Today’s business world is full of ethical challenges and failures. As a commercial mortgage broker, you can ensure your reputation stays on solid ground and prepare yourself to deal with new challenges by getting past the myth that ethics are simple questions of morality or of absolute right and wrong. Ethics are standards of conduct and judgments about fair and appropriate behavior. You can improve upon them.
Consider the following sample scenarios of potential ethical challenges a mortgage broker may face:
- Over lunch, a longtime lending partner asks about a new borrower who you know has a material contingent liability that could spring to life soon. Do you disclose the matter, claim ignorance or something else?
- You are working with a borrower who seeks senior and mezzanine debt from two different lenders. During the negotiations, a sensitive point arises regarding collateral position in case of default. Both lenders ask you to “take their side” relative to the other. How do you respond? Could you have taken steps to prevent the issue from arising?
- A new lending partner asks you to market a program with exceptional terms but suggests that most borrowers will end up in a different program once in underwriting. How would you respond to the lender? What would you tell borrowers?
Clearly, ethics go a step further than just right versus wrong and address questions of human behavior, judgment and perception. Consequently, addressing ethics as a matter of training and industry standards is critical for today’s mortgage professionals.
There are five steps you can take toward improving your ethics in the workplace:
- Join a professional or trade association that promotes a standard of ethical conduct and that provides training on the subject. You can look into joining the CCIM Institute, the Mortgage Bankers Association, and the Society of Industrial and Office Realtors, among others. These affiliations will help you stay in touch with industry trends and provide peer-to-peer interaction to help you evaluate difficult situations.
- Read at least one book on ethics per year. Look for biographies or historical nonfiction rather than a book just about ethics; they will more likely be read and retained. A good story about people who dealt with a difficult ethical issue, how they resolved it and what they learned goes much further than a textbook on the philosophy. When you’re done reading, pass it around the office.
- Integrate ethics in your corporate culture. Pay more attention to the values statement when reviewing your company’s mission statement. Adopt a corporate code of conduct. Less formally, talk about ethical issues and how they were handled, for good or bad, at staff meetings, corporate events and training sessions. Sometimes, owning up to lapses can be one of the best ways to drive home the point.
- Plan for ethical challenges. Once a year, take 30 minutes and write down the three most-difficult ethical challenges you expect to face in the coming year, plus how you plan to respond. This will give you a chance to think through your responses well before an issue becomes urgent. This forethought also is a great way to focus on the important and long-term ethical issues likely to arise without being distracted by the details of the particular decision.
- Find a peer group, inside your industry or outside, where you can discuss ethical issues without judgment and where feedback is available. Having a group of peers who are open and willing to discuss ethical issues, even informally, may give you useful insight into others’ experiences, perceptions and expectations.
By taking these five steps, you’ll be better prepared to handle the subtle questions of judgment and decision making that come up every day in the mortgage and real estate business. And you will ensure that you have done everything possible to make sure that your reputation, the most important component of your business, is firmly established.