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This is an open letter from Countrywide to its brokers regarding the recent market situation. This is the third such communication in a series that started here, and continued here. What are you thoughts? Honest, genuine insight in to Countrywide or marketing drivel to placate an important (but problematic) revenue source?
Dear Business Partner:
My previous note in this series of communications outlined some of the decisive steps that Countrywide®, America’s Wholesale Lender® has taken to address projected industry declines in loan origination volume for the remainder of 2007 and into 2008.
The focus of this note is the ongoing importance of the mortgage broker “value proposition” in today’s mortgage market. This topic is particularly significant to all of us in the wholesale lending channel—lenders and brokers alike—as our industry adapts to the new realities of the current market environment.
With a shared goal of revitalizing the wholesale lending channel, we can and must work together to strengthen customer loyalty and enhance your prominence as a trusted advisor. This is not only an appropriate response to the growing misperceptions about wholesale lending, but it’s also the key to a prosperous and sustainable business model.
Succeeding in Today’s Environment and Beyond
In my mind, succeeding in today’s environment is primarily about a return to basics. Now, and into the future, success will be based on the fact that borrowers in all stages of the homeownership cycle will truly benefit from working with a seasoned mortgage professional. We have returned to the days when your value proposition is based on:
- providing borrowers with access to leading and competitive options in the marketplace;
- ensuring that options align with borrower financial needs and the ability to re-pay;
- guiding borrowers in making informed buying decisions; and
- serving as a long-term advisor for borrowers who may need some time and/or an “action plan” before they are able to qualify for a home loan.
In fact, I believe that the need for your expertise in these areas is stronger than ever before, especially as it relates to your advisory role. The complexity of financing a home is now heightened for many borrowers given the changes that have occurred over the past several months to lending guidelines and product selection. In addition, customers are confronted with a never-ending stream of often confusing media reports about what’s going on in today’s real-estate finance market.
Thus, an essential element of your value proposition is educating borrowers on the specific terms, conditions and even consequences of potential financing solutions. Best practices include:
- explaining loan program disclosures;
- illustrating, comparing and contrasting product features such as interest-only payment options, varying loan terms, etc.; and
- providing guidance and assistance throughout the home loan process - including after the loan has funded.
These simple, return-to-basics practices can strengthen consumer loyalty, solidify your role as a trusted advisor, and create a long-term referral stream from satisfied clients.
Consumer Awareness Resources
If you don’t already have tools in place to assist you with some of the practices outlined above, you may want to refer to the recent Interagency Guidance on Non-Traditional Mortgage Products. The guidance will give you insight into the steps that lenders are being encouraged to take to better inform borrowers on the features, benefits, and risks associated with non-traditional mortgages like Interest-Only and Payment Option ARM loan programs. The Federal Reserve’s web site also offers some basic consumer awareness brochures and other resources that may be helpful. In addition, here at Countrywide, we are currently developing new materials to assist you with further educating your borrowers on non-traditional loan products and other special programs. These materials will soon be made available through www.cwbc.com< or directly from your Account Executive.
For your convenience, I have provided links at the bottom of this e-mail to both the Interagency Guidance documents and some of the Federal Reserve consumer-education resources in case you are not familiar with these tools.
Focused on Your Success
At Countrywide, America’s Wholesale Lender, we remain focused on helping you provide your borrowers with the most appropriate, high-quality financing solutions. We also remain dedicated to supporting your value proposition. The two go hand in hand. The return to basics means catering to the needs of various borrower segments while developing informed “customers for life.”
Our organization remains fully committed to the wholesale channel, to the broker community and to boosting your business today and into the future. Thank you once again for your business and for the opportunity to share these thoughts with you.
Todd A. Dal Porto
Senior Managing Director & President
Countrywide, America’s Wholesale Lender
Tangelo’s going to abide by the non-traditional guidance doc and force brokers to comply as well?
If so, that would make this state regulator’s life a whole lot easier.
I’m a mortgage broker in Palm Desert, Ca. While I can find plenty not to love about Countrywide, I also think they have been piled on a little unfairly. The letter seems pretty good to me. I don’t feel that the tone of the letter was condecending. We are in a very different market and all of us are fighting for our lives to survive. Waiting for things to get better, or return to normal, whatever that means, could be a long wait. Another letter from WAMU today expressed some of the same themes. They are going further in that they are requiring us to disclose clearly all terms, pre-pays, and YSP on their form up front and send with submission. Also they will be calling borrowers prior to funding to redisclose terms. Perhaps this is all good for our profession. I remember when the public respect of my job was much higher. Going forward we will need to earn that respect.
This will be interesting..I see that unlike WaMu and Florida Mortgage Broker Association, he is not asking brokers to fully disclose. New guidelines have come down from WaMu and FMBA in regards to stating that as of todays date it is up to the broker to provide proof that all fees(meaning what they are totally making on the loan) are not only disclosed but are also showed to the buyer as a “$$ amount” and not a percentage and that the buyer sign a paper stating that they “fully understand in laymens terms” the loan they are getting and agree to how much compensation the broker is getting…hmmm..wonder why Countrywide doesn’t see this as important as everyone else??
Paul - I think that is really well said.
I agree with Paul 100%. If rules like this bother you, then you should not be in the business! If you were doing things they way you should the whole time, then all this form amounts to is a minor inconvenience.
I find this email to be very different than the other 2 emails CW sent……
The first two were meant to market the broker and try to solidify broker relationships. Those initial emails were torn apart by brokers on several blogging sites. The tearing apart of the first two emails was rampant and as result those emails gained a ton of unwanted exposure.
This email looks more like a public relations move meant to make CW look like champions of the prudent lending cause. I think they were hoping that a bunch of people would tear it apart which would in turn bring more attention to it.
This attention in turn would make people say “look, Countrywide is trying to do the right thing”. And it would be more powerfull than say an add in the paper because it would appear that it was not meant for public distribution.
This reminds me of when a jerk at a bar talks loudly enough to his friend so that everyone else in the bar can hear it. Acting like he is talking to his friend but he is really trying to comunicate with everyone within hearing distance.
Brilliant idea……. But it did not work.
People just deleted the email, just like they ignore the jerk at the bar.