TheMReport — News and strategies for the evolving mortgage marketplace.
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take 5 Courting Consumers While Remaining Compliant In a frenzy to prepare for the new regulations, some wonder if too much focus has been taken from the consumer experience. Chris Cobbs, managing director for National Asset Advisors, LLC, has a few thoughts on what the industry can do to ensure the consumer comes first. M // We're used to hearing a lot of bad news about the housing industry. What inspires you about housing today? Cobbs // From our perspective, as an operator within the ownerfinanced contract-for-deed space (land contracts), we are inspired by the desire that people have in the U.S. to own their own home. Even after all of the credit-related issues that homeowners in our country have faced since the mid2000s, people overwhelmingly list homeownership as a primary goal to which they aspire. This occurs across demographic sectors, economic sectors, and educational levels. Americans want to own the home they live in, and despite what some government bureaucrats might believe is best, that type of social entrepreneurial spirit is inspiring. M // The industry has been completely absorbed with preparing for the new rules to take effect this month (as of the press date, the rules had not yet launched). How do you think the consumer will fare as companies settle into this new way of operating? Cobbs // Unfortunately, in the zeal to regulate, we believe new rules will negatively affect the consumer in ways that serve to diminish the availability of competitively inspired services. There are more than a few stories circulating about companies that have moved out of the servicing business, not because they were forced to either provide better customer service or lose business 6 | The M Report "Even after all of the credit-related issues that homeowners in our country have faced since the mid-2000s, people overwhelmingly list homeownership as a primary goal to which they aspire." to competitors but, rather, because of the risk of exposure to a regulatory environment that might be untenable in its efforts to demand perfection. We've had excellent legal minds involved in the process of understanding the breadth of the effect of new regulations on the business environment. At some level, we believe if we were to leave decisions entirely to the legal review, we might not actually ever service another note again. Over time, the risk may subside, as companies and regulatory agencies become more oriented to what rules are really important to consumers. Until that time, until that learning curve is experienced, we think it's very likely consumers will be increasingly frustrated by the rigidity with which servicers handle their accounts—rigidity that will be forced onto those servicers who remain by regulators tasked with enforcing the current array of rules and regulations. That being said, there is absolutely no doubt that reforms are a step in the right direction, especially with regard to the manner in which consumers are informed with respect to their home loans, the rights they have, and the speed with which lenders respond to customer inquiries. M // Despite recent layoffs at many organizations, the field is still flooding with talented companies looking to lead and innovate in the industry. What is your company doing to stay ahead of the competition? Cobbs // Our executive manage- ment team continues to commit resources and take the steps necessary related to hiring, licensing, internal structure, and strategic partnership to present ownerfinanced contracts as an economically viable asset class among the institutional investment industry. We are committed to being compliant with all aspects of the mortgage lending and servicing laws for the states in which we conduct business. We have created an innovative approach to originating legally compliant, ownerfinanced contracts and to ensuring that we fulfill our obligations to our customers as a loan originator. Similarly, as a servicer of ownerfinanced notes, we employ a hightouch approach to work with our customers so that they might have long-term success in their desire to own their own home. M // How will you use your particular brand of leadership to guide National Asset Advisors into continued success? Cobbs // We have three primary areas of focus within the operation of our companies: our employees, our clients and customers, and our community. Our employees are our primary resource. Our brand of business requires a high-touch approach to servicing because our customers (those who purchase homes via owner-financed contracts) are entitled to being treated with dignity and respect, regardless of their economic circumstances. Our employees are on the front line of this initiative each day, and it has been our experience that employees who are treated with the dignity and respect they deserve are more likely to treat others, including our clients and customers, on a similar level. M // Among the wide array of new policies and regulatory changes, what critical initiatives have had the greatest impact on National Asset Advisors? Cobbs // By far, the enactment of federal residential lending legislation, in which our particular form of homeownership structure, owner-financed contracts (or land contracts), were defined as instruments of debt and were, therefore, to be regulated similarly to mortgage loans. This provided the opportunity to scale our business and provide an array of services related to owner-financed contracts, which would ultimately be of an institutional quality.