We asked Calvin to share his perspective on the industry, having spent 50 professional years weathering the highs and lows of interest rates and other forces that impact our business.
Calvin, you’ve shared that interest rates have been significantly higher than what we’re seeing today. Can you take us back to the 1980s?
I purchased a home in west Houston in 1986 with an ARM loan with a negative amortization feature. The start rate was 16.25% and during the payment period the loan went negative, increasing my principal balance. The economic challenges were such that the doc prep law firm I was with at the time was more focused on foreclosure and eviction work than origination work. For an historical perspective, in June of 1981, the Federal Open Market Committee (FOMC) set the Fed funds rate for overnight loans to banks at an all-time high of 21%. For the period 1971-2022, the 30-year mortgage rate in America averaged 7.76%. In that time the 30-year rate hit a high of 18.63% in October of 1981.
What advice do you share with those in our business about polishing skills and continuing education during a slower period?
Use the time with lower loan volume to assess what and how you are doing to create success for you and your company. With honest reflection, you may find out you need to double down on your current efforts or adjust and add new steps. If you are not currently engaged in MBA and/or NAMB and/or the local chapters of these organizations in your state, now is the time to do so. Not only will attending meetings increase your knowledge and provide continuing education, but it will also afford you networking opportunities to boost your business.
Based on your years of experience, how would you advise your 30-year-old self about being successful in this industry?
The advice I have given myself is to remember good times follow the bad and worrying about when the change will take place doesn’t help. Consider the positive things in your life, after all, positivity is a choice. Take time to help others that are less fortunate than you, in doing so you will appreciate that much more your circumstances in life.
What about our industry still excites you?
This is my fiftieth year practicing law, much of which has been spent representing mortgage lenders. Despite the cyclical nature of the business, I still enjoy the interaction with clients, team members, and people in all facets of the business. I maintain my interest by remembering that while I may have not succeeded at something, it just means I haven’t succeeded yet. Famed basketball coach John Wooden offered a thought that will benefit us all – “Things turn out the best for the people who make the best of the way things turn out.” And one last recommendation from me that I embrace every day – “Keep moving!”