"Do whatever you can to build that trust,' says branch manager
It’s widely accepted that the mortgage industry will have a decidedly jittery ride this year.
International conflicts notwithstanding, the talk in the US is largely about margin compression, over capacity and consolidation.
Recent job losses at several firms have confirmed those fears, and, in such a competitive environment, businesses may have to rely once more on tried and tested skills if they wish to grow or even survive, according to Debbie Klein (pictured), branch manager for Arizona-based Reliability in Lending - PRMI Chandler.
“Anytime you have margin compression and a competitive market like this, you’ll start to see some people get out, because it’s just going to be difficult. But it’s going to come down to service; it’s going to come down to educating the client and making them feel comfortable with what they’re doing,” she told MPA.
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With more than 18 years’ experience in the mortgage industry and a Master’s in business administration, it’s not altogether surprising that customer relations are of paramount importance to Klein – even when it comes down to remembering seemingly trivial details.
“The one thing that’s difficult for all originators is finding a system to keep in touch with those past clients, not via an email, but (remembering) birthdays, and just trying to keep a pulse.
“Do whatever you can to build that trust, because it’s easier to keep past clients than it is to retain a new one,” she stressed.
Klein said her firm had “a pretty robust program” of keeping in touch with former clients and having a service after the close – “the originator makes or breaks that experience,” she added.
Having started her professional career in sales and marketing for tech companies, Klein eventually left the sector after deciding that she could do a lot better in a job that was better suited to her talents, even if, at the time, she wasn’t exactly sure what that was.
“I needed to figure out what the heck I was going to do for the rest of my life. My mom was in financial services - she was one of the first female agents for Northwestern Mutual Insurance – and after having worked for her when I was in high school, helping her with clients, filing and listening to her on the phone all day, I knew I wanted to go into finance.”
It appeared the perfect fit. Faced with the prospect of a growing family and a desire to find a more flexible job that involved less travel, she grabbed the opportunity, but what she saw in the industry back in 2004, didn’t impress her.
“Nobody was really educating the client. There were just so many bad products out there at the time and they were just throwing people into stated loans. I felt like I could make a difference,” she said forcefully. “The reason why I got into it was education.”
Nothing has changed in that respect for her, despite the current difficulties in the housing sector.
“There’s still the opportunity for cash out refinances, people are sitting on a lot of equity, so there’s still that opportunity to consolidate debt and lower their overall cash flow,” she said.
She added that purchases were still “super strong” but conceded that it was “a real struggle” having to compete in bidding wars that often involved up to 30 offers.
“There’s more buyers than there is inventory. And it’s not going to drop off anytime soon, it’s kind of an inverse curve,” she said.
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Given that she’s based in Arizona, one of the country’s hottest housing markets, and that the supply of homes for sale in the US has fallen to a record low - down 16.5% from a year ago - that’s not altogether surprising.
Despite this, Klein remained optimistic, noting that buyers - including institutional investors – were still flocking to her from California, Washington, Seattle, Washington and beyond.
“Buyers that have cash, have a significant down payment or are able to waive appraisals and inspections, are in a better position to get their offers accepted than those that don’t,” she stated.
She expressed frustration, however, that the very regulation that stamped out “goofy loan products” and helped transform an industry she had once been so critical of, could now be hampering borrowers.
“The industry has gotten a lot better. There’s licensing in place today, the disclosures are better, the client is more educated and they understand the disclosure and settlement process, but I feel like we do make it a little difficult on the borrowers to qualify.”
