New Year, New Business?

I put a question mark there after "New Business" because I have heard a lot of worrying and fretting among my colleagues in the mortgage business about how everything is changing (for the worse, of course).

I don't think that's true for the most part. Yeah, our disclosure requirements have changed a bit and they're making us be a bit more accurate up front. But the big change is one that doesn't impact me much - you have to make it crystal clear to your customer up front how much you, the loan officer/broker, will make on their loan, even if that payment comes from the lender. And once you tell them how much you're going to make, you can't increase it. No big switch for us, most of our lenders have been making us do this anyway in anticipation of the rule change. Not on the same form, but the content is the same.

The big outcry in the biz is that banks won't have to disclose these figures in the same way, supposedly putting them at a competitive advantage over brokers. They can leave out the part of the compensation the lender pays to the broker because there is no broker involved. The why of this is technical with a lot of initials, but it is true that the disclosure requirement is not the same. The way I see it is this: a broker still has the same advantage they've always had over the banks - we can go to any one of a number of different lenders to get the best rate and best chance at an approval on the loan, where if you deal with one bank, you get their rate even if it's not the best and you deal with that one bank's lending criteria even if they can't approve your loan. This second part is a major factor in today's market - on every deal we do, we're having to think through carefully which lender to target to give ourselves the best shot at an approval. Some deals will not fly with one lender and sail through with another. So having the flexibility to find the right lender is even more important today than it has been in the past. That's a value I can bring to my customers.

This business is still the same business, and these small changes won't have a major impact on what I do or how I do it. That's my feeling here to start the new year.