Scott Adams beware.
The creator of "Dilbert," the wildly successful comic strip that lampoons corporate culture, may have some competition from mortgage bankers.
The Mortgage Bankers Association of America's conference on ways to expand market share had a distinct "Dilbert" theme-both deliberate and accidental-as attendees lamented the often surreal events in the mortgage banking world.
William D. Dallas, president and chief executive officer of First Franklin Financial Corp., a San Jose, Calif., mortgage bank, lambasted the industry as slow and deaf to what customers say they want.
Mr. Dallas, whose oratorical style resembles a television evangelist's, said the industry is preoccupied with one product, the 30-year conventional mortgage.
"The biggest innovation we've had in 20 years is the adjustable-rate mortgage," Mr. Dallas quipped as he roamed around the room.
Nancy Boles, senior vice president of direct sales and marketing for Fleet Mortgage Group, Columbia, S.C., said many mortgage companies are faced with the dilemma of how to sell this same product in an era of tight pricing-and in many cases, with smaller marketing budgets.
Mr. Dallas stressed marketing as opposed to selling, defining "marketing" as focusing on consumer needs and "selling" as trying to get rid of a product quickly to make a buck.
Marketing is necessary in order to make mortgages less of a commodity. "Think of mortgages as baking soda," Mr. Dallas said, pointing out that baking soda is a product that essentially had one use-sitting in a refrigerator-until marketers persuaded people to buy it for other reasons as well.
Mr. Dallas added that all too often consumers are given short shrift because their loans have been sold to multiple servicers. The originator usually isn't helpful in answering the borrower's question, so the borrower isn't likely to want to do more business with the company, he said.
"We do everything in our power to make the consumer mad," he said.
Ms. Boles challenged the audience to discuss alternative strategies for marketing loans. "If anyone in this room is getting loan originations off the Internet, come up to the podium and give a speech about it," she said. Nobody did.
First Franklin's strategy is to employ only mortgage brokers and have them do everything in the loan-origination process. Mr. Dallas said many companies are competing with themselves by having large retail networks as well as using correspondents and brokers. All this does, he maintains, is contribute to the industry's profitability malaise.
"We figured out how to price a mortgage without making any money," he said.
The conference also gave the rest of the attendees a chance to test their satirical skills by having them break up into groups to create their own "Dilbert" cartoons mocking their bosses. The audience judged the cartoons, and the two winners joked about the industry's low profitability.
In one winning cartoon, a clueless chief financial officer remarked that even though his company is still losing money after a year of using laptops for originations, it has at least automated the process of losing money.
The other winning cartoon featured a failed marketing ploy of sending out key chains. After the employees figure out that they can probably make more money making key chains than selling mortgages, a brilliant idea results-key-chain-backed securities.
Dogbert, Dilbert's entrepreneurial pet, would be proud.