By Jennifer Hadley
Calling Ed Smith Jr. a new face in the mortgage industry is clearly a tongue-in-cheek statement. After all, Ed aka “Smitty” has been an active player in the mortgage industry and specifically in the California Association of Mortgage Brokers for years. Now though, as the newly inducted President of CAMB, he’s become the new face of the association. And he’s planning to take CAMB in a new direction, by opening up new dialogues with industry partners, consumer groups, brokers, and naturally with consumers. Here’s how he plans to do it.
With the S.A.F.E Act looming, Ed’s first priority as President of CAMB is “to reach out to our industry partners and open a new dialogue.” To that end, before the S.A.F.E Act is implemented, Ed is working with CAMB to “get out in front of it, and open the discussion with bankers on how we can work together to make the industry better for the consumer.”
Ed speaks candidly of the need to begin these discussions to “reemphasize the value that brokers bring to bankers and their retail distribution channels. Brokers serve as a huge sales force for wholesale operations, particularly in serving underserved clients, or clients who haven’t been able to secure loans with banks on their own. With bankers’ profit margins being greatly reduced by the constrictions and implosion in the overall marketplace, they need our loan originations. Similarly, the broker channel needs access to competitive products to provide to our client base as well. In the end, this is all for the benefit of the consumer.”
It is partly this reduction in choices which has Ed steering CAMB in the direction of opening new discussions with consumers; again, with the goal of education about the mortgage process. “We have to take our industry to the consumer. It’s frightening how many people don’t even know what kind of loan they have. That’s why for the past few years, as a result of the Preserving Homeownership Initiative, CAMB has held countless telethons, town hall style meetings, workshops and more; to educate consumers. “It is absolutely our responsibility to get information to consumers who desperately need it, now more than ever. And we’re going to expand our sphere of positive influence even more this year by educating not only consumers, but industry partners and consumer groups as well. This includes keeping everyone updated on legislative changes, RESPA changes, Reg Z changes the Safe Act and more.”
In fact, according to Ed, educating consumer groups as well as legislators will be one of CAMB’s main objectives during his term as President. “We’ve never sat down in concerted effort with consumer groups to discuss proposed legislation. While we’ve tried to talk with legislators, often times they don’t understand exactly how this industry works. So even though they make decisions that are rooted in the right spirit, in reality they don’t benefit consumers. And the unintended consequences wind up hurting the very people they are trying to protect. Not everybody fits into a vanilla 30 year fixed mortgage. So this year as in the past, CAMB will be stepping up its efforts to meet with consumer groups for educational purposes and to come to synergistic agreements on legislative issues. Once we find those issues that we can agree upon, then we can take them to our legislators in Sacramento and Washington D.C.”
Lastly, Ed reiterates the need to open up new channels of communication within the mortgage broker community as well. “We’ve been subjected to a smear campaign over the past several years, as a result of bad actors in our industry,” he says. “The S.A.F.E. Act will weed out most of those remaining, and finally the playing field will be level. CAMB will vigorously continue to work in concert with legislators, regulators and law enforcement to prosecute those bad actors to the fullest extent of the law and remove them from our industry.” But it is the brokers themselves who will need to rise to the occasion of the new licensing and testing requirements, and to report to the proper authorities any acts of violations of their peers when it comes to their attention. This will be achieved through education, and a higher commitment to the cleaning up of our industry; two of the cornerstones of CAMB itself.
“I’ve been in this industry 27 years and I still say that I learn something new every day,” says Ed. But as for other loan officers and originators, Ed wants to know where and how they are continuing their education. “If you don’t belong to CAMB, where do you get your current, ever evolving information on the daily changes from? CAMB gives you the professional development opportunities that you need to inform your legislators, consumer groups and most importantly your clients.” Luckily though, as part of the new direction Ed is taking CAMB; that information is going be made much more accessible to brokers, legislators and consumers alike in coming months.
“This year, we’ll reduce the operating costs of CAMB substantially through automating some of our services with the efficiencies of the internet,” Ed explains. “Brokers, legislators and clients will have more readily available access to services or help they need. Instead of waiting for a return phone call for example, much of the assistance we provide to CAMB members will now be available online to others”
Moreover, Ed plans to raise the visibility of the association on the internet. “People are used to the internet. Everyone uses it. We’re going to capitalize on new efficiencies to get the CAMB message out to consumers by increasing our presence online.”
Dialogue About Direction
Aside from opening new dialogues and steering CAMB in the direction of automation, is there anything else Ed hopes to achieve during his year as President? Absolutely, and it’s ironically a conversation specifically about the new direction the mortgage industry is headed.
“There has been a cultural change in our industry, and the S.A.F.E Act will only serve to make this more obvious. I think it’s important to open the lines of communication with fellow brokers as to the direction our industry is headed,” says Ed.
“The constriction of the industry as result of the mortgage implosion has forever changed the way we do business. Some of the changes are for the best, as CAMB has always stood for higher standards and ethics in our industry. But some of the changes will make the small broker shop an endangered species, and we need to talk about that.”
“For many independent brokers, or broker shops, the new model of broker and banker will be the key to survival. I predict that we’re going to see most small shops integrating into larger shops with their own warehouse lines, as a net branch. The economies of scale will demonstrate that it’s much cheaper to operate as a net branch or an affiliate than it is to remain independent. This will mean a big change for a lot of us, but I see this change as positive.”
“Technology and the internet have made it so easy to get a loan, and automation available in larger broker banker models has drastically reduced the cost to produce a transaction. The paradigm has shifted, and long gone are the days of thick paper files, which have been replaced by CDs, portable memory cards, and zip drives. So it’s important that we acknowledge this shift, and open up the dialogue to discussing it, which will be accomplished through town hall style meetings throughout the state to discuss the new regulatory changes and how CAMB will respond to them. Because like it or not, our industry is definitely heading in a new direction. But, I’m confident this new direction is for the best, and I’m thrilled to be a part of CAMB as we welcome in this new business model.”
Ed Smith Jr. welcomes questions at firstname.lastname@example.org