From the Editor
BY IVANNA C. SUKKAR, EDITOR
It’s often saId that to succeed and stay ahead of the game, you must
change wIth the tImes. thIs advIce seems especIally relevant to mort-
gage brokers these days.
In fact, the mortgage-brokerage industry has seen some of the biggest changes in the past
few years. just look at the industry’s employment data: The number of mortgage brokerages
nationwide went from 53,000 in 2006 to an estimated 12,000 in 2010, according to a recent
Access Mortgage Research & Consulting Inc. study (
sctsm.in/4345). That’s a decline of more
than 77 percent.
To stay in the mortgage business, many brokers have indeed been changing with the times
— and turning to branch opportunities and retail banking. This is nowhere more evident
than the pages of Scotsman Guide. In fact, we’ve seen an increase not only in advertisers
promoting their branch opportunities but also in editorial content on the topic.
With that in mind, we decided to address this change in the industry and dedicate much of
this month’s content to branch- and banking-related articles. Obviously, there’s a lot to consider when making such a significant change as going from broker to banker, from regulatory
and compliance issues to the paradigm shift that comes with such a transition. And surely,
many brokers will decide that they prefer — and are able to — stay on the brokering side of
Mark Buskuhl of Southwest Funding LP lays out many of these considerations, including
the pros and cons of becoming a banker, in his article on Page 21. If you are thinking about
making the shift, you also have the decision of whether to join a national banker or a local
one. On Page 36, LoanSouth’s Kim nelson discusses the benefits of joining a community
bank. And in this month’s BackSpace column (Page 59), associate editor jennifer E. Garrett
discusses some of the key differences between being a broker and being a branch operator.
Whatever your choice — whether you remain a broker or take the leap to banking — we all
know that the recent (and ongoing) regulatory changes, as well as changed lending products,
make the industry’s future less than certain. Ken Lambert of Ken Lambert Mortgage Enterprises Inc. offers his forecast of where mortgage products may be headed on Page 26.
Looking at the mortgage industry as a whole, there was a 51 percent decline in employment
from the peak in February 2006 through this past February, according to Bureau of Labor
Statistics data. It’s likely safe to say those who remain — brokers and bankers alike — have
mastered the art of changing with the times.
… in July’s Scotsman Guide
• Underwriting and your
• I do: How weddings can
lead to home financing
• Mortgage insurance and
• Spotlight: Missouri after
… and much more.
Online? Check out current and past editions
of Scotsman Guide at scotsmanguide.com.
TIP OF THE MONTH
Avoid credit surprises
Have you ever asked clients to pay off an old
debt then watched their FICO score drop?
This can occur because negative defaults become current when new payments occur. Instead, help clients negotiate with collection
agencies and others. As part of any agreement, require the deletion of old accounts.
Credit scores underpin your success. Know
how to restore them or team with a company
— ELIzABETH KARWOWSKI
GET CREDIT HEALTHy
In the Past Month
Pending sales up;
new-home sales stuck
WASHInGTOn, D.C. — Pending U.S. home sales rose modestly this past March, climbing for the second consecutive
month, the national Association of Realtors (nAR) reported.
“Since reaching a cyclical bottom last june, pending home
sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own,” nAR chief
economist Lawrence Yun said.
nAR also reported existing-home sales rose 3. 7 percent
from this past February to March. Total sales of single-family homes, townhomes, condominiums and co-ops rose to a
seasonally adjusted annual rate of 5.1 million in the month,
continuing what nAR called “an uneven recovery.”
Meanwhile, the U.S. Commerce Department reported that
sales of new single-family homes in March remained far below sales from 12 months earlier. At the March rate of sales,
it would take 7. 3 months to deplete the new-home inventory, the Commerce Department reported.
According to some researchers, fewer new single-family
houses are being sold in the U.S. than at any point since
Existing-home sales: June 21
new-home sales: June 23
Pending home sales: June 29
Case-Shiller: Home prices still falling
nEW YORK — U.S. home prices dropped this past February, according to the S&P/Case-Shiller Home Price Index.
The 10-city composite index showed prices 2.6 percent less
than a year ago, while the 20-city index was off 3. 3 percent
over the 12-month stretch.
“There is very little, if any, good news about housing,”
S&P index committee chairman David Blitzer said. “Prices
continue to weaken, trends in sales and construction are
Prices in Atlanta, Cleveland, Detroit and Las Vegas were below
their 2000 levels. Phoenix barely avoided joining that group.
Washington, D.C., new York, Los Angeles and San Diego,
meanwhile, held on to some of the large gains experienced
before the downturn.
The national Association of Realtors reported the national
median price for all housing types was $159,600 this past
March, down 5. 9 percent from March 2010.
The Commerce Department said the average sales price for
a new home sold in March was $246,800.
S&P/Case-Shiller Home Price Index: June 28
U.S. wages reach 82-year low point
WASHInGTOn, D.C. — Financial analysis conducted by USA
Today found U.S. wages as a percentage of personal income were at their lowest point in 82 years in 2010.
Wages made up 51 percent of personal income last year,
while government payments hit a record 18. 3 percent, as unemployment benefits, rising health-care costs and a sluggish
economy pushed the figure higher, the newspaper said.
Government aid came out to an average of $7,427 per citizen last year, more than double the $3,686 average from
1990, with figures adjusted for inflation.
Farkas guilty of $2.9 billion fraud
RICHMOnD, Va. — Ex-Taylor, Bean & Whitaker chairman Lee
Bentley Farkas was convicted in a $2.9 billion mortgage-fraud scheme that helped sink Colonial Bank.
Farkas was found guilty on one count of conspiracy to commit bank, wire and securities fraud; six counts of bank fraud;
four counts of wire fraud; and three counts of securities
fraud following a 10-day trial. He is to be sentenced july 1.
© 2011 United Press International. All rights reserved.