Making Sense of Reverse Mortgages Information you need to make a good decision!

November 26, 2013

Unintended consequences

Filed under: Uncategorized — Scott Larson @ 11:40 am

I have been thinking about second order effects, the mortgage business, the Dodd Frank Act and ObamaCare.

Sort of a strange mixture at first glance, but hear me out.

As we are witnessing the disastrous rollout of ObamaCare, one of the unintended consequences is that the front line sellers of private insurance, the agents, have been cut out of the picture.  These people have been replaced by “navigators” – newly hired people that are supposed to guide the unfamiliar through the insurance process after 20 hours of training.  Ignore for a moment that these people have not been background checked, and may be working for the next version of the corrupt ACORN housing agencies and look at what has happened to the agents.

They have been discarded.  And they won’t be coming back.

The agents have spent vast amounts of time getting licensed, and learning their business.  They have invested in their careers, have dealt with state licensing agencies, and passed continuing education requirements. I could go on and on about the requirements of the job.   As a result of Obamacare, these experts have had to re-orient their business to other lines of insurance, or leave the field due to government regulation.

Is the mortgage business next?

We have seen incredible changes to the mortgage business over the last 6 or 7 years, some good, some bad, many justified, some just patently stupid.  But during my re-licencing this year (45 hours of continuing education for my brokers license, another 8 for my NMLS) one statement stood out;

LESS than 10% of the Dodd Frank Act’s regulations have been implemented

Less than 10%! only 9 times more regulation to come – woo-hoo! Let’s add another fact.  Currently 95% of mortgage originations are sold to the government.  Want another?  The Consumer Financial Protection Board (CPFB) a non-elected, non accountable is going to be an additional regulator in the mortgage world.

That is a dangerous combination for the mortgage business.

I said earlier that the insurance agents would not be coming back.  That’s my opinion, based on what i see in the mortgage business.  This business, due to regulation, has become much more difficult, for much less reward.  As we get squeezed, other careers become more attractive.  If I was forced out of the business due to regulators/regulation, How likely would I be to return?  I wouldn’t.  If intrusive regulation happened once, it would happen again.  And the industry would lose 25 years of experience…  replaced by a “mortgage navigator” perhaps?  with 20 hours of training?

I am not against regulation – quite the contrary, it is necessary and appropriate.  but we need to have a balance between industry needs, government regulation, and consumer protection, not the government domination that we appear to be moving to.

I love my career, I love my clients, I love the service I can provide.  But if I am forced to leave… I’m not coming back

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment

Powered by WordPress