Despite forecasts of gloom and doom, broker innovations have kept the future bright

Layne Sapp, founder and CEO, MILA Inc.

As published in Scotsman Guide's Residential Edition, September 2006.

This year began with a tiptoe in the mortgage industry. Before it even started, industry watchdogs and leading lenders, brokers and Realtors anticipated a potential bubble burst not in terms of "if" but "when."

Soon into the year, class-action lawsuits were brought against big players. Other shops were closing doors and laying off employees at staggering numbers. Many argued that all this was part of the industry cycle. "Sometimes you're up, and sometimes you're down," they said.

Unprecedented growth in the past five to six years led to homeownership rates close to 70 percent, the highest in U.S. history. So when things stopped escalating at the rates to which we became accustomed, many feared a collapse.

The reality is much less dramatic. Although we certainly need to rethink our strategy to find success in this new market, it is foolish to say that we have hit some kind of black hole. The bubble didn't burst. It just changed shape, and we need to adapt our approach to take advantage of it.

Many innovations are benefiting borrowers and mortgage brokers who take advantage of them. They include increased creative product development, technological improvements and enhanced borrower-education tools.

Creative product development

To meet the needs of today's borrowers, lenders have developed creative products that help more people get into a home. From 40- and 50-year loans to growing option and hybrid ARMs and interest-only products, there are simply more ways to fund mortgages.

Many previously underserved segments of homebuyers are benefiting from such mortgage products. Single women in particular have become a powerful demographic in the real estate market as a result of these various new loan options and more buying power than they had in the past. According to the National Association of Realtors, single women now make up the second-largest group of homebuyers at 21 percent.

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