Ed Delgado 		From the CEO

There is a saying; determination, patience, and courage are the only things needed to improve a challenging situation.

As the mortgage banking industry and policymakers work to implement programs to stem the number of families facing foreclosure, another issue has come into focus—a matter that some would argue is at the very core of the current financial crisis. Though helping responsible American homeowners restructure their debt remains a top priority for the industry, we cannot ignore the lack of financial literacy throughout the country and the impact this condition will have upon generations to follow.

Continuing to offer temporary solutions that focus on ‘products’ rather than people will at some future point reignite the financial crisis and our children will once again be exposed to economic stress and financial instability. If we—as an industry and a country—choose to ignore the gaps in financial education, we will inevitably find ourselves right back at the start of financial uncertainty.

Data doesn’t lie. Consumer behavior amongst Americans and the grasp of financial responsibility are at a crossroads. In fact, the latest Consumer Financial Literacy Survey from the National Foundation for Credit Counseling indicates that 64 million adults admit they don’t pay their bills on time. About two in five households report that they have some form of significant credit card debt and more than 11 million Americans say they carry $10,000 or more in credit card debt—on a rolling month-to-month basis. Can we seriously expect a long-term recovery for the mortgage industry with so much debt building in the average household?

According to NFCC’s 2010 survey, we shouldn’t have that expectation. In fact, 80 percent of adults feel there are situations where it is “acceptable” to default on a mortgage, and two of the top three most justifiable circumstances point the finger toward the lender.

Now, more than ever, the mortgage banking industry has a calling to work together with the administration, government officials, nonprofit entities, and other financial education partners. Colleagues, competitors, and even critics must collaborate during this unprecedented to propel us forward and out of this financial malaise.

By joining the Five Star Institute (FSI), an independent service provider that exists to address an industry-wide need for standardization and education within mortgage banking and default servicing, I have made a commitment to be a driver of change. Through dynamic and engaging workshops, and continued collaboration, we will foster best practices, promote effective policy, and become the conduit for effective communication.

As the new CEO of the FSI, I’m looking forward to partnering with you to address the issues facing the mortgage default servicing community, and hope you will leverage our new initiative, the Five Star Lender League, to your advantage. Designed to bring lenders and institutional investors together in a cooperative coalition to foster industry innovation and provide homeownership education and financial literacy to consumers, my goal is to work with all of our partners to develop relevant and much-needed curriculum for this initiative and its related conferences, brands, and media products.

Directing the market through this pivotal period requires a commitment by all of us to be the drivers of change and to capitalize on innovation. Through this one-of-a-kind interactive FSI experience, the industry will foster best practices, brainstorm new-market strategies, and promote effective policy that will ultimately reshape and redefine our industry.

Looking forward to seeing you at one of the many upcoming Five Star Institute events,


Ed Delgado
CEO, The Five Star Institute