View from the U.S.: CMP's dispatch from the NAMB conference in Las Vegas
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15/02/2010 8:00:00 AM
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Simon Parker attended the U.S.-based National Association of Mortgage Brokers (NAMB) annual conference and expo in Las Vegas and took the opportunity to speak with the organization''s president, Jim Pair, and chief executive officer, Roy DeLoach about the year ahead
Canadian Mortgage Professional: How would you evaluate the role of U.S. mortgage brokers in today's economic environment?
Jim Pair: There is still a need for the mortgage broker. The consumers have always relied upon mortgage brokers ...We've developed relationships with the consumer, and most of our business comes from referrals. If we don''t do a good job for customers, they're certainly not going to go out and refer to their family and friends. I think the role of the mortgage broker is definitely needed, and will continue to be needed to better serve the consumer. We're 24-7, they can call us on a Saturday night if they've got a question. The retail lenders aren't like that - they''re strictly eight to five-type operations. They don't tend to service the consumer in the same way that we do because they have big deposits and a lot of depositors, and a lot of business can come from that and they don't have to do the things that we do.
CMP: Was there ever a threat to mortgage brokering in the U.S.? Were they being overly blamed for what was happening?
Roy DeLoach: Our job was to explain to the media and Congress the mortgage process. We had to teach everybody what we could about what our role was. It came out that we were basically giving the information to lenders, they were running through the automated underwriting systems and they were collecting the data. [The lender's] job was to... check the data and underwrite. That's come out now, and we've been vindicated. One thing our members do need to know more about because of all of this is the chain from Main Street to Wall Street, [particularly] if the pull through (high-efficiency ratio) doesn''t happen. What we're committed to doing is teaching brokers on why the pull through rate is very important, and [how] in the future it's going to count against you if you can't make sure the loan you start with the lender gets to close. The role of the broker is that they understand all the information they have from the borrower and the particular lender that he picks ... Then the probability of it closing is pretty high. That''s the new value-add for mortgage brokers.
JP: Five years ago, mortgage brokers and wholesale lenders were guilty of this, the market was that good, the wholesale lenders were not that concerned about pull through rates. They knew there was so much business out there and they were going to get it, that they could take the risk of [low] pricing. We all need to recognize that you can't shop that loan. We've got to select one, and we''ve got to stay with that one.
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