Nobody likes being a scapegoat, and neither does George Hanzimanolis.
"I find it frustrating for a number of reasons," the new president of the National Association of Mortgage Broker said at the group's annual convention in Seattle in late June.
"First, like the majority of brokers, I run an honest, customer-focused business and I don't want to be lumped into the same category as bad actors who commit mortgage fraud," the Tannersville, Pa., broker said in his first speech to the membership.
"Second, the fact that mortgage brokers provide valuable choices to consumers seems to always get lost in the shuffle."
But if Hanzimanolis has his way, mortgage brokers won't be singled out much longer as the source for the industry's problems, and one industry group will no longer be able to point an accusing finger at another in order to deflect the blame.
For starters, the president of Bankers First Mortgage intends to continue his predecessor Harry Dinham's proposal to establish a national registry that includes all mortgage originators. And he's also working on a way for honest, reputable brokers to identify themselves as such to would-be borrowers.
Regarding the registry, Hanzimanolis said in his inaugural address that "all mortgage professionals need accountability," not just brokers who, he reminded the audience, were regulated in all 50 states.
"It doesn't matter if you are a loan officer at a large bank or a small mortgage broker," he said. "Individuals harm consumers, not companies or products. That is why individual accountability is so important."
As the NAMB would have it, the registry would be run by a federal agency, and every individual originator, including loan officers at banks, direct lenders and brokerage firms would be in the system.
If an originator is found guilty of a "bad behavior," his license would be yanked and he would be "kicked out of the industry permanently," the new NAMB president said.
But the registry, he added, "is just a start." In another effort to "protect and enhance" the reputation of honorable mortgage brokers, Hanzimanolis said he is working on giving them their own brand.
Like Realtors, who are easily identifiable by their capital "R," NAMB's 25,000 members would have their own seal as a way to "set themselves apart in the mortgage community as responsible mortgage originators that consumers can rely on for ethical behavior, knowledge and honesty," he said.
Under this initiative, which is still in development, a "Lending Integrity" seal would be made available to all qualified NAMB members, said Hanzimanolis.
Besides the new seal, NAMB is working of creating new specialized professional certifications and designations that will be useful in marketing to potential customers.
It is also is working on removing regulatory barriers that prevent loan brokers from originating federally-insured mortgages. Brokers must not only post a $75,000 bond to write FHA loans, but they also must agree to annual audits.
The NAMB says its members can live with the bond provision, but the yearly audit requirement is too expensive for small firms which don't make many FHA loans. And it appears the group may have an ally in very high places.
In a talk to NAMB's delegate council, FHA Commissioner Brian Montgomery said he would like to see broker participation grow.
Toward that end, Montgomery said his office is "working hard" to expand its direct endorsement program "to allow highly qualified FHA-approved lenders to use non FHA-approved mortgage brokers."
That's "how it's done in the rest of the industry right now," he said, adding that final clearance for such a change requires departmental clearance and rule making for public comment.
According to Montgomery, the ten most active FHA-approved mortgage brokers were responsible for more than 70,000 loans is fiscal 2006.
Brokers now account for a third of the agency's production, he told the council, which consists of the group's executive leadership plus two representatives from each state affiliate.
He also said there has been a 25 percent increase so far in fiscal ‘07 in the number of brokers approved to write FHA loans. He called the increase a "great sign" and a said it is a trend he hoped would continue.
Dinham, NAMB's outgoing president, applauded Mr. Montgomery's remarks, saying that "with a little help," brokers originations could grow exponentially.
"Commissioner Montgomery and his staff are making it easier for mortgage brokers to be FHA originators," the Texas broker said. "We look forward to the even better access that proposed changes will bring."
