STOP! Stop selling mortgages: stop it now.
There is any number of definitions of ‘selling’. It could be defined as the act of persuading a prospective customer that buying the product or service would benefit them. It could be defined as influencing demand your way. A darker interpretation could be that selling is the art of shifting product, maybe reliant upon information asymmetry.
I cut my teeth in the freewheeling, unregulated days of the finance companies a few decades ago. We were trained to ‘upsell’- look for pockets of equity or disposable income and turn that into interest.
We thought we were being trained to sell. Obviously what we were crudely trained to do was to be predators.
Move forward in time to the year 2000 and a beach in Puerto Rico and the ‘sales conference’ of the mortgage division of a major (foreign) Bank. They had K.C. and the Sunshine Band appearing and performing one their hits, however they’d changed the words to “We gotta sell, sell, sell!”
It was so obvious that this was going to end badly. This company blew up in 2007 during the subprime mess; ultimately they too were desensitised into becoming sales focussed predators; feeding the machine.
Mortgages bought or sold? I would venture that under any of the above definitions, ‘selling’ a substantial, long term, often complex financial obligation is not what our industry does or should do.
A mortgage isn’t a consumable item- it’s not “bought” for its own intrinsic merit and it should not be ‘sold’ for the gratification of a need or a perceived need.
The concept of ‘selling’ a mortgage runs contrary to the requirements of the NCCP- it’s right there in the language. Brokers provide “credit assistance”; they don’t influence demand or encourage consumption, two concepts inherent in the selling of a product.
In the future brokers should sell their skills and experience, their accessibility, their neutrality and their commitment to their fiduciary duty toward achieving the most suitable outcome for their clients.
Confucius said: “The superior person understands what is right; the inferior person understands what will sell”
In the future right brokers need to focus on what is right and stop selling mortgages.
Remember: The future isn’t what it used to be