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   ARTICLE   |   From Scotsman Guide Residential Edition   |   September 2012

Proactive and Reactive Education

Stay educated and informed to get ahead of the pack

The mortgage industry has faced unprecedented change over the past few years. For those of us who are still here and still originating residential loans, navigating these rough waters sometimes can be an arduous task. Some of us have finally seen land and set our sails in its direction, but others still seem to be going in circles.

The ability to see land comes to those who understand how we got here and where we’re going. A significant part of developing this understanding and vision for the future is attained by pursuing industry related education. Generally, education occurs through any experience that has a formative effect on the way a person thinks, feels or acts. In its narrow, technical sense, education is the formal process by which society transmits its accumulated knowledge, skills, customs and values from one generation to another.

This definition is eye-opening in how it relates to the mortgage industry and how the individual experience and outlook of every broker and originator has affected where they are now and where they are going. What is it that distinguishes one originator from another in our industry? To a large extent, what sets one professional apart from the next is a person’s self-driven motivation to pursue ongoing education, which in turns expands industry knowledge and develops superior skills. This could be called proactive education — i.e., an independent desire to expand and enrich your entire career.

Reactive education, on the other hand, is education that’s completed to comply with basic job requirements. An example of reactive education in the mortgage industry would be entry- level testing or annual continuing- education hours to comply with the Secure and Fair Enforcement for Mortgage Licensing Act, as well as any other industry policies and procedures that originators must learn about as mandated by their employers or regulators. This type of education is not optional; it’s required to perform your duties as a mortgage loan originator, in accordance with federal and state licensing requirements or the requirements of your employer.

The primary benefit of reactive education is that it provides brokers and originators with consistent reminders of federal and state laws — laws that may have changed since their last educational session. Reactive education helps to ensure that mortgage professionals are in compliance with the law and are making necessary changes to their business practices if at all applicable. The primary downfall of reactive education, however, is that it’s often done too quickly and with the intent to comply rather than comprehend. When people are not motivated to learn and simply go through the motions, it’s difficult for them to fully comprehend and retain the material in question.

That typically isn’t the case when it comes to proactive education, as mortgage professionals will pursue this type of learning solely for the purpose of improving and advancing their own production and careers. In the mortgage industry, proactive education can be much more thorough than reactive education, and in many ways, these types of learning have little in common. After all, proactive education is not a job requirement, but rather a desire to excel through knowledge.

Brokers and originators who are looking to expand their proactive education should consider any or all of the following:

  • Read sales and self-improvement books and media. Read as much as you can on topics that improve your business and keep you focused on honing your professional skills. Almost any industry related book or magazine you’ll read will provide something useful or offer a different perspective on techniques and ideas that are applicable to your business. Consider getting suggestions from friends and colleagues to build your library.
  • Learn as you drive. There’s no better time than on your way to work to listen to an audiobook or motivational recording to start your day. You’ll be amazed at how beneficial this can be to your business and even your personal life. Listen to music on the weekends, but save your driving time in the work week to advance your career.
  • Market and brand yourself with new technology. We’re in a new world when it comes to technology and what it means for marketing. Social media, search-engine optimization and video marketing have radically changed how we brand ourselves and our businesses. The more you can understand the benefits of using the tools of this generation, the more productive you can be. Learning and using these elements of Internet marketing may take time, but it’s time well invested.
  • Consider finding a mentor or coach. Surrounding yourself with successful and experienced people allows you to take a short cut to success by seeking their advice. You can learn what has worked and what has not worked for them, as well as which ideas and techniques you may be able to use in your own business. A mentor or coach also can hold you accountable for your goals and help motivate you to reach them — or even surpass them.
  • Understand the government-sponsored enterprises and mortgage markets. Be sure that you’re thoroughly familiar with some of the more technical aspects of the mortgage industry, such as lending standards; primary and secondary markets; underwriting guidelines; interest rates and the bond market; buy-back risks; and the intricacies of Fannie Mae, Freddie Mac and Ginnie Mae. Understanding how the loan process works and what it means to the consumer allows you to effectively and accurately communicate with your client. It’s imperative that you understand each and every detail about underwriting and any agency requirements or overlays that may affect your business. Use your knowledge to educate others, such as Realtors and other referral sources. Make sure, however, that you understand these topics from an industry perspective and not just from your employer’s perspective.
  • Familiarize yourself with federal and state regulations, as well as the Consumer Financial Protection Bureau (CFPB). It’s vital that you proactively seek out information to understand the mortgage industry’s latest rules and how they impact your business. The Federal Reserve rule on compensation, for instance, was one of many recent changes, and it’s now in the process of being revised under Dodd-Frank with the CFPB using its authority to amend and improve industry legislation. Regardless of the regulation at hand, it’s imperative that you understand the proposed and final rules thoroughly and objectively. Oftentimes, mortgage professionals subjectively learn about legislation from their employers or those who have a financial interest in people believing one thing over another. Always be sure to proactively — and independently — seek out your own answers.
  • Join national and state trade associations. Being a member of your trade association is not just a benefit to the industry; it’s a benefit to your business and ongoing education, as well. Sharing information and support among other colleagues will provide you with information that you would never have access to otherwise. It will take you outside your office’s setting and procedures and allow you to see the industry at a larger scale, which will then allow you to more accurately anticipate the future and understand coming trends.

There are many forms of proactive education, but the preceding list is just a good place to start the learning process. In short, it’s important to take advantage of the training your employer offers — as well as any required education — but you’ll likely find that the education you proactively pursue can be equal parts enjoyable and rewarding to your business. It’s easy to feel busy and overwhelmed by work in the mortgage industry but, no matter how busy your schedule may get, it’s crucial that you continue to pursue knowledge in this ever-changing industry to stay one step ahead of the competition.


 


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