Leading a horse to water and the politics of thirst in the desert
The environment within the mortgage and finance industry has improved “a bit” the last month or two, but don’t allow this to change your view on whether the thirst for regulation and enforcement has slackened in the minds of the public, especially since mortgage late payments and mortgage defaults are expected to continue to rise in the next 12 months. The mortgage broker is still in the desert and they can still be sacrificed for the “greater good” on the way to economic recovery.
Leading a horse to water…
Mortgage Brokers, did you know that…
The Mortgage Bankers Association (MBA) has developed a proposal “for reforming lending and servicing practices and streamlining and improving consumer protections. This proposal, the ‘Mortgage Improvement and Regulation Act’ (MIRA), would establish a new, comprehensive framework for national regulation of mortgage lending to protect borrowers and improve the mortgage process nationwide”? – MBA website.
Did you know that the proposal contains numerous provisions that would impact the mortgage broker, including, but certainly not limited to, further restrictions on YSP and possibly new criminal penalties for enforcement of these restrictions?
Did you know that the MBA has been actively sharing this proposal with Congress and that the proposal has been sent to both the House Financial Services and Senate Banking Committees in an attempt to gain widespread support for its passage into law?
This is a concerted effort by the MBA to define the landscape of the mortgage industry and regulation in the very near future. If you want to know who is leading the congressional horse to water, it’s the MBA.
The politics of thirst in the desert…
It’s pretty simple actually, if you’re in the desert and you’re really thirsty, and someone offers you a direction that will lead you to water, you’re going to go, and you will be grateful when you get there. Do not maintain a belief that the horse won’t drink deeply at the well.
Where is The National Association of Mortgage Brokers (NAMB) comprehensive proposal to Congress that would equally protect borrowers and protect the freedom of competition in the mortgage industry? Where is the concerted and coordinated effort to define the landscape of what mortgage regulation should look like? Usually what I hear about is lawsuits and defense funds and how NAMB is going to “respond” to proposed legislation.
If brokers want to shape and define the direction of the mortgage industry toward one that is not going to sacrifice them to necessity, I think they have to do their fair share of “proposing” legislation and offering to lead the horse to water as well. They obviously need to be part of every dialogue going on in Congress and they need to communicate much better about what they are doing to their members and what they want their members to do.
On NAMB’s website for instance, there is no mention of MIRA in their weekly briefs and their stated policy agenda for Congress (under government affairs) is dated from 2007 for last year’s 110th congressional session. Quick news flash, we’re in the 111th congressional session now and it’s 2009. That’s just weak representation and coordination of resources. As a broker, you should be alarmed by this level of organization and be angry; that is of course, if you’re contributing at all. If you’re not, you have no right to complain.
Mortgage brokers, grab the reigns and help drive the direction of the policies being implemented in this industry. And by that, I mean don’t just try and pull up on the reigns of a thirsty horse and say “whoa, slow down, those are just mirages out there”. I mean lead by understanding the thirst for change and the abuses of the past and take part in helping to choose and mold this industry in a way that will work for everyone involved. That also means knowing when someone else is leading your horse in a direction you may not want to go.
Make no mistake, the horse is going to charge ahead somewhere and in some direction to slacken a dire thirst, it WANTS to be lead to an oasis in the desert. Brokers need to be an integral part of that change and direction or risk ending up abandoned in the desert without a ride.
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