Ethics in Mortgage Lending - Then and Now

As a member of the mortgage community I witnessed the comings and goings of many mortgage employees for the last twenty years. In recent years, we witnessed first hand the ultimate human tragedy – people getting what they wanted. On a national scale we watched unashamed homebuyers signing promissory notes for homes they could not afford, MI companies taking on more and more risk, investors making erroneous assumptions based on never ending appreciation and the entire time mortgage personnel around the country worked over time and double time to keep the Humpty Dumpty mortgage world smiling.

Then Humpty Dumpty’s wall began to sag and sag and sag until off he went! Some say he was pushed and the blame game started. I say he wasn’t pushed but just got fat, lazy, greedy and brazen from bottom to top – especially at the top – the part that hit the bottom hardest. Ethical behavior was thrown out the window like ticker tape for the parade of money to be made.

So now put Humpty Dumpty back together again, or as the story goes, we can at least try. We will run into barriers, especially those of us in sales. Polishing the tarnished image held by consumers, rebranding our offerings and finding sales channels that work best are all daunting tasks.

In the last few years most mortgage professionals whether in sales or operations, have had their world rocked, turned upside down and perhaps even ruined. People who were reading others credit reports and approving loans find themselves in foreclosure. To stay in this business over the last two years has taken an act of faith and commitment to ourselves and the mortgage industry. With luck and hard work our efforts will be rewarded and our lives righted again…maybe not as flamboyant but hopefully not struggling to survive and surely with a steady eye on strong ethics.

Before the recent collapse we mortgage professionals lived in unbelievably rich times. Most loan officers, processors, underwriters and even vendors made really good money. Wages grew and commissions abounded. Company parties and trips were free and frequent and sales soared.

When it ended we found ourselves realigning our relationships and re budgeting our families. Then we began the journey back to learning the true purpose of mortgage lending (putting and keeping people in their homes) and re-learning our profession (calculating real income and doing FHA loans!). We also now understand the mine-field that is our industry. We no longer play at our work but put thoughtful effort into each loan so as to deter any unintended consequences. Liars loans, false appraisals, misrepresented income...are they a thing of the past? No, there are still those out there that need lesson in truth but for the majority of the people who once or still work in mortgage lending they have found a new the joy of working with the old saying "Tell it like it is".