This Week in Broker Magazine

This week's featured story from Broker magazine, our sister publication:

Not Auto-matic

By Brad Finkelstein

Many a scandal in the mortgage sales business has included the following phrase: the company recruited its sales force from the automobile industry.

Furthermore, detractors have compared mortgage sales professionals unfavorably with used car sales people.

So I found it highly ironic when I saw a press release with the following headline come across my desk at the start of August: "'The Next Up' Empowers Car Dealerships With Leverage to Hire Successful Sales Professionals From Declining Mortgage Industry."

But it is the second sentence of the release that really drives the point home about what makes a truly successful mortgage sales person. "With U.S. home sales at a 10-year low, many mortgage industry professionals are looking to switch careers. Many of these professionals are seeking positions in fields that, like the mortgage industry, place a high priority on customer service."

The release goes on to say that car sales lets mortgage originators "shift careers without totally shifting gears."

The company that issued the release, Next Solutions, Anaheim, Calif., then goes on to explain how its software creates an environment that lends dignity to the auto sales business.

But its quote from an anonymous sales person is one that I think of as also being highly ironic, especially given the vast number of sales people that have passed through the mortgage business in the last few years. "I now think of selling cars as a profession I can manage and grow with, not just a job until I find another," said a veteran sales representative.

The unfortunate byproduct of the explosive growth of the mortgage business was the hiring of too many people who were in it only for the quick buck. These people treated the mortgage business not as a profession, but just as a job they could make a lot of money at until they found another. Now those people have affected the mortgage profession in another way. Because of their lack of professionalism, tighter rules about who can be a mortgage sales person are being passed on the state and federal level.

This is not such a bad thing. Forcing people to have more than a basic knowledge of the business they are in and the products they are selling to people can only enhance the image of the mortgage broker.

The National Association of Mortgage Brokers' Lending Integrity Seal of Approval is a voluntary effort, but it applies only to the organization's members.

Meanwhile, included in the recently signed update to New York State's mortgage laws is a "duty of care" feature which requires brokers to act in the borrower's interest by presenting loans most appropriate for the borrower.

More troubling is news from Florida. The Miami Herald ran a series of articles regarding people who had criminal records yet were allowed to originate loans. All of this happened on the regulator's watch, but the mortgage industry is the one to suffer.