The end of September means two things in New England: the beginning of fall and an annual gathering of mortgage bankers in Providence, R.I. While the leaves haven’t yet changed, the air is getting crisper and last week almost 3,000 mortgage professionals and 265 exhibitors attended the 18th annual New England Mortgage Banking Conference.

Held at the Rhode Island Convention Center in downtown Providence, NEMBC offered industry-related conferences with an aggressive educational and network agenda. Conferees included representatives from banks, independent mortgage companies, credit unions and titles companies.

“Whether a bank president, principal in a mortgage company, an originator, processor or underwriter, we guarantee that [the] NEMBC experience [has] something of interest for everyone,” said Kevin Cuff, executive director of the Massachusetts Mortgage Bankers Association, which organizes the annual event. “Most importantly, the NEMBC represents itself as a professionally managed trade convention with all of the bells and whistles associated with national convention standards.”

Highlights of this year’s conference included an opening general session featuring Peter Gammons, a journalist for ESPN and ESPN.com and recent inductee into the Major League Baseball Hall of Fame. Lawrence K. Fish, chairman and chief executive officer of Citizens Financial, also spoke during the opening session.

For the second year in a row, the event also featured the NEMBC Learning Center, a 100-seat amphitheatre-style classroom with six motivational speakers discussing topics geared toward loan officers and originators. Six educational workshops tackled current issues in the industry, such as reaching out to the minority community, adapting to a changing economy, properly funding commercial loans, fraud and USA Patriot Act compliance.

“This year we celebrate our 18th NEMBC Â… and it looks as though we are all grown up,” Kathleen Schreck, MMBA chairwoman, said of the conference. “Given the current unpredictable interest-rate environment, most professionals who work on residential loans have been working 70-hour weeks to service their many clients. So we’ll offer all of our industry’s attendees the appropriate menu for them to relax and discover new educational and networking opportunities for future business growth.”

Efficiency Counts
As part of the educational series, the NEMBC hosted a panel discussion on Thursday titled “P&L Strategies” with several industry leaders who focused on ways to smooth out profit and loss on the balance sheet. Because of the rate of fluctuation that occurs in the mortgage industry due to changing interest rates and economic cycles, the panel discussed ways mortgage companies can deal with the related challenges – the up-and-down swings between busy and slow periods. The session also covered strategies that industry experts use to improve profitability.

Moderated by Charlie Nilsen, New England regional manager for JPMorgan Chase in Braintree, the session included insight from Dean Caso, president of Needham-based Homevest Mortgage; Steven Jacobson, co-founder of Fairway Independent Mortgage in Texas and Wisconsin; and Saber Salam, senior vice president of the mortgage banking division at Boston-based Eastern Bank.

So how can a mortgage company make the most money in an ever-changing market? According to Caso, maximizing the gross basis points earned on each loan is the most important component, but determining the best execution to do so may differ for each institution. Companies must decide if they want to act as a mortgage banker or broker, Caso said. Homevest has experienced a better execution on loans by being a mortgage banker, funding the loans rather than simply originating them. While the rewards may be high, there are still some challenges.

“You have to be able to control the risk, have capital available,” Caso said.

Mortgage companies should also decide whether their rate sheet will be company-controlled or loan officer-controlled.

“We [the management at Homevest] control the rate sheet at Homevest,” Caso said.

In order to be more efficient and to control costs, Caso also suggested using technology to mitigate human variables

“It allows you to be more cost-efficient,” said Caso.

Using a team concept to streamline the loan process has also been successful. By having the underwriter, loan processor and other employees working as one team, the entire process can be executed smoother.

Jacobson of Fairway Independent Mortgage also supports the team concept. Each branch in his company has a team of four. If a loan file needs to be completed, the entire team is e-mailed and coordinated work can begin in unison.

While most companies have found ways to generate more business and revenue, even during slow times, tackling expenses may be more challenging.

“The key to any expense Â… is trying to make the expenses as variable as possible,” said Caso.

For instance, at Homevest, temporary employees are hired during busy times and part-time or hourly employees have also been used. The company currently employs three high school students to scan closed loan documents before they are shipped.

When the industry experiences a slow period, Jacobson said he actually invests more money into his employees with coaching and training to keep them inspired.

“We spend money making sure we invest in people,” said Jacobson.

For most companies, benefit packages are a “huge” expense item, Caso said. But it is an important element in finding and keeping talented employees.

“It’s an important aspect of recruitment,” Caso said.

Homevest uses a benefits company to help him shop for the best benefit deals for his employees. Another way to keep costs down is to keep short leases on rented branch office space.

Caso said companies should look to cut as much in expenses as they can and then look to additional revenue to increase their profitability, in that order.

“Once you’ve taken care of expenses, it’s really revenue you need to focus on,” Caso said.

Need for Speed
While companies often find very different ways to increase profits and decrease expenses, the entire panel agreed that speed is important. Salam, of Eastern Bank, noted that the faster a loan moves through the system, the sooner everyone is paid. This also allows for more loans to be closed.

“You need speed,” Salam said.

Eastern Bank uses a formula to gauge production based on a the number of staff people working on loans. Salam said with automated underwriting, it is easier to look at staffing as a team-based approach to determine how many people are needed and how much business the team can do.

Each of the lenders also noted that speed is good for not only the customer, but also the company and employees. Caso said everyone is selling the same commodity – a mortgage – but price and services are the variables. If a loan doesn’t get approved quickly, a loan officer can simply go to another company where the process is quicker and, therefore, make more money.

Salam said it is especially important to retain top employees through multiple cycles.

“You can grow and shrink accordingly,” he said, but keeping the best employees is important.

To do so, Eastern prepares employees for the transition from a busy market to a slower-paced one. The bank has expanded its product menu, giving loan officers more opportunities to sell loans that best meet customer needs regardless of the prevailing economic situation. Salam said the service side must be strong in order to keep employees.

“Make sure the service side of the equation is better [during slow periods] than what they had when things were really good,” Salam said.

Homevest also anticipated a slowdown in the marketplace. Because of that, loan officers were armed with marketing materials tailored to reach out to Realtors and niche consumers with specific loan needs. Loan officers are looking to generate as many loans as possible and if they can offer services or a niche product, this can be crucial during a slow period.

Some of the other highlights of the conference included a panel of state regulators. Regulators from each of the New England states updated attendees on the latest regulatory and legislative changes that will affect the mortgage industry overall and specifically in New England states.