For 25 years, the Massachusetts Mortgage Bankers Association has kept close watch on the industry for its members. Now, for the first time in its history, the MMBA is taking a formal in-depth look at both the industry and itself.
The association has hired one of the leading association consultants in the country to develop a strategic planning initiative, encompassing everything from internal matters and changes in the industry to ways to reach out to current and potential new members.
“We exist to serve a membership. What can we do to serve them better? What new products are out there? What new communications methods are there? Who are our members going to be?” said Susan Zuber, MMBA executive director, describing the thought process behind the study.
Aside from the fact that most associations operate with a formal strategic plan in place, the real tour-de-force behind the MMBA’s decision has been the way the industry has changed in the past few years, Zuber said. The impact of technology and the changing faces of players in the marketplace were two major areas the board wanted to examine.
“The board voted unanimously to go with this group, which we selected out of five proposals. Everyone is really committed to the process,” she said. “I give the board credit. They elected to go all-out.”
To do this, the MMBA hired the firm Consensus Management Group of New York and Virginia. During the six-month process to develop a strategic planning initiative, the firm will examine the industry in the state and beyond.
One of the most appealing parts of the firm’s proposal was to conduct one-on-one and group interviews with long-term and new members as well as non-members, said Zuber.
“We wanted to make sure we involved the rank and file,” she said. The association currently has nearly 400 corporate members.
The planning initiative began in early September. A draft report will likely be completed by the end of this year, Zuber said, with a final report due in the first quarter of 2001.
Technology is one major focus for the report, which will examine how high-tech innovations have changed the industry in the past few years and what changes may be on the horizon. Automated underwriting programs such as Desktop Underwriter, for example, are just one way the industry has been revolutionized by technology, said Dean Caso, president of HomeVest Mortgage Corp. and MMBA chairman.
“And I think it’s just the tip of the iceberg. I think we’ll continue to see enhancements, that the process will become much more automated, all towards getting rid of paper. There’s too much paper we push around here,” he said.
‘Hybrid’ Membership
Rather than fear advances in technology, the association recognizes that the mortgage process is still one in which customers long for human contact. Caso sees lenders using the Internet more as a tool to enhance production rather than as a way to generate it.
Technology has changed the business in particular for mortgage lenders, but also for the association.
“Technology impacts our delivery mechanism to our members,” Zuber said, mentioning online training as an example. “The dynamics for adult education are changing.”
The dynamics within the organization may be in for a change as well. Everything from the governance of the organization to its membership categories and membership benefits will be examined in the strategy report.
“We want to be sure we’re keeping pace with our members’ needs,” Zuber said.
To that end, one goal of the study is to get a better understanding of the board composition: who the board should be, what walks of life they should be from, how long they should stay on the board and how many board members there should be, said Caso. He estimated that the board is made up of about 30 percent mortgage companies, 25 percent banks, 15 percent affiliates and 20 percent wholesalers.
“It’s quite a broad mix,” said Caso. “We want to make sure we’re headed in the right direction so we attract all members of the lending community, not just banks and mortgage brokers … There are so many different hybrids out there now.”
Shared among those hybrids is the common concern about predatory lending. Although predatory lenders make up a small minority of the lending community, Caso said, it’s a topic that continues to receive national attention.
In partnership of the National Council on Economic Education, the association may begin offering a consumer education curriculum as one of only five pilot state programs in the country, Caso said. The program would likely be in association with a neighborhood organization in Boston, he added.
Such a program would target people who haven’t purchased a home yet, and those who are perhaps a year into the process and may begin getting calls about their increased debt from potential predatory lenders.
Zuber characterized predatory lending as the biggest issue facing the organization right now. Part of the report will include looking at the regulatory and
legislative environment its members operate under, and how the MMBA’s own efforts can best be advanced, she said.
One of the association’s goals is to make clear in the minds of its members, the Legislature and state Division of Banks the difference between subprime and predatory lending.
“A sub-prime loan is not prime; it can’t be sold in the secondary market, and it’s a big market,” Caso said, adding that such loans are offered to buyers who have “tough” credit but still are worthy of a loan. “Predatory lending can be any type of lending in which people are going to be taken advantage of. There’s a distinction there.”
With so much being examined, both Caso and Zuber said they were excited about the anticipated final report next year.
“We want it so that mortgage brokers in the state feel comfortable that we have their best interests in mind,” Caso said.
