After refusing to bend to various conditions, some concerning regionalization, the Connecticut Mortgage Bankers Association has been ejected by the Massachusetts Mortgage Bankers Association from the New England Mortgage Banking Conference (NEMBC), the industry-wide trade show that the six New England states have shared for 20 years.

The CMBA’s exclusion is the result of several weeks of simmering tensions over the future of organized mortgage lending. With membership, and membership fees, drastically reduced, mortgage banking associations across New England are fighting for their existence.

One clear example of that struggle can be seen in the number of exhibitors already signed up for this year’s conference, slated to begin Sept. 30: As of press time, the NEMBC Web site displays only 17 vendor booths sold. Last year’s conference featured 71 exhibitors, according to the NEMBC Web site.

Massachusetts’ mortgage banking leadership believes a regional umbrella group for mortgage banking is the most viable solution.

But other states’ mortgage banking leadership – including Connecticut, which has the second-largest mortgage banking association in the region – have expressed concerns over whether a regional model would best serve their states’ mortgage bankers and brokers.

The MMBA offered the CMBA an ultimatum: agree to a framework for future regionalization or be cut out of the NEMBC.

“They put some conditions on our participation that we do not agree to,” said Christopher Dannen, president of the CMBA. “Some of it’s tied to regionalization. We’ve been agreeable to talk about regionalization, but we haven’t agreed to regionalization. We’ve decided that we want more discussion around that, and [the MMBA] wanted a firmer commitment.”

By mid-July, Connecticut had effectively been jettisoned from the NEMBC. Their logos were stripped off all conference brochures and literature, while the other five New England associations’ graphics remained. After a couple weeks of high-level discussions and back-room negotiations, the two sides haven’t found any reconciliation, and the NEMBC will not include Connecticut.

“Connecticut is welcome back at any time,” said MMBA Executive Director Kevin Cuff. “All that Massachusetts and the other partners want to do is have long-term, sustainable discussions on the future of organized mortgage lending for 2010 and beyond. If Connecticut wants to join us at the table for that, they’re always welcome.”

The MMBA organizes and runs the NEMBC – which is being held in Providence, R.I. this year – but the conference has traditionally been attended by the associations from all six states, with each sharing in the profits. The MMBA distributes the show’s profits.

The associations from the other New England states have decided to focus on their own members, and keep out of the fight between Massachusetts and Connecticut.

“I’ve left that between [the CMBA] and the MMBA,” said Thomas Fleming, president of the Rhode Island Mortgage Bankers Association. “I look at what’s right for Rhode Island.”

“I look at it as this is between Connecticut and Massachusetts,” said Margaret Malette, executive director of the Mortgage Bankers and Brokers Association of New Hampshire. “Connecticut and Massachusetts both have to work out what is the best decision for their members.”

However, the CMBA is the only state association that appears to have been required to agree to a regionalization framework in order to participate in the conference, according to Dannen.

“I’ve spoken to the other state presidents, and most of them expressed surprise and concern that we’ve been excluded,” Dannen said. “I do know that some of them have decided not to regionalize, and some of them are still considering it, but no one that I know of has said yes to regionalization.

“What I’m finding out in talking to others is that we’re all trying to make it on our own,” Dannen added. “I don’t get the sense of anyone feeling the immediate pressure today of needing to regionalize”

When asked if that represented a double standard, Dannen said: “It could be perceived as a double standard. Maybe that Massachusetts feels the other states have shown more of an interest than we have. We’re simply taking the position that we need more discussion on the issue.”

From the start of discussions, Vermont’s association has stated that it does not want to be part of regionalization.

According to Melinda Boehm, the past president of the Mortgage Bankers Association of Maine, her state’s association has listened in on conference calls and participated in discussions, but she doesn’t think regionalization is right for her association, citing both geography and the different demographics.

“We’ve always kind of worked on our own, and been successful at it, and I’m not sure we’ve seen the need,” she said.

Both Rhode Island and New Hampshire have been more receptive to a regionalized effort, but neither has agreed to anything, either in writing or in concept, according to Fleming and Malette.

Staying The Course

Still, the NEMBC will go forward without Connecticut. The conference has an added hook this year, as mortgage brokers now require continuing education, and the conference serves as an opportunity for training.

Fleming also sees the opportunity for people to mingle with others “of like mind,” who have survived the subprime fallout and the current, regulation-intensive environment.

“I think this tradeshow is going to be very well attended, because the people who have stayed the course … a number of them are thriving, so something is going right,” he said.

The CMBA is not going to take any legal action to claim part of the profits, and they are not going to advise their members to boycott the conference.

“We are sending a letter out notifying our membership informing them that we will not be participating in the NEMBC,” Dannen said. “We cannot get into boycotting – that’s up to people’s personal choices. But we are notifying them that we are not participating this year.

“We’re clearly very disappointed in Massachusetts’s decision to do this,” he continued. “We’re hoping at some point that they reconsider and revisit their decision, since we are a New England state, we think you can’t have an NEMBC without Connecticut.” â– 

E-mail: imurphy@thewarrengroup.com