Don't Say I Didn't Warn You

People (including loan officers) have a tendency to expect things to remain more or less the same. It's understandable; you're busy going about your day-to-day business and you don't have a lot of time to be thinking about where the major trends may be leading us. Call it the Black Swan effect, or the triumph of hope over experience, but when seismic shifts happen, they tend to take most people by surprise.

In my Sept 13th webinar, I said the following about the future of the mortgage business as it affects originators:

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"I want you to think about something very seriously: how difficult, really, do you think it would be to design an online application that would allow a consumer to start a loan file and send it directly to processing and underwriting?

I can tell you that if that technology does not already exist, it certainly could exist within a year or so. Those of you who work for small banks and correspondent lenders probably don't have to worry too much in the short term. But if you work for one of the big banks, can you imagine how they would promote such a technological innovation to the general public? Why, they're cutting out the middleman and saving John Q Homebuyer money – lots of it!

I'm not saying this just to scare you, but rather to warn you that the world is changing faster than you may realize, and that the time when you could be satisfied to be just a good loan officer is coming to an end. There is one thing you can do that an automated system can’t do – you can create a relationship based on trust, you can become a trusted financial advisor, and you can become a Homebuyer Coach – which means that your clients who are buying homes can trust you to help them properly prepare themselves to find and buy the right home without overpaying for it. If you did these things, you would be adding value to what you do – value that would not be easy to replace.

If there were more ethical Homebuyer Coaches around in the first half of the last decade, we would've either avoided the housing bust, or we would've helped a heck of a lot of people avoid getting caught up in it."

The other day, I came across this website, created by a new division of Peoples Bank, out of Kansas City. Check it out:

http://www.closeyourownloan.com/

It's aimed at people looking for a mortgage loan, and the headline says, "Skip the salesman, Keep the Commission!"

I was talking to a client yesterday who works for a well-established lender in a major city. He told me that his company, in anticipation of the CFPB's proposed rule changes on compensation (all 369 pages of it), "is preparing for a radically different business model for the coming years. They are gearing up for a massive internet presence, with salaried type originators (The new compensation expectation). They don’t feel that they will be able to keep their current producers based on what they have heard will be the coming comp plans. Their plans call for lots of small offices that will feed a very cost advantaged internet processing and delivery system."

If you'd like to be out in front of the next big wave of change in your career, you might want to consider pre-registering for the next group of The League of Extraordinary Loan Officers.