NMP National Mortgage Professional July 2022 by ambizmedia

JULY 2022

Vol. 14, Issue 7 $20.00

DAYS TO DOLLARS YOUR 5-DAY PLAN TO BOOST YOUR PIPELINE CROWDFUNDING HOME CONSTRUCTION N TIO C SE L A I EC P S

E AG P >

IT AIN’T HARD ANYMORE

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The

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JULY 2022

Vol. 14, Issue 7 $20.00

DAYS TO DOLLARS YOUR 5-DAY PLAN TO BOOST YOUR PIPELINE CROWDFUNDING HOME CONSTRUCTION N TIO C SE L A I EC P S

E AG P >

IT AIN’T HARD ANYMORE

PRIVATE CAPITAL SHEDS HARD MONEY IMAGE

The

40 Year-Old Virgin Mortgage How Adding A Decade To Loan Term May Save Originations A PUBL ICAT ION OF A ME RICA N BUS INE SS MEDI A

Volume 14 Issue 7

JULY 2022

CONTENTS

nationalmortgageprofessional.com

COVER STORY PAGE 38 Mortgages That Last Has the time come for 40-year mortgages? We explore the pros and cons of loans that stretch over four decades but offer lower entry costs to home ownership.

4 Better, better, better … The mantra for 2022 is be better at everything to be a leading loan originator 6 A Plan For Inequality Fannie Mae details need for more equality in housing amid past issues. 8 Let’s Play Pretend Don’t put the brakes on role playing as an effective coaching tool.

10 Hard Money Needs A Hard Fairwell Focus on the positive opportunities that private lending now provides.

16 Build-A-Broker: Innovate For Inclusion Remain culturally aware to combat ‘The Great Resignation.’

12 Mind The Gap Feds might be taking wrong approach; need to look at buying gap

18 Don’t Fear The Changes Preparation goes a long way to overcoming angst about challenging times.

15 People on the Move See who the movers and shakers are in the mortgage industry.

20 Don’t Give Up On Goals Ignoring goals can lead to professional invisibility.

32 New Way To Invest In Real Estate A new marketplace opens up million-dollar investments starting at $500.

22 Five Days To Volume Follow this Monday to Friday plan to build up volume in tough times. 24 Non-QM Lender Resource Guide 28 Wholesale Lender Guide 30 DataBank 47 NMP’s Most Connected Awards Our recognition of industry leaders who are effectively using social media to build awareness. 60 Non-QM Lender Directory 62 Facebook Thoughts: Public Displays Of Rock ‘n’ Roll

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

STAFF

JULY 2022

Vincent M. Valvo CEO, PUBLISHER, EDITOR-IN-CHIEF Beverly Bolnick ASSOCIATE PUBLISHER

Volume 14, Issue 7

LETTER FROM THE PUBLISHER

Failing Up

ometimes it feels like the mortgage industry is just flailing around, hoping to touch any viable handhold to keep from sinking into an economic whirlpool. National Mortgage Professional’s daily news reports are filled with stories about interest rate woes, layoffs after layoffs, and company closures. Some cases are reports of lenders merging to survive (or grow). Some cases are reports of lenders, such as First Guaranty Mortgage Corp., all but shuttering their doors. But while the daily editions of our email newsletters and our multimedia reporting via Mortgage News Network reflect the woes of each day, our journalism in our magazines takes a different tack. We’re interested in showcasing insights and action. Who are the mortgage pros who are succeeding wildly in this market? How can originators adjust their sales plans and tactics? What are the new innovations that can help to save the day?

TRY EVERYTHING From little more than a wayward thought to a growing portfolio of active lenders and secondary buyers, the new 40-year mortgage is getting a lot of attention. Yes, it saddles borrowers with more interest payments long term and delays a buildup of initial principal. But the longer term allows borrowers a smaller monthly payment, which may be exactly what they need to get into the housing game. With average interest rates now double what they were at the start of the year, having a tool that can offset that and give borrowers a path forward is critical. Similarly, originators are taking another look at private capital lenders — formerly characterized as hard money lenders — for possible product. And in this issue, we also look at the idea of effectively crowdfunding a real estate investment strategy that will put more housing units into play. Great success can often be born out of great despair. Tough times force innovation, and compel us to find different ways of doing business — often, better ways of doing so. Not everything works. But even then, the tech industry has a helpful term for that, “failing up,” that means even a setback sets you up for future achievement. Yes, the daily news is full of foreboding. But our magazines offer hope and insight, and tell the tales of what might yet be the strategy that wins it all. After all, our tagline is simple and straightforward: We write the story of your success.

V INCEN T M. VALVO Publisher, Editor-in-Chief

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

Christine Stuart EDITORIAL DIRECTOR David Krechevsky EDITOR Keith Griffin SENIOR EDITOR Mike Savino HEAD OF MULTIMEDIA Katie Jensen, Steven Goode, Douglas Page, Sarah Wolak STAFF WRITERS Rob Chrisman, Dave Hershman, Erica LaCentra, Nick Roberson, Lew Sichelman, Mary Kay Scully CONTRIBUTING WRITERS Alison Valvo DIRECTOR OF STRATEGIC GROWTH Meghan Hogan DESIGN MANAGER Christopher Wallace, Stacy Murray GRAPHIC DESIGN MANAGERS Navindra Persaud DIRECTOR OF EVENTS William Valvo UX DESIGN DIRECTOR Andrew Berman HEAD OF CUSTOMER OUTREACH AND ENGAGEMENT Tigi Kuttamperoor, Matthew Mullins MULTIMEDIA SPECIALISTS Melissa Pianin MARKETING & EVENTS ASSOCIATE Kristie Woods-Lindig ONLINE ENGAGEMENT SPECIALIST Michael Castro MARKETING MANAGER Joel Berman FOUNDING PUBLISHER Submit your news to editorial@ambizmedia.com If you would like additional copies of National Mortgage Professional Call (860) 719-1991 or email info@ambizmedia.com

www.ambizmedia.com © 2022 American Business Media LLC. All rights reserved. National Mortgage Professional magazine is a trademark of American Business Media LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: American Business Media LLC 88 Hopmeadow St. Simsbury, CT 06089 Phone: (860) 719-1991 info@ambizmedia.com

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OP-ED

Knocking Down Barriers

A people-centered approach to advancing equity in housing BY JEFFERY HAYWARD, CONTRIBUTOR, NATIONAL MORTGAGE PROFESSIONAL (Editor’s note: this is a post Jeffrey Hayward, Fannie Mae’s Executive Vice President and Chief Administrative Officer, published after the announcement of the three-year Equitable Housing Finance Plan that outlines actions the company will take to knock down barriers faced by Black renters and homeowners.)

n April 1968, President Lyndon B. Johnson signed the Fair Housing Act, which guaranteed equal access to housing for all. At the signing ceremony, Johnson told the packed White House East Room, “We have come some of the way, not near all of it. There is much yet to do.” LBJ’s note of hope, tempered by frustration, still resonates today. The Fair Housing Act sought to end legal discrimination in housing. But more than 50 years later, the vast gap in homeownership rates between Black and white people remains, as do many disparities in economic and social wellbeing that are tied to homeownership. In fact, in many ways that gap has widened. The Black homeownership Jeffery Hayward rate today is stuck at around 42%, the same as in 1970. Meanwhile, the white homeownership rate was at 66% in 1970 and rose to 72% by 2019. We estimate that if this racial gap were closed, our country would have about 4.7 million more Black homeowners. Other indicators of Black economic well-being tell a similar story. From 1989 to 2019, the median net worth of Black households grew from $15,500 to $24,100. But during that same

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

time period, white household median net worth rose more than $45,000, to $189,100. Throughout much of our nation’s history, Black people were denied full access to housing and homeownership because of their skin color and ancestry. One example is legalized redlining that effectively closed the regulated and subsidized housing

Black people were free to want the American Dream, but largely denied the means to have it. finance system to whole swaths of the Black community during the post-World War II era. Black people were free to want the American Dream, but largely denied the means to have it. We at Fannie Mae believe this racist legacy is one of the root causes of economic disparity in our country. The gap in generational wealth between white and Black populations today is rooted in this discriminatory past. To ignore this — to pretend that our history does not affect our country’s present and future — is not only wrong, it’s also economically destructive. Our country is less affluent, and our economy less vibrant, because of this past. Our future will be brighter if we take real steps to recognize and redress it. For Fannie Mae, which plays a large role in a

mortgage market that is the bedrock of our housing system, our choice is clear: We must begin to knock down barriers to homeownership and the wealth it can build in order to repair the harm done to generations of Black families. To do this, Fannie Mae sought to create a new roadmap to greater housing equity, one drawn not from a corporate perch but from the ground up, rooted in an understanding of the lived realities of Black renters and homeowners today.

THE BLACK HOUSING JOURNEY To build this roadmap, Fannie Mae developed a consumercentered, research-based body of work that we call the Black Housing Journey, which catalogs housing experiences at each of life’s stages. That journey is filled with promise and opportunity, but also enormous obstacles. Here are just a few examples that throw these obstacles into sharp relief: • 53% of Black renters aged 25 – 44 were “housing cost burdened” in 2019, meaning they spent at least a third of their monthly income on housing costs; 35% of white renters were similarly burdened. • The median cash-onhand (or liquid assets) of Black renters between the ages of 25 and 44 was $880 in 2019; it was $2,400 for white renters. • Only 40% of Black families reported in 2019 they could get $3,000 from family or friends, say, for a down payment or to help with a short-term financial disruption; 72% of white families said they could. • About 15% of Black consumers are “credit invisible” — lacking any records in nationwide credit reporting agencies — compared with 9% of white consumers. Limited or nonexistent credit history is a common barrier to qualifying for a loan. Of course, the experience of Black people in the United States is not monolithic, and any single “journey” can’t describe the infinite nuance of lived experiences. Nor are barriers like those I cite above exclusive to Black people. But they are real, and by tackling them, we can begin to make a difference, one renter or homeowner at a time. Importantly, we plan to bring this same consumer-centered approach to help us knock down barriers faced by other underserved communities. The three-year Equitable Housing Finance Plan we submitted to our regulator, the Federal Housing Finance Agency, details a range of actions that we believe lay the groundwork for meaningfully addressing these barriers, one by one. We believe the Equitable Housing Finance Plan is a solid step toward a goal that will take years of sustained will and work to achieve. But it’s a goal we must pursue, not only as a moral imperative, but as a historic economic opportunity for our country and the people and communities we are chartered and committed to serve. Fannie Mae’s Equitable Housing Finance Plan is just one piece of a much larger and evolving strategy for Fannie Mae

to make housing more equitable. Our goals include: Empowering consumers through a robust program of financial and housing education. Fannie Mae’s Here to Help education campaign helped millions of homeowners and renters access housing and mortgage assistance during the COVID-19 pandemic. Its success demonstrates the dire need for more financial and housing education as a vital tool not only in attaining homeownership but maintaining it. It’s a need we can help fulfill. This year, Fannie Mae launched HomeView™, a comprehensive and free education resource designed to support consumers at every stage of the homeownership journey. Pushing our company and the housing industry at large to better reflect the true diversity of the nation and communities we serve. We’re growing a more-inclusive housing sector for consumers, lenders, and our employees. Our Future Housing Leaders program and Appraiser Diversity Initiative have set ambitious goals to place more people of color in positions across the mortgage and housing industries. And we know that racial equity starts at home. Just as we are listening to Black consumers about their housing journey, we’re including diverse voices to shape the future of Fannie Mae and help us live up to our mission. Changing the way homeowners and renters are served. We’re investing in innovations that eliminate barriers to first-time homeownership, and working to finance more affordable, quality rentals. That means expanding access to quality affordable rental housing in more high-opportunity neighborhoods, including for renters who rely on Housing Choice Vouchers. It also means a more inclusive credit eligibility system. For example, we recently helped lenders consider the history of timely rental payments as a factor when assessing mortgage applications. Our RefiNow™ option provides an easier mortgage refinance process and lower upfront costs. Together, these innovations help knock down some of the barriers to stable homeownership that Black families have historically faced, and do it in a way that is safe, sustainable, and fair. As with so much of Fannie Mae’s work, collaboration and partnership is the key. To make progress, we are willing to put our intellectual and financial capital to work, but we need the housing, mortgage, and financial service industries to do the same. That means partnerships of substance, which we are ready to lead or join wherever they arise. In that spirit, and with eyes clear on the challenges to come, we urge everyone with a stake in housing’s future to join us in making that future fundamentally fair, once and for all. n

Importantly, we plan to bring this same consumercentered approach to help us knock down barriers faced by other underserved communities.

Jeffery Hayward is Fannie Mae’s executive vice president and chief administrative officer, responsible for all the company’s missioncritical work on affordable housing and Environmental, Social, and Governance, and leads the human resources and enterprise workplace functions.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

DAVE HERSHMAN

RECRUITING, TRAINING, AND MENTORING CORNER

Don’t Put Role-Playing On Hold

Prepare your loan officers with extensive training for better sales. BY DAVE HERSHMAN, CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL

n the last issue of National Mortgage Professional, we introduced the difficulties that coaching loan officers present, including identifying the issues and making coaching calls. We will now delve into the tools you can use to become a more effective coach. Scripts. No salesperson can develop into a true relationship star using scripts. Yet, we all know that the secret to great telephone sales and overcoming objections is being prepared with what to say and at the right time. You will facilitate the process greatly by developing standard answers for standard questions. Coaching should cover examples of scripts for enabling statements, standard questions, sample closing statements and objection responses. In training, I often jest by saying, don’t put the customer on hold while you search for your script. Scripts do have a time and place — but they do not substitute for real needs assessment and conversational/relationship skills. Role-Playing. I am not a believer in canned closes — the alternative close, Ben Franklin close, etc. Closing is a matter of identifying needs and filing them at the right time. You cannot teach timing. You can facilitate the process by conducting role-playing exercises that approximate real life situations. Role-playing should be a major part of your coaching and

training sessions, as well as sales meetings. Let your leaders be major role players and allow everyone to analyze responses. Then let your leaders analyze the novice’s response. Some factors to consider regarding role-playing over the phone (note that role-playing is just as important for real estate presentations, etc.). • Your loan officers will not get better if they don’t practice! Ever hang up the phone and say to yourself — “I should have said … .” Well, you don’t get “do-overs” over the phone. Like an Olympic athlete who trains for years and years — if you trip out of the starting lane, the quest is over. So, what do they do? They practice again and again. • Role-playing is not the same as benchmarking. Benchmarking is very important to those who would like to improve their sales processes. After all, there are others who are good at what you want to become good at. So why should your loan officers re-invent the wheel? Find out what leaders say over the phone and let them use what works for

them! But remember that watching is not performing the task. Nothing substitutes for practice. • Practicing the wrong way will make them worse! If you don’t believe me — ask your golf pro. If you have a bad swing, going to the driving range and playing more often will only make you worse. So, if you are saying the wrong things or saying the right things in the wrong way or at the wrong time, doing it more often will only make them comfortable at losing the opportunities they have to increase their income. Do not let them become comfortable losing money! • What is practicing the right way? Conduct practices in front of observers — experts who can help your loan officers get better. They do not even have to be from your chosen field. Role-playing without feedback is just a bit better than not practicing at all. Without feedback, you will never get better. And those who do not improve every day will stay stagnant. • Try out new techniques in different situations. It is said that the true definition of insanity is

What is the real key to sales over the phone? Confidence. Your prospect or customer wants to hear confidence in your voice.

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Role-playing without feedback is just a bit better than not practicing at all. doing the same thing again and again and expecting a different result. Role playing must include practicing many different situations such as those who need help urgently and those who are

procrastinators. The more practice in different situations, the less your loan officers will be surprised by anything. And believe me — that is a good position to be in.

• Confidence is the key word. Those who are great over the phone can react quickly to just about any situation. What is the real key to sales over the phone? Confidence. Your prospect or customer wants to hear confidence in your voice. And it is this type of practice that can make your loan officers confident. The one thing that is easy about telephone sales is that we know what prospects are apt to say. All the objections have been documented so many times before. You just need to be prepared—and role-playing in the right way will do just that. We will introduce additional training and coaching tools to use in the next issue. n

Dave Hershman, senior vice-president of sales for Weichert Financial Services, is a prolific author with seven books published as well as the founder of the OriginationPro Marketing System and the OriginationPro Mortgage School.

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ERICA LACENTRA

RECRUITING, TRAINING, AND MENTORING CORNER

Putting An End To The Hard Money Moniker

Focus on the positive opportunities private lending provides. BY ERICA LACENTRA | CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL

movement is currently underway in the private real estate lending space to phase out the term hard money once and for all. Long gone are the days of what hard money used to be, with shady loanto-own business practices, sky-high interest rates, astronomical points, and visions of mobsters ready to break your kneecaps if you didn’t pay on time. It’s more than fair to say that hard money has become institutionalized, and grown into its new moniker of private lending, however, so many in the industry, lenders, brokers, and clients alike, are hesitant to let go of that long-standing phrase. With the strides this industry has taken over time, why wouldn’t people want to leave behind that shady past and focus on the positive opportunities that private lending now provides to real estate professionals? Simply put, its complicated.

THE DIFFERENT ‘SIDES’ OF THE REAL ESTATE INDUSTRY I was recently having a conversation with someone on the residential side of real estate about the semantics of hard money vs. private lending and they pointed out that typically in the residential space, private lending refers to a wealthy individual investor that lends out

Just like the term subprime is no longer used in the world of residential real estate, it’s time for hard money to be phased out of existence. their own money. It doesn’t reference the bigger private lenders that have saturated the real estate investing space as we know it today. However, if you asked residential

mortgage brokers or originators to rattle off the biggest hard money lenders, they would have no problem naming companies like RCN Capital (although I cringed at being referred to as hard money). This individual also mentioned that companies like RCN could be considered a bridge lender if we didn’t like being called a hard money lender. I countered by saying that bridge lending simply doesn’t cover the full scope of products that private lenders now offer. Private lenders have expanded their loan program offerings to include not just short-term bridge loans or fix and flip loans. Many offer DSCR products, long-term rental products, new construction products, and much more. Again, confirming that this part of the industry has truly become that much wider reaching and legitimate. And while those that reside on the private lending side and deal primarily with clients on that side of the real estate industry may think that phasing out the term hard money is an easy task, the real challenge lies with gaining acceptance from the residential side

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

and making a push within that side of the industry. That’s where the majority of apathy towards this whole movement seems to lie.

THE MARKETING DILEMMA When RCN Capital went through its rebrand, we made the conscious choice to use the phrase private lending and private lender instead of hard money in all our print advertising and company boilerplate from day one, and that was back in 2013. This was because I did not want our new brand identity associated with the term hard money. I wanted to have RCN Capital be of a higher caliber and not just another hard money lender, we were a private lender. I ran into significant challenges when it came to digital advertising and website SEO. If I didn’t utilize keywords related to hard money in our advertising strategy, I would be missing out on a large portion of customers that were searching for our types of loan programs.

Even today, at many residential mortgage broker trade shows, when I present my elevator pitch about RCN, which does start off with “RCN is a direct, private lender,” more often than not, I am immediately met with, “Oh, so you are hard money.” In those moments, of course I am going to agree with a potential client so they can easily understand what our loan programs are, rather than argue and say well no, we are private money. From a marketing perspective, because our client base is split between the residential world and the private world, like many other private lenders, this initiative has become a delicate balancing act of portraying our company as a private lender to show our support for moving our industry forward while still trying to attract the customers that are looking for hard money products.

inventory levels remaining limited, and so many other issues going on in the mortgage industry and real estate industry, arguing the semantics of hard money vs. private money seems so low on the list of priorities right now. However, such a small change for real estate professionals to make is all the private lending industry is asking as it would make such a tremendous impact. Just like the term subprime is no longer used in the world of residential real estate, it’s time for hard money to be phased out of existence. The term hard money is obsolete, and it no longer reflects the players in this space and the products they offer. It is a disservice to those businesses and their customers alike to continue to use it. It is time to put hard money to bed and embrace the rise of private lending. n

R.I.P. HARD MONEY

Erica LaCentra is chief marketing officer for RCN Capital.

With interest rates going up,

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LEW SICHELMAN

RECRUITING, TRAINING, AND MENTORING CORNER

Biden Aims to Fill Housing ‘Gap’ But it focuses on housing supply, not buyers as it should BY LEW SICHELMAN, CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL

hen it comes to housing, the focus sure has changed at 1600 Pennsylvania Avenue. During the run up to the presidential election, candidate Joe Biden went heavy into policies to increase the supply of home buyers, offering, among other things, a down-payment assistance program paid for with a refundable and advanceable tax credit. He also advocated for fully funded federal rental assistance. Now, President Biden has switched gears, forgetting about buyers — at least for the moment — and concentrating instead on the supply of houses. My, how the times have changed in the 18 months Biden has been in office. Housing prices are such that many buyers — especially rookies — are still having a tough time rubbing enough shekels together to come up with a down payment, let alone enough to cover their closing costs, too. Rising mortgage rates haven’t helped their cause, either. But the real bugaboo right now is that there aren’t enough houses for sale or apartments for rent to satisfy demand. If there were more of each, the think-

ing goes, the crawl of ever-rising prices buyers and tenants pay would slow to, well, a crawl. Or maybe even fall back to somewhat more affordable levels, at least for some people. Moreover, once inflation is tamed and supply chain issues are solved, loan costs should return to a more modest level, maybe even to those of the last year or so.

TOO LITTLE, TOO LATE? Some may believe that Biden is too late on the draw. After all, most signs already point to a falloff in demand and an increase in houses listed for sale. Some sellers, already in a panic, are cutting their asking

prices. But the total lack of for-sale houses has gummed up the works for everyone, starting with apartment dwellers who would like to move into places of their own and moving on to current owners who want to move up to bigger, better houses. Even elders who’d like to retrench into smaller digs in better climates are stuck. So, the White House is taking aim at boosting the supply, and with good reason. In a 2020 resolution, the National Lieutenant Governors Association put the shortfall at more than 1 million. Robert Dietz, chief economist at the National Association of Home Builders, says that number is still about right. “That is the growth

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

in the housing stock (needed) to return vacancy rates back to near historical norms,” he told me. But Moody’s Analytics puts the figure at nearly 1.5 million nationally, largely because fewer new houses were built in the 10-year period following the Great Recession of 2008 than in any other decade since the ‘60s. Hence, Biden’s 13-page Housing Supply Action Plan, a multi-faceted effort to close the gap over the next five years. “The best thing we can do to ease the burden of housing costs,” said White House Press Secretary Karine Jean-Pierre, “is

to make the cost of a FHA mortgage cheaper at a time when it seems like all consumer goods are going up in price,” says the U.S. Mortgage Insurers, the trade group for private insurance companies, “it will have negative unintended consequences further increasing demand with minimal housing supply as well as the economic uncertainty related to the economy.”

‘DOWN IN FLAMES’ Furthermore, a good part of the President’s plan must be executed legislatively. Unfortunately, or fortunately, depending on your point of view, the Republicans in the evenly divided Senate have shown little interest with anything put forward by the White House. Consequently, while the administration’s legislative proposals could clear the House, they are likely to hit a wall in the upper chamber. Indeed, some proposals have already gone down in flames on Capitol Hill. For example, broader funding for 800,000 new rental and affordable

The last thing the housing market needs right now is more buyers, at least not until the well of dwellings rises. to boost the supply of quality housing, including building more new homes and preserving existing federal support and market-rate affordable housing.” All well and good, but there are a few problems. For one thing, it seems that part of the Biden Administration hasn’t heard the message. I’m talking about the Federal Housing Administration, which is said to be seriously considering a cut in its insurance premiums. Such an admirable step would allow more borrowers to qualify for low-cost government-backed financing. But the last thing the housing market needs right now is more buyers, at least not until the well of dwellings rises. “While it may be well-intended

housing units through the Low-Income Housing Tax Credit program was part of Biden’s “Build Back Better” initiative, which stalled in the Senate. Now it has been salvaged as a stand-alone legislative proposal that would expand LIHTC allocations and reduce the 50% bond test to 25% from 2022 to 2026. Proposals like this are usually “embedded in some sort of tax credit bill and attached to a bigger piece of tax legislation,” David Sebastian, senior managing director at Greystone, told Multi-Housing News. But, as the White House noted, there has been longstanding support for the LIHTC program, so the proposal could happen, perhaps as part of the President’s 2023 budget.

On the brighter side, meanwhile, a big part of the Housing Supply Action Plan can be implemented immediately, either by Presidential fiat, aka executive orders, or by various federal departments. And at this writing, some steps have already been taken. In early May, days before the Biden plan was released, the FHA as well as Fannie Mae and Freddie Mac, at the direction of their conservator, the Federal Housing Finance Agency, extended the period during which REO properties are made available only to owner-occupants and non-profits to 30 days. The 30-day exclusive period gives these specified buyers an opportunity to bid before investors are allowed their shot at the brass ring. Separately, the FHA also established an initial 30-day exclusive sales period for Claims Without Conveyance of Title (CWCOT) post-foreclosure sales for owner-occupants, HUD-approved non-profits and governmental entities. Again, large investors are only permitted to submit bids after the 30-day period expires. The White House says that after it announced that it would take these steps, 50% of the notes secured by HUDheld properties sold at auction went to non-profits. Normally, 90% of the assets would be snapped up by investors, so there is evidence this step puts more houses into the hands of people who will live in them rather than profiteers. Now, under the Action Plan, the target going forward is “at least 50%.” You can see the entire plan here (https://www.whitehouse.gov/ briefing-room/statements-releases/2022/05/16/president-biden-announces-new-actions-to-ease-theburden-of-housing-costs/). For now, let me highlight a few sections: • Exclusionary zoning and land use regulations are often blamed for constraining housing supply. Consequently, the Administration has begun using federal transportation programs to encourage localities to boost housing supplies. For example, the Transportation Department is urging applicants for $6 billion in federal grants to put in place land-use policies that promote density and rural main street revitalization. CONTINUED ON PAGE 14

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

RECRUITING, TRAINING, AND MENTORING CORNER

FILL HOUSING ‘GAP’ CONTINUED FROM PAGE 13

But Congress needs to pass the Unlocking Possibilities Program included in last year’s budget reconciliation bill. That program would establish a new $1.75 billion competitive grant program to help state and local governments eliminate barriers to affordable production, including permitting manufactured housing communities. • To boost funding for new construction for affordable housing and the rehab of same, the White House is going big on manufactured housing. Toward that end, Fannie and Freddie have revised their targets for purchasing mortgage on such properties under their Duty to Serve requirements. Meanwhile, the Department of Housing and Urban Development is backing greater securitization of the FHA’s Title I program for manufactured houses through the Ginnie Mae platform. • At the same time, the FHA and

FHFA are looking at ways to help lenders pilot and scale up construction financing for backyard alternative dwelling units, particularly for low and moderate-income homeowners and renters. And the Agriculture Department’s Rural Housing Service plans to work with lenders to boost its construction-to-permanent loan program. • The White House also is asking lawmakers to revive the Neighborhood Homes Investment Act, which also was part of the last year’s reconciliation measure. The bill would offer tax credits to encourage investment in houses too costly or difficult to develop or rehab and require those places to be sold to owner-occupants rather than investors. Biden also is asking for $25 billion in grants for affordable housing production is his ‘23 budget. • To close the housing gap within the targeted five-year time frame, the

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

Administration wants to expand Fannie-Freddie financing for multi-family properties, with one possibility being a single-close, construction-to-permanent program. Additionally, the Treasury Department is pushing state and local governments to dedicate more of their American Rescue Plan money to build affordable housing. To date, the White House says, nearly 570 jurisdictions have committed more than $11.7 billion to housing-related activities, $3.2 billion of which is set for production and preservation. n

Lew Sichelman is a contributing writer to National Mortgage Professional magazine. He has been covering the housing and mortgage sectors for 52 years. His syndicated column appears in major newspapers throughout the country. He also has been real estate editor at two major Washington, D.C., dailies and spent 30 years on the staff of National Mortgage News, formerly National Thrift News.

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HOW NMP’S MONTHLY SECTION OF HANDS-ON PRACTICAL ADVICE

BUILD A BROKER Inclusiveness Can Drive Profits In Interesting Ways YOUR FIRST MILLION DOLLARS Customer Education Makes Them Less Fearful Hit The Bullseye Or Else You Become The Target Eight Days A Week? Nope. Build Volume in Five CAREER TICKER: People On The Move

PEOPLE ON THE MOVE //

> Inlanta

Mortgage announced that Paul Buege has been promoted to CEO.

> Mid America Mortgage promoted Gary D. McKiddy to chief financial officer.

> Open

Mortgage has selected Brenda Hedeen, CPA, as the new chief financial officer.

> Waterstone

Mortgage Corporation named Paul Garrigues as the company’s new CFO.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

BUILD-A-BROKER: HANDS ON PRACTICAL ADVICE BUILD-A-BROKER

How To Create An Inclusive Workplace

Innovation, anticipating change and responding effectively improves with inclusiveness. BY NELLIE AKALP, SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL

s the nation’s employers struggle to attract talent and retain valued employees, many companies remain culturally short-sighted. While American businesses are still impacted by The Great Resignation, companies must look beyond merely offering competitive salaries and benefits. In an employeedominated marketplace, an inclusive workplace culture greatly influences employee job satisfaction and dedication to their employer. NELLIE AKALP In Deloitte’s latest report, “Unleashing the Power of Inclusion,” 80% of surveyed employees say inclusion is essential when choosing an employer, and 39% report they’d consider leaving their current companies to work for more inclusive employers. In addition, creating an inclusive workplace pays off for a growing company. Research shows that companies with inclusive cultures are six times more

likely to be innovative, six times more likely to anticipate change and respond effectively, and twice as likely to meet or exceed financial targets. As the owner of a growing company, I constantly strive to provide my employees with a workplace culture that celebrates diversity and encourages individuals to be their authentic selves. But to get your people on board, it’s not

enough to be a boss — you have to be a leader. And inspire them. How do you do that? We’ve all heard the age-old phrase, “There is no I in team.” As an entrepreneur, it is easy to take a path of “me, myself, and I” in all aspects of the business. But for organizations to succeed, leaders must realize that while there is no “I” in “team,” there is an “I” in

PEOPLE ON THE MOVE //

> Embrace

Home Loans announced that Mehdi Pirzadeh has been named senior loan officer, vice president.

> Floify

announced the hiring of Sofia Rossato as president and general manager.

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

> Luminate

Home Loans has appointed Paul Schuster as its new divisional VP.

> Geneva

Financial hired Jesse Seidel to run its new Greenwood Village, CO branch.

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“responsibility.” Here are five key takeaways for how leaders can and should change their “I” mentality to a “we” mentality: 1. How leaders handle inevitable mistakes can be the make or break moment for a company 2. Hiring others to do what you don’t like to do can only help, not hurt, your business 3. Transparency is crucial to success, but it goes both ways between leaders and teams 4. When you talk, people listen, but sometimes it is better to listen while others talk 5. Taking time for yourself is a sign of strength—not weakness Once your team trusts that you have their best interests at heart, creating an inclusive workplace is easier. Here’s how:

UNDERSTAND WHAT’S IMPORTANT Before creating an inclusive workplace, it’s essential to understand the difference between merely proclaiming company inclusivity and authentically practicing it. According to the Deloitte survey, the top aspects of an inclusive culture for employees are “an atmosphere where I feel comfortable being myself” and “An environment that provides a sense of purpose, where I feel like I make an impact.” They do not want to work in an atmosphere where everyone is the same, meaning having the same life experiences and social values. Diversity is key.

USE INCLUSIVE LANGUAGE Under U.S. laws enforced by the U.S. Equal Employment Opportunity Commission (EEOC), discrimination is

> Waterstone

Mortgage Corporation opened a New Hampshire branch led by Ray Tweedie.

illegal in every aspect of employment, including using offensive comments about someone’s sexual orientation. Knowing what language to use and what not to use may not always be apparent (especially to older generations) but intentionally using inclusive language helps foster an inclusive culture where the historically marginalized can feel safe. For example: Use language about the person and not a label. Use neutral words such as “you all” and not “you guys.” Say “partner” instead “wife” or “husband.” Be wary of specific implications in words and phrases. If you’re not sure, look up the historical context, there may be cultural insensitivity you’re not aware of. Pay attention to how your employees react to the particular language used and if you’re unsure, ask. Promote inclusive leaders Your managers should show and promote inclusive behaviors. Consider sending your team to inclusive training.

and celebrate the team’s efforts. Employees with a strong sense of each other’s worth and abilities will embrace inclusivity for the company’s good. Celebrate employee differences A diverse and inclusive workplace creates an opportunity for all employees to learn and grow in acceptance. Encourage employees to share their backgrounds, traditions, and social causes.

For organizations to succeed, leaders must realize that while there is no “I” in “team,” there is an “I” in “responsibility.”

CREATE A COLLABORATIVE ENVIRONMENT Once you hire a diverse staff and encourage inclusivity, it’s time to build a connected and supportive team. Utilize the skills and strengths of individuals

> CMG

Financial announced the new hire of Area Sales Manager Ricardo Torres.

ENCOURAGE AUTHENTICITY

You can encourage authenticity at work by supporting conversations about lived experiences safely and respectfully. Employees who can’t be themselves at work or feel they must hide certain aspects of their lives can’t be comfortable enough to focus on performance. Take away the fear of bias and retribution and watch performances soar. Finally, it’s time to treat inclusion as more than legal compliance. Making inclusion a business-critical priority can make the difference in helping your company practice what it preaches. n

Nellie Akalp, CEO of CorpNet, is a passionate entrepreneur, business expert, professional speaker, author, and mother of four.

> Floify has hired Dan Goldman as its vice president of sales.

> Revolution

Mortgage has hired Denise Lott as head of its new Savannah, GA location.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

BUILD-A-BROKER: HANDS ON PRACTICAL ADVICE

YOUR FIRST MILLION DOLLARS

MARY KAY SCULLY

Navigating Rising Rates

Educate your customers so they don’t fear the ongoing changes. BY MARY KAY SCULLY, CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL

or the past few years, everyone has been speculating about rates going up. Well, wonder no more — rates have increased. We can’t be certain if they will get even higher or come down, but we can count on rates continuing to change. Most industry professionals have never seen rates move as quickly as they have been lately, so let’s take a moment to dive into rates and how you can help your borrowers navigate

this higher-rate environment.

RATE TRENDS HISTORICALLY Like I said, if we know anything about rates, it’s that they will fluctuate. Every decade — and even every year — they will have their highs and lows. It’s encouraging to remember that these are not the highest rates have ever been — not even close. Rates have been so low in the last few decades that it makes today’s rates seem more intimidating than it should. It is the highest they’ve been in years, but if you look over decades of rates, today’s “high” rates are still well below average, data from Freddie Mac shows. Rates have been as high as 19% looking back to the early 80s and the average for a 30-yearfixed-rate over the last 30 years is 7.78%. When examined wholistically, rates aren’t as bad as they seem.

NAVIGATING HIGH RATES Though rates are still

historically low, they are the highest they’ve been in quite a while. Many of you, especially new professionals, may be unsure about how you can help borrowers in this environment. High rates create uncertainty for you, so just imagine how your borrowers feel. Between increased rates and low inventory, anyone on the hunt for a home is frazzled. With this in mind, do your best to ease their concerns. There can be so much stress associated with buying a home right now, so help your borrowers understand the process. The more they know about getting a mortgage, the less they will fear it. Also, help them understand why rates have shot up. The average borrower does not have a great understanding of how the market works. Again, the more they know, the less they have to fear. Finally, be sure to communicate any options they have for dealing with increasing rates. There are many programs out there for all types of

Rates have been so low in the last few decades that it makes today’s rates seem more intimidating than it should. PEOPLE ON THE MOVE //

> Cenlar FSB announced that Steven Taylor has joined the company as SVP, chief information officer.

> The

Mortgage Bankers Association promoted Adam DeSanctis to vice president of communications.

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

> Planet Home

Lending named Hugh Blevins head of its new San Antonio, Texas, branch.

> Bonzo

announced that Chad Jampedro has been named the company’s CEO.

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borrowers that can help them manage affordability and offset the cost of higher rates.

ARMS For example, adjustable-rate mortgages are a potential solution for a lot of borrowers looking to deal with today’s higher rates. ARMs have been out of the conversation for the better part of a decade. According to CoreLogic data, ARM share of the dollar volume of mortgage originations moved from near 45% in 2005 to 2% in 2009. Since then, the ARM share has varied from as high as 18% to as low as 8%. ARM usage declined during the pandemic and reached a 10-year low of 4% in January 2021. At the end of April, the Mortgage Bankers Association reported that the share of ARMs as a percentage of home loans had doubled over the last 3 months. Since not many people use them or understand them, ARMs have gotten a bad reputation. It’s easy for anyone to hear the word adjustable and just assume the rate will change unpredictably and without warning, so

let’s talk about how ARMs work so we can remove that stigma and help more borrowers with this product. How ARMs work: With a hybrid ARM, during the initial number of years, which is determined upfront, the interest rate will stay the same. The initial interest rate will change based on an index that reflects general economic trends but is set for that initial period when the loan closes. There is also a margin, which is an extra percentage the lender adds along with the index. After the initial period, the interest rate may change each adjustment period; the adjustment frequency and index are disclosed at application along with the maximum cap. Lenders will generally charge lower initial interest rates for ARMs than for fixed-rate mortgages of the same amount, which makes ARMs an option for those who don’t plan to stay in their house very long. ARMs also can be an option for anyone expecting their income to grow over that initial period of time. An ARM could potentially be less

expensive over a long period than a fixedrate mortgage — for example, if interest rates remain steady or move lower.

EMPOWER BORROWERS Navigating a rising rate environment may feel foreign to many of you, but it’s time to step up to the plate. It is the lender’s job to help borrowers move through changing markets and educate them about their options for buying a home without increasing their concerns needlessly. Don’t be discouraged by today’s market and don’t let your borrowers become discouraged either. Rather, empower them with the right tools, products and knowledge that can guide them to their new home. n

Mary Kay Scully is the director of customer education at Enact, leading the development of the company’s customer education curriculum. The statements in this article are solely the opinions of Mary Kay Scully and do not necessarily reflect the views of Enact or its management.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

BUILD-A-BROKER: HANDS ON PRACTICAL ADVICE

YOUR FIRST MILLION DOLLARS

Use Goals To Fight Professional Boredom

The way you set your goals can be a prerequisite for success. BY HARVEY MACKAY, SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL

ood old Charlie Brown from the “Peanuts” cartoon fame had a hard time understanding the value of taking aim at his goals while shooting his bow and arrow in his back yard into the fence. After shooting an arrow he would run over to the fence and draw a target around it. Suddenly Lucy shows up and says, “That’s no way to have target practice! You are supposed to draw the target and then shoot at it.” Charlie responds, “I know that Lucy, but if you do it my way, you never miss!” Sadly, many people approach life like Charlie Brown. They Harvey Mackay cheat or are afraid to set goals for fear of failure. Don’t give up on your goals, or your goals will give up on you. The harder you work for something, the greater you’ll feel when you achieve it. Goals give you a sense of accomplishment. Tony Robbins said, “Setting goals is the first step in turning the invisible into the visible.” Goals can create more excitement in our lives and prevent boredom. They stretch us and make work more fun. Goals give us a sense of purpose and help identify what we want. Goals keep us pressing on and enable us to accomplish more. “People with goals succeed because they know where they’re going,” said Earl Nightingale, one of the motivational authors and radio personalities I followed when starting my business career. In short, setting goals is an important

Sudden market or technological change can happen at any time, and you must be prepared for it. prerequisite for success. But the way you set your goals, and pursue them, can be determined by many factors. One of them, according to a study by Leadership IQ, may be your gender. The survey, in which 2,506 women and 2,184 men participated, showed that women are more emotionally connected to their goals than men. That makes them more likely to hang on when the going gets tough. The study also found that men visualize their goals better than women. This gives them greater direction and focus.

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

Women are more likely to procrastinate. They tend to feel less urgency about accomplishing their goals, which can undermine their efforts. Women tend to set more difficult goals. Men are less likely to challenge themselves and step out of their comfort zones. Each individual is unique when it comes to setting and achieving goals, but we can all stand to check our blind spots from time to time. Bottom line, it’s difficult to advance in your career unless you’re working toward goals. Setting goals that will

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inspire and motivate you are crucial. Aim for goals that are: • Quantifiable. You should be able to measure success in objective terms so everyone can see the value of your efforts. • Challenging. If goals are too easy, chances are your objective won’t have significant impact on your organization. • Realistic. Although challenge is important, pursuing an impossible dream will result only in a morale-crushing letdown. • Flexible. Don’t back yourself into a corner. Although you don’t want to adjust your goals to suit your results, be willing to modify your ambitions if circumstances propel your original objective out of reach. “If you want to live a happy life, tie it to a goal, not to people or things,” said Albert Einstein. In his book “The Spirit of St. Louis,” the famed aviation pioneer Charles Lindbergh recalled addressing a group of naval officers about longdistance aerial navigation. This was only a few weeks prior to him being the first person to fly solo over the Atlantic Ocean to Paris from New York. “What kind of charts do you intend to use?” one officer asked him. “The same as you carry on ships at sea,” Lindbergh answered. “Suppose you strike a wind change in the night, and it drifts you far off course,” said a second skeptic. “A navigating error wouldn’t be too serious,” said Lindbergh. “This flight is not like shooting for an island. I can’t very well miss the entire European continent.” Lindbergh got a good laugh at that line. But there is a moral here for anyone preparing for a difficult and risky assignment. You don’t want to aim for too small a target. That is because sudden market or technological change can happen at any time, and you must be prepared for it. But most of all, it is vitally important to have a carefully prepared, and flexible, flight plan to guide you as you begin. Mackay’s Moral: Winners make goals; losers make excuses!. n

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NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

BUILD-A-BROKER: HANDS ON PRACTICAL ADVICE BUILD-A-BROKER

Building Your Volume One Day At A Time

Put this five-day plan into place to increase your unit production. BY CALEB MITTELSTET, SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL

ising interest rates and soaring home prices are making the 2022 origination landscape more challenging. Mortgage loan officers seeking to maintain or increase volume can overcome those hurdles. The Mortgage Bankers Association predicts purchase originations will increase to a record $1.77 trillion in 2022. With 1 million more new homes on track to be built, more entry-level homeowners could list their homes for sale and purchase move-up properties, according to the MBA. A solid business plan can help increase your share of that purchase volume in the year ahead. In the five-day plan below, you commit three hours a day to building your customer base and home loan volume from various sources each day Caleb Mittelstet of the week.

MONDAYS: 30 COLD CALLS TO POTENTIAL SOURCES OF NEW CLIENTS There are multiple methods of cold calling, but the goal is usually the same: Sharing your value proposition. Write a two-minute script with a three-minute encore to use when you get a positive response. Once the source accepts your call, push to Facetime or Teams so you can speak “face-to-face.” Your goal is to create enough interest that they agree to learn more about your value proposition. Note: Your value proposition isn’t product or pricing. It’s the service you provide. Talking price is like shopping for a shirt at

Your personal interaction builds relationships in a way that even the best technology cannot. Dollar General versus Nordstrom. Dollar General is cheaper, but you feel better when you shop at Nordstrom because there’s someone ready to help you find a shirt that looks great on you and immediately ring it up. People want the Nordstrom service from you as a lender. Every Monday, call a mix of sources — people you know 100% will send you

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

borrowers, people you know who send you a deal here and there, people you hope to get business from in the future. If they see you’re trying that hard to get their business, they may first send you a first-time homebuyer with a 610 credit score who wants to use down payment assistance. Be grateful and do everything in your power to help

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those customers. They know you’ll be that consistent with their customers if you’re that consistent in contact.

TUESDAYS: UPDATE ALL REAL ESTATE AGENTS AND CLIENTS This is back to basics. You’re calling the customer for every refinance

the pre-approval process. In many markets, pipelines are brimming with pre-approved customers out there trying to buy homes — and failing. It can be discouraging to go out every weekend and put in an offer on a home only to lose out to an allcash investor or a buyer willing to go

Community service is another crucial component of networking because it builds your brand visibility and allows you to give back. Spread your time between local groups that serve a broad audience. transaction in your pipeline, as well as the selling and the buying agents for your home purchase loans (with the borrower’s permission). During the call, you’ll update everyone about where the loan is in the process and what’s happening next. You may wonder why you need to make calls when so much technology in your marketing tech stack communicates automatically with customers and agents. If everyone gets in-process videos, why do you need to personally update them? Your personal interaction builds relationships in a way that even the best technology cannot. A conversation can make the difference between doing a transaction and having a relationship. Automated marketing will keep you top of mind. Still, the mortgage loan originator who meets with me in person and speaks with me on the phone each week is the one I’ll use for the next transaction. People want to know that you have their best interest at heart. I’m not saying the technology is not critical. It is. I’m saying technology is the cake, and you are the icing.

WEDNESDAYS: PRE-APPROVALS A typical mortgage loan originator might have a couple of dozen customers who are at some point in

$100,000 over the asking price. When it takes four to six months to find and buy a home, your customers have time to get a lot of emails, phone calls and text messages from competitors. Be the one they talk to about the properties they saw and what they bid. Educate them about other options they can try, like buying a fixer-upper with a purchase plus renovation loan, a bridge loan or a new home community breaking ground next month.

THURSDAYS: DATABASE MINING A solid database is a fundamental marketing tool for lead generation. Contact information for anyone you have ever worked with or prospected should be in it — including current and former customers, builders, Realtors, attorneys, and tax professionals. Database mining can be as simple as scheduling mortgage check-in calls to customers every six months to chat about home values and current life changes, like financially preparing to pay for college. Some companies retain servicing and use sophisticated analytics to drive database mining. The marketing team can send automated communications to customers and alerts the original MLO when a customer is “in the money,” for example, having enough equity to make a cash-out refi appealing, or they’ve

taken an action that makes its likely they’re in the market for another home. While some of those leads need to be worked on immediately because time is of the essence, the rest can be set aside for Thursday follow-ups. If your company doesn’t apply analytics and send leads back to the originator, you may purchase those services directly from a vendor.

FRIDAYS: VIP CALLS AND COMMUNITY SERVICE On Friday, make calls to your VIPs. If I’m a branch manager, my VIPs could be my top five recruits and my regional manager. For an MLO, the VIPs might be clients who have given me at least six transactions and my mentors. Community service is another crucial component of networking because it builds your brand visibility and allows you to give back. Spread your time between local groups that serve a broad audience, like the Chamber of Commerce, sports clubs or community groups, and those that serve the industry, like the local home builders. If your city is large enough to have a local chapter of the Mortgage Bankers Association, the National Association of Hispanic Real Estate Professionals, or the National Association of Minority Mortgage Bankers Association, attend those meetings to build your career network.

WORK THE PLAN Having a great company brand behind you is just the ante. You’re the winning hand, the professional customers trust. People want to be able to say, “Go look at their reviews. Check out their Facebook – there are so many stories about happy first-time homebuyers they helped.” That’s who I’m setting you up with. Your contacts are handing you their baby — their clients, friends or family members. It’s like hiring a babysitter you don’t know versus the kid down the street. Following the 5-Day Plan makes you the kid down the street. n

Caleb Mittelstet is executive vice president, national production distributed retail sales, Planet Home Lending

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

N O N - Q M LE N DE R RE SOU RC E GU IDE

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Road Trip!

oin Originator Connect Network as we traverse the country, bringing together hundreds of mortgage brokers, loan originators and bank and credit union lending officers, for an event full of education, networking and fun.

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See our partial sample of upcoming events here, or visit our site for our full calendar at originatorconnectnetwork.com.

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| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

MBA Mortgage Finance Forecast June 10, 2022 2021 Q1

2022 Q3

2023 Q3

2021

2022

2023

2024

Housing Measures 1,581

1,591

1,569

1,679

1,724

1,701

1,675

1,682

1,710

1,734

1,720

1,746

1,605

1,695

1,728

1,715

Single-Family

1,138

1,112

1,104

1,170

1,186

1,137

1,186

1,216

1,236

1,267

1,264

1,292

1,131

1,181

1,265

1,273

Two or More

443

479

465

509

538

564

489

466

474

467

456

454

474

514

463

443

6,287

5,950

6,067

6,203

6,063

5,630

5,645

5,710

5,719

5,838

5,879

6,039

6,127

5,762

5,869

6,076

896

737

699

752

814

693

774

794

803

832

815

816

771

769

816

827

13.1

17.7

18.6

17.6

18.8

16.6

5.6

2.7

2.4

2.3

2.5

2.4

17.6

2.7

2.4

2.5

Median Price of Total Existing Homes (Thous $)

313.5

351.7

356.1

353.8

361.4

396.5

391.9

385.7

387.5

396.1

398.3

401.1

343.8

383.9

395.8

411.3

Median Price of New Homes (Thous $)

364.9

380.6

407.8

422.5

430.9

452.6

442.8

437.1

440.3

442.0

443.6

444.1

394.0

440.8

442.5

447.7

30-Year Fixed Rate Mortgage (%)

2.9

3.0

2.9

3.1

3.8

5.1

5.0

4.8

3.1

5.0

4.8

4.4

10-Year Treasury Yield (%)

1.3

1.6

1.3

1.5

1.9

2.9

2.8

1.5

2.9

2.8

2.6

Housing Starts (SAAR, Thous)

Home Sales (SAAR, Thous) Total Existing Homes New Homes FHFA US House Price Index (YOY % Change)

Interest Rates

Mortgage Originations 1,094

1,050

954

893

689

678

527

517

481

621

582

581

3,991

2,411

2,266

2,501

Purchase

320

460

442

424

381

477

417

406

349

484

449

437

1,646

1,681

1,720

1,806

Refinance

774

590

512

469

308

201

110

111

132

137

133

144

2,345

730

546

695

293

169

170

180

Total 1- to 4-Family (Bil $)

Refinance Share (%) FHA Originations (Bil $) Total 1- to 4-Family (000s loans) Purchase Refinance Refinance Share (%)

3,146

2,926

2,714

2,497

1,830

1,846

1,561

1,446

1,313

1,670

1,571

1,502

11,283

6,683

6,057

6,296

974

1,341

1,302

1,259

1,025

1,282

1,113

1,059

912

1,252

1,153

1,090

4,876

4,479

4,408

4,494

2,172

1,585

1,412

1,238

805

564

448

387

401

418

412

6,407

2,204

1,649

1,802

12,536

13,389

14,188

14,814

Mortgage Debt Outstanding 1- to 4-Family (Bil $)

11,783

12,022

12,274

12,536

12,777

12,993

13,211

13,389

13,590

13,800

14,000

14,188

Notes: Total 1-to-4-family originations and refinance share are MBA estimates. These exclude second mortgages and home equity loans. Mortgage rate forecast is based on Freddie Mac's 30-Yr fixed rate which is based on predominantly home purchase transactions. The 10-Year Treasury Yield and 30-Yr mortgage rate are the average for the quarter, but annual columns show Q4 values. The FHFA US House Price Index is the forecasted year over year percent change of the FHFA Purchase-Only House Price Index. Copyright 2022 Mortgage Bankers Association. All rights reserved. THE HISTORICAL DATA AND PROJECTIONS ARE PROVIDED "AS IS" WITH NO WARRANTIES OF ANY KIND.

MARKETS WITH HIGHEST PAYMENT TO INCOME RATIO Rank

CURRENT STATUS OF COVID-19 RELATED FORBEARANCES

8.1 Million Forbearances

Removed/Expired Performing 4,274,000 53%

Removed/Expired Delinquent - Active Loss Mit 333,000 4%

Los Angeles, CA

Current Payment to Income Ratio

Difference From 1995-2003 Average

69.6%

+34.1%

Record High 71.8%

San Jose, CA

65.0%

+30.9%

65.0%

San Diego, CA

63.8%

+29.7%

63.8%

San Francisco, CA

58.1%

+23.2%

60.2%

Las Vegas, NV

50.8%

+27.2%

50.8%

Seattle, WA

48.7%

+21.5%

48.7%

Riverside, CA

45.8%

+20.1%

48.7%

Sacramento, CA

44.9%

+17.8%

48.3%

Phoenix, AZ

44.5%

+22.2%

44.5%

Miami, FL

44.2%

+19.8%

47.5%

MARKETS WITH LOWEST PAYMENT TO INCOME RATIO

Active Forbearance Term Extended 468,000 6%

Removed/Expired Delinquent 295,000 4%

Active Forbearance Original Term 178,000 2%

Removed/Expired Active FC 82,000 1% Paid Off 2,409,000 30%

Source: Black Knight McDash Flash As of May 17, 2022

Geography (CBSA)

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

Rank

Geography (CBSA)

Current Payment to Income Ratio

Difference From 1995-2003 Average

Record High

Milwaukee, WI

24.5%

+4.0%

27.1%

Louisville, KY

23.9%

+2.8%

24.7%

Pittsburgh, PA

23.3%

+1.6%

Chicago, IL

23.3%

-0.2%

31.2%

Rochester, NY

23.2%

+5.9%

23.2%

Cleveland, OH

22.8%

+1.2%

26.8%

25.1%

Cincinnati, OH

22.8%

+1.4%

25.6%

Kansas City, MO

22.4%

+3.3%

22.4%

Detroit, MI

22.1%

+0.3%

24.9%

St. Louis, MO

21.4%

+1.9%

24.0%

DATABANK

APRIL OVERVIEW STATS

1.3%

11.9%

19.1%

DELINQUENCY RATE

FORECLOSURE STARTS

The national delinquency rate fell to a new low of 2.8%

Though starts dropped in April, active foreclosures edged slightly higher

Prepayments fell to a three-year low in April

Serious delinquencies – those 90+ days past due – fell 7.8% (-54K)

The month’s 21K starts remain well below pre-pandemic levels

Activity is down 61.8% from a year ago amid sharply rising rates

PREPAYMENT ACTIVITY

TAPPABLE EQUITY OF U.S. MORTGAGE HOLDERS $12,000

$10,000

$8,000

$6,000

$4,000

$2,000

20 04 2 0 Q1 04 2 0 Q3 05 2 0 Q1 05 2 0 Q3 06 2 0 Q1 06 2 0 Q3 07 2 0 Q1 07 2 0 Q3 08 2 0 Q1 08 2 0 Q3 09 2 0 Q1 09 2 0 Q3 10 2 0 Q1 10 2 0 Q3 11 2 0 Q1 11 2 0 Q3 12 2 0 Q1 12 2 0 Q3 13 2 0 Q1 13 2 0 Q3 14 2 0 Q1 14 2 0 Q3 15 2 0 Q1 15 2 0 Q3 16 2 0 Q1 16 2 0 Q3 17 2 0 Q1 17 2 0 Q3 18 2 0 Q1 18 2 0 Q3 19 2 0 Q1 19 2 0 Q3 20 2 0 Q1 20 2 0 Q3 21 2 0 Q1 21 2 0 Q3 22 -Q 1

Source: Black Knight McDash Property Module Tappable equity defined as estimated amount that could be withdrawn while still maintaining an 80% or lower loan-to-value ratio

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

Small Investments For Big Housing Levi Brackman’s Invown seeks small investors looking to invest in real estate.

BY STEVE GOODE, STAFF WRITER, NATIONAL MORTGAGE PROFESSIONAL

hat If someone told you that you could buy the Brooklyn Bridge for just $200? You probably wouldn’t bite, even though a surprisingly larger number of people than you’d expect fell for con man George C. Parker’s famous scam at the beginning of the 20th century. But what if someone told you that you could get in on a $1.2 million real estate deal in North Carolina for as little as $500? You still might think it’s too good to

be true, but Levi Brackman swears the deal, and his idea, is on the level, and so do regulatory authorities. Brackman, a former rabbi from England, has created Invown, a unique two-sided marketplace where he hopes to help scores of people, normally shut out of the high-priced world of real estate investment, get in the game. “Real estate is expensive and incredibly hard for the average person to buy or invest in,” said Brackman. “By creating a marketplace where owners seek investors and everyday investors get into real estate at a low financial barrier, everyday people

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

participate in an asset class traditionally dominated by the wealthy.”

THE BIG IDEA Brackman, a business author published internationally, came up with the idea for democratized “real estate and investment opportunities” after a deal to buy a home he was renting fell through because the owner jacked-up the previously agreed upon price. “My landlord wanted at least $50,000 more than the market value of the property,” he said. To mitigate the risk of paying too much for the house, Brackman looked

opportunities the wealthy and accredited have access to,” he said.

THE DETAILS Brackman said the company employs two people full time and has two more contractors. Invown also has 10 investors who collectively invested about $500,000 in the concern. Brackman said the platform does not hold any of the money that is invested with a project. “The funds are held in escrow with a third-party escrow agent and the sponsor gets access when the round ends,” he said. “If this is for the purchase of the property, then the funds are released to the other escrow agent that is responsible for disbursing funds related to the purchase of the property.” The company, he said, makes its money through fees that investors and sponsors pay.

in. Initially the floor for getting in on the deal was $1,000, but Chen agreed to lower the minimum to $500 to attract more investors and increase accessibility. As of mid-June, 13 people have invested $14,000 in the project, which is under construction and expected to close by August. Chen’s plan is to rent the houses for the first five to seven years before selling at an expected market peak. The investors, who are asked but not required to stay in for the seven years, are slated to receive their first quarterly return on investment three months after closing, with a targeted annual return of 20.7%. Chen said Invown’s funding portal was attractive to him because it gives him access to a unique investor class. “My typical investment is $200,000,” Chen said. “Levi’s investors don’t usually have access to

By creating a marketplace where owners seek investors and everyday investors get into real estate at a low financial barrier, everyday people participate in an asset class traditionally dominated by the wealthy. for companies that would invest in the equity with him. “I found a few but when I ran the numbers and turned their return, based on a modest 3.9% annual appreciation rate, into an annualized interest rate the cost was equal to about 30%,” he said. “In other words, it was a bad deal for me.” Brackman said the revelation led him to think deeply about homeownership and real estate investing and the roadblocks facing the little guy. He recalled his own childhood with nine siblings and limited resources. Still, his father tried to get into investment opportunities, which were closed to him because he didn’t have wealth or influence “I wake up every day and think about who I am building this for. It is to allow people like my father — hard working, honest people — the types of financing and investment

“The investor pays a 2% platform fee and the sponsor pays up to 5% platform fee. All fees are held in escrow and are only paid out to Invown at closing,” Brackman said.

THE FIRST DEAL After a little more than a year of planning, getting Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) approval, raising money from investors, building the platform and networking for partnerships, Brackman launched the website in May with the first investment deal, a four-house project in Conover, NC. The developer, Kurt Chen, and his company, Golden Eagle Real Estate, formed Delta Housing 30X LLC, set aside $400,000 of the $1.2 million real estate deal to build four single-family homes that Invown clients can invest

private equity. Levi’s platform opens the door for them.” Chen said he had no expectations of how much money would be invested or how many would get involved for the first project, especially since the platform is so new. “It takes some time to ramp it up, but I believe the floodgates will open,” Chen said. Brackman believes the first project will be a success if the portal transacts $100,000 in investments by the time the deal closes.

CAN IT WORK? David Sacco, a practitioner in residence at the University of New Haven finance department, believes the platform can thrive. “It’s definitely viable, a Robin Hood CONTINUED ON PAGE 34

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

SMALL INVESTMENTS BIG HOUSING CONTINUED FROM PAGE 33

for real estate instead of stocks,” Sacco said. “It will democratize real estate investment if the platform is successful.” Sacco also believes that Invown is a safe investment because of the regulations applied by the SEC and FINRA and that it will eventually lead to more acceptance of smaller investors in the real estate realm. Daniel Gould, who was part of an Angellist syndicate that invested in the startup, had some early reservations about Invown around regulatory risk, but Brackman spent enough time working with the regulators and keeping him informed to the point that he felt the risk was well-managed. Gould said Brackman has identified a white space or open area in proptech that was not yet well served, but that will have significant demand based on his own experience with real estate investing. “In five years, I see Invown as

a multi-billion dollar marketplace (primary and secondary) providing a new type of low friction marketplace for real estate investing, similar to what Robinhood has done for equities and what Coinbase has done for crypto,” Gould said.

WHAT’S NEXT? The next move, Brackman said, is to get the word out through various media to attract sponsors and investors and to get more real estate projects onto the platform. Beyond that, Brackman has short term and long term goals for Invown. On the revenue side he is hopeful that the company will achieve $12 million in investments through Invown by the end of the first year. And down the road the vision is more philosophical than financial. “By creating an efficient and fair two sided marketplace for real estate equity, we will have revolutionized

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

how people finance and invest in real estate,” he said.

NO BRIDGES FOR SALE … OR ANYTHING ELSE For those who remain skeptical, Brackman wants them to understand that Invown is not trying to sell anyone a bridge, and that his platform is not actually selling anything beyond access to the platform. “We facilitate the sale of securities and have the responsibility to ensure that fraud does not occur,” he said, adding that the company is closely watched by FINRA and takes the notion of fraud very seriously. “Our mandate as a FINRA-regulated entity is to ensure that fraud does not take place against investors,” he said. “No one can guarantee that fraud wont happen. But the concept of funding portals (Invown’s full legal name is Invown Funding Portal LLC and legally designated as an SEC registered funding portal) was set up to do everything humanly possible to limit fraud being perpetuated against the public by issuers.” n

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COVER STORY

Pros & Cons 40-Year Mortgages The

Why a longer term loan might tackle affordability issues in today’s higher interest rate environment

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

BY DOUG PAGE, STAFF WRITER, NATIONAL MORTGAGE PROFESSIONAL MAGAZINE

ith inflation hitting a 40-year high in June, has it come time for the 40-year mortgage to become more widespread? It might be the appropriate time for traditional lenders to offer loans that could help both homebuyers and mortgage originators. As the Mortgage Bankers Association shows, mortgage applications were down for four of those six weeks. Given Federal Reserve Chairman Jerome Powell’s statements that the Federal Open Market Committee, which sets interest rates, is determined to kick inflation down to 2% from its current 8.6% spot — which means increasing interest rates — the downward trend for mortgage applications will likely continue. Two traditional lenders in Massachusetts and three private ones may have a solution to putting people into homes: the 40-year mortgage. The Federal Housing Authority does allow 40 years as a modification to existing mortgages if it will keep people in their homes during these COVID-19 inflicted times but, as of yet, 40-year mortgages aren’t purchased by the GSEs. The FHA sought comment on the possibility of making this modification permanent. Both the American Bankers Association, a trade association representing the country’s banks, and the MBA submitted comments to the FHA supporting the modification.

INTEREST-ONLY THE FIRST DECADE Needham Bank, headquartered in the Massachusetts town it’s named after, started offering a 40-year mortgage four years ago, while Metro Credit Union, headquartered in Chelsea, Mass., started offering this new loan three months ago. Needham’s is a 5/5 ARM,

starting at 4.25%, while Metro’s is fixed at 4.5%. East Meadow, N.Y.-based Sprout Mortgage started offering a 40-year mortgage in July 2021. “It’s a fixed rate for 40 years,” said Sam Bjelac, an executive vice president with private lender Sprout Mortgage. “There’s an interest-only feature for the first 120 months or 10 years and then the loan recasts into a 30-year fixed loan with Samuel Bjelac principal and interest but the interest rate doesn’t change.” While this type of mortgage is aimed at property investors, Bjelac says mortgage originators can offer it to homebuyers seeking a primary or secondary residence. Sprout Mortgage’s Chief Marketing Officer Bev Thorne said the interest rate on their 40-year mortgage is “hovering just above or just below 5% currently.” [As of June 10, 2022, the average 30-year mortgage rate was 5.23%] As to where Sprout is seeing the most interest in these loans, Bjelac said, “It’s usually in the smiley face states. You go from California down through Arizona, into Texas, down through the Gulf Coast and into Florida. It’s more where you have investment properties.” Atlanta-based Angel Oak Mortgage Solutions, another Non-QM player, offers a 40-year mortgage, says Steve Winokur, its chief marketing officer. It’s similar to the one offered by Sprout: The first 10 years it’s an interest-only loan followed by a more traditional 30-year fixed mortgage, which includes monthly principal and CONTINUED ON PAGE 40

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

40-YEAR MORTGAGES CONTINUED FROM PAGE 39

interest payments. Winokur says their 40-year mortgages are for people looking to buy and live in a home as well as property investors. “The big difference for us is that people have to qualify on the 30-year portion of the mortgage,” said Winokur. “You can’t qualify on the interest only portion, when the payments are lower.”

STRONG NUMBERS ON LOANS Rockville, Maryland-based ACC Mortgage, another Non-QM entity, also offers a 40-year mortgage similar to the ones from Angel Oak and Sprout. It’s an interest-only payment for the first 10 years before converting to a 30-year fixed mortgage. “It’s about 5% of our production,” said ACC Mortgage CEO Robert Senko, adding that his company has written about 20 of the 40-year mortgages at a volume of $35 million. According to Mike Sinclair, Needham Bank’s executive vice president for residential and consumer lending, the bank, which writes loans mostly in the Bay State, currently has about 150 40-year Robert Senko mortgages worth about $120 million on its books. Because these loans aren’t purchased by the GSEs, Needham holds the loans. Metro Credit Union CEO Robert Cashman says the credit union, with over 200,000 members, closed a few of these new loans; they only write

was 25%. “We’ve seen a big spike this quarter so far, and while we’re only about six weeks into it, it’s about 35% of our non-owner occupied loans. I attribute it to higher interest rates because professional investors are looking for lower cash flow payment options,” Bjelac added. National Mortgage Professional Magazine talked with the experts about the pros and cons of this new loan.

THE PROS:

With interest rates on the rise, a 30-year mortgage is more challenging for some, making the 40-year mortgage a viable option. “It appeals to all kinds of people at all ends of the spectrum,” said Needham Bank’s Sinclair. “It appeals to a first-time home buyer, obviously, because they want to keep their payments down. It also appeals to a second-home buyer because they want to keep their payments down, and it also appeals to a stepup buyer who’s looking for a larger home because they want to keep the payments down.” Mike Sinclair Metro Credit Union’s Cashman says there’s another group of people for whom a 40-year mortgage might work — retirees. “When they retire, their incomes are cut,” Cashman said. “The mortgage payment they once made is more difficult and this (the 40-year

“If this had rolled out earlier, maybe a couple of years ago, it wouldn’t have been as popular. I think now that rates have risen, and their pipelines are smaller, they’re looking for more ways to qualify borrowers.” – Sam Bjelac, Sprout Mortgage mortgages in the Massachusetts. “Being that we’re in Massachusetts and not in a rural part of the country, this has one of the highest housing costs in the country,” he said. “This type of mortgage addresses where our members are. Not everyone is going to make six figures and be able to afford a 30-year mortgage.” Bjelac said that during 2021’s third quarter, 40-year mortgages “were 5% of our non-owner occupied loans. In this year’s first quarter, it

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

mortgage) makes it easier for them to stay in their home.” While she doesn’t write 40-year mortgages, Middletown, R.I.-based Embrace Home Loans Senior Loan Officer Dawn Ryan also thinks there are benefits to them. “It could be the difference between qualifying and not qualifying for a mortgage,” she said. CONTINUED ON PAGE 42

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40-YEAR MORTGAGES CONTINUED FROM PAGE 40

“It could also provide ease of mind in managing a monthly payment because it’s lower and, especially, with home prices not dipping, it could provide peace of mind.” Said Angel Oak’s Winokur: “The 40-year mortgage is one of the ways to help out with affordability issues. We’ve been offering them for at least a couple of years now. People are looking at them more and asking a lot more questions about them than before.” “It helps make the payments more manageable,” said ACC’s Senko, “The line I’ve always used is that you can’t pay less every month but you can pay more. If someone pays more, it will accelerate the equity position and principal reduction.”

“It appeals to a first-time home buyer, obviously, because they want to keep their payments down. It also appeals to a second-home buyer because they want to keep their payments down, and it also appeals to a step-up buyer who’s looking for a larger home because they want to keep the payments down.” –

Volatile times make the 40year mortgage appealing. “In the current environment, with housing stock lacking and causing the prices of homes to be exorbitant, the more difficult it is for the individual to come up with a down payment,” Cashman said. “We don’t control home prices; we don’t control the interest rate environment, which can make it difficult for someone to get into or stay in a home. The only thing we can do to combat this lack of affordability is time. Mike Sinclair, executive That’s the reason for the vice president for residential 40-year mortgage.” and consumer lending, As an example, excluding Needham Bank taxes, the monthly payment on a $600,000, 40-year fixed mortgage with a 4.5% interest rate is $2,697.38. In comparison, the monthly payment on the 30-year fixed mortgage for the same amount, with a 5.25% interest rate, also before taxes, is $3,313.22: a difference of nearly $616. “Anytime you can keep a borrower’s payment down, it definitely helps,” said Sinclair. “If they’re making a low-down payment, a firsttime home buyer would also need mortgage

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

insurance on the loan. A lot of times the difference between a 30-year and a 40-year mortgage can absorb the cost of the mortgage insurance for the borrower.” The 40-year mortgage helps people and communities. “The impetus for this is two things: we’re very focused on our community and affordable housing and helping people improve their financial well-being,” said Cashman. “Because prices are going up, the next generation is having trouble getting into their first home. This helps people get in place and stay in place.” Ryan sees the benefits of the 40-year mortgage another way. “Unlike our grandparents, mortgages are not one and done,” she said. “People do refinance, so the 40-year mortgage might be the way to get into the house.” Mortgage originators need new loan offerings. “With the increase in rates, even over the last six months, they (mortgage originators) are looking for more ways to originate loans,” said Bjelac. “If this had rolled out earlier, maybe a couple of years ago, it wouldn’t have been as popular. I think now that rates have risen, and their pipelines are smaller, they’re looking for more ways to qualify borrowers.” When asked if she would like to offer 40-year mortgages to her clients, Embrace Home Loan’s Ryan replied, “If it helped the customer, certainly.” Sprout Mortgage’s Thorne said 40-year mortgages offer “great flexibility for many (mortgage) originators, and, thereby, helps them as no other alternative does.” More interest revenue While 40-year mortgages take longer to pay back and, thus, require more interest payments compared to the traditional 30-year mortgage, there could be an upside because it means more revenue for the lender. Sprout Mortgage’s Thorne said, “It depends on the time and duration during which the mortgage is outstanding. It truly is a win-win for originators and lenders unless the loan is very short or very long.”

THE CONS:

Paying more interest. Both Ryan and Sinclair described the downside the same way. “You’ll pay more in interest. But what if a customer makes one extra principal payment a year? They’ll reduce the loan by five-and-a-half CONTINUED ON PAGE 44

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40-YEAR MORTGAGES CONTINUED FROM PAGE 42

years so that the 40-year mortgage isn’t really going to harm them that much more,” Ryan said. Added Sinclair: “You’re not building up equity as fast as you would with a 30-year, 20-year or a 15-year mortgage. You’re basically working your monthly cash flow to get the lowest payment possible with a 40-year mortgage. So, if you don’t have the discipline to make extra principal payments, you’re not going to build up equity as fast.” The length of time on the loan While the length of the loan certainly means more interest payments, Sinclair and Cashman looked at this way: “I don’t know that today’s borrowers, when they get a mortgage, ever think they’re going to see it through to pay off,” Sinclair said. “For the most part the average life of a loan is five years.” Said Cashman: “People typically have a mortgage for seven to nine years. This is really a first-time buyer program, but we have borrowers who are all over the place, from those who are older to those who are five or six years out of college.” The loans aren’t purchased by the GSEs Freddie Mac spokesperson Angela Waugaman, in an email, wrote, “A 40-year mortgage isn’t a qualified mortgage (and) therefore the GSEs can’t purchase them. We will modify a loan for a distressed borrower to 40 years and did so during the pandemic if it meant the borrower could keep their home and still afford the lowered monthly

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

mortgage.” In her reply, she referenced the rules spelled out by the Consumer Financial Protection Bureau about what constitutes a qualified mortgage. They specifically prevent an “interest-only” period, when the interest is paid down without paying down the principal. It’s the same with Fannie Mae. They retired the 40-year mortgage when they updated their Selling Guide in August 2013. Their cuide was updated to align with the Ability to Repay and Qualified Mortgage Rule. It requires a creditor to make a reasonable, good faith determination of a consumer’s ability to repay a residential mortgage loan according to its terms. ACC’s Senko thinks it’s time for the GSEs to reconsider their position. “Anything they can do to make housing more affordable would be helpful. But I’m a Non-QM guy. I don’t have any great insight into them but it makes sense. I wouldn’t be shocked if they did start (purchasing them). The loans could require balloon payments That’s the word in a blog piece from Detroitbased Rocket Mortgage, meaning the loans are written by private lenders, like Angel Oak Mortgage Solutions, Sprout Mortgage and ACC Mortgage and, as a result, aren’t regulated. In addition to paying more interest, the blog piece also warns readers that 40-year mortgages can sometimes require balloon payments. Rocket spokesman John Perich wouldn’t comment further on the company’s position on 40-year mortgages, referring a reporter to the blog piece on the issue. n

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2022 NMP Most Connected

his month, National Mortgage Professional Magazine features its “Most Connected Mortgage Professionals of 2022.” They are the top industry professionals selected by editors for their participation in the world of social media.

The winners were chosen in part based on the nominations we received and focused on these social media

platforms: Twitter, Facebook, LinkedIn, and Instagram. Winners were not selected based just on their numbers. To be considered for a Gold Level Connection, a nominee must be among the top three of the categories; Silver Level Connection in two; and Bronze Level Connection in one. None of the nominees were among the top in all four platforms.

All information was supplied by the nominees and reviewed by magazine staff. Social media stats are as of 6/7/2022.

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

GOLD LEVEL CONNECTIONS Bryan Bergjans Jonathan Arnold Jonathan Arnold is a branch manager with Inlanta Mortgage. Jonathan has been working in the mortgage industry since 2003. As the Ada Branch Manager, Jonathan ensures that each client is confident in making their home ownership dreams a reality throughout the states of Michigan and Florida.

After honorably servicing in active duty in the U.S. Navy from 1995–1998, Bryan Bergjans earned his MBA and master’s degree in HR management from American InterContinental University. He started his mortgage banking career in 2002 and remains a member of the United States Naval Reserves. Twitter Followers: 1,182 Facebook business page likes: 1,538 LinkedIn Connections: 4,500 Instagram Followers: 265

Twitter Followers: 2,095 Facebook business page likes 4,822 LinkedIn Connections 2,200 Instagram Followers N/A

Katrina Cole John Cady John Cady, SVP Retail at Cardinal Financial, is a 30+ year mortgage veteran and award-winning champion for leadership, sharing his take on mortgage news, lending strategy, teamwork, culture and other trending topics. His insight has proven invaluable for both seasoned professionals and those fresh to the industry.

Twitter Followers: 2,095 Facebook business page likes: 1,998

Twitter Followers: 1,689

LinkedIn Connections: 5,500

Facebook business page likes: 27,045

Instagram Followers: N/A

LinkedIn Connections: 4,198 Instagram Followers: 3,421

Katrina Cole has over 16 years direct experience with real estate, mortgage lending including all aspects of origination and processing as well as marketing, social media, public relations, business development, budgeting, talent procurement, reorganization, software integration, customer service, administration, marketing automation, planning, implementation, personal coaching and team management.

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

Jonny Fowler Krish Dhokia With a 20-plus year career in mortgage and real estate marketing in varying leadership roles, Krish Dhokia, a recipient of the Atlanta Business Chronicle 40 Under 40 award, is a frequent speaker and marketing innovator in mortgage, finance, and real estate. Twitter Followers: 2,360

For the past 28 years, Jonny has dedicated himself to the mortgage industry. Every step he has taken was with the aim to improve the experience of his colleagues, whether he’s teaching social media to thousands of real estate agents or orchestrating the development of thousands of mortgage branches. Twitter Followers: 402 Facebook business page likes: 7,021 LinkedIn Connections: 27,799 Instagram Followers: 2,461

Facebook business page likes: N/A LinkedIn Connections: 6,344 Instagram Followers: 6,298

Jason Richardson Mat Ishbia Mat Ishbia is the president and CEO of United Wholesale Mortgage: the No. 1 wholesale mortgage lender in the nation for seven years running. Under Ishbia’s leadership, UWM has soared to new heights, becoming one of the most innovative lenders in the industry and a leading advocate for mortgage brokers.

Jason R. Richardson specializes in digital marketing strategies. He founded a digital agency that quickly became a preferred marketing provider for real estate companies and nationwide mortgage lenders. Jason is a secondgeneration mortgage banker. The Richardson family has been lending in California over 40 years. Twitter Followers: 2,006 Facebook business page likes: 5,100 LinkedIn Connections: 15,707

Twitter Followers: 11,300

Instagram Followers: 926

Facebook business page likes: 10,000 LinkedIn Connections: 17,856 Instagram Followers: 2,364

NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022 |

GOLD LEVEL CONNECTIONS Adam Smith Dave Savage Dave Savage is founder and CEO of Mortgage Coach. Known for inspiring lenders to turn mortgage advice into a competitive advantage, Savage transforms loan originators into mortgage coaches with high-tech and high-trust strategies. Dave frequently speaks at sales rallies and leads a YouTube channel hailed as “Netflix for LOs.”

Adam Smith is one of the country’s leading minds in lead generation. After building a successful mortgage brokerage in Denver, he wanted to share his knowledge and Just The Tips Coaching was born. Just The Tips provides a nononsense approach to helping clients build repeat and referral businesses. Twitter Followers: 969 Facebook business page likes: 1,100 LinkedIn Connections: 11,095 Instagram Followers: 1,882

Twitter Followers: 4,072 Facebook business page likes: 11,162 LinkedIn Connections: 29,635 Instagram Followers: 3,513

Phil Treadwell John Stevens An award-winning executive, John Stevens is president of SRE.com. Prior to that, he served as vice president of Cornerstone Mortgage Group and vice president of business development for Mountain West Financial. Stevens served the industry at the National Association of Mortgage Brokers (NAMB) for many years, ultimately serving as president in 2017–18. Twitter Followers: 2,090 Facebook business page likes: 3,400 LinkedIn Connections: 29,339 Instagram Followers: 46,100

| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE | JULY 2022

Phil Treadwell is a certified mortgage advisor & market leader with Thrive Mortgage, and host of the Mortgage Marketing Expert podcast. He has 18 years of experience as a top-producing mortgage professional, is a national speaker, and has built teams in markets all over the country. Twitter Followers: 1,767 Facebook business page likes: 1,947 LinkedIn Connections: 20,486 Instagram Followers: 4,334

Kari Zurn Russell Warner Russell Warner’s passions are recruiting, training, and marketing. He has spent the past 20 years in sales and marketing nationwide. He enjoys technology and new innovative ways to bring value to partners and colleagues.

Academy Mortgage Sales Manager Kari Zurn is a mortgage professional who is passionate and committed to helping others. As a former public-school teacher, Kari uses her background in education to help others understand the mortgage process. Her relationships in the industry and community have helped her achieve overwhelming success. Twitter Followers: N/A Facebook business page likes: 1,538

Twitter Followers: 3,701

LinkedIn Connections: 2,112

Facebook business page likes: 3,580

Instagram Followers: 1,087

LinkedIn Connections: 22,602 Instagram Followers: 314,000