Wednesday, December 29, 2010

2011: The Year of Big Decisions

If we think 2010 was a tough year, then hang on because 2011 is going to be fast and furious. With all of the legislative and regulatory changes coming within the next 18-24 months, we will not be able to sit back and hope it all works out for the best.
Yes, there is some good news … all loan officers, no matter who you work for, are now going to be paid on an equal compensation program. Unlike in the past, either one side or the other had an advantage, but now compensation becomes one set of guidelines starting April 1, 2011.

Loan officers, effective April 1, 2011, will be paid off the loan amount only, plus any bonuses developed by companies, with nothing involving fees, programs or interest rates.

The broker/owner is going to have to plan for all of the following:

1. How is my company going to be paid?
2. How much is my company going to make on the loan?
3. How much does it cost for me to originate the loan?
4. What is my compensation program going to look like?
5. Am I going to have a bonus program and how is going to be structured?
6. Is my company going to be a broker, banker or a hybrid?
7. How do I attract good producing loan officers?
8. Can I stay competitive?
9. Am I going to be able to meet all of my deadlines on my own, or do I need outside help?
10. How do I make sure I keep my loan officers within Nationwide Mortgage Licensing System (NMLS) timelines and requirements?
11. Have I met all of the minimum wage and labor requirements?
12. What is your mortgage origination projections for 2011?

Now that you have answered these questions, you are ready to sit down and develop your own business plan for 2011. In the past, we have never had to experience the number of challenges in developing a plan for 2011. It may be overwhelming, but as the old anecdote says, “How do you eat an elephant … one bite at a time.” The year 2011 may one of the most challenging years to date, but it is going to be one of the most exciting and fun years as you develop your company into the fighting machine it has to be to survive. Don’t give up.

As you look at the overall market, in 2006 there were 1,800 mortgage companies in the state of Illinois alone and a total of 18,000 loan officers. In 2011, we will see less than 700 companies and approximately 5,000 loan officers in Illinois. How does that make you feel? It should make you feel fantastic as you are a survivor who has less competition to deal with and you will have a greater opportunity with the right plan to gain increased market share.

Everyone predicts that the banks are going to take over the market, I can assure that has been said at least five times since 1986. Mortgage brokers and mortgage bankers continue to survive and develop their own market and niche. Why, because they are innovative and are filled with an entrepreneurial spirit. So, let’s be aware of what others are doing, but let’s develop our own plan for survival and increase our presence. Remember, no matter what the market was doing, good or bad, the mortgage customers came to you, the mortgage broker and mortgage banker, because you were more knowledgeable, persistent in getting a loan and more economical.

As a mortgage broker and a mortgage banker, we also one other thing that no financial institution can sat and that is we are licensed professionals … be proud of that.

Once you have figured out how to navigate your business through what lies ahead in 2011, I hope you’ll ponder what you can do in terms of helping the industry at large. The greatest opportunity to make a far-reaching impact comes when many small companies band together as one. Whether that’s through getting involved in a trade association, making an appointment with your legislator, taking continuing education classes or attending industry events, we all have many opportunities, and the responsibility, to not only see to it that our companies endure, but that our industry thrives as well.

So as we enter the year 2011, we have a lot to look forward to as long as we are willing to make the difficult decision and put together a plan that is real and obtainable. We will continue to be under attack, but we have survived 15 years of new regulations and we continue to be here, so they cannot do much more to hurt us.

Posted via email from WESTCHESTER COUNTY DISTRESSED PROPERTY INFORMATION

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