What They Do
Preface
These writings are representative of the negative characteristics, and poor ethics of (a number of) mortgage companies, and (a number of) those originating or brokering mortgage loans. I personally don’t like to read one-sided banter, and do not intend to write it. There are true professionals out there in the mortgage industry. There are some brilliant leaders and managers currently in the field. And there are also some well-rounded loan officers, who operate with integrity, that cut their teeth in this business within the last five years. Unfortunately they are hard to find, and constantly having to battle uphill to compete against swindlers and swine.
Introduction
This is the first article in a series that will cover many of the tactics that unscrupulous mortgage companies are instilling in their salespeople. These scams are everywhere, from small brokerages with a staff of three, to some of the biggest players in the industry. To introduce the following modules detailing the manipulative methods that plague this business, I would first like to articulate what I feel set much of this awful mess into motion.
The Roots of Hyper-Competition
The mortgage marketplace of today has brought new meaning to the term “hype-competitive”. There are entirely too many people employed in this industry in relation to the available volume of business. Many who are loan officers/mortgage brokers/loan consultants (LO’s from here on) began their tenure during the “boom” (everyone has a different take on the time period, but I would say roughly 2003-2005). There was so much business during this time, that most folks working in the business, didn’t take time (or weren’t required) to learn the business. Sure, they learned how to cold call, how to (kinda) complete a 1003 (Uniform Residential Loan Application), and how to “pitch a deal”. In essence, they learned how to sell. There was always someone else that could handle the “other stuff” like underwriting, proper documentation requests, and proper qualification measures. If you know a mortgage processor or underwriter that worked during the boom, ask them how frustrating it could be. The very laurels of what one should know to be a professional, was often pushed on to mangers, account executives, processors, and underwriters. To many, it didn’t matter if a loan didn’t make it to closing (for not meeting underwriting requirements after being improperly disclosed), because there was another willing prospect waiting in line, ripe for the picking. A majority of mortgage offices took on a “boiler-room” atmosphere, which often fostered a mindset where LO’s thought more about their own pockets before the best interests of their clients.
Where are they now?
By virtue of natural selection, a number of them have exited the business. The majority of those who were top producers within their organization were promoted to management positions. This would later become a large contributor the lack of professionalism in today’s market. Many who moved into management positions, did not posses the necessary skill-sets to lead (or manage). By promoting on the merits of LO’s individual production abilities, companies inherently set insufficient leadership in place. Others with strong production levels who earned a fantastic living at the time, made the decision to open their own mortgage businesses, once again resulting in faulty leadership.
The problem was compounded for those with their own companies. Not only did many of them lack the ability to lead/manage their employees, but they also had a lackluster understanding of being business owners. Today, these operations are dropping like flies. Those that have yet to go under are teetering on the brink of closing, and absolutely reek of desperation. Much of the recent mortgage fraud perpetrated has taken place in these collapsing organizations.
Boomer-Babies”
There has been an unquantifiable level of abrupt change since the last wave of the boom receded. Much of the management and ownership of today’s mortgage companies is comprised of these folks who were the best-of-the-best (salespeople) that started their careers during the boom. Those that only knew the boom (and did not make learning and development their mantra) are ill-equipped to conduct business in the radically altered landscape of today. They are even less capable of leading those who are still entering (or have recently entered) the business. The culture of a great number of companies is being determined by those who are less than qualified. The picture now becomes a bit clearer when we look at the heightened instances of mortgage fraud, a hyper-competitive climate, and utter lack of professionalism that stains the mortgage lending industry today.
More to come…
The next article and first module in this series will cover misleading loan disclosure and cost-related bait-and-switch tactics.
Stay tuned…
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