NAMB's White has 40 years in the business and says education has never mattered more than right now
Every mortgage market presents unique challenges that brokers have to navigate in order to get deals closed. Whether the headwinds are rate-driven, caused by inventory shortages, or are just unique to a certain area, there are always hurdles to clear.
The current market conditions nationwide have seen rates settle in an area higher than most expected when the year started. Regional challenges vary from city to city, and sometimes from neighborhood to neighborhood.
In addition, new regulations in certain sectors are adding additional challenges. All of this has added up to a market that is causing slowdowns for many brokers.
In a market like this, one veteran said the brokers with the best chance of coming out ahead are the ones treating the slow period as an opportunity to get better, because the knowledge gap is where deals are disappearing.
Kimber White (pictured top), president of the National Association of Mortgage Brokers (NAMB), has been originating loans for 40 years and said he has not seen anything like the current environment.
"I've been in this business 40 years in October, and I've not seen such a secular shift in the market," White told Mortgage Professional America. "I've not seen the rates fluctuate up and down in such an instability in the market. And most loan originators, a huge majority of them, have not seen this kind of market. They don't know what to do."
Closing the education gap
White said the danger of entering a market without the right knowledge shows up in deals lost to originators who were better prepared, and in some cases the broker never even knows the deal was there.
"If you don't know what you don't know, you're going to lose deals that you don't know," he said. "Things are changing. Underwriting guidelines are changing, condo rules are changing, how you market yourself is changing. The importance of an originator is that people and realtors want, number one, to close the deals. Number two, they want you to answer their questions."
He compared the situation to going to the doctor and finding a medical professional who doesn’t have the answers you need. The odds of you returning to that doctor are slim, which is why education is crucial.
White said the tools are already there. NAMB offers education, webinars, live classes, and recently hosted a webinar with Fannie Mae and Freddie Mac that drew approximately 1,500 attendees.
"If you're not educating yourself, you're not moving forward," he said. "And this goes for the seasoned professionals too. For the seasoned professional who thinks they don't need it — I know you don't know it, and I can say that — you've got to open your eyes."
Time to get ready
White said the market has changed in ways most originators have not yet adapted to. For years, the business rewarded brokers who were in the right place at the right time.
"You're sitting in the apple tree, and apples fall down on your head all the time," he said. "And all you do is take your bucket and just pick the apples. You didn't have to climb the tree. Now you have to climb the tree, and you have to get the apples. And the tree is kind of barren."
He said the deals available in this market are structurally different from what most brokers grew up doing, with self-employed borrowers, 1099 income, non-QM products, and DSCR loans making up a larger portion of what is moving, and none of them fitting a cookie-cutter model.
"This is a day of self-employed borrowers, 1099, non-QM loans," he said. "It's a basket of different types of loans, and none of them fit a cookie-cutter hole. The days of the real cookie cutters are — how do we make every deal work? How do we become experts in our field right now? Because it's different — get that education."
One of his strongest pieces of advice is to avoid making mortgage rates, regardless of how good or bad they are, your conversation centerpiece.
"Stop selling rate," he said. "Don't sell rates, sell yourself. Learn how to market the tools, the products, expand your horizons. Being prepared, having your knowledge, your leadership, knowing sales tactics: these are the things that really make a big difference."
He said the originators who spend the slow period getting better are the ones who will be ready when volume returns.
"Rates will get better, things will get better," he said. "But when markets are slow like this, it is the best time for people to educate, hone their skills, and get ready."
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This article is part of our Monthly Spotlight series, which in August focuses on broker training and education. Full coverage can be found here.
