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Analyzing The Election

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A Forbes article by Jonathan Vanian said it best, “Prior to Trump’s upset win, virtually all national polls showed the businessman and reality television star trailing Democratic nominee Hillary Clinton. Her win was considered inevitable, with prominent pollsters and pundits merely arguing about how big her guaranteed victory would be. And then on Tuesday, voters proved the experts wrong.”

What did Trump do right? To say he ran an unconventional campaign would be a gross understatement. He methodically eliminated 16 primary contenders, countering their talking points with his bombastic personality. He captured an inordinate amount of free TV time by being outlandish. Trump had a sense of what people wanted to hear and recognized that anger among working class white voters ran deep. He played to emotion, not data points.

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Steven Bertoni’s article headline in the December 20, 2016 in Forbes magazine read, ”The secret weapon of the Trump campaign: his son-in-law, Jared Kushner, who created a stealth data machine that leveraged social media and ran like a Silicon Valley startup.” Kushner, who had no political experience, committed to Trumps’ campaign in November 2015, after seeing a raucous Trump rally in Springfield, Illinois. On that return trip, Trump and Kushner talked about how the campaign might better use social media.

”At first Kushner dabbled, engaging in what amounted to a beta test using Trump merchandise. ’I called somebody that works for one of the technology companies that I work with, and I had them give me a tutorial on how to use Facebook micro-targeting,’ Kushner says. The Trump campaign went from selling $8,000 a day worth of hats and other items to $80,000, generating revenue, expanding the number of human billboards—and proving a concept. By June the GOP nomination secured, Kushner took over all data-driven efforts. Within three weeks, in a nondescript building outside San Antonio, he had built what would become a 100-person data hub designed to unify fundraising, messaging, and targeting.”

In this case, a lack of awareness of traditional campaigning was an advantage. Kushner was able to look at the business of politics without the constraint of precedent.

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Eric Schmidt, the former CEO of Google and one of the designers of the Clinton campaign’s technology system, agrees with Vanian. “Jared Kushner is the biggest surprise of the 2016 election. Best I can tell, he actually ran the campaign and did it with essentially no resources.”

What did Clinton do wrong? According to The Washington Post, Clinton’s campaign used a custom Algorithm called Ada; a complex computer algorithm that staff fed “a raft of polling numbers, public and private” to play a role in most strategic decisions Clinton aides made. According to aides, Ada ran 400,000 simulations a day and a report was generated that gave Robby Mook, the campaign manager, a detailed roadmap of which background states were most likely to tip the race in one direction or the other, allowing them to decide where and when to send the candidate and her surrogates and where to air television ads.

Like much of the political establishment, however, Ada did not accurately predict the turnout of rural voters in Rust Belt states. Pennsylvania was correctly identified as a critical state early on, which explains why Clinton visited it often and closed her campaign in Philadelphia. Other states that Clinton would lose, like Michigan and Wisconsin, either were not identified as at-risk or were deemed so too late.

A number of election post mortems indicate that Bill Clinton, a politician with proven fluency in reading and responding to voter emotion, advocated that his wife’s campaign pay more attention to white working class voters. Perhaps he reasoned that while that group was not within Clinton’s reach, she might draw enough votes to win Michigan, Pennsylvania, and Wisconsin—states that Trump narrowly won instead.

Let’s look at data analytics as it pertains to a presidential election: An article in Wired by Cade Metz stated, “The lesson of Trump’s victory is not that data is dead. The lesson is that data is flawed. It has always been flawed—and always will be…. But this wasn’t so much a failure of the data as it was a failure of the people using the data. It’s a failure of the willingness to believe too blindly in data, not to see it for how flawed it really is.”

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Summary: The use of data analytics by presidential campaigns did not begin in the 21st century. Clinton aides believed their work with data was the most sophisticated to date, and while this may be true, it did not translate to a strategic advantage over Trump when all other factors were accounted for. If Barack Obama’s 2012 presidential victory proved big data’s triumph for accurately predicting elections, Donald Trump’s 2016 presidential win could demonstrate the opposite.

According to Nik Rouda, senior analyst at the Enterprise Strategy Group, “Polls aren’t really big data. The sample sizes were certainly good enough for a poll, but maybe didn’t meet the definitions around volumes of data, variety of data, and historical depth contrasted against real-time immediacy, machine learning, and other advanced analytics. If anything, I’d argue that more application of big data techniques would have given a better forecast.”

Professor Samuel Wang, manager of the Princeton Election Consortium, which gave Clinton a 99 percent chance of winning as of the morning of Election Day, stated ”The incorrect forecasts don’t appear to be a problem with the margin of error, the polling resulted in a systematic error. The entire group of polls was off, as a group. This was a really large error, around 4 points at presidential and Senate levels, up and down the ticket.”

Wang went on to say he is still evaluating the results. Late candidate selection by undecided voters may have impacted predictions. Whether predication models can better account for such last-minute decisions or changed minds remains unknown for now.

As the world makes the Internet its primary means of communication, we will be confronted with even more data—so-called “Big Data.” On the Internet, fact, opinion, idle chatter, and humor run together in a common sea where intent is difficult to ascertain and the bots are becoming more indistinguishable from the humans. The old database maxim of “garbage in, garbage out” should guide all efforts to incorporate this data in predication models.

And in the meantime, the even bigger promise is that artificial intelligence will produce more reliable predictions. But even the most sophisticated artificial decision engine remains dependent on imperfect data inputs. Neural networks can’t forecast an election without data—data that is selected and labeled by humans. While such AI systems have become adept at object recognition because people have uploaded millions of photos to places like Google and Facebook already, we lack the same kind of clean, organized data on presidential elections to train neural nets.

Conclusion: Are your data analytics predictions models suffering from the same problems as the models that predicted Hillary Clinton would easily win the U.S. presidential election? Next month we will explore this further.

About The Author

Roger Gudobba
Roger Gudobba is passionate about the importance of quality data and its role in improving the mortgage process. He is vice president, mortgage markets at Compliance Systems and chief executive officer at PROGRESS in Lending Association. Roger has over 30 years of mortgage experience and an active participant in the Mortgage Industry Standards Maintenance Organization (MISMO) for 17 years. He was a Mortgage Banking Technology All-Star in 2005. He was the recipient of Mortgage Technology Magazine’s Steve Fraser Visionary Award in 2004 and the Lasting Impact Award in 2008. Roger can be reached at rgudobba@compliancesystems.com.

Trust Matters

This year the Presidential Election is the major story. And, in my opinion, the state of play is very sad. Significant majorities of registered voters have an equally unfavorable opinion of both major party presidential candidates, according to a new survey.

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In total, 59% of registered voters say their opinion of Clinton is unfavorable, according to a poll put out by the Washington Post/ABC News.

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Those numbers put Clinton on equal footing with Donald Trump, who also faces a daunting favorability deficit. Trump is viewed unfavorably by 60% of registered voters according to the poll.

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What does this have to do with the mortgage industry? It’s crazy to say but while these two, Clinton and Trump, were successful in getting their party nomination, neither would be able to maintain long term success in the mortgage industry. Why do I say that? Because in our industry trust matters. Relationships matter. If you want to get ahead you have to build a solid reputation.

So, how do you do that these days? Jon Gordon’s best-selling books and talks have inspired readers and audiences around the world. Numerous NFL, NBA, MLB coaches and teams, Fortune 500 companies, school districts, hospitals and non-profits have put his principles to the test. Here are 11 tips that he has for companies to build trust and capture market share as a result:

1.) Say what you are going to do and then do what you say!

2.) Communicate, communicate, communicate. Frequent, honest communication builds trust. Poor communication is one of the key reasons marriages and work relationships fall apart.

3.) Trust is built one day, one interaction at a time, and yet it can be lost in a moment because of one poor decision. Make the right decision.

4.) Value long-term relationships more than short-term success.

5.) Sell without selling out. Focus more on your core principles and customer loyalty than short-term commissions and profits.

6.) Trust generates commitment; commitment fosters teamwork; and teamwork delivers results. When people trust their team members they not only work harder, but they work harder for the good of the team.

7.) Be honest! My mother always told me to tell the truth. She would say, “If you lie to me then we can’t be a strong family. So don’t ever lie to me even if the news isn’t good.”

8.) Become a coach. Coach your customers. Coach your team at work. Guide people, help them be better and you will earn their trust.

9.) Show people you care about them. When people know you care about their interests as much as your own they will trust you. If they know you are out for yourself, their internal alarm sounds and they will say to themselves “watch out for that person.”

10.) Always do the right thing. We trust those who live, walk and work with integrity.

11.) When you don’t do the right thing, admit it. Be transparent, authentic and willing to share your mistakes and faults. When you are vulnerable and have nothing to hide you radiate trust.

Let’s lead by example. Do what you can to build trust and your business will thrive.

About The Author

Michael Hammond
Michael Hammond is chief strategy officer at PROGRESS in Lending Association and is the founder and president of NexLevel Advisors. They provide solutions in business development, strategic selling, marketing, public relations and social media. He has close to two decades of leadership, management, marketing, sales and technical product experience. Michael held prior executive positions such as CEO, CMO, VP of Business Strategy, Director of Sales and Marketing and Director of Marketing for a number of leading companies. He is also only one of about 60 individuals to earn the Certified Mortgage Technologist (CMT) designation. Michael can be contacted via e-mail at mhammond@nexleveladvisors.com.

Let’s Learn From The Presidential Candidates

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Despite having the two highest unfavorable ratings of any major presidential candidates in history, Donald Trump and Hillary Clinton have outlasted their competitors—and one of them is going to become the leader of the free world.
What does success in the face of such highly unfavorable ratings teach us about personal branding? And what can working professionals at every level learn from it?

Below, internationally-regarded brand strategist and revered media expert source Karen Leland, author of the newly released title, “The Brand Mapping Strategy: Design, Build, and Accelerate Your Brand,” examines both candidates’ personal branding successes, challenges and resulting lessons for us all in six specific areas. According to Leland’s predictive Brand Mapping Matrix, the success of any brand—in business, politics or otherwise—boils down to how the brand performs across these six key dimensions.

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Leland details each dimension below, including exactly how each candidate fared therein as well as the correlated Personal Brand Takeaways, to help other enterprising professionals achieve in kind.

  1. Develop Your Brand by Design, Not Default. Know precisely where you are so you can discern where you need to go.

Trump: The Donald has clearly defined himself as the billionaire Maverick, owing no one anything. Trump has carefully crafted his image as the anti-establishment candidate proudly going against the grain. As a general strategy, it has allowed him to get away with more than the typical business leader or politician normally would.

Clinton: Despite her best efforts to promote herself as “the qualified candidate,” many Americans have by default stamped Clinton with the brand of Matron—part of the old guard of Washington politics. Recently she has begun to pivot and is trying to find her way to a brand by design based on straight-talking thoughtfulness.

*** Personal Brand Takeaway: Every business person, from secretary to CEO, needs to start by assessing the personal brand they currently have and be truthful about the degree to which it exists by design—or default. Then they need to take stock of the impact that current brand is having. Is your brand producing the reputation you desire? Is it creating the environment and responses you are looking for? If not, a pivot to a more powerful personal brand may be needed.

  1. Anchor Statement. What is the go-to description of who you are and what you do? This is sometimes referred to as an elevator pitch.

Clinton: To date, Mrs. Clinton has made her marketing bottom line “I’m the woman candidate,” but that has not played well with Sanders supporters and younger voters in general. While Clinton’s status as the first woman Presidential nominee is certainly history-making and a proud moment, as an elevator pitch, it’s flawed. She would be better served by focusing on another message (consider Obama’s focus on messages of hope and change, as opposed to his race) that resonates with a wider slice of democrats and the population at large.

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Trump: Four words—“Make America Great Again.” This single sentence has become Trump’s signature call to arms, his reason why voters should check the box next to his name come November. The issue Trump will face as the election gets closer is how he will translate this general idea into specific policies.

*** Personal Brand Takeaway: All business people need to be able to present their brand in less than a minute. For example: When at a cocktail party you are asked the standard, “What do you do?” can you answer in a few short sentences that pique the listener’s interest? If not, your anchor statement needs some work. In addition, it’s important to pay attention to how your anchor statement is resonating and landing with your desired audience.

  1. Unique Branding Proposition. What is it about what you do, or how you do it, that makes you unique, distinct and special? What sets you apart?

Trump: The presumed Republican nominee, Trump has taken a two-pronged approach to differentiating himself. First off, he is keen to point out (at every possible opportunity) that he is a businessman, as opposed to a career politician. Secondly, his message of “I’m willing to go it alone,” whether it relates to raising money to fund his campaign or being supported by the Republican party, is at the heart of his “why I’m unique” message.

Clinton: Hillary’s strongest point of differentiation to date has been “I’m the woman candidate.” The problem is that too much of her messaging has focused on this, and the voters don’t really seem to care.

*** Personal Brand Takeaway: Positioning yourself by specifically articulating how your brand speaks to the needs of your audience, and the unique way you address those needs, is critical to creating an effective personal brand. And the more specific you can be, the better.

  1. Brand Tone and Temperament. What is the consistent mood, tenor, quality, character and manner you bring to all your interactions?

Clinton: Clinton’s tone has consistently been one of a serious Implementer. The tonal subtexts to her speeches ring with “I’m experienced, I know what I’m doing and I can get the job done.” Her demeanor, while dignified, is missing an accessibility (and even friendliness) that voters need to see in order to wholeheartedly embrace her as their Presidential candidate. However, given the alternative, it may be enough to win her the highest office in the land.

Trump: Trump is always Trump. To some, his brash pronouncements play with a tone of rugged individualism. For others, (even some members of his own party) his demeanor shows up as angry, and even childish in cases. So much so that the question of his temperamental suitability to be President has become a Democratic rallying cry. Likewise, Trump’s tone has some Republicans begrudgingly supporting him for the sole “anyone but Hillary” reason. Not exactly the inspiring message you would want your personal brand to create.

*** Personal Brand Takeaway: What you say has power, but the way you say it—your tone—has just as much impact. Every businessperson needs to be aware of how their brand tone is coming across (online and off) and adjust where necessary. In addition, taking any tone to an extreme will always backfire: Too serious or too snarky both harm a brand in the long run.

  1. Signature Story. Why do you do what you do? What’s the essential story that brought you to this place?

Trump: Rather than focus on a narrative based on how his past has informed his bid for the Presidency, Trump is pointing to the present problems America faces as his reason for seeking office. But by doing so, he is missing the opportunity to tie his brand to a bigger, more historical reason for running.

Clinton: After her win in California on Super Tuesday, Hillary Clinton spoke about her mother, the influence she had on her life and how the way she grew up set her on a path to public service. Clinton has skillfully integrated her history into her narrative and connected the dots from how what she learned there has brought her to here.

*** Personal Brand Takeaway: Never underestimate the power of a good story. A strong (and truthful) narrative about where you came from and what has influenced you to do the work you now do can connect you with your customers, employees and colleagues at a deeper level. Your brand needs to be more than a single sound bite or pithy elevator pitch. Otherwise, you run the risk of damaging your brand when things don’t go exactly as you planned. The best brands feature multiple, complementary messages that weave together to form an accessibly complex and in-depth communication.

  1. Signature Services. What are your core competencies?

Clinton: At the heart of Hillary Clinton’s brand is her varied and deep experience in government—and her proven ability to get things done in a political system that makes this challenging at best. Her particular expertise in foreign relations—especially at this time in American’s history—gives her a powerful place to stand as the candidate of choice. She is able and willing to talk about the “how” of the why.

Trump: In almost direct opposition to Clinton, Donald Trump’s brand is rooted in being “not” a government insider—but a business one. Continually providing tough talk about his corporate success, negotiation expertise and business acumen, Trump is presenting voters with the idea of a president who would function more like the CEO of a company than the head of state. While this “non-establishment” message is resonating with many people, the downside is Trump’s lack of specifics and seemingly naïve understanding of how things actually work in Washington and the protocols that keep the wheels turning—thus causing a questioning of his suitability for the job.

*** Personal Brand Takeaway: Know exactly what your brand brings to the table and how it stacks up against your competitors, and craft a powerful way to talk about it that inspires confidence in others. The fulcrum of your brand needs to rest on the material ingredients of your values and commitments.

A standout style (be it a brash Trump or competent Clinton) is a plus, but it will only take you so far. At some point going beyond taking a stand for what you believe in and specifically letting people know how you plan to get there will become a central issue. Think about one area where your personal brand is being expressed more in talk than displayed in action and focus on aligning the two.

About The Author

Karen Leland
Karen Leland is CEO of Sterling Marketing Group, a branding and marketing strategy and implementation firm helping CEO’s, businesses and teams develop stronger personal and business brands. Clients include AT&T, American Express, Marriott Hotels, Apple Computer, LinkedIn and Twitter. She is the best-selling author of 9 books, including her most recent title, “The Brand Mapping Strategy: Design, Build, and Accelerate Your Brand,” which details proven strategies, best practices and anecdotes from real life brand-building successes to help readers design, build and accelerate a successful brand. Learn more online at www.KarenLeland.com.

Why Tear Down That Wall?

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Ronald Reagan knew that tearing down walls Trumped building them. Presidents Ronald Reagan and Bill Clinton were both widely known as master communicators. Their extraordinary communication skills were a key element that made them wildly popular and successful as presidents. During this highly partisan, crazy political season, much can be learned about how to improve the way we do business in the mortgage industry by studying either of these former presidents.

Regan was dubbed The Great Communicator. “What made him the Great Communicator was Ronald Reagan’s determination and ability to educate his audience, to bring his ideas to life by using illustrations and word pictures to make his arguments vivid to the mind’s eye,” opined Ken Khachigian, former Reagan speechwriter.

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Clinton was known as the Explainer in Chief. Media analyst and syndicated columnist Steve Adubato, Ph.D., makes the case that Clinton used two key techniques that contributed to his success as Explainer in Chief. Clinton used the terms “we” and “us” more than “I” when explaining even the most complex geopolitical or economic issues to the electorate. And he employed liberal use of the Q&A approach. Adubato points out, “The former president consistently asked ‘why?’ something was the case and then quickly and confidently answered that question. For example, Clinton asked; ‘Now why is this true? Why does cooperation work better than constant conflict? Because nobody’s right all the time, and a broken clock is right twice a day.’”

What Builds Walls

It’s not a question, and it’s not “who” builds walls, but “what” builds walls. In the mortgage industry, we tend to undertrain and under-explain. We tend to state the “whats” without the “whys” and inadvertently build walls. Let’s use a simple loan origination example to understand this point. When an underwriter provides an approval condition on a loan, he or she typically states what is needed. The processor and the loan originator scurry about to meet the underwriter’s demand and often become extraordinarily frustrated when the underwriter then asks for more information or rejects what is provided as inadequate. The reason often lies in an underlying lack of understanding of why the item was needed by the underwriter. This lack of full communication and understanding the why behind the request leads to additional cycle time for the loan file, additional labor expense for unnecessary back and forth and general inefficiencies. Perhaps more important, simply stating “what” without “why” is an insidious separator that builds walls between colleagues and erodes the culture of companies and our industry overall.

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Why Educates and Motivates

It has been my long-held belief that we should train everyone to have (and everyone should have a keen interest in having) a working knowledge of performing the role at least two steps beyond theirs in order to fully understand and be effective in their own role. To extend the example, if the processor and loan originator have a full understanding of not only the underwriting guidelines that prompted the underwriter’s condition, but also of the secondary market’s risk factor experiences that prompted the guideline to begin with, the condition likely would have been fully resolved far more easily and efficiently. Ultimately, the borrower would have been hassled less, the processor and loan originator would have been more productive and the underwriter’s relationship with the production staff would have been stronger. The wall never would have been built had the why been adequately understood with what.

In Regan’s famous 1987 Berlin speech he did not simply say, “Mr. Gorbachev, tear down this wall!” In a mere 2,600 words, he made his demand, provided historical context of the building of the Berlin wall and then explained not only how, but why it had failed to achieve its purpose. Then he invited his foes to join him to work together. Toward the end of the speech, he focused on the unity that could be achieved in tearing down the wall by saying, “and I invite Mr. Gorbachev: Let us work to bring the Eastern and Western parts of the city closer together, so that all the inhabitants of all Berlin can enjoy the benefits that come with life in one of the great cities of the world.”

We all know that the Berlin Wall fell, the cold war thawed and the European Union was eventually formed where the wall formerly stood. It did not happen simply because of the demand to tear down the wall. It happened because of the persuasive context of why. What can you do in your organization to improve efficiencies and cohesiveness using the techniques of the Great Communicator and Explainer in Chief? Consider requiring everyone to explain why each time they state what. Imagine the power and benefits why can offer your organization if consistently used.

About The Author

Daniel Jacobs
Daniel Jacobs is the EVP and managing director of national retail lending for MiMutual Mortgage. With nearly 20 years of experience in the mortgage industry, he has previously had senior positions at American Financial Network, Residential Finance Corporation and Freedom Mortgage Corporation. Jacobs can be reached at djacobs@mimutual.com.

Listen Up Candidates

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Have you been following the Presidential Election? Most people have. Why? It’s outlandish. Earlier this year presumptive Republican nominee Donald Trump called Hillary Clinton an “unbelievably nasty, mean enabler” who “destroyed” the lives of her husband’s mistresses.

The comments, made during an evening rally in Eugene, Ore., marked the sharpest tone he’s taken against the Democratic frontrunner since becoming his party’s presumptive nominee, and the first time he’s been so direct in referencing Bill Clinton’s affairs in months.

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“She’s been the total enabler. She would go after these women and destroy their lives,” Trump said. “She was an unbelievably nasty, mean enabler, and what she did to a lot of those women is disgraceful.”

In exchange, presumptive Democratic nominee Hillary Clinton condemned Donald Trump’s criticism of U.S. District Judge Gonzalo Curiel, who is overseeing lawsuits involving Trump University, during a conversation with MSNBC’s Rachel Maddow.

“This racist attack on the judge is just another example of how he is absolutely impervious to the values of America, to the progress that we have made over many, many decades,” Clinton said of Trump’s comments. “He’s trying to demean, and defame a federal judge who was a very accomplished federal prosecutor who was first appointed by a Republican governor in California.”

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Trump has said Curiel, who is presiding over two of the three cases against Trump’s now defunct for-profit school, cannot be fair in the ruling because Curiel is “a hater,” “very hostile,” and “Mexican,” and Trump wants to build a wall along the border with Mexico. Curiel was born in Indiana and is American.

I know, the level of discourse it’s unbelievable. With the presidential elections fast approaching, one in five Americans (21%) say a candidate’s housing and finance policies will influence their vote, according to new research conducted for loanDepot. Nearly two out of five (36%) also think the presidential candidates are doing a bad job of articulating their housing and finance policies, and 35 percent would like to hear more from the candidates on these topics. Among those interested in hearing more, 56 percent are Democrats, 39 percent are Republicans, and 29 percent are Millennials.

Americans also weighed in on their economic and housing priorities for the 45th president’s first 100 days, electing to keep housing more affordable and interest rates low. Making homeownership more affordable for middle and lower income families topped the list with 37 percent of Americans, including 32 percent who are Millennials, 64 percent who are Democrat and 32 percent who are Republican. Keeping interest rates low (34%) and making more credit available to small businesses (11%) are second and third priorities. There was bi-partisan agreement on keeping interest rates low during the next president’s first 100 days with Democrats and Republicans at 47 percent and 49 percent respectively.

“People across the nation told us they want to hear more from the presidential candidates about their housing and financial policies on issues like income, access to credit, interest rates and affordable housing,” said loanDepot Chairman and CEO, Anthony Hsieh. “The candidate who does a good job in communicating their policies moving forward has an opportunity to influence millions of potential voters.”

Same Old Same Old? Maybe Not ?

Most Americans expect their financial situations to stay the same or get worse as a result of the upcoming presidential election, which could be due to a lack of information from candidates about these key policies. While the majority of likely voters (66%) don’t expect the election will impact their personal finances, nearly one quarter (24%) think they’ll be worse off financially. Of those who expect be worse off, 56 percent say the candidates have done a bad job of articulating their housing and financial policies. More Democrats (50%) expect to be worse off financially as a result of the elections than Republicans (44%). Only six percent of all voters expect to be better off as a result of the general November election.

Millennials May Miss Out?

With Millennials now outnumbering baby boomers as the nation’s largest living generation of consumers, their entrance into homeownership has been anticipated as a welcome boost to home sales, especially starter homes. However, while 38 percent of home loans closed by Millennials in April 2016 were FHA loans1, the survey revealed many are still discouraged about their incomes and the election’s impact on their access to credit. In fact, more than one third (36%) of Millennials say their primary financial concern is not making enough money, and 46 percent are concerned about how the elections will impact their ability to access credit. Two out of five (40%) Millennials said making homeownership more affordable to middle- and low-income Americans should be a priority for the next president’s first 100 days.

“As more Millennials enter the housing market, we expect to see a higher priority placed on better borrowing options for first-time homebuyers,” said Hsieh. “loanDepot is one of the five largest FHA lenders in the country and we remain focused on helping borrowers, including Millennials, access the credit they need to finance home purchases.”

Accessing Credit: Perception vs. Reality?

The loanDepot research found perceptions on financial trends sometimes don’t match reality. For example, 38 percent of Americans said they think it’s harder to get home loan today than it was immediately after the financial crisis in 2008. In fact, while guidelines have tightened since 2008, applications for purchase mortgages were more likely to be denied in 2008 than in 2014, the most recent year for which Federal Reserve2 data is available. Denial rates for home purchase loan applications hit 18 percent in 2008, while denials in 2014 topped out at 13 percent. Denial rates for home refinance applications in 2008 were 38 percent and dropped to 31 percent in 2014.

About the Survey?

The survey was conducted by OMNIWEB using the KnowledgePanel in a national online omnibus service of GfK Custom Research North America. The KnowledgePanel is the only commercially available online probability panel in the marketplace making the sample truly projectable to the US population, which sets it apart from traditional “opt-in” or “convenience” panels. A total of approximately 1,000 interviews were completed, with 500 female adults and 500 male adults. The margin of error on weighted data is +/- 3 percent for the full sample.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

They Always Have Something To Say

The Presidential race of 2016 is off and running and while home financing does not have the same impact that it had in the two previous campaigns, there is still some focus on the underlying cause of the crisis and what government should be doing to prevent another one. And while there is not much overtly said about creating more opportunities for homeownership, there are directives and actions taking place that indicate that government policy is still thinking in that direction.

Of course we know that any politician worth their salt will have something to say on everything and while the focus has been on foreign policy and immigration, the candidates have been fairly vocal when it comes to monetary policy, government oversight and assigning blame for the financial crises. Yet in their effort to win votes and influence people they sometimes say the most outlandish and inaccurate things. Here are just some examples from both the Republican and Democratic candidates.

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Marco Rubio: On January 10th Mr. Rubio declared that “…banks and other firms crave being declared too big to fail.” He went on to say that “We have created a category of systemically important institutions and these banks go around bragging about it.”   The reality is that no one is bragging and in fact regional and mid-size banks are pressing Congress to actually raise the threshold currently considered as the entryway for a “too big to fail” classification.

Jeb Bush: In the same debate Mr. Bush claimed that the Dodd-Frank Act had lowered capital requirements on the big banks. He stated that “What we ought to do is raise the capital requirements so banks aren’t too big to fail. Dodd-Frank has actually done the opposite, where banks now have higher concentrations of risk in assets and the capital requirements aren’t high enough.”   Unfortunately for Mr. Bush he was just plain wrong. As every banker knows the Basel III Accord requires all banks to have higher capital requirements and the Federal Reserve Board added a capital surcharge between 1% and 2.5% to the most complex banks.

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Ted Cruz: The senator from Texas went further when he claimed that the Feds monetary policies and actions in the 2000s directly caused the crisis. According to the FCIC report the causes of the crisis were determined to be a breakdown in corporate governance, firms willingly taking on too much risk and a mix of excessive borrowing by households and investors.   Unfortunately, Mr. Cruz obviously failed to read the report himself.

Bernie Sanders: In numerous statements made by Mr. Sanders the weakening of the Glass-Stegall Act was the true cause of the crisis. According to him the diluting of this act allowed shadow banks (such as Lehman and AIG) to gamble recklessly with the money that came from the federally insured commercial banks. However, two Yale professors quoted in American Banker stated. “…Bear Sterns…and Lehman…and Merrill Lynch and…Morgan Stanley all managed to get enough funding to be systemically dangerous without the deposit bases, in ways that would have been consistent with Glass-Stegall.”

Hillary Clinton: Of course Mrs. Clinton cannot be left out of this listing of misstatements. In October of 2015 when she announced her plan to “rein in Wall Street” she accused President Bush’s administration of basically ignoring the accumulation of risk and pointed a finger at regulators in Washington who “would not or could not” keep up. Her point of reference was a picture taken of regulators taking a chainsaw to banking regulations. Unfortunately, she failed to acknowledge that this picture was actually part of an initiative by regulators to ease outdated regulations for Community Banks.

There are of course other housing policy issues that do not make the regular debate circles but are still active in government circles. One of these of course is Fair Housing and expanding homeownership. Despite the failure to be part of an active candidate dialogue these issues are still a focus within the government housing community. For example, the FHFA recently announced that they have directed Fannie Mae and Freddie Mac to evaluate why some consumers are unable to obtain a mortgage and to make changes where required to ensure the availability of mortgage financing. The CFPB, while currently focusing on LO compensation is still working or changes to the HMDA data to be collected and how the resulting information will be used to address Fair Lending problems. From my perspective it would be beneficial if these same issues and related regulation would be something that the candidates discussed before November rolls around.

About The Author

[author_bio]

Rebecca Walzak
rjbWalzak Consulting, Inc. was founded and is led by Rebecca Walzak, a leader in operational risk management programs in all areas of the consumer lending industry. In addition to consulting experience in mortgage banking, student lending and other types of consumer lending, she has hands on practical experience in these organizations as well as having held numerous positions from top to bottom of the consumer lending industry over the past 25 years.