Mortgage Industry Trends

The following is a posted response to Source Media / Mortgage Technology editor Anthony Garritano’s weekly blog (http://www.mortgage-technology.com/plus/blog/) discussing mortgage processes and recent published research – Get Smart is the title of the post.

First and foremost, I would like to thank Tony and everyone else who has contributed on this blog this week.  As Tony alluded to, the discussions regarding the use of processes within the mortgage industry are long overdue.  As I’ve stated many times, we need to move beyond the current debates and dogma of the past and recognize that the industry’s future will probably be unlike any of us has dealt with previously.  Open discussion in the holistic context of customers, regulators, investors, realtors, secondary markets, and even lawyers are not only productive – they are demanded.

The creation of the Mastering Survival Integration for the Mortgage Industry sector report was, for Rick Grant and me, a labor of both pleasure and pain.  A pleasure from the standpoint that we needed to bring to the forefront new ideas and trends supported by many sources which we felt the market was overlooking as it seeks solace and comfort.  Painful, in that what we assembled from both inside and outside the industry when examined comprehensively, signifies a significant and potentially problematic realization for individuals and processes rooted in history.

There are a great many things that we examined to reach a logical and comprehensive understanding of our situation – sovereign wealth funds, global investment climates, permanent wealth shifts, consumer behaviors, competition, projected growth, M&A’s, securitization, secondary markets, and the list goes on.  Why?  From experience within and across industries we know that there are material lessons that can be learned from others – especially by not repeating their mistakes. 

Without a complete realization and internalization that to improve our operating situations we must clearly address our data interoperability issues while also understanding and encapsulating micro and macro processes.  Furthermore with the recognition that we are entering our fourth generation of globalization (not first), sourcing of processes via internal or external providers will demand precision, adaptability, variability, orchestration (to achieve iterative best-in-class) and collaboration.  You see, the ways of the past are exactly that – past. 

While we are not saying it is time to “throw the baby out with the bath water,” it is time that we come to the realization that data and standards alone will never singularly fix the issues.  Process alone will not fix the issues. And of course, outsourcing is never the answer for processes that are poorly defined or executed.  Most outsourcing firms have entirely missed the mark when it comes to the mortgage industry – they are merely order takers, not saviors (regardless of the labor arbitrage opportunities).

I could continue to go on describing why changes or survival integration (i.e., M&A’s, restructuring, transformations, and insourcing / outsourcing) is our industry’s future, but I think that is obvious given the high-profile failures of late, the bailouts, and the white-knights rushing in to pick off the bones of our dying.  The corporate “death toll” is just beginning as we enter the second double bottoming of this crisis.

I will leave you with one of history’s most notable quotes from 1516 when Niccolo Machiavelli wrote, "And one should bear in mind that there is nothing more difficult to execute, nor more dubious of success, nor more dangerous to administer than to introduce a new order to things; for he who introduces it has all those who profit from the old order as his enemies; and he has only lukewarm allies in all those who might profit from the new. This lukewarmness partly stems from fear of their adversaries, who have the law on their side, and partly from the skepticism of men, who do not truly believe in new things unless they have personal experience in them.”

Regards,

Mark Dangelo

www.Innovative-Relevance