You Talkin' to Me?
Now that it's almost 2006, there will be many of us who will re-think and re-tool our plans on operating this new year. One thing's for certain, the refi mania is going through a long-drawn-out death, it's disintegration has been slow and agonizingly for many. The Fed has promised, and kept their word to increase the prime at a minimum of .25 or more each time they met in 2005 - they'll be more in 2006.
For those of you who have be originating for a mere 5 or six years, the steady march of interest rates (as they rise) will painfully effect your bottom line; since all you've seen in your short career has been loads of customers - historically low rates and very little need to do what all businesses in America need to do to stay alive - advertise. Customers have been everywhere so far in your brief career; good for you! The money's been good and easy to come by ... but ...
This business however, isn't like that. It has been like that, but only for a limited engagement. It's simply been like that due to a flood of customers racing to take advantage of what the Fed's done with rates -
keeping them artificially low for a long long time. For the most part, all that business you've been doing hasn't truly been your fault; it's been the marketplace. If you look at anybody else, or any company out there - origination numbers like the last several years, have never been seen before. In the 'old days' (and once again pretty soon) it took a great deal of (gambling) money advertising and very hard work to do a third of what's become common recently ... harder is right around the corner ... so please let's all be prepared.
So you don't become a statistic, now's the time to get on the training & education bandwagon.
Knowledge is Power, the more you know about our industry and how things work (besides just your job), the easier it will be for you to adapt to the coming changes. And believe me, you'll see plenty of them this new year.
We've watched wholesalers march upward from a maximum of 70% LTV on non-owner properties to 100% these days, funders reaching for an ever growing market share. Also we have watched more and more of them dipping ever closer to 500 FICO 100% LTV Stated loans! What's next Stated FICO? Both those loan types (among others that are offered these days) are wreckless, a dramatic lesson many of them will learn the hardway.
As the applicants become fewer and fewer and some of the crazy wholesaler programs tighten, originators - many of whom are pretty casual about how they operate - will be temped to cut even more corners in their process simply to survive.
My advice is to learn all you can about our industry, and strive to do the right thing all the time please, so you don't get caught in the cross-fire. Tell yourself, you'll have Zero Tolerance for unethical behavior and questionable integrity issues when it comes to how you'll operate in 2006. Translated, that means you won't do unethical things, nor will you let others you know (including wholesale AE's) sell their integrity for pennies either.
Ethics is doing the right thing, even when it costs more than you want to pay. 
You Talkin' to Me? 
