The buzz from Toronto

On The Road

THE BREEZES BLOWING OFF LAKE Ontario felt nearly gale-like, rushing as they did through a thinly populated Toronto convention center during the Mortgage Bankers Association of America's (MBAs) Annual Convention held there in mid-October. Those hearty souls who chose to attend the

first such event outside the United States noticed some notably missing companies, some of which apparently had pulled out at the last minute. The two most often-heard explanations for the no-shows were fear of closed borders due to threats of terrorist attacks and companies being too busy in this record production year to need-or want-to come.

Steve Renock, president and chief executive officer of CUNA Mutual Mortgage Corporation, Madison, Wisconsin, said he went to Toronto because of his membership on MBA's Residential Board of Governors (RESBOG). "But if it hadn't been for that [responsibility]," admitted Renock, "I'm not sure I would have wanted to go either." It was a "tough call" for companies and their employees, said a sympathetic Renock.

But in Tom LaMalfa's view, "The people who were missing should have been there." LaMalfa, managing director of Wholesale Access, Columbia, Maryland, said it was "very disappointing to go to three different committee meetings [and not] have input from [some of the biggest names in the industry]. These are important players who need to participate in these 'democracies."' LaMalfa, who said convention attendance was down substantially from last year, praised some companies, including Washington Mutual, Principal Residential, Charter One, Interfirst, HSBC and GMAC for honoring their registration commitments.

Robert M. Couch, who wears two hats-one as president of New South Federal Savings Bank, Birmingham, Alabama, and the other as vice chairman of the MBA-had a "half-full glass view," saying he had heard "scuttlebutt that the exhibitors were happy." A candid Couch said that the "bag people"-those attendees who traverse the exhibit hall mostly in search of promotional items like T-shirts and yo-yos-weren't in evidence, "but the [business] conversations were as fruitful or more than in years past." He praised the MBA for standing up to terrorist threats in refusing to cancel the 88th annual event.

Meanwhile, those who did attend the convention in Toronto got a fascinating tour-de-landscape from former British Prime Minister John Major, a keynote speaker. Interviewed by journalist Anthony Lewis, in an appealing faceto-face sit-down on stage, Major said global bankers must help fight terrorism by getting together "to track laundering of money used for illegal purposes." On economics generally, Major noted that "for the first time in 50 years," recessionary conditions now exist simultaneously in the United States, Japan and Western Europe. "With globalization you get global recessions," explained Major. He forecast a "shallow, U-shaped downturn" that should end in "the middle of next year."

Proving that today's oddball notion can be tomorrow's mainstream idea, the Nehemiah Corporation of California, Sacramento, California, has gained considerable credibility for its seven-yearold down payment assistance program. The nonprofit program has distributed $300 million since 1994, "transforming the lives of more than 88,ooo families," said a proud Scott Syphax, president and chief executive officer of Nehemiah-which is named for a biblical figure credited with rebuilding cities.

In a conversation with this columnist at the MBA Annual Convention, Syphax said the program's founding philosophy has been widely embraced. "We went from being heretics to being imitated," said Syphax, referring to low- and nodown-payment financing programs now commonly offered by Fannie Mae, Freddie Mac and major lenders. However, Syphax said, there are still "pockets of opposition to our purpose* from those "who continue to believe that if a prospective borrower does not have sufficient funds for a down payment, they must not be quite ready to own." According to Syphax, the issue boils down to "how much risk society is willing to take on to build its urban centers."

Not surprisingly, there was disagreement at the annual convention over an MBA position paper on the government-sponsored enterprises (GSEs), which questions whether some current Fannie Mae and Freddie Mac activities are within the GSEs' charters. "We clearly disagree with [MBA's] position," said Dwight Robinson, senior vice president, corporate relations, who added that the MBA's position is "not new" and questioned the timing of the document's release. Paul Peterson, Freddie Mac's executive vice president, single-family business, said, "Congress has defined a bright line" separating primary and secondary market activities, "and it appears the MBA wants to change that." In a news release, the MBA was careful to note that the issue paper "did not set forth any new policy toward the two GSEs." Rather, the release stated, it is "the culminating activity of mission analysis undertaken by an MBA blue-ribbon panel of industry experts" after legislation was introduced by Representative Richard Baker (R-Louisiana). The document sets forth an analytical framework against which to measure GSE initiatives, according to the MBA.

And, finally, if you've ever wondered why some employees don't seem to quite fit the jobs you've given them, Pat Sherlock, founder and president of QFS Consulting Group, Medford, New Jersey, has an intriguing hypothesis, specifically relating to mortgage originators. Speaking at a GHR Systems client conference in Absecon, New Jersey, this past September, Sherlock said, "Up to 6o percent of mortgage originators should not be [originators." The most common mistake when hiring a mortgage originator is to assume that similar, prior experience is a key indicator of future success, according to Sherlock. In fact, she said, she'd rather hire a person with the right personality characteristics and then train him or her to do a specific job than vice versa. "You have to have a need to achieve," she advised. "Nobody can give it to you." Sherlock tallied the cost for such "mishirings" at $190,000 per salesperson.

AUTHOR_AFFILIATION

Neil J. Morse has covered the mortgage finance industry for nearly five years and knows a quotable quote when he (over)hears one. "On the Road" will be an occasional column we run throughout the year. Morse can be reached at morse@ntplx.net.