... contact our friends at AcuClix Social Media Compliance. The contact info for their TMC dedicated resource, Mike Wallace, can be found below.
Michael J. Wallace, Esq.
Our partners at Fannie Mae are committed to providing innovative technology solutions that make it easier for our lenders to do business, while driving greater certainty for the entire industry. Their technology suite includes applications that simplify the loan manufacturing process, facilitate quality control, and provide certainty in appraisal review.
Fannie Mae believes lenders can originate higher-quality loans when they have the right tools to develop a comprehensive, holistic view of the risks associated with each loan. For years lenders have leveraged Desktop Underwriter®/Desktop Originator® to underwrite quality loans with greater certainty. In 2015, they added Collateral Underwriter® to their technology suite to provide the industry with an automated way to assess appraisal quality.
You may already be aware that you do not need to be an approved Fannie Mae seller/servicer to take advantage of these technology solutions. But did you know these applications and tools are widely available at no cost to lenders?
That’s right, even if you are not delivering loans directly to Fannie Mae, you can benefit from these innovative risk management solutions free of charge.
Visit the Fannie Mae Technology Solutions page to learn more about these and other applications and tools. Fannie Mae’s Industry Partner Solutions team stands ready to assist you.
TMC - Chief Operating Officer