Their is a trend in the Commercial Mortgage Industry or I should say more accurately; the Online-Internet Marketing industry happening right now. Maybe you’ve noticed companies presenting themselves as Commercial Mortgage companies offering to the general public the opportunity to become a Commercial Mortgage Broker. The consumer simply has to pay an upfront and monthly fee in most cases to have access to Lenders and Training Materials. After paying their fees and watching a few videos the Bar Tender or Cab Driver will be hanging their shingle out as a Commercial Mortgage Broker.
This is less a bonafide opportunity for the Barista with dreams of becoming a Commercial Mortgage Broker as it is an opportunity for tech savvy entrepreneurs to make a buck or perhaps millions of bucks off of those dreams.
I have been in the Residential and Commercial Mortgage business since 1990 and have watched how the industry has evolved. I spent many a morning over processed scrambled eggs and greasy bacon as the owner and Broker of a multi state Residential Mortgage Brokerage trying to convince my colleagues at the monthly association meetings that we needed to raise the bar for entry into the business – NOT lower it. They did not listen and for many years the bar got lower and lower and lower still.
When I first started in the business you had to have a college degree to get an interview for a position of Loan Officer. At all the industry functions and trade shows for instance everybody was dressed professionally with suits and ties etc. Around 1995 this began to change and by 2000 the dress code was more like Bermuda Shorts, Flip Flops and gold medallions. I began to disrespect the industry but continued to argue for higher standards much to my dismay to no avail. I only hired experienced, educated and professional Loan Officers and had to pay them accordingly. My competitors were hiring people off the street. The industry took an ethical and professional nose dive; the result of which was the crash of 2008. It got so bad that by 2008 before the crash the girl who was making my latte at Starbucks on Friday afternoon was taking a Loan Application at that same coffee shop on Monday morning!
Self regulation was supposed to be the solution for the industry but it didn’t work. The writing was all over the wall but the Broker community just wasn’t willing to do the right things to prevent the industry debacle. The same thing is happening in the Commercial Real Estate Mortgage industry right now. The reality is that the Commercial Real Estate Mortgage business is a relationship driven business. Relationships within the Industry take months if not years to develop and learning the business takes equally as long.
Allowing the industry to be flooded with unqualified amatures is not only bad for the industry but also the starry eyed amatures. I recommend the self regulating bodies within the industry begin to take very close look at the trends and start strategizing before it’s to late. There is a place for technology in the industry for recruiting, training, origination, processing, marketing etc., but not for the purposeful dilution of the industries hard fought for reputation and credibility.
About the Author: Michael Hall is a seasoned Mortgage professional, owner of Hall Jacobs a Commercial Mortgage Brokerage at hj2day.com and the Software Engineering firms of Dash Point Studios at dashpts.com and Expantive at expantive.com