In the past two years, many lenders began to match customers' income records with income reported to the IRS. Cross-referencing income lowers the likelihood of placing clients in mortgages beyond their fiscal capabilities.

Change and opportunity

Despite mortgage-industry challenges, brokers can expect many exciting changes and growth opportunities throughout this year and beyond. For those who run successful shops, consider increasing the number of lenders with whom you partner, particularly lenders that showed resilience during the economic downturn.

In addition, make sure to remain current on new licensing standards outlined by the Secure and Fair Enforcement for Mortgage Licensing Act (aka, the S.A.F.E. Act). They provide a significant step toward increasing integrity and reducing fraud in the residential mortgage industry.

Because stricter regulations and underwriting guidelines come with increased costs, many brokers who previously closed fewer than 10 loans per month may want to increase their production to compensate. Developing strong lender partnerships can be crucial to the success of such efforts.

Brokers also should continue to watch for higher interest rates, which many industry players believe could be inevitable by or before year's end. Planning for the likelihood of these changes and determining how to react in advance can be the difference between a thriving business and a struggling one.

Although some brokers and lenders view higher interest rates as a disadvantage, brokers will continue to have many opportunities to refinance loans for consumers looking for new terms and lower payments. In addition, purchase demand likely won't dive in the face of higher rates, especially if home prices remain low in response to elevated inventory levels.

Ultimately, many brokers who survived the market downturn have proven their strength in difficult conditions. To move forward, they must continue to originate solid loans, help past clients in need and watch market trends.

Building strong relationships with lenders can help with all of the above and lead to continued success in a mortgage market where change has settled in for the long run.

Vince Parlove is president of Michigan Mutual Inc., based in Bingham Farms, Mich. He oversees day-to-day operations of the company's 160 employees. Before joining Michigan Mutual Inc., Parlove served as executive vice president of secondary marketing for FMF Capital, where he managed 90-plus employees, selling more than $400 million per month into secondary markets. He earned a bachelor's degree from Adrian College in 1992. For more information, call (248) 203-1340 or visit www.michiganmutual.com.

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