Beauty in simplicity: The danger of over-complicating

by MPA10 Jun 2016

Sometimes, in the mortgage industry as well as in other areas in life, we suffer from an illusion of complexity. We think that, just because something is more complicated that it is necessarily more sophisticated. We're impressed by the college professor that talks "over our heads," or by the journalist who used big words in the articles she writes. But does more complicated necessarily mean better?

On the June 6 episode of my Lykken on Lending podcast, we had the opportunity to interview Bill Isaac, former chairman of the FDIC and author of the 2012 best-selling book Senseless Panic. During our conversation, we talked about the several thousands of pages included in the Dodd-Frank Act. The ensuing regulation over the last decade has led to countless ambiguities about what is and is not required in the mortgage industry. According to Bill, the final result of Dodd-Frank was "gobbledygook," a meaningless mess of legislation lacking any cohesive meaning. Perhaps complicated isn't always better...

As leaders in the mortgage industry, we should take a lesson from this. When we're trying to convey a message to our team, our investors, or our customers, it's usually better to keep it simple. It's more important that they get the message than that we look smart. Besides, as Albert Einstein is credited with saying, "If you can't explain it simply, you don't understand it well enough."

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