Mortgage bankers confab reflects tough times for industry

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Hotels at the San Diego Convention Center are sold out today as lending professionals gather for the Mortgage Bankers Assn. annual convention. But the throngs do not appear happy.

There’s a slightly desperate edge to many of the sessions as lenders and loan servicers ponder how to deal with the fiasco created by loose lending a few years ago during the housing boom.

At 11 a.m. conventioneers had their choices of four specialized sessions, including a meeting focusing on pending legislation and regulation in Washington and the states -- what was billed as a ‘major transformation’ for home lenders. Translate: more restrictions and increased government involvement in the business.

Alternatively, attendees could head for a session titled ‘Doing More With Less Warehouse Funding’ -- a reference to the once-plentiful pools of cash that allowed independent mortgage bankers to compete with the huge banks by funding their own loans before eventually selling them off in pools. Where there once was $250 billion in capital for such operations, there is now about a tenth as much -- making fewer options available for consumers and small lenders as well.

Also at 11 there was a panel on Making Home Affordable -- the Obama administration’s initiative to get homeowners to refinance or otherwise modify the loans on their underwater homes to keep them out of foreclosure and limit lenders’ losses. The key word here would appear to be ‘bottleneck,’ if calls to The Times from consumers trying to get their mortgage restructured are to be believed.

Just one session appeared to be looking past immediate problems to the future -- a look at how technology is tempting lenders to market mortgages directly to consumers, cutting out much of the infrastructure of brokers and loan officers that most home buyers are used to. Perhaps these efforts will ultimately cut costs for borrowers, though it seems likely that many will still want a certain amount of individual hand-holding through the tricky process.

-- E. Scott Reckard