It took a dozen or more slides for Orawin Velz of MBA to lay out the current environment for attendees of the eLynx IdeaWorks conference here in Las Vegas. When Robert Camerota followed her to the podium, he summarized: "We're not in the market we think we're in today; we're back in the market of the 1980s."
Camerota has been in the industry for more than 25 years and is a recent past president of the California Mortgage Bankers Association. While he admits that his views differ from those of both CAMB and MBA, he says that if monoline mortgage bankers want to have any hope of surviving the next 18-24 months, they had better get aggressive at cutting out anything that doesn't make them money. "It's not redlining if you have a methodology for determining where you make money and where you don't."
If you're a mortgage broker, Camerota says you won't. Your day is over. While some in the audience disagreed, Camerota points to pending legislation in California that will outlaw YSPs. In a few more words, he said the broker's days are numbered.
So what's a lender to do? Camerota had a lot of ideas to share, including tactics for human resources management, facilities management and product selection.
Cut as much as you can and do it now, he said. But don't cut your investor delivery guys. The person who transports the file across the room from post close to investor delivery may be one fo the cheapest guys in your office and the last one you hired, but don't fire that person unless you want things to start getting lost.
Most bankers need to move out of their fancy offices now, or negotiate better leases. If you're in Orange County, you're in a good position to negotiate. Finally, if you're not looking seriously at reverse mortgage lending, you should. Velz pointed to research that says 35% of American homeowners own their homes free and clear. Camerota says that should be your next target.