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Meeting the Mortgage Challenge

Meeting the Mortgage Challenge

Last month I had an opportunity to work with Brian Buffini and the Wells Fargo Home Mortgage team in a program called Meeting the Mortgage Challenge in 2010. I thought the program had great merit and I hope you will all forgive me for sharing both the experience and the message of that interaction.

The format of the program was a first for me. It is called a “CineMeeting,” the name being drawn from the company that broadcasts live by satellite to theaters across the country. While the main production was staged at the Public Television studios in Chicago, it was broadcast live by satellite to 60 theaters across the country, and reached a combined audience of over 28,000 REALTOR® guests.

I was struck by the professionalism of the team and how detailed the production process was. It was like visiting another world. It started at 6:30, when I was whisked away to the studios and taken through the process of preparing for a live satellite broadcast – a big departure from most days around my office.

Putting the whirlwind of production aside, I also want to share the serious side of the experience. First of all, I was taken aback by the professionalism, knowledge and caring of the Wells Fargo team. More specifically, I was impressed with Executive Vice President for Loan Servicing Mary Coffin and Executive Vice President and National Sales Manager Brad Blackwell. These are two very impressive young executives who are very much tuned into the current mortgage situation. They were really focused on getting a specific message across regarding the seriousness that surrounds the current mortgage environment. They noted that the mortgage conversation has three participants, pointing out the fact that the vast majority of mortgages are sold to an investor shortly after execution.

They reported literally hundreds of regulatory changes that have occurred in the mortgage process over the past year, and warned of more to come. They talked about the fact that just their organization alone has hired over 7,000 new employees who will be tasked with helping to clean up the mess. They shared the communication nightmares caused when the Administration announces mortgage benefits and solutions as if they were going to materialize in minutes. In fact, the underlying regulations would take 6 to 8 weeks to draft, distribute and take effect while, in the interim, the very families they were supposed to protect are losing their homes.

Then they spoke in grave terms about the almost epidemic level of mortgage fraud that still exists even in the short sale process. Finally, they talked about all the work that would have to be completed in order to restore the mortgage system to being capable of supporting the REALTOR® and the American families that want to shelter their children in a secure environment.

During one of the breaks, the conversation turned to the importance of teaching partnerships between mortgage professionals and REALTORS®. The challenge of teaching both agents and consumers about the new world of mortgages, may be one of the most important elements standing in the way of a full market recovery.

It is sufficient to say that the dysfunctions, oddities and indeed vulgarities of the mortgage world of 2005 and 2006 are hopefully only distant history. In their place is an industry in which young executives like Mary and Brad are doing everything they can to make sure that funding is available to monetize the hard work of agents and fulfill the dreams of American families. Yet despite Mary and Brad’s best efforts, the mortgage process that survives and the rules that will govern mortgages in the future will bare few similarities to those which gave birth to the sub-prime crisis of 2006. In fact, for the next several years, it may more closely resemble the mortgage process of the late 1970s.

So what is the message here? Let’s start with the fact that funding real estate transactions must be on the top of everyone’s priority list. Interestingly enough, the first step of that challenge will be to ensure that REALTORS® themselves understand the new mortgage rules at a level that allows them to explain to their clients how the new systems work. The second step is to ensure that consumers are prepared for what they may have to go through in order to qualify, so that they don’t end up angry and dissatisfied with their agent, and a system, which is still pretty reasonable considering all that it has gone through.
Brokers should immediately undertake to meet these challenges by working with responsible and educated members of the mortgage community. It is essential that agents not only understand the changes that have already been made but, of equal importance, that they understand the changes that might yet occur, as they occur, rather than months later.

We share our real estate marketplace with a number of other professionals. This is a time to put aside past unhappiness and work together to give the American consumer the sense of confidence they deserve and, given the reality of today’s market, will probably demand before those closing documents have been signed.

We can do this.

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