Editorial: Do Mortgage Brokers “Get it” Yet?

I regularly read the websites and press releases from the mortgage brokerage industry. Partly it is because that is where my professional mortgage background lies—developing retail mortgage brokerages and serving them through wholesale lending programs. Partly, though it is also to see how much progress they have made from their role in the collapse of the US housing market and the partial collapse of the entire US economy. That role can be debated (again) at another time, but suffice it to say, mortgage brokers now inhabit a completely different world from where they lived a couple of years ago. Do they get it?

Like with most issues in life, some are faster on the uptake than others. I have been encouraged by comments on mortgage broker forums, articles in their professional publications, new software and training programs that reflect a prioritization of consumer needs and the placing of home finance in its proper place within a person or family’s overall financial plan. However, I also regularly hear brokers and those who work with them, belly-aching about new regulations, loss of income generation capability and a general lack of appreciation for the mess the industry (including them) had a hand in creating.

A recent case in point will illuminate. Greg Schroeder is the President of Comergence Compliance Monitoring, a firm that provides services that help lenders to evaluate brokers before accepting business and monitor their performance after a relationship is formed. His firm provides a great service that is one positive response to the new reality in the mortgage industry. However, in a recent article written for a major industry publication/website, he made the following statement:

If brokers ever hope to regain their status as Trusted Mortgage Professionals and protect what money making ability they have left, they must be willing to change their perspective on what it means to be a broker in today’s economy and work both harder and smarter to achieve success for themselves individually and the industry at-large.

Wow, I really like that statement—well most of that statement.“Change their perspective” is a strong and direct statement of fact. “Work harder and smarter” is absolutely necessary. My problem is the first clause: “If brokers ever hope to regain their status as Trusted Mortgage Professionals”. Regain? Trusted Mortgage Professionals? You have got to be kidding! While some, but relatively few mortgage brokers may have been properly deemed to be “Trusted Mortgage Professionals”, and may be unduly suffering as a result of negative PR regarding their industry, there is simply no way that the term can be used in a blanket sort of way to refer all mortgage brokers.

More important than placating the bruised egos of the mortgage brokerage community is the necessity to provide assistance and support to creating Trusted Mortgage Professionals. I applaud Mr. Schroeder for his good work but encourage him to be even bolder in seeking real change. We need brokers—but ones who earn trust by employing professional practices. Much more change is needed.