Lance Cassell is the managing director of the Consumer Mortgage Bureau
, an organization that provides consumers tools and education to make informed homebuying decisions. For this edition of In This Corner
, Cassell sits down with HousingWire to talk about a new originator designation program through the CMB that creates an online network of credited originators for consumers to choose from. Originators must apply and be accepted to the program, where they can create an online profile, post pictures and a resume.
HousingWire: What motivated the Consumer Mortgage Bureau to develop this kind of "originator standard," if you will? Where did this idea to classify mortgage originators come from?
We feel strongly that the borrowers should know more about their mortgage than the loan officer. Consumers need to make sure they know their loan officer and know the type of loan they're getting. With the launch of the National Mortgage Licensing System, put in effect by the SAFE Act in 2008, there are two distinct types of loan officers — licensed officers and ones that simply need to be registered. We created the designation program to not only explain what those differences are, but to allow loan officers the opportunity to take it a step further — create a profile page, put a picture or their logo up there, tout some of the training they've done. It also allows them to put their specialization up there.
HW: Since this designation can be applied nationally, how do you feel this will change mortgage origination in the future?
With the advent of SAFE Act, a minimal standard was put across nationwide. There's a minimum number of hours of continuing and pre-licensing education. There's also national test originators have to take and a state test for every state they want to do business in. We believe the mortgage industry is coming out of a darker time. We're trying to elevate the industry and enrich the mortgage process, by bringing more accountability to it and more transparency to it. In the end, I think you'll see potential homeowners getting the mortgage they should be getting. Frankly if they don't qualify for a mortgage, they'll know why and be able to go back, fix whatever they need to fix, and come back and get that mortgage.
HW: Sounds like everybody's trying to create this standard for the industry players, and what your organization is trying to do is focus on the consumer and build a smarter consumer. Is that a valid conclusion?
Absolutely. In the mortgage industry, it's alphabet soup. We have a glossary of terms on our website for consumers and ultimately we feel they need to be educated. There's no doubt it takes two to tango. When the borrowers put their name on and sign that loan agreement, that's the biggest investment they're going to make in their life. It's a 30-year mortgage and they have to know what they're signing. Of course, there were professionals out there that took advantage of programs, but the mortgage industry is made up of problem solvers. Over the last five to 10 years, they've figured out how to solve a lot of problems, and this just another one we're all trying to solve together.
HW: With this new designation program, what can borrowers and consumers expect from an originator with a title (registered mortgage professor and licensed mortgage professional) as opposed to one without? What will be the difference?
I think the biggest difference is transparency. I know for a fact many of the consumers I talk to don't know the difference between a loan officer at a bank around the corner versus a mortgage broker, versus a mortgage originator in another state. We're really trying to be transparent as much as possible in the process, and I think federal legislation that is coming down has helped. There are all kinds of programs and money available for first-time homebuyers and for people who have gotten in over their head. This designation will show consumers that the mortgage originator cares. They care enough to differentiate themselves from other loan originators out there.
HW: Your company is taking full responsibility in designating these originators and saying, "These guys know how to do it right." What if they mess up? How do you account for ethical lapses in this designation program?
The ethical piece comes into play because that is a gray area and it has been. Originators have taken a lot of heat in the media for different things over the last couple years. We take that into account and if somebody has negative feedback put on their profile, we get both sides of the story and if we need to remove them, we remove them.
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