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“The first step toward change is awareness.  The second step is acceptance.”   Nathaniel Branden

Ok, maybe that was a little cheesy.  And it’s possibly even out of context.  But it strikes me that Dr. Branden’s words could be very applicable to the real estate and mortgage industry today.

We’re all well aware of the havoc the RESPA changes wreaked earlier this year.  What was intended to be a simple forms change disrupted well-established workflow processes.  Add in a touch of confusion on the interpretation of the new rules, and one has a good prescription for chaos.

I’m not a RESPA lawyer.  I’ve never even operated my own title or mortgage company.  But it strikes me that, if we thought the RESPA changes of 2010 caused some volatility, we ain’t seen nothin’ yet.

What struck me the most about the RESPA-induced scrambling earlier this year was how many firms were completely unprepared for it.  Don’t get me wrong, many were.  And I’m aware it’s very difficult to prepare for a moving target.  Then again, it seemed as though some had no idea what they were in for as the rules came into effect.

In this continuing period of market turmoil, I understand that winning and keeping business is absolutely critical.  And it will remain so.  But there seem to be a few more icebergs on the horizon, and I’m not sure everyone is really aware of them:

• Dodd-Frank and the Consumer Financial Protection Bureau.  Even if this new atomic-powered bureau doesn’t directly handle matters of insurance, it will handle mortgage lending, closing and escrow…at a minimum.  It’s housed within the Fed, and will have a significant portion of its budget.  Oh, and it can impose daisy-cutter caliber penalties.  Anyone doubt that this will have some impact on every corner of the industry?
• NAIC “data call.”  “What’s that?”you say?  My point exactly.  On the list of things a settlement services firm should be nervous about, this one’s way down the list.  But it strikes me that more than a few are completely unaware of it.  While the interested parties assert that they’re going to try to make this as simple and unobtrusive as possible, it will still be enacted (to my understanding) state-by-state.  Even if it is simple, it will be yet another requirement for companies already trying to keep a number of plates spinning.
• GSE reform.  We’ve been talking about this so long, some wonder if it will happen.  Maybe it will.  Maybe it won’t.  Maybe it will take more time.  But whatever happens, bet on it having a huge impact on our industry.  If nothing else, it bears watching.
• Oh yeah…the market.  That too.  We have a number of variables in play as 2011 rounds the corner.  Quantitative Easing II (will it impact mortgage interest rates, and if so, how much?), unemployment, and the general state of origination.  Stability and predictability still seem to be a pipe dream for the short term future, at least.

Add to all of this the fact that the mortgage industry (and its related elements) still make a popular and easy target for regulators and politicians seeking to slay perceived political demons to curry favor with an electorate that simply doesn’t understand the mortgage industry (then again, how many really do?), and we’ve got another interesting year ahead.

This is not the time for me to chide people far more experienced and perhaps wiser than me about a failure to prepare or inability to change.  I see quite a few firms doing an admirable job of this.   Instead, consider this a pep talk of sorts.  The firms that I see thriving are the ones that are trying to see what’s coming (as difficult as that is) as soon as possible, and which are aware that “we’ve always done it this way” is a roadmap to failure.  I suspect 2011 will challenge the industry even more, but that it will open opportunities for those willing and able to adapt.  We hear “adapt” way too often in marketing materials or motivational speeches.  But in 2011, it will be time to take that seriously.  And that will start with awareness.