Vol. 126
Silly Mistakes #3 Being a One-Night-Stand Loan Officer
Like it or Not We are being judged on Our Virtual Image
Forget Red Flags, Where’s My White Flag?
A Lesson
From Old Yeller!
NO EXCUSES
Broker Banker of the Month:
DON
CURRIE HighTechLending, Inc.
DON CURRIE
Branching Out Providing Brokers with a New Home To Thrive
New Year, New Tactics, and New Business: No Excuses
AMERICA’S TRADE PUBLICATION FOR LOAN ORIGINATORS
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BrokerBanker
FEATURES 5
Don Currie: Branching out
9
Silly Mistakes #3: Being a “One-Night-Stand Loan Officer”
11
Broker Bankers product of the Month
By Brian Sacks
Like it or not, We are being judged on our virtual image Byron G. Torres
12
Commercial Loan Exchange
13
Industry Service Providers
14
Residential Loan Exchange
15
Forget Red Flags, Where’s My White Flag?
By Terri Buckman
17
A lesson from Old Yeller!
19
Private Money Loan Exchange
20
Branch Opportunities Exchange
21
By Brian L. Peart
New Year, New Tactics, and New Business: No Excuses! By Greg Frost
BROKER BANKER STAFF
Executive Publisher: Editor: Staff Writer: Staff Writer: Design: Production: Photography:
Ed Craine Deborah Kaya Ed Craine Jennifer Hadley Jon Kaya – Kaya Design Kaya Design Vinit Satyavrata
ARTICLES
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BrokerBanker | Volume 126, 2010
DON CURRIE
Branching Out A candid conversation with CAMB/CAMP-Orange County President and President of HighTechLending, Don Currie, on the State of Banking, Brokering, and Net Branching in the new decade. With nearly 30 years in mortgage lending and 45 retail branches, there are very few who could speak to the future of our industry with more experience than Don Currie.
Q: As the President of CAMB/CAMP-OC, do you feel Mortgage Brokers will survive in the coming years?
“Mortgage Brokers are a very resilient group of entrepreneurs and adaptors to the industry. Can we survive? Very possibly, but we don’t want to just survive, we want to thrive. Unfortunately the industry has stacked the cards against us in that department. The contraction of wholesale lenders, private mortgage insurance companies, stringent compliance, and now the limited ability to receive rebate or yield spread premiums have made it very difficult for the broker to prosper. Additionally, the reemergence of the FHA loan product and restrictive qualification to offer this product is a damaging blow. Brokers, by the basic virtue of their name, must have the ability to offer all of the most popular products to serve their customers. Without the ability to access the FHA product, brokers have suffered. Many can’t or won’t provide expensive financial audits (cost $7–10K) showing a minimum of $63,000 net worth to be a mini-eagle.”
Q: What is the difference between a MiniEagle and a Full Eagle?
“HUD states a Mini-Eagle can originate and process FHA loans. They must then broker the loan to a Full Eagle that can originate process, underwrite and fund the loans on their warehouse lines. HUD requires a $250,000 audited net worth to be a Full Eagle, but it is virtually impossible to obtain a warehouse line as a start up these days. ”
Q: You’re the President of HighTechLending; are you a FHA Full Eagle or a Mini-Eagle?
“HighTechLending is a Direct Endorsed Full Eagle Mortgage Bank with multiple warehouse lines.”
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BrokerBanker
Q: I’ve heard that HUD may drop the requirements for brokers and raise the minimum net worth for the Bankers. Is that true?
“This is under discussion, but the government isn’t exactly expedient in putting new requirements in place. So, we don’t know if this will actually become the law, and it’s difficult to build a 2010 business model on a ‘maybe’. That’s precisely why so many brokers have made the business decision to merge with a Full Eagle Mortgage Bank.”
Q: Ok, so tell me more about HighTechLending and building a Net-Branch platform for brokers?
“The term ‘Net Branch’ has some negative connotations due to past lenders literally renting their license to brokers for a fee. Thankfully that practice has also been purged from our industry. HUD has made it very clear on how we can do business in a compliant arena. Branches are completely integrated with our corporation and become Branch Partners.”
Q: What do you mean by the Branch Partner becoming ‘completely integrated’?
HighTechLending cannot provide a specific product, we’ll broker to our network of wholesale lenders. However, over 80% of our loans are closed ‘in-house’ as our branches prefer to work with our staff and our efficient paperless loan process. They enjoy being on a first name basis with underwriters, document drawers, and funders.”
Q: It seems to be the best of both worlds. Where’s the catch or the cons of branching?
“Many brokers tell me the most difficult transition is the feeling there will be loss of control and autonomy. This is understandable, but we allow some branches to maintain a DBA if they have branded their company name. They’ll almost immediately and unanimously recognize the benefit in maintaining compliance with the multitude of industry changes and retaining the freedom to do what they do best which is serve the consumer and produce.”
Q: Tell me about this ‘Paperless Loan Process.’ Sounds pretty green to me, which is certainly enticing.
“The Mortgage Broker becomes employed by HighTechLending, must be paid with a W-2, cannot work for another Real Estate related company, and cannot conduct Real Estate transactions. Moreover, all branch expenses are paid by HighTechLending including rent, phones, etc.”
“Green is good. The amount of trees lost to the mortgage industry would make Paul Bunyan shed a tear. Equally important, you must close the loan in a timely fashion, and with the paperless loan process we excel in that department. Using the words ‘FHA’ and ‘Paperless Loan’ in the same sentence is a bit of an oxymoron, but we make it work quite successfully. In the past, the DON CURRIE paper package was carried from one department to the next. I call this the horizontal process, old fashioned and terribly inefficient. On the contrary, the web based paperless process allows people and departments to work the file simultaneously in a vertical fashion. While the package is being processed, underwriters, document drawers, and funders can also work the package. These individuals can view the file from any geographic location, and the results are a dramatic improvement in customer service and turn times. Vol. 126
Broker Banker of the Month:
HighTechLending, Inc.
Q: Logically there must be a lot of benefits to a Broker joining forces with a Mortgage Banker. What are they?
DON CURRIE
Branching Out Providing Brokers with a New Home To Thrive
AMERICA’S TRADE PUBLICATION FOR LOAN ORIGINATORS
“The benefits are numerous and powerful as you are no longer referred to as a ‘Broker’ but an ‘FHA Direct Endorsed Full Eagle Mortgage Bank.’ This carries a lot of weight with consumers and more importantly, with REALTORS®. REALTORS®, in most cases, will not accept an offer unless the borrower is backed and approved by a mortgage bank. Moreover, you are now partnered with a corporation that can offer all the ‘bells and whistles’ of a larger, more financially stable company. This integration includes access to state of the art technology, LOS, paperless processing, group medical insurance, marketing, training, compliance, quality control, and networking with other branches.”
Q: Once a Broker becomes a branch are they allowed to continue to broker loans?
“Yes, absolutely. We are a banker first, and a broker when necessary. As a mortgage broker myself for 14 years, I understand the necessity to provide a consumer with every loan product available today. The consumer always comes first and if
But there are more advantages too, such as: • Branches and Consumers get to keep all original documents and disclosures. • Loan packages and conditions are no longer sent overnight and possibly lost. • The cost of Transbox/Fed-ex delivery is eliminated. • Paper loan packages are no longer carried throughout the departments. • Multiple Departments can work the file simultaneously from multiple locations. • No special equipment needed. A good fax machine or Continued on Page 7 scanner will do the job.” Volume 126, 2010 | BrokerBanker
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BrokerBanker
HighTechLending Corporate Headquarters, Irvine California
Don, Grace and Vena Currie
Pictured on Front Cover: Don Currie in Corporate Training and Conference Room Pictured Top Left: Don Currie, President and Erika Macias, Senior Vice President
Pictured Bottom Left: Jennifer Prestley – DE Underwriter, Don Currie – President, and Erika Macias – Senior Vice President
Q: You’re not the only company with this business model, what makes you different?
highest ethical standards and insist that all of our branches are committed to this as well.”
“What makes us different? Our company motto has always been ‘what you promise at the kitchen table you must deliver to the closing table’. You need all the current technology tools at your disposal to make this happen, point of sale automated approvals and rate lock protection so you can accurately disclose and then quickly close with the efficient paperless loan process. One day all Mortgage Brokers and Bankers will do business this way. We offer these tools today.”
Q: When a branch wants to grow their business, do you offer marketing support?
“Marketing is the name of the game, and HighTechLending has a robust marketing department free of change to our branches. Your customers must know who you are, what you offer, and where to contact you. Our marketing department offers drip marketing to previous customers, e-blasting, voice broadcasting, direct mail, and radio spots. We specialize in REALTOR® marketing so you can become the “In-House” lender utilizing the Marketing Service Agreement (MSA).”
Q: How long does it take for a Broker to integrate with HighTechLending and become an FHA Full Eagle Mortgage Bank? Are there any net worth requirements or qualifications?
“The process only takes approximately thirty days. There are no net worth requirements, but we require a full background check, training in FHA/Compliance, and your organization must be committed to producing quality loans. We hold ourselves to the
Q: So, what’s in your crystal ball for 2010? What advice can you offer Broker Banker Readers?
“You don’t need a crystal ball to know our industry is cyclical! We just got our hat handed to us in grand fashion, and now we are at the bottom of a cycle. Call me an optimist, but it is time to rebuild and prosper once again. Advice? I was late to my nephews little league game, so I walked up to the kid on deck and asked the score. He said with a smile on his face, “We’re down 12 to nothing.” I remarked, “You don’t seem too upset about that.” He replied, “Why would I be upset, we haven’t even got up to bat yet!” The moral of my story is no matter what your personal score is, now or in the recent past, join a great team (mortgage banker/ broker), grab the best bat (FHA), play ethically, and swing for the fence in 2010.” Don Currie has served as a mortgage professional for 28 years along with
being a national speaker and published author. Currie is also the President of HighTechLending, Inc., a retail mortgage bank specializing in FHA Financing with 45 branches. In 2009 Currie was appointed President
of CAMB/CAMP – OC. In a previous life, Don served as Senior Vice
President, National Director of Sales for IMPAC LENDING GROUP from 1999 to 2006, where he increased wholesale production from 200
million in 1999 to 2.4 billion in 2005. Contact Don at (949) 468-2611 or
via e-mail at Don@HighTechLending.com. Visit www.HighTechLending.net (Branch Partners) or www.HighTechLending.com (Consumers).
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Silly Mistakes #3: Being a “One-Night-Stand Loan Officer” By Brian Sacks Ok, if that title didn’t grab you, you must be asleep at the wheel, which is clearly a huge mistake. It’s also a huge mistake to fall into the trap of being a “OneNight-Stand Loan Officer.” This, the third dumbest mistake that loan officers can make, is easily avoided though, with just a little bit of conscious effort. Read on to learn how to avoid becoming a “One-Night-Stand Loan Officer” and instead learn how to run a successful origination business.
“Dumbest” Mistake# 3: Who is the easiest person to sell a mortgage loan to? Obviously, that would be someone who already knows, trusts, and likes you. But these folks are few and far between. Because, let’s face it, even someone who knows and trusts you only buys a house every five to seven years in a normal market, and when rates go up very few of them are going to refinance. That puts you in the position of constantly looking for new business. But what if your clients could do the selling for you? Everyone you have done a loan for has a family, friends, coworkers, and neighbors. Think of the potential for new business you could realize if you had them all talking about you and referring your services? There are many ways to communicate with all of the people you know. You could do an online e-mail newsletter or a written monthly newsletter; you could (gasp!) call them once a month; you could send them personal e-mails. In fact, not only can you do this, but you must, as I’m about to share a very scary statistic with you For every month that goes by without contacting a former client, you lose 10% of your influence with them. After about ten months, clients aren’t even likely to remember your name. This is, of course, a shame since there are so many effective yet inexpensive ways to stay in touch with them. And by staying in touch with them, you can therefore remind them to refer you to others. But don’t forget all of the other sources of easy repeat business. Take 9
BrokerBanker | Volume 126, 2010
REALTORS®, for example. One of the keys to my success was having a stable of REALTORS® who consistently sent me new business. I know what you’re thinking, “Brian, I’d rather have a root canal without anesthesia then deal with some of the nasty REALTORS® out there.” News flash! The majority of REALTORS® are anything but nasty. In fact, they’re hardworking, just like you, and eager to earn new business, just like you. Consider this for a minute. When a REALTOR® gives you a deal, they are really giving you their hard earned commission check and hoping you don’t screw it up. When you look at it from that perspective, it makes sense when they call you concerned, doesn’t it? Let them know what’s happening on their files. Call them back. Do what you say you are going to do and everything will be just fine. Even though the market has turned really tough, homes are still selling and you must proactively go after and earn your fair share of their business. Remember, you can’t be a “OneNight-Stand Loan Officer.” That means you can’t do one deal for a client or a REALTOR®, never contact them again, and expect to stay afloat. You need to work hard to earn the business of a handful of successful REALTORS®, and you need to be in regular contact with each and every client you’ve ever worked with. In doing so, you’ll solidify your success for many years to come. Don’t forget to do the same with other potential referral partners like insurance agents, financial planners, accountants, and attorneys. The same rules apply for them. Make sure you are regularly staying in touch with them and diligently helping them build their business through sending referrals. This, I guarantee, will prevent you from earning the unfortunate reputation of being a “One-Night-Stand Loan Officer.” Brian Sacks is the CEO of www.loanofficerformula.com. He has been an industry expert for over 24 years, closing over 6000 loans totaling
1 BILLION Dollars. Brian has trained thousands of originators and
company owners in North America, sharing his “FORMULA” for success that will allow you to close LESS loans, Make More Money and Have a Life REGARDLESS OF MARKET CONDITIONS.
BrokerBanker
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Like It or Not
We Are Being Judged on Our Virtual Image
Byron G. Torres If your web site is maintained and up to date, your visitors are more likely to spend a longer time on your site getting to know you. Tell your story and invite people to get to know you as a person and as a professional. If you do not have the option to update your web site, look at building a new web site that allows you to make changes using an online Content Management System (CMS). A CMS is a tool that enables site administrators to edit text, add images, add pages, and even embed video. If you are a broker with multiple agents, give each of them their own dedicated page on your web site. Your potential customers will appreciate it, and it will make your office more approachable.
When visiting 100 search results for “local” loan originators throughout the county, I found a disturbing trend. Either the web sites were not maintained and looked “aged”, or they were replicated web sites with multiple calculators and a link to fill out a full or mini 1003. For some reason it seems as if lending professionals are not adapting to the ever changing Internet. I admit that is a generalized statement, but of the more than 100 web sites visited, maybe 7 were well maintained and not packed with information overload. Think of your web site as your brick and mortar office. If it is over cluttered, filled with brochures and applications on the table for a consumer to fill out on their own, what image do you think you are portraying to the customers walking through your door? The loan originator business still relies on research, thorough processing, and most importantly it relies on trust. You may be the most experienced loan originator in the state, but if your web site portrays you as otherwise, your trust factor may not be shining through. The solution could be as straightforward as simplifying and maintaining your web site on a regular basis. Keep it simple. No need to have tons of generic calculators and applications. A contact form with general information should replace a full or mini 1003. 11
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Social Networks and Your Business I am often asked about how social networking will help financial professionals. My thinking is that “you” are the best reporter on “you” that you will ever find. Update your Facebook, Twitter and/or Blog on things you accomplish. Link to these pages from your main web site to give your visitors a chance to learn more about what you are doing. If your visitors start reading things that you do, they will feel as if they know you and that is a good thing in marketing. Make your site visitors comfortable with you and invite them to do business with you. Share your knowledge through videos and updates to web site and social network pages. Tell your story and become the source of information. You will have a chance to discuss rates and home values at some point down the road but make your first (virtual) introduction a pleasant and welcoming experience.
Byron G. Torres is the founder and creative director of Pritzer
Media (www.pritzer.com). As a former originator, Byron understands the
needs of mortgage professionals. Pritzer’s services include: web site design,
mobile marketing, videos for the web and video-SEO. Byron G. Torres can be reached at 888.214.7041 Ext 101 or by e-mail at byron@pritzer.com
Commercial Loan Exchange
BrokerBanker
The lenders in our Commercial Loan Exchange are all active commercial lenders who are broker friendly. We encourage you to contact them for your commercial lending needs.
Lone Oak Fund
Stephan Kachani Type: Private Lender Email: Stephan@loneoakfund.com Min Loan: $250,000 Phone: 310-826-2888 x28 Max Loan: $10,000,000 Lone Oak Fund is a portfolio lender larger than many banks. Bridge loans from $250K to $10M on California property. Rates from 8.9%. No pre-payment penalties, appraisals, tax returns or junk fees. Minimal paperwork, creative structuring, fund in a week. Ask about special pricing arranged by Broker Banker Publisher Ed Craine.
Commercial Mortgage Corporation
Leo Gluck Email: leogluck@clickcmc.com Phone: 800-538-5626 x3
Type: Mortgage Banker Min Loan: $200,000 Max Loan: $3,000,000
“Helping mortgage brokers successfully fund small commercial loans since 1976. Stated income loans and other niche products available. Call Leo for marketing tips.� Beach Business Bank
Timothy Fisher Email: tfisher@beachbusinessbank.com Phone: 818-957-8110
Type: Bank Min Loan: Call Max Loan: Call
Blackburne & Brown Mortgage Company, Inc.
Michael Thurman Email: thurman@blackburne.com Phone: 916-338-3232 x310
Type: Private Money Min Loan: Call Max Loan: Call
Bridgelock Capital
Brent Houston Email: brent@bridgelockcapital.com Phone: 877-663-4268
Type: Private Money Min Loan: Call Max Loan: Call
Circle Bank
Mark Sklonick Email: mark@circlebloans.com Phone: 415-893-9321
Type: Private Money Min Loan: Call Max Loan: Call
First California Bank
Don Sonsma Email: DSonsma@FCBank.com Phone: 800-714-4106
Type: Bank Min Loan: Call Max Loan: Call
Luther Burbank Savings
Samuel Shummon Email: SShummon@lbsavings.com Phone: 415-257-3701
Type: Bank Min Loan: Call Max Loan: Call
Redwood Mortgage
Lori Randich Email: lori@redwoodmortgage.com Phone: 650-365-5341 x 218
Type: Private Money Min Loan: Call Max Loan: Call
Second Angel Bancorp
David Gruebele Email: dg@secondangel.net Phone: 916-863-7300
Type: Private Money Min Loan: Call Max Loan: Call
Sonoma Bank
Jim Barnett Email: jbarnett@snbank.com Phone: 925-946-4270
Type: Bank Min Loan: Call Max Loan: Call
Volume 126, 2010 | BrokerBanker
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Industry Service Providers
The businesses represented in this Industry Service Providers page are all broker friendly. We encourage you to contact them for your particular needs.
Accounting Services
Don’t see your Industry below? Call us at 415-406-2330 to add your Service to our growing list.
Appraisal Services
Other services that can be advertised in the “Industry Services Providers include: • Coaching • Efficiency Services • Insurance Services • Legal Services • Licensing Services • Processing Companies • SBA Loan Exchange • and more. Call 415-406-1210 to add your service to the list.
Landmark Appraisals
Stephen McClanskey Email: LMappraisals@aol.com Phone: 949-981-0456
Need an Appraisal Report? If so, we can help. We cover most of Southern California.
Value Express
David Naciri Email: david@nexusappraisals.net Phone: 888-835-3741
Value Express, the easiest and quickest way to the value of any property.
Marie Currie Email: marie@hightechlending.com Phone: 866-714-2040 x 2626
Need FHA? Want to lend in multiple states? We’re focused on your success.
In Touch
Nickolas C. Jones Email: NJones@In-TouchCorp.com Phone: 408-458-4300 x 318
InTouch keeps you in touch with your clients. Ask about our Broker Banker special.
MyRateTrack.com
Jeffrey Pinkerton Email: jeffrey @myratetrack.com Phone: 678-488-5159
Is your business refi-ready? Get ready with myRateTrack.com Ready. Set. Refi.
Edward Jamison, Esq. Web: www.creditcrm.com Phone: 877-256-8162
Start your own credit repair business and make $10k a month easy. Call to get your free brochure.
Cal Coast Credit Reports
Gordon G. Chin Email: gordon@calcoastcredit.com Phone: 415-252-2888
Achieve higher FICO scores with our Credit Scoring Tools. We are here 24 hours a day to serve you.
ENTITLE DIRECT
Buy Title Insurance Direct and Save Claire Fennessey Email: Claire.Fennessey@EntitleDirect.com Your Borrowers Thousands in Closing Costs! Now in 32 states and Growing. Phone: 203-724-1140
Mortgage Modification Center
Cameron Pannabecker Email: cameron@themmcenter.com Phone: 209-478-3200
Let Our 30 Years of Experience Provide Light to the End of Your Home Loan Tunnel.
Richman & Associates
Jim Richman Email: jimlrichman@msn.com Phone: 877-502-7283
Serving the clients of mortgage brokers and attorneys across the nation for over 9 1/2 years.
Jon Kaya Email: jon@KayaDesign.com Phone: 805-495-8215
We specialize in corporate identity branding including logos, ads, print colaterial, e-zines, and more.
Branch Opportunities
HighTechLending Inc. Client Retention
Credit Repair Services
Credit CRM Credit Reporting Services
Insurance
Loan Modifications
Marketing & Advertising
Kaya Design Notary Services
Henry Davidson - Director Email: henryd@expnotary.com Phone: 888.282.9747
Express Notary Service Inc. EsignNotaries.com Website Services
Thinking2 13
BrokerBanker | Volume 126, 2010
Jon Kaya Email: Jon@Thinking2.com Phone: 805-495-8215
We design custom SEO compatible websites that help you stand out from the competition.
Residential Loan Exchange
BrokerBanker
The lenders in our Residential Loan Exchange are all active residential lenders who are broker friendly. We encourage you to contact them for your residential lending needs.
Lone Oak Fund
Area: California Stephan Kachani Type: Private Money Email: Stephan@loneoakfund.com Phone: 310-826-2888 x28 Lone Oak Fund is a portfolio lender larger than many banks. Bridge loans from $250K to $10M on California property. Rates from 8.9%. No pre-payment penalties, appraisals, tax returns or junk fees. Minimal paperwork, creative structuring, fund in a week. Ask about special pricing arranged by Broker Banker Publisher Ed Craine.
Bay Equity
John Curtin
Phone: 415-699-4063 Email: john@bayeq.com
Area: Type:
8 Western States Conforming
Colin Field
Phone: 949-202-5092 Email: cfield@bayeq.com Bay Equity is a Direct Lender in 8 Western States providing Mortgage Brokers a dependable funding solution in today’s turbulent mortgage environment. Our mission is to provide you with competitive pricing and unmatched customer service. Our experienced team is focused on what is important to you, which we believe, is PRICE & SERVICE! We have the ability to move quickly and give you answers in hours, rather than days. Brian Cerruti p: 707-338-3632 Email: bcerruti@cmgmortgage.com
Area: Type:
No. California Conf., FHA, VA
Brent Eckhardt p: 831-566-0022 Email: beckhardt@cmgmortgage.com
Area: Type:
No. California Conf., FHA, VA
Jim Tomczak p: 925-719-4108 Email: jtomczak@cmgmortgage.com
Area: Type:
Seattle & Portland Conf., FHA, VA
Erin Toohey p: 760-612-9051 Email: etoohey@cmgmortgage.com
Area: Type:
No. California Conf., FHA, VA
Franklin American Mortgage Company
Raoul Badde Email: rbadde@your-ae.com Phone: 415-699-0980
Area: Type:
No. California Conf., FHA, VA
MetLife Home Loans
Darren Siegrist Email: dsiegrist@metlifehomeloans.com Phone: 818-575-2600
Area: Type:
No. California Conf., FHA, VA
Web: www.wmfinc.com
Area: Type:
No. California Conf., FHA, VA
Paramount Residential Mortgage Group, Inc.
To find your rep., go to our website Web: www.prmglending
Area: Type:
No. California Conf., FHA, VA
Reunion Mortgage
Marilyn Tsai Email: mtsai@reunionmortgage.com Phone: 415-265-2470
Area: Type:
No. California Conf., FHA, VA
Titan Wholesale
Wendy Edwards Email: wedwards@titan-wholesale.com Phone: 775-852-6888 Ext. 225
Area: Type:
No. California Conf., FHA, VA
CMG Mortgage
Mountain West Financial
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14
BrokerBanker
The Trend of Brokers Seeking Partnerships with Bankers Continues To Gain Steam. As mortgage brokers, are we waiving our white flags of surrender, or are we just adapting to our new environment? The bad players have left the industry by now, but the attack on mortgage brokers continues in the halls of Congress at both the federal and state levels. The net effects of HVCC, MDIA and RESPA require wholesale lenders to be very involved in many up-front origination processes. Wholesalers now must order the broker’s appraisal, deliver their TIL, and soon may have to deliver the new GFE within three business days of the broker taking an application, or at the very least will have to deliver all subsequent revised GFEs. And with the new zero tolerance on lender fees, effective immediately, brokers will need to know where they are placing the loan at application or potentially absorb any fee discrepancies. All of these processes have hindered one of your biggest advantages, the ability to redirect a loan as necessary for better terms. To boot, the new GFE has disparities in how YSP is disclosed between bankers and brokers, with brokers being at a clear disadvantage. Brokers will have a little more “splainin’ to do, Lucy” to convince the consumer they are not charging more than the banker. Brokers will now have to charge all their compensation in the form of origination charges in order to make their full income goal. YSP is not a POC fee any longer, it is now always a LENDER credit for closing costs paid to the borrower in its entirety. The borrower CAN select a rate that pays sufficient credit to offset origination and/or settlement charges, but the broker must disclose their compensation as origination charges only. Just an additional note, there will be no way to make overage as a broker from “unused” YSP. Bankers can continue to choose not to disclose YSP, which makes for a little less math for the borrower to digest. These are some of the obvious reasons brokers are now driven to seek partnerships with bankers. The less apparent reasons are more alarming. HUD is in the process of doing away with their loan correspondent mortgagee approval (the mini-eagle), which still has unknown ramifications to the mortgage broker. At the MBA conference, I heard directly from the horse’s mouth (President John Courson) that many DE lenders are considering putting a higher net worth requirement to their brokers originating FHA loans than 15
BrokerBanker | Volume 126, 2010
the $63,000 that HUD required. This is a very big unknown for mortgage brokers that originate FHA loans, making it tough to project volume for 2010. Aligning with a banker generally secures HUD approval. The other big unknown is the Federal Reserve’s proposal to regulate loan officer compensation, doing away with YSP as we know it and requiring private flat fee compensation agreements between brokers and lenders. It’s difficult to envision how the broker/wholesaler world will look if this comes to pass. The trend from broker to banker is not a new trend but an accelerating trend. I expect that first quarter 2010 will reveal a lot of new partnerships. It feels like the beginning of a land grab by the mortgage banking community. There is some sense of urgency and also opportunity among bankers to align with the most profitable and well run broker shops for a more exclusive relationship. The urgency stems from a concern that there will be very few true broker shops left. The viability of the wholesale channel is in question. Profitable wholesaling is about volume and efficiencies, and the contracting broker community and increased labor necessary per loan is making this ideal harder to achieve. The opportunity for bankers in these arrangements is, of course, a closer relationship with the originator and the fact that converting any portion of production from TPO (third party originated) status is a benefit. Retail loans simply perform better. The affiliate branch operators better understand their
BrokerBanker BrokerBanker
Article by Terri Buckman banking partner’s products, processes, policies and people. I think of it as the ultimate broker partner program. One colleague of mine likes to say, the dating is over, it’s time to settle down. Beyonce would say it this way, “If you like it, then you shoulda put a ring on it.” It is also very telling that CAMB is in the process of changing their name to CAMP (California Association of Mortgage Professionals). The assumption is that the association hopes to gain membership from the banking community. Let me be quick to add, I sincerely hope wholesale survives. And should you decide to forge a partnership
with a bank as an affiliate, I wish you continued success and commend you for refusing to give up your independent and entrepreneurial spirit. But, I also commend you for recognizing that the need for adaptation is paramount to success moving forward.
Terri Buckman is the Vice President and Sales Manager of Affiliate
Branching for Pinnacle Capital
Mortgage. With more than 25 years
of experience in the mortgage banking
and brokering industries, Terri
welcomes questions at tbuckman@ pcmloan.com or via phone at
925.822.5931.
Terri Buckman
2009 | BrokerBanker Volume 126, 2010
16
A LESSON FROM
OLD YELLER! By Brian L. Peart
Recently I watched the movie Old Yeller with my kids. Shocking, I know, but it was the first time I’d seen it. As you undoubtedly know, at the end the boy has to shoot Old Yeller, because he contracted a disease that made him crazy. As the boy is lamenting the loss of his beloved dog, his father uses this opportunity to teach him a critical life lesson that all of us to some extent realize, but many seem to forget (especially those of us in the mortgage business). Though not verbatim, the father says something to this effect: “Son, sometimes life just kicks you down and grinds a man into the ground, and it just doesn’t seem to make sense. But life is not all like that. A lot of it is pretty good. If you spend all the good times worrying about the bad, you make the whole thing bad. If you look around, you will find something good to take your mind off the bad.” At this point, the boy acknowledges that the pup of Old Yeller is right in front of his face, and he makes the decision to love Young Yeller like he did Old Yeller. This lesson–to not obsess over the bad, or you will make the good times bad too–is something we know in our hearts to do, but we rarely do it. As an originator, manager, or mortgage company owner, you get to practice this lesson all the time. A loan is dying through no fault of your own. What do you do? Do you obsess over it and allow it to ruin your day or week or even (and I have seen people 17
BrokerBanker | Volume 126, 2010
BrokerBanker
“Son, sometimes life just kicks you down and grinds a man into the ground, and it just doesn’t seem to make sense. But life is not all like that. A lot of it is pretty good. If you spend all the good times worrying about the bad, you make the whole thing bad. If you look around, you will find something good to take your mind off the bad.”
do it) your entire month? Or do you switch your focus
loans die. EVERYONE has had things not go their way.
away from the loss, write it off as a learning experience,
It’s a part of life, and it’s a part of business.
and focus on the good things going on in your pipeline? When you get hit with an irate customer or an IRS audit
I know it is hard, especially in the midst of the storm, but
or a Comptroller audit, how do you respond?
if you want to live a life that is rewarding, you must learn to accept this reality. Life will continue to throw you the
All of life is a lesson in learning to accept this simple
curve balls, and there will never be a time when you have
truth. When things don’t go our way, when we get hit
years with no curve balls. That occasional loan will die. It
with that curve ball that just does not seem fair, we
may not be your fault. But we must learn to shake it off
must understand that it is just a test. We must get over it and
and get back on the horse, or we will never win the race! Remember in the Old
move on to the wonder-
Yeller story, the boy intentionally de-
ful future that awaits us.
cided to begin to love Young Yeller.
Every top producer has
We too can stop lamenting the
had loans, which have
loss of loans and instead
died at the last minute
decide to love working on
through no fault of
new loans, new marketing
their own. They’ve all
strategies, and so on. It’s
had irate customers and people parked in U-Hauls, because the loan did not close and so on and so forth. What made them top producers was that
just a matter of where we decide to focus our energy. We can channel our energy on all of the things that haven’t gone our way, or we
they did not allow it to ruin their production. They took
can focus on making the next transaction go our way. The
a walk around the building, took a deep breath, and got
beauty is that we get to decide how we’ll react. We control
back in the game, focusing on the good things and the
it! Which path will you choose?
things they could control. Unfortunately, the trap that many of us fall into is in believing that we are the only ones who are going through this. EVERYONE has had
Brian L. Peart is President of Nexus Financial Group, Inc. and Commercial Capital Ltd. He offers FREE tips to loan officers and owners through a weekly net letter. To opt-in just go to www.nexusfinancial.com. Volume 126, 2010 | BrokerBanker
18
BrokerBanker
Private Money Loan Exchange
The lenders in our Private Money Loan Exchange are all active private money lenders who are broker friendly. We encourage you to contact them for your private money lending needs.
Lone Oak Fund
Type: Private Lender Stephan Kachani Min Loan: $250,000 Email: Stephan@loneoakfund.com Max Loan: $10,000,000 Phone: 310-826-2888 x28 Lone Oak Fund is a portfolio lender larger than many banks. Bridge loans from $250K to $10M on California property. Rates from 8.9%. No pre-payment penalties, appraisals, tax returns or junk fees. Minimal paperwork, creative structuring, fund in a week. Ask about special pricing arranged by Broker Banker Publisher Ed Craine.
Agricap
Web: www.agricap.com Email: RealEstate@agricap.com Phone: 213-542-5232
Area: Type: Amount:
California SFR & Commercial $500k to $5MM
Blackburne & Brown Mortgage Company, Inc.
Michael Thurman Email: thurman@blackburne.com Phone: 916-338-3232 x310
Area: Type: Amount:
California SFR & Commercial $500k to $5MM
Bridgelock Capital
Brent Houston Email: brent@bridgelockcapital.com Phone: 877-663-4268
Area: Type: Amount:
California SFR & Commercial $500k to $5MM
Brownstone Mortgage Capital Corporation
Alex Nackoul Web: www.brownstoneloans.com Phone: 1-800-547-1285
Area: Type: Amount:
California SFR & Commercial $500k to $5MM
California Equity Lenders Inc.
Mike Christl Email: mike@calequitylenders.com Phone: 818-807-3866
Area: Type: Amount:
California SFR & Commercial $500k to $5MM
Redwood Mortgage
Lori Randich Email: lori@redwoodmortgage.com Phone: 650-365-5341 x218
Area: Type: Amount:
California SFR & Commercial $500k to $5MM
Roza Real Estate Loans
Eva Roza Email: eva@roza.com Phone: 415-584-3000
Area: Type: Amount:
Northern California 1-4 NOO & Comm. $200k to $1.5MM
Second Angel Bancorp
David Gruebele Email: dg@secondangel.net Phone: 916-863-7300
Area: Type: Amount:
California SFR & Commercial $200k to $5MM
Your Listing Here Your Listing Here Your Listing Here Your Listing Here 19
BrokerBanker | Volume 126, 2010
Branch Opportunities Exchange
BrokerBanker
The Branch Opportunities Exchange members are all broker friendly. We encourage you to contact them for their services.
HighTechLending Inc.
Marie Currie Email: marie@hightechlending.com Phone: 866-714-2040 ext 2626
Excellent rates. Fast closings. Paperless. Focused on your success.
Frost Mortgage Lending Group
Greg Frost Email: info@gregfrost.com Phone: 800-659-3767
Great pricing. Fast U/W. On time closings. Mentoring. 100% net payout. $2 Billion monthly line.
Pinnacle Capital Mortgage Corporation
Amber Wiertalla Email: awiertalla@pcmloan.com Phone: 888-708-2707 ext 18286
Turnkey. Keep your DBA. Keep 100% of profits. All products. Western states.
Gateway Mortgage Group
Dane Basham Website: gatewayloan.com Phone: 888-544-0034 ext 222
FNMA and GNMA direct lender. We provide leads. Grow with us. 25 States.
American Pacific Mortgage
Melissa Arntzen Email: marntzen@apmortgage.com Phone: 916-960-0493
Retail Banking and Branching Company since 1996. 160+ branches. Banker/broker platform. Your DBA ok.
Southwest Funding, LP
Linda Litt Email: llitt@southwestfunding.com Phone: 877-878-8989
Since 1993, we have been the industry leader in branch opportunities.
Debt Zero
Jeff Miller Website: debtzeroprocessing.com Phone: 866-356-2755
Topnotch business support, training, and back-end processing for Debt Settlement.Â
Your Listing Here Your Listing Here Your Listing Here Your Listing Here Your Listing Here Your Listing Here Your Listing Here Volume 126, 2010 | BrokerBanker
20
New Year, New Tactics, and New Business: By Greg Frost My team revealed to me in August 2009 that they were worried about their production for the next 4 months. After all, we had school starting, the State Fair in September, the International Balloon Fiesta in October, Thanksgiving in November, and both Christmas and New Years holidays at the end of December. They shared every excuse in the book with me about why their production would be lower through years end. I listened, smiled, stood up and said, “Well, based on that input, I think we ought to send everybody home and shut the whole thing down until January. I want to thank you all for your input. See you after the first of the year.” As I left the
DAILY
1) Go to breakfast and lunch with a REALTOR® referral partner or prospect every day. You can’t afford to eat alone. 2) Ask each REALTOR® if they know anyone at their office that is an “up and comer” or verbalizing frustration with their lender. Ask them to bring them to lunch with the two of you next week. 3) Call the listing agent and selling agent on every loan in process with an update on their file that you are currently processing. 4) Call the borrower with a loan in process update on their file. Do this, and you will get a referral before the loan closes. 5) Find a reason to send out 5 note cards to industry professionals and past clients each day. Very few hand written cards are sent; all are appreciated when received. Think about it: 5 cards a day = 25 cards x 52 weeks = 1300 opportunities to make a lasting impression. 6) Forward “The Daily Communicator” to each of your REALTOR® referral partners and prospects.
In short, “bear down” and spend every minute of every day doing something to get your name out, to speak your message, to show you care, to provide valuable information, and to cross sell those who know and use you. Your attention and effort will announce your professionalism, enhance your authority, prove your consistency, and trigger reciprocity. 21
BrokerBanker | Volume 126, 2010
room, I looked back over my shoulder and said, “Anyone who is willing to reassess this decision with me and try to convince me to keep the office open, meet in my office in 15 minutes.” The result of that meeting was a restatement of the sales activities that were being performed by each LO on a daily, weekly, and monthly basis. As we shared all the activities, some LOs liked those that others were doing and chose to add them to their repertoire. I managed to interject a few ideas myself that were also added. Here are a few ideas to keep your business channels open and productive during slow months.
WEEKLY
1) Call every REALTOR® referral partner on Monday morning and ask if they ran into anyone over the weekend that may need your assistance. 2) Call every REALTOR® Referral Partner/Prospect every Friday afternoon and remind them that you are on your cell phone all weekend and available to answer questions or run the numbers on a prospective buyer. 3) Send a written loan status report every Friday afternoon to the listing agent, selling agent, and borrower on every loan in process.
MONTHLY
1) Send your REALTOR® Referral Partners, current borrowers, and past clients a monthly newsletter. 2) Send everyone from every list that you have a Birthday card. Call them and leave a Happy Birthday voice mail the day before their Birthday, “I wanted to be the first to wish you a Happy Birthday. I know that I’m a day early. In my business it’s great to be early.”
Greg Frost directs the largest NetPartner
Division for PRMI Mortgage. He is also
PRMI’s National Training Director. Greg Can be reached at: 505-292-7200, email: greg@gregfrost.com
• •$2B $2BMONTHLY MONTHLYWAREHOUSE WAREHOUSECAPACITY CAPACITY • •4848HOUR HOURUNDERWRITING UNDERWRITING
• •100% 100%NET NETPAY PAYOUT OUT • •WET WETFUNDINGS FUNDINGS
“I joined “I joined Frost Frost Mortgage Mortgage and and immediately immediately saw saw mymy revrevenue enue getget back back to to what what it used it used to to be.be. I now I now have have thethe tools tools I need I need to to bebe successful successful in in today’s today’s market market place.” place.” - Bill - Bill Morris Morris Lancaster, Lancaster, OHOH
I'veI've never never worked worked forfor a lender a lender with with such such a hard a hard workworkinging closing closing department. department. I really I really appreciate appreciate allall they they dodo to to help help keep keep mymy business business running running smoothly. smoothly. - Ryan - Ryan Morrow Morrow Lancaster, Lancaster, CACA
"I've "I'veknown knownGreg Gregsince since1992. 1992.After Afterananexhaustive exhaustive search, search, I found I found thethe Frost/PRMI Frost/PRMI business business model model to to bebe thethe very very best. best.I should I should easily easily double double mymy income income in in 2010." 2010." - Robert - Robert Shaffer Shaffer Lancaster, Lancaster, CACA
Our Our semi-annual semi-annual BranchPartner BranchPartner Master Master Mind Mind MeetMeetings ings areare what what really really motivate motivate me. me.Great Great mentoring mentoring and and loads loads of of business business building building ideas ideas coupled coupled with with thethe hands hands onon “How “How to.”to.” - Momi - Momi Pointer Pointer Tustin, Tustin, CACA
Greg Greg is is doing doing what what hehe promised. promised.Great Great pricing, pricing, fast fast underwriting, underwriting, onon time time closings! closings!That’s That’s allall I needed I needed and and that’s that’s what what Greg Greg has has delivered. delivered. - David - David Hoffman Hoffman Westlake Westlake Village, Village, CACA
I can't I can't telltell you you how how different different this this whole whole experience experience has has been. been.I'mI'm now now going going outout to to celebrate; celebrate; notnot that that I I funded funded a loan, a loan, butbut that that I didn't I didn't have have to to process process thethe filefile or or beg beg thethe funder funder to to review review mymy conditions conditions and and hope hope that that it funded it funded onon time. time. - Tim - Tim Ross Ross Lancaster, Lancaster, CACA
A APRMI PRMICompany Company
IfIfyou youwould wouldlike liketotolearn learnmore moreabout aboutour ourBranchPartner BranchPartnerbusiness businessmodel, model,please pleaseinquire: inquire:
info@gregfrost.com info@gregfrost.com
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