Botha says challenges yield a bright future for originators
| JOHANNESBURG (March 11) - The fact that 2009 will be a year
of change can no longer be disputed with one of the biggest issues being
the shape of the future of origination and whether or not the South African
financial institutions believe there is still a place for the service originators
Focussing on the issue in a company media release Rudi Botha, CEO of the PA Group (holding company of Betterbond, South Africas largest originator), says: In order to ensure a sustainable future for the business of origination along with all the interlinked partners, we are engaging with the banks to find a workable solution to the current challenges.
He says that even without the possible reduction in origination fees as is currently under negotiation with the banks the origination industry is a young one that is facing the challenge of maintaining in these turbulent economic times, especially in a low volume environment.
Botha stresses that the banks do still see the value in dealing with originators and their continued utilisation of the services offered by the industry for all new homeloan business. However, he emphasises in certainty that commissions paid to originators by the banks will be reduced estimating the commission reduction to be as much as 70-90 basis points.
These potential changes will have a huge impact on how originators operate in the future. Now is the time for originators to take a serious look at their fixed costs as a percentage of expenses on a monthly basis, says Botha.
He says that while many people see these changes as a crisis situation, and in some instances rightfully so, he sees huge opportunity for originators who are able to:
Now more than ever, standing together as an industry and creating a sustainable future for all originators is of vital importance, says Botha. It is imperative that we revive an organisation such as National Association of Mortgage Originators (NAMO) to look after our interests and to promote our industry with all stakeholders, especially the consumer.
Botha says that the originators value proposition to the banks, real estate agents and the consumer has not changed and that many fly-by-nights will leave the industry to make way for the professionals who will ensure the maturation of the industry over the next two years.
While many challenges and some pain may pave the way forward, a great future beckons for those who can survive this year, Botha says.
Article from: www.rodneyhayter.com