Don Neill, loss mitigation manager at Guardian Mortgage, has a long history in the housing industry, working in virtually every position from real estate to lending and back again. Currently, he serves as loss mitigation manager for Guardian Mortgage in Dallas. He spoke with Woodward Asset Capital about the state of the industry today and tomorrow and how we got into such a great big mess.

Know your business, or get out of the way.

I don’t look at things the way most people do in this industry. I’m a free thinker. In the beginning, when we started reviewing all the loss mit programs, I did it from a risk perspective. If I were sitting here just as an employee, I wouldn’t care why we got into this mess or what will take us out of it; I’d be just doing the job for my paycheck.

The reason people don’t want to fix the housing industry, is everybody’s too busy blaming each other for the mess we’re in. They always say to fix something, you have to get to the root cause, and no one’s much interested in that.

Through the years, the guidelines for qualification have become blind to factors they should pay attention to. “I can overlook an issue if you have cash reserves as a compensating factor, not relizing borrowers will not part with their cash reserves to make the house payment…”

What happened is the home buyer, the individual, the human being, got lost.

Industry folks only cared about getting people in houses – regardless of whether doing so was financially wise. No one cared to ask if the buyer understood the fine print of home ownership.

For years, the VA was the only one that really got it right, doing everything based on cash flows vs. debt ratios. In the ‘90s, there was pressure to develop programs to make financing available to everybody. If they could fog a mirror, they could get a loan.

People were getting loans who shouldn’t. If they don’t care about their debt, they won’t care about their mortgage.

I want to know who we’re lending to.

I want all of us to be fair across the board. I want us to stop taking people out of the equation. Don’t reduce them to a social security number and a credit score. Otherwise, we’ll never resolve our current problems.

I would love to see the industry get more human-to-human, but I’m not sure it will. Everybody’s trained to shuffle paper. No one cares about people; they care about processes.

Big banks have to realize that being too big sometimes is detrimental to accomplishing much of anything.

Our customers bake for us at Christmas. If you poll America, especially people who are delinquent, they’ll tell you they’re scared to death to call their lender.

We want them to know we are their best friend. We want to hear from them. That’s the way we solve the problem.