This is an open letter from Countrywide to its brokers regarding the recent market situation. This is the third such communication in a series that started here, and continued here. What are you thoughts? Honest, genuine insight in to Countrywide or marketing drivel to placate an important (but problematic) revenue source?
Dear Business Partner:
My previous note in this series of communications outlined some of the decisive steps that Countrywide®, America’s Wholesale Lender® has taken to address projected industry declines in loan origination volume for the remainder of 2007 and into 2008.
The focus of this note is the ongoing importance of the mortgage broker “value proposition” in today’s mortgage market. This topic is particularly significant to all of us in the wholesale lending channel—lenders and brokers alike—as our industry adapts to the new realities of the current market environment.
With a shared goal of revitalizing the wholesale lending channel, we can and must work together to strengthen customer loyalty and enhance your prominence as a trusted advisor. This is not only an appropriate response to the growing misperceptions about wholesale lending, but it’s also the key to a prosperous and sustainable business model.
Succeeding in Today’s Environment and Beyond
In my mind, succeeding in today’s environment is primarily about a return to basics. Now, and into the future, success will be based on the fact that borrowers in all stages of the homeownership cycle will truly benefit from working with a seasoned mortgage professional. We have returned to the days when your value proposition is based on:
- providing borrowers with access to leading and competitive options in the marketplace;
- ensuring that options align with borrower financial needs and the ability to re-pay;
- guiding borrowers in making informed buying decisions; and
- serving as a long-term advisor for borrowers who may need some time and/or an “action plan” before they are able to qualify for a home loan.
In fact, I believe that the need for your expertise in these areas is stronger than ever before, especially as it relates to your advisory role. The complexity of financing a home is now heightened for many borrowers given the changes that have occurred over the past several months to lending guidelines and product selection. In addition, customers are confronted with a never-ending stream of often confusing media reports about what’s going on in today’s real-estate finance market.
Thus, an essential element of your value proposition is educating borrowers on the specific terms, conditions and even consequences of potential financing solutions. Best practices include:
- explaining loan program disclosures;
- illustrating, comparing and contrasting product features such as interest-only payment options, varying loan terms, etc.; and
- providing guidance and assistance throughout the home loan process - including after the loan has funded.
These simple, return-to-basics practices can strengthen consumer loyalty, solidify your role as a trusted advisor, and create a long-term referral stream from satisfied clients.
Consumer Awareness Resources
If you don’t already have tools in place to assist you with some of the practices outlined above, you may want to refer to the recent Interagency Guidance on Non-Traditional Mortgage Products. The guidance will give you insight into the steps that lenders are being encouraged to take to better inform borrowers on the features, benefits, and risks associated with non-traditional mortgages like Interest-Only and Payment Option ARM loan programs. The Federal Reserve’s web site also offers some basic consumer awareness brochures and other resources that may be helpful. In addition, here at Countrywide, we are currently developing new materials to assist you with further educating your borrowers on non-traditional loan products and other special programs. These materials will soon be made available through www.cwbc.com< or directly from your Account Executive.
For your convenience, I have provided links at the bottom of this e-mail to both the Interagency Guidance documents and some of the Federal Reserve consumer-education resources in case you are not familiar with these tools.
Focused on Your Success
At Countrywide, America’s Wholesale Lender, we remain focused on helping you provide your borrowers with the most appropriate, high-quality financing solutions. We also remain dedicated to supporting your value proposition. The two go hand in hand. The return to basics means catering to the needs of various borrower segments while developing informed “customers for life.”
Our organization remains fully committed to the wholesale channel, to the broker community and to boosting your business today and into the future. Thank you once again for your business and for the opportunity to share these thoughts with you.
Todd A. Dal Porto
Senior Managing Director & President
Countrywide, America’s Wholesale Lender
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