[Anthony Garritano, Editor of Mortgage Technology, recently lamented in his Tech Niches blog that there were no new ideas presented at the MBA Annual Convention. So, I wrote this comment and now would like to generate some serious discussion. We're entering the era of 'Change We Need' and I just think this idea, this approach to loan originators doing business with REALTORS, can resolve some issues - among them, how to keep the REALTORS in the selling business and out of the mortgage business; how to get REALTORS to want to do business with the loan originator; how to deliver a better homebuying experience; how to avoid the lender being blamed for bad borrower decisions.]
"Here's a new idea: Let's draw a line in the sand where the role of the real estate agent ends and the role of mortgage lender begins. Let's move the line a little so that the real estate agent, the homebuyer's fiduciary, introduces the loan programs available in the context of transaction scenarios. Let's give the agent "artificial knowledge" to do the task effectively and accurately; that is, provide a transaction scenario generator that cannot tell a lie (cannot generate a transaction scenario that does not meet lending guidelines, credit unknown) and is linked to the lender's and closing agent's quoted fees and costs, including the day's rates/points. Let's load the transaction generator tool up with all sorts of analytics and details that will help the homebuyer make a good decision. Then let's train the agent to point out to the frothing homebuyer that "all depends on being approved for the financing" and to put the homebuyer on the phone with the loan originator. And let's train the agent to do all this at the first meeting with the prospect and to not even ask about the`prospect's`credit.
"Let's don't offer to pay the real estate anything to do this. Instead, let's make the transaction generating tool a valuable selling tool that the agent will want to use because it impresses the prospect and thereby helps land the prospect as a client. Oh, and we (the lender) will be happy to provide the tool free to the agent because it's a great way to put our name and loan programs in front of propsects very early in the home buying process.
"Let's make it real real simple for the agent to use the tool, but let's make the tool very powerful, too! In fact, let's make the tool work backwards from the prospect's primary constraints: cash to close and total monthly payment. That way, the agent can very simply point out what price can be bought given the prospect's own stated constraints, compare the "buying power" of the different loan programs; and so, as homes are considered, each home can be "expressed" in terms of it's resulting cash at closing and total monthly payment!
"Now let's have the agent put the transaction up on a conveyor belt and call it the transaction platform. Let's allow the agent and borrower to watch the transaction travel over the platform all the way to the closing table. Of course we'll allow the lender's LOS to import the transaction's data elements and to edit the data as it becomes neccessary; and of course we'll let the settlement agent's closing program import the final data, too."
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