Prior to the financial crisis, mortgages were sold and delivered nearly as easily as filling out a change of address slip at the post office for your new home. Anyone could choose to sell mortgages and anyone with a small bond could open a mortgage company. This was our industry from 1993 to 2008.
Today, the landscape has changed dramatically due to regulation and better governance of our industry. Mortgage Loan Officers, MLOs, are now licensed or monitored by an exempt financial institution. MLOs have to choose employers more carefully.
In the past, MLOs focused on who had low rates, who allowed the most MLO control with approvals, and/or who had the newest HOT program. Today MLOs focus on who will protect my license with prudent practices and compliance and who will have product and funding to keep up with demand. In the past if a company violated a rule, the MLO could move to another company. Today, the MLO could be held accountable for their employer’s oversight.
During my 25 years in this industry, I have never seen a more valuable opportunity for financial sales representatives than obtaining a NMLS and State MLO License. In my opinion, the MLO License not only ensures a minimal level of knowledge, it creates a mutual respect between the employer and MLO. A licensed MLO can choose employers based on service and culture vs. non-licensed exempt MLOs who are limited to the exempt firms that can hire them. For licensed MLOs that choose companies based on great service and product availability, their income will lead other occupations in the US and exceed past MLO compensation benchmarks.
The primary benefit to all the changes since 2008 is the consumer wins! They can be assured they will get competent advice from regulated providers. Unless you pay attention to some of the many subtle changes over the past 12 months and make early preparation for the impending turn, mortgage product availability will be reminiscent of the 1973 oil crisis. Consumer demand will be greater than any past cycle; however, product access and delivery will dictate the mortgage industry landscape over the next five years.
I will expand on the quiet changes that will require a preemptive turn in my next column on this topic.