HOUSTON - It was like the first week of college for the 90 assorted students, most of them mature, who arrived here last week for the School of Mortgage Banking's weeklong introductory course.

The week at the school, sponsored by the Mortgage Bankers Association of America, consisted largely of long classes, but some students made plans for a trip to the Johnson Space Center or a rodeo in town. Some also organized late-night poker parties.

Shirley Kelley, assistant director of the school, said enrollment was down from the classes of 140 when the mortgage industry was booming and companies had money to spend on education.

Some mortgage bankers were beginning the requirements for certification, and others were there to learn basics they do not have daily contact with. Two students were checking out job prospects, and a servicing software salesperson practiced a pitch.

Among the students were an economics specialist from Poland's Ministry of Finance and a mortgage banker who said he enrolled "to get out of Iowa."


Classes covered topics ranging from a general history of mortgage lending through how technology is changing the business with artificial- intelligence underwriting and creating more savvy consumers.

Case studies were presented to allow students to put lectures to practical use. One fair -lending case presented documents from a rejected loan. Students had to whether the action was discriminatory. The underwriting session had students break into smaller groups for two hours and make loan-approval decisions based on the available documents.


Most of the classes were for people unfamiliar with that particular area of the business. Lesson 1 in the secondary marketing seminar was "buy low and sell high," said the instructor, Peter Taglia, senior vice president of Midwest Mortgage Services Inc. Chicago.


The fair-lending session, presented by Terry Rowland from Countrywide Funding Corp., delved into government regulations and common lending practices that fall into gray areas.

He said some of the practices that may result in unintentional discrimination were tiered pricing, where low-balance loans cost more; tiered compensation programs, where loan officers working on commission are paid more for higher loans; and use of discriminating third parties, such as appraisers who work only in certain neighborhoods.


Friday was a short day, with the afternoon set aside to study for the exam. The majority of students went shopping at the Galleria, played golf, or went to the rodeo. The morning topics were quality control, fraud detection, and mortgage banking ethics.

"Before closing, make sure the borrower is still employed" was a bit of obvious, but apparently overlooked, advice from Lynn T. Chavdarov, president On Track Training, Pomona, Calif.

During the ethics session, Ms. Chavdarov addressed issues ranging from employees taking office supplies home to intraoffice dating. She asked students how they would handle actual cases.

One case had a processor telling the branch manager about a loan officer originating a loan for which the customer was not qualified.


The first afternoon offered two diametrically different sessions: one on real estate finance and the other on the human side of lending.

The finance session did not feature as much work on the HP-12C calculator as those unfamiliar with it had feared. The students' main concern was whether PV=FVx would be on the exam.

"We spent the entire flight trying to figure this thing out," said Susie Baxter, a student and assistant vice president at Lomas Information Systems, recently acquired by Prudential Home Mortgage.

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