Have you heard this before? "So what's the big deal with me learning about my industry? As a new owner of my own shop I know it's all about Production. Making bank deposits in my company checkbook because I bring in customers and closing them – so that's where I focus all my attention! How to find customers, sell them & close them - is all that matters to me!"

That's actually a common thought, and the absolutely wrong one to focus on. That's our opinion on that limited thinking about staying in business over any length of time. Our industry is slow to change many things and the one hand, yet changing all the time. Which is one reason mortgage loan providers have to stay flexible and nimble, to survive longer than just a year or two.

Instead, had you been attending State & National conferences and conventions to ‘learn and not play'; carefully studied industry trade papers on a regular basis, imagine what you would have seen coming, and prepared yourself for: Potential law suits against you, after having seen articles about mortgage brokers getting sued who didn' clearly realize they were responsible under Truth in Lending (not just ‘lenders'), when you advertise to consumers by flyer, newspaper, Internet. etc. as compliance with Reg. Z disclosures is mandatory (12 C.F.R. Part 226, Supplement 1, Official Staff Interpretations, 226.2: Definitions and Rules of Construction 01/01/01). Like maybe you have a website, you post Rates but neglect to show APR as well.

You would have been reading about the Gramm Leach Bliley Financial Modernization Act of 1999 – Privacy Statement and know that the required security protection features, needs to be in place pursuant to the Federal Trade Commission Regulations on or about July 15, 2003; and that as per 16 CFR Section 314(d) you are responsible for seeing your outside service providers – including processors and telemarketers – (1) have a manual from you, and (2) that you have a written contract with each of them stating they will comply with GLB 67 Federal Register (like maybe you use an outside processor and 'hoped' she had adequate security measures in place for your files at her house). Or how about the new telemarketing - no call lists and fax restriction laws? You might not have set up an expensive telemarketing department to solicit former customers, or new ones either. Besides the fines you may get, you would not have spent the money to start up those endeavors! Only to shut them down 60 days later ….

Or what if you operated in South Carolina, and saw how the predatory regulations devastated your North Carolina office's production, when they had major legislation changes. Had you been reading the trade papers all along, you might have side-stepped the subsequent Georgia fiasco, where almost every major lender "ran for the hills" – and where you had started to open up a new branch office maybe!

Unfortunately, we have heard many stories where new shop owners didn't pay much attention to current events in this ever changing industry, and they were driven out of business.

To date our 'Going Out on My Own 101' & our 'Subprime 101' are the two most popular CD Lessons in our "Secrets of The Mortgage Industry" training collection!

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We spotted this question on an Internet residential real estate mortgage industry discussion group last week. "I continually see posts from people with last minute closing issues. Specifically, stips/conditions that mysteriously appear. From what I am able to gather from the posts, it appears that the loans involved are not prime/A paper loans. My personal experience is that last minute stips/conditions never happens with prime/A Paper loans, but is generally the norm with subprime. I do all my own processing and do both refinances and purchases, and have dealt with numerous prime lenders and numerous subprime lenders. And the results are consistent. Thus, I can only assume that last minute "out of the blue" stips/conditions are simply the nature of the subprime business ...."

The conclusion drawn by the individual who started this commentary is partially true. What appears to be ‘last minute out of the blue stips' are indeed the nature of the non-conforming industry when incomplete packages are submitted to wholesale funding sources. Because, unlike ‘black-box' conforming lending, the applicants are not uniform. In conforming, guidelines and approvals can be programmed into computers, and loan determinations can be effortlessly obtained via data entry in their intelligent Internet accessed engines, resulting in instantaneous decisions. Of course, there is a certain technique to this procedure, but generally it's pretty clear-cut. The subprime customer, at times have uncommon kinds of income, unusual property types, and they use their equity differently (if it's a routine non-purchase re-fi kind of transaction), usually debt consolidation loans not rate & term re-fi's. Making the transition from black-box stip lists to the non-conforming processes, signals a need to study all the pieces of paper you collect in a subprime file carefully. They often are full of surprises – that's the difference!

Will this situation continue for this individual? Probably so. Even "good" conforming loan providers need to understand what all the differences are between these different types of lending. If you have experienced a similar situation to this poster, we suggest you hook up with a good trainer/mentor consultant right away. Every loan file that gets goofed up, could end up costing you many thousands of dollars in lost income, and a lot of heartburn too!