COMMERCIAL LENDING KEY OPPORTUNITIES EXPLAINED MPAMAG.COM ISSUE 7.04
MORTGAGE INSURANCE THE BIG CHANGES AFFECTING ORIGINATORS EGO CHECK WHY VOLUNTEERING BOOSTS BUSINESS
MORTGAGE PROFESSIONAL AMERICA: THE NEW NAME FOR THE NICHE REPORT
Branch opportunities MPA surveys the originator community on the top six reasons for joining a branch network
NEWS 6 | Forum forces Comments from the MPA online forum on the big news stories 8 | News analysis The key trends affecting originators
TEAM MOTIVATION Nine ways to keep your people motivated
54 | The data Must-read statistics for mortgage professionals
FEATURES 28 | Commercial lending Why this segment of the market is due a comeback 40 | Mortgage insurance The big changes that are affecting originators
BUSINESS STRATEGY 50| Business etiquette How to conduct yourself for success
ALLYSON KREYCIK The country’s seventh highest female originator reveals the story of her success
MORTGAGE INSIDERS 10| Louis Amaya The co-founder and CEO of National Asset Direct and iServe Lending talks payback 58 | A day in the life of… Mary Kladde, CEO and co-founder, Titan Capital Solutions and Titan Lenders Corp 59 | Favorite things Raymond Brousseau, EVP Mortgage Lending Division, Carrington Mortgage Services
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CONTENTS / EDITOR’S LETTER
BACK AND FORTH COPY & FEATURES MANAGING EDITOR Robin Christie JOURNALISTS Diana Aqra, Kelli Rogers CONTRIBUTORS Nikki Heald, Leanne Faraday-Brash PRODUCTION EDITORS Roslyn Meredith, Danielle Chenery, Moira Daniels
ART & PRODUCTION SENIOR DESIGNER Rebecca Downing GRAPHIC DESIGNER Marla Morelos
SALES & MARKETING MEDIA SALES MANAGER Chris Brezsko, Molly Hummel COMMERCIAL DEVELOPMENT MANAGER Jon Tkach COMMUNICATIONS MANAGER Lisa Narroway MARKETING EXECUTIVE Anna Farah
CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Diana Aqra firstname.lastname@example.org Advertising enquiries Chris Brezsko email@example.com Molly Hummel firstname.lastname@example.org Subscriptions email@example.com Key Media 7807 E Peakview Ave Suite 115 Centennial CO 80111 United States of America tel: +1 720 452 2600 Offices in Singapore, Auckland, Toronto, Denver mpamag.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as MPA magazine can accept no responsibility for loss
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Welcome to issue 7.04 of MPA magazine. First of all, I’d like to say a big thank you to all the readers who took the time to offer their thoughts on the last issue of MPA. Feedback is vital to our ethos, and we welcome comments from our readers – whether via, mail, email or through our vibrant online forum. With that spirit in mind, we offered the originator community the chance to contribute to this month’s cover story on branch opportunities. Ultimately, the decision of whether to go it alone or join an established brand rests with you as an originator, and to help you to weigh up the benefits of going down the branch route we surveyed hundreds of originators and asked them to give an importance score to each of the six key benefits of starting a branch. The fascinating results are presented on page 14, along with insightful comments from originators who are making the branch system work for them. Meanwhile, we explore the reasons why the commercial property market is due a comeback (page 28) and investigate the impacts originators will feel as the FHA reduces its mortgage insurance book and private insurers increase their market presence (page 40). If you’re in search of inspiration, look no further than this issue’s broker profiles, where top female originator Allyson Kreycik explains how a fresh start did wonders for her career (page 26) and Academy Mortgage high flyer Brett Mills reveals the valuable lessons he learned from volunteering to pull teeth in Guatemala. Meanwhile, this month’s Head to Head interviewee, co-founder and CEO of National Asset Direct and iServe Lending, Louis Amaya, reveals why he believes those who are still standing in the mortgage business are likely to see long-term payback. Robin Christie, managing editor, MPA
Contact the editor:
JUNE 2013 | 5
NEWS / FORUM FORCES
Comments from the MPA online forum on the news stories that have been making waves in the originator world. BLAME GAME
ORIGINATORS BITE BACK All parties were to blame for the mortgage melt down. Pointing fingers at the low man on the totem pole while making themselves out to be innocent is disingenuous.
Dodd-Frank and its offspring, CFPB, also will harm small borrowers. There must be some help for this lot of borrowers as well. - Richard H Mohler
The Community Mortgage Lenders of America’s proposal that legislation be put in place to deal compliance relief to small community lenders stirred debate. I’m a private money, non-bank lender and we’ve never engaged in predatory lending practices. We lend to real estate investors, not to homeowners in distress. However, we too have come under regulation and are now required to be licensed. I can hardly make a living myself because of the burden of these new regulations. - CoreyD
FANNIE AND FREDDIE, RIP?
Alette wasn’t the only one to comment on National Association of Independent Housing Professionals (NAIHP) president Marc Savitt’s passionate defense of the originator channel.
More damage than good was – and is – done by CRA. I totally disagree with bailing out underwater loans. - Penny Z
I have been a small town mortgage broker for 22 years. Same place, same name, same employees. We survived it all. Some times were tight. The lenders would not turn down loans even if you asked them to. If we wouldn’t do a loan for a realtor or homebuyer they would go somewhere else. The other most unfair portion of this new world is how insulting it is to borrowers with real integrity, honesty, good credit and excellent credit histories. Where is the common sense underwriting we used to have? - Wanda Martin
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I have been a mortgage broker for 27 years and always done everything by the book. This over regulation makes it impossible for a small lender to stay in business. - Alette
I remember when our current President made a public speech stating that the brokers were to blame for the Banking meltdown. Thank you Mr Savitt for speaking on our behalf! - Mary
MPA online’s report on the nominee to head the FHFA supporting replacing Fannie and Freddie with a privately capitalized system, created discussion on bailing out underwater loans. Penny Z said no to bailing out underwater loans. I disagree: All home owners paid a terrible price for the sins of the mortgage market elite who created this mess. - Lonn Dugan
Join the debate at mpamag.com/forum
The latest Federal regulations are there to protect consumers, but for consumers to ask their neighbors to bail them out with tax dollars seems a bit greedy. - Ronn Starr
JUNE 2013 | 7
NEWS / ANALYSIS
EMPLOYMENT NEWS: WHAT IT MEANS TO ORIGINATORS Employment rates may be heading in the right direction, but one mortgage analyst believes this could be bad news for originators. The Department of Labor announced 202,000 private sector jobs were added in June, mostly from leisure and hospitality (75,000 jobs), professional business services (53,000), retail trade (37,000), and
financial services (17,000, more than double its prior 12-month average). Total non-farm payroll employment for April and May (shown below) was also adjusted upwards to 70,000. The positive economic news is not so positive for mortgage rates, however, said Bryan McNee, analyst at MBS Authority. Positive economic data generally
means the Fed is more likely to scale-back on MBS purchases sooner. When MBS supply rises, prices will fall, causing mortgage rates to increase, he said. “After the last two Non-Farm Payroll reports, mortgage backed securities (MBS) sold off in a major way, which pushed mortgage rates upward,” he said.
HIGHEST FORECLOSURE STATES
Florida: 103,000 California: 76,000 Michigan: 64,000 Texas: 51,000 Georgia: 47,000 Source: CoreLogic
MONTHLY EMPLOYMENT RATE CHANGES
FLORIDA TOPS FORECLOSURE LIST
North Dakota 3.1% Texas 2.7% Idaho 2.6%
Utah 2.6% Colorado 2.2% THE TOP 10
Commercial and multifamily mortgage debt outstanding decreased 0.2%, which translated to $4.9bn, and left the nation’s total commercial and multifamily mortgage debt at $2.41tr at the end of the March quarter.
Arizona 2.1% Delaware 1.7% Georgia 1.7%
Massachusetts 1.7% Nevada 1.7% New Jersey 1.7% Alabama -1
Source: Mortgage Bankers Association
Ohio -0.3 Arkansas 0 Wisconsin 0 Pennsylvania 0.1
THE BOTTOM 10
Rhode Island 0.2 Maine 0.2 District of Columbia 0.3 Wyoming 0.5 Alaska 0.7
-1.0- 0.50 .0 0.51
% Source: Bureau of Labor Statistics, employees on nonfarm payrolls, May 2013. (Not seasonally adjusted.)
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The number of homes in foreclosure is on the wane, but Florida topped six figures when it came to completed foreclosures over the past 12 months. According to CoreLogic data, Florida saw 103,000 completed foreclosures in the 12 months to May, followed by California (76,000), Michigan (64,000), Texas (51,000) and Georgia (47,000). These five states accounted for almost half of all completed foreclosures nationally. Foreclosure inventory in May 2013 stood at one million homes, or 2.6% of all homes with mortgages. This was an improvement on May 2012’s figure of 1.4 million homes, or 3.5% of homes with mortgages. There were approximately two million properties in shadow inventory as of May 2013, which is down 34% since its peak in 2010. This figure included properties with mortgages that are 90-days-plus delinquent, in some stage of foreclosure, and in REO status.
MORTGAGE CREDIT AVAILABILITY
CREDIT AVAILABILITY EXPLAINED
The availability of credit to Americans has taken an interesting ride over the past year. Looking at the latest data from the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI), lending standards between October 2012 and February 2013 loosened, with index scores increasing by almost 10 points. Lower MCAI values indicate a tightening in lending standards, while higher index values are indicative of loosening credit. The index score dropped again in March 2013, indicating a tightening of lending standards, but these standards have shown some signs of loosening since. The index, which analyzed data from AllRegs Market Clarity, increased to 109.8 in June – a gain of nearly 1% over May. “The increase to the MCAI was primarily driven by a small uptick in the number of products which offer a cash-out feature. There were also small increases in the number of jumbo, investor, and higher LTV offerings,” the association said. The index is calculated using several factors related to borrower eligibility, including credit score, loan type, LTV, and others. Its base period and value is 100, established in March 31, 2012.
Source: MBA, AllRegs Market Clarity
MARKET SHARE MOVEMENTS IN FOCUS
There have been some interesting movements in terms of the overall market share position held by several mortgage types over the past few years. According to the ABA Real Estate Lending Survey Report (2013), the low documentation segment of the market saw its share of originations drop by 0.6% last year. This followed a relatively stable two-year period, where low documentation mortgage originations dropped by only 0.1% between 2010 (2.8%) and 2011 (2.7%). The market share of prepayment penalty mortgages yo-yo’d from 3.5% in 2010 to 2.5% in 2011 and then back to 3.5% in 2012, while the share held by balloon payment products dropped by 0.3% last year to hit 8.6% having made a gain of 1.7% the year prior. Piggyback mortgages – when a borrower takes out a second mortgage in the form of a home equity or line of credit – accounted for 3.8% of the loans originated by surveyed bankers in 2012, compared to 1.7% in 2010. Commenting on this movement, vice president of Advisors Mortgage Group Sean Clark said, “The reason piggybacks went away is values dropped so dramatically, so many of the banks that offered second mortgages out there lost everything they lent.”
Indian IT and BPO companies are expected to double their revenues from mortgage process outsourcing to $316m this year from $158m in 2009. Source: HfS Research
Low Documentation mortgages Piggyback mortgages Prepayment penalties Balloon payments Source: ABA Real Estate Lending Survey Report (2013)
AUGUST 2013 | 9
HEAD TO HEAD / LOUIS AMAYA
LOUIS AMAYAâ€™S CAREER TIMELINE
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Graduated Point Loma Nazarene, BS Business Administration.
Graduated University of Phoenix, MBA.
1993-1999 Cal-Western Reconveyance Corporation, assistant VP/operations manager trustee sales.
Peoples Bank of California, San Diego, assistant VP of servicing.
Green Point Credit, reengineering program manager.
SURVIVING THE CRISIS
Co-founder and CEO of National Asset Direct and iServe Lending, Louis Amaya has been in the mortgage industry for 25 years. He tells MPA how the origination business is still in a period of “normalization”, but those still standing are likely to see long-term payback.
How did you co-found iServe Residential Lending and the iServe Companies?
A. National Asset Direct [NAD] is the parent to all the iServe Companies (which includes iServe Servicing, iServe Residential Lending and Xplair Technologies). NAD was built in 2006 to purchase non-performing loans portfolios. We built an infrastructure to service those loans and distressed real estate. We brought a loan officer to come in and start to try to re-work the loans, do re-financing and such for troubled borrowers. Then, over time, we saw a lot of mid-level bankers were going out of business. So we saw a good opportunity to get in the origination business. In 2009, we acquired United Residential Lending, which was out of Scottsdale, Arizona. It was a small, clean wholesale mortgage shop that just needed some capital. We brought its senior management over to San Diego (where National Asset Direct is) and we started growing. It has led us to build 30 retail branches employing more than 150 employees, mostly in California.
Option One Mortgage, Irvine, California, project manager/group asset manager.
Homecoming Financial, San Diego, California, director of the servicing capital group/VP asset resolution.
Co-founded National Asset Direct (NAD). The enterprise grew to include a special servicing platform licensed in all 50
states, a nationwide real estate disposition platform, residential mortgage banking and a technology provider.
Serves as executive VP of iServe Companies and Xplair Technologies, as well as CEO of iServe REO.
AUGUST 2013 | 11
HEAD TO HEAD / LOUIS AMAYA
What does the environment look like for originators?
Due to lower overall demand, banks are going to be forced to open up credit criteria like FICO scores.
A. I think, in general, the market is going to switch back to the wholesale market in the next two to three years. Wholesale is the cheapest way to do business. Finding the customer is 90% of the work in the origination business. So as the market normalizes, and infrastructure sets in again, the origination business will shift back to the wholesale, and eventually correspondent business.
What do you think about the branch model for originators? What is your outlook on mortgage origination supply and demand over the next few years? A. As normalization continues, it’s going to take some time before traditional buying activity comes back. Rising interest rates have reduced the need for refinance business, so origination business will really have to adjust for that. In terms of traditional buyers, inventory is still an issue. There were a lot of institutional investors that purchased a lot of real estate for rental income, which took a lot of homes off the market. It won’t be until investors back-out of this space that we see traditional buyers come back.
Do you think there will be major changes in credit availability/ requirements? A. Due to lower overall demand, banks are going to be forced to open up credit criteria like FICO scores. Nothing too crazy, but it’s been so strict over the past few years. There are a lot of people who lost their homes during the financial crisis, dying to get back into a home again, but their credit is dinged up a bit. You don’t have to open up [credit] that much to get more volume.
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A. In many cases, a broker doesn’t have to give up the flexibility if he goes to work for a branch/banker model. You give up some autonomy, but you trade it for stability.
Are originators still in survival mode? A. Things are getting somewhat stable, and if you have survived as a broker at this point, it probably means you are doing good quality business. If you aren’t already attached to a banker, it’s likely you will stay in business. On the other hand, there will still be a lot of brokers who, because of lower overall volumes, will need to become bankers. Brokers have very difficult operations right now – they are heavily regulated and are frowned upon. Even for us, as an originator, to buy loans from brokers we need to raise our net worth significantly so we can safeguard our warehouse providers. For specialized brokers, for instance, a small broker focused on FHA loans, might be in a tight spot. FHA used to be the non-prime giant, but after it raised its fees and minimum net worth requirements [to be an FHA-approved lender], small FHA lenders may have to move to banking.
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SPECIAL REPORT / BRANCHES
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It’s a tough choice whether to go it alone or join an established brand. To provide some food for thought on the issue, MPA has surveyed the originator community on the top reasons for joining a branch network. Read on to discover the results and what branch managers and owners have to say about the key benefits of going down the branch route. Diana Aqra and Kelli Rogers investigate.
Navigating the mortgage market can be challenging in today’s environment and, while independent originators are still going strong, many mortgage professionals are finding going down the branch route and having the support of a major corporate entity is helping pave the way to success. In this issue of MPA, we decided to explore the key benefits of joining a branch network by asking the originator community to score each of six key selling points from one to 10. We received hundreds of responses, and collated the average scores for the benefits presented in the survey in order to rank them from one to six. The ranks and scores for each of these benefits are presented in this special report, along with comments on the merits of each benefit from branch managers, branch owners and lender executives. Thank you to all the originators that took part in the survey. Turn the page to see the results. AUGUST 2013 | 15
SPECIAL REPORT / BRANCHES
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UNDERWRITING, PROCESSING SUPPORT AND TURNAROUND SPEED
Being known as an originator with a reputation for gaining quick loan approvals, can do wonders for business. In this respect, branch managers and owners can benefit from strong, direct relationships with onsite or HQ-based underwriters and processers – which can make loan applications speedier and more efficient. Speaking to branch operators and managers, it’s clear they are thrilled their company offers either centralized or on-site underwriting and processing support. Having in-network underwriters and processors allows for faster turn-times – one of the most important factors to running a profitable business. “Underwriting can make or break a deal,” says Sean Rogerson, branch manager for Equity Loans in Southbury, Connecticut, who opened a brand new branch for the company recently. He notes loan processing speed is vital when it comes to repeat real estate agent referrals, for example, where they are highly pressed for time. “We are always shooting for 30-day turnaround times, meeting timelines… if I was turning in 60 days, I wouldn’t be a top-originator,” he says. “If I have to spend time fixing loans, then I can’t originate new business,” he adds, noting a “topnotch” branch will see the difference and have the knowledge up-front. For Chad Melin, who runs Academy Mortgage’s Maricopa, Arizona, location, the biggest benefit is not having to wait for files to transfer to another location. As of May, Academy Mortgage had the second highest market share in his region, after Wells Fargo. “The best benefit to working in a branch is having nine underwriters and nine processors right on-site,” Melin says. This type of arrangement allows for originators to forge the kind of relationships with processors that don’t tend to exist in other scenarios. Jim McQuaig, branch manager in Virginia for Churchill
Mortgage, for example, says there isn’t typically a lot of interaction between a loan officer and loan underwriters at a brokerage or a bank. He adds he’s able to gain a great deal of control over the process by engaging with underwriters to prioritize loan files, like a purchase referral from a builder he might want worked on first. “You don’t’ have that ability at a bank or a small company”, he says. Andy Sandkamp, area manager for Nationstar Mortgage in the Minneapolis, Minnesota area, agrees. “It’s easier to discuss a file… and, as time progresses, the relationship [with underwriters] develops [so] I know what they need,” he says.
“We are always shooting for 30-day turnaround times... If I was turning in 60 days, I wouldn’t be a top-originator” - Sean Rogerson
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SPECIAL REPORT / BRANCHES
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2. COMPLIANCE SUPPORT Dealing with regulations and making sure the advice you give and loans you write are on the correct side of the law has become an increasingly onerous task since the financial crisis. So, to branch managers and owners, having an in-house or corporate compliance team to deal with regulations and keep your branch compliant, can be invaluable The constant slew of new regulations governing the financial industry in the past few years have been an effort to create a safer lending environment, but understanding and implementing new rules has created a new set of obstacles for those in the industry. Having an in-house compliance team is invaluable to navigate the ins and outs of complicated rules, according to several branch managers. “The cost of noncompliance is not being able to be in business,” says Jason Klaskin, district manager for Academy Mortgage in Pennsylvania. “It’s easy to blame regulators for not being able to do a loan, but they are just enforcing what we should be doing anyway.” Accepting this enforcement is one thing, but it often means the cost of compliance for small broker shops is too high to be able to turn over a profit and stay in business, Klaskin says. Before he joined Academy, Klaskin says his other option was to get his Mini Eagle accreditation and take that route to writing FHA loans, but he had his misgivings about following that path. “It didn’t pay for me to have to worry about audits and liability,” he says. And Klaskin’s not alone when it comes to liability concerns. Scott Schang, branch manager at Broadview Mortgage in Orange, California, says the elimination of compliance worry the branch system presents is just as important at his branch. In fact, the compliance team at his corporate office had a lot to do with his decision to join the company. “As a branch manager, I only have to worry about originating loans and following compliance, not
“ The cost of noncompliance is not being able to be in business” - Jason Klaskin
trying to figure out what is compliant and what’s not,” he says. “This was one of the biggest factors in making the decision to join a mortgage bank.” Scott Gordon, CEO of Open Mortgage, says his background as a software engineer helped him see the importance of compliance early in his business. It’s difficult to imagine how an independent person could keep up with changes, he says. “When I got into mortgage 12 years ago, I just assumed we would get shut down if we weren’t compliant, which is the case now,” he says. “That paranoia allowed us to live through a lot of the bad years they shut a lot of companies down.” And in terms of compliance with HUD, relations couldn’t be better, says Gordon – whose branch recently went through an HUD audit. “It went quickly and the report was good,” he says. “It’s nice when you can have a happy relationship with HUD.”
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SPECIAL REPORT / BRANCHES
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3. AUTONOMY WITH SUPPORT Running your own mortgage origination business can be extremely rewarding, but going it solo doesn’t come without its challenges. Many mortgage professionals who have gone down the branch route have found they have discovered the perfect mix of the ability to feel like they’re running their own business – but with all the support of a large entity. For the most part, the branch managers interviewed by MPA explained they could have the freedom they needed to feel as though they were operating their own business, but also obtain necessary support when they needed it. Many managers came from either brokerages or banks offering either too much or too little space for movement. The structure braches provided seemed to be a good fit for those who needed a bit of structure, but could still maintain their entrepreneurial spirit. Take Helen Ivatorov, branch manager for Residential Home Funding Corporation in Brooklyn, New York, for example. After being in the accounting world for many years, she wanted to take an “entrepreneurial path”. She started as a loan officer on the side, but has worked as a branch manager for several companies. Finally, she says, she has found one that matched her own ethics, values, and idea of professionalism – all of which are the values that draw her to any organization. “Every branch network is different,” she says. Sometimes you are alone, and sometimes your support is one call away. What Ivatorov benefits from now, she says, is being affiliated with a company that offers training orientations and live webinars, as well as human resources and ongoing education. Sean Rogerson of Equity Loans in Connecticut adds, in his case, he finds the relationship with his organization allows him to “fine tune” his business. Under his company’s current business model, he says, he is able to originate loans that fit in with
“ Corporate is not telling me to make ‘x’ dollars on every deal. When I do deals, they are determined at the branch level” - Sean Rogerson
the direction his branch is taking, not just the company. “Corporate is not telling me to make ‘x’ dollars on every deal,” he says. “When I do deals, they are determined at the branch level.” And there are financial benefits too. According to a former bank loan originator, who chose not to be named, the branch model tends to pay out more than the bank originator model does. He says, typically, bank originators cannot negotiate compensation plans but branch loan officers can. At the same time, bank loan originators cannot earn referral fees, but branch employees can. Another benefit of the corporate culture is branch staff are also treated as full-time employees – often receiving benefits, 401ks, and bonuses.
4. TECHNOLOGY, SOFTWARE AND CRM SUPPORT Staying in touch with the latest technological advances can be crucial to mortgage origination success. However, this can be a costly and complicated affair. For originators making the most of the branch system, having access to corporate infrastructure for technology, software and CRM support needs can drastically improve efficiency and productivity. Mortgage professionals are no different from those in other industries: they want to keep up with advancing technology. As Open Mortgage CEO Scott Gordon notes, this hasn’t always been the case in the mortgage origination game. “10 years ago, there was little mortgage technology,” he says. But now there are countless mortgage CRM systems that help loan originators capitalize on relationships with clients, prospects and referral partners. When it comes to the way in which branches approach the issue, managers say there are benefits to having a streamlined platform throughout the company – as well as branches having flexibility in the technology they utilize. Take Jason Klaskin, branch manager at Academy Mortgage in Pennsylvania, for example. He notes most people in the mortgage industry now are fairly tech savvy and, in his case, the corporate IT support on offer fits perfectly with the way he runs his branch. “We know just enough to get ourselves in trouble, so it’s nice to have an IT department to call up and get help on anything and get it resolved quickly,” Klaskin says. Technology can also help a company stay in better contact with their clients, says Richard Romano, vice president of regional sales for Guaranteed Rate in Boca Raton, Florida. “Our technology is always helping make us more efficient,” Romano says, adding most consumers love the company’s platform, which allows loan processors to stay connected with consumers at all times. The advantage of this platform, he explains,
is consumers can take a proactive role in keeping up with their loan application status. Gordon, who has a background in software engineering, enjoyed building marketing and client database tools, then adding a web-based platform. “We can make it be whatever we want,” he says. “We brought closing, shipping and funding inhouse. It took us months to write page and code, but now when we are closing loans we manage it all ourselves. When we discover a change we want or an idea, we can just do it, we don’t have to contract it out.” Technology support extends to social media platforms, says Gordon, who notes his company has reinvented their marketing strategy in the past two years, due to the growing importance of social media to the business world. “A lot of loan officers aren’t necessarily forward thinking about how to get into social media,” Gordon says, adding Open Mortgage provides a platform its affiliated loan officers can use to support their presence on Linked In, Facebook and Twitter.
“ Our technology is always helping to make us more efficient” - Richard Romano
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SPECIAL REPORT / BRANCHES
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5. MARKETING AND BRAND AWARENESS Getting your name out there as a mortgage originator is a major challenge. After all, the amount of leads an originator can generate has a direct correlation with his or her success or failure. Having access to corporate marketing support, therefore, as well as working under a brand that’s already known to consumers, is another benefit of running a branch. The question of how to best present yourself to your market and become known in your community is an important one for independent shops and branches alike. Marketing support for branches can vary widely, depending on the overall company strategy. For those companies relying heavily on online sales, some companies offer operate a ‘top-down’ approach, applying specific strategies and campaigns to their branches. Others can adopt a more ‘bottom-up’ approach, allowing branches to do their own marketing. This arrangement gives branches the flexibility to market specific products, or to specific people and regions. “We’ve seen a big change in the past couple years,” says Scott Gordon, CEO of Open Mortgage. “We still have branches that came to us and want to use their own name, but we have less and less who want to do that.” Gordon says there is more interest in assuming the name of a nationally recognized brand because of the benefits of working under a known, established name – as well as the ready-made specials corporate provides to each branch. “I started out saying ‘I’m not going to tell loan officers how to market, they know what works,’ but over the years, I’ve learned a lot of them are not good at marketing on their own,” Gordon explains. Open Mortgage’s marketing team presents an annual calendar of specials branches can take advantage of at no cost to themselves, Gordon says. If the company decides to offer a special or a credit, corporate will take that as a loss, meaning the branch can reap the benefits of offering the specials
and attracting clients without having to absorb the associated costs. At the time of interview, for example, Gordon’s organization was offering a special for those who serve the community, such as teachers, police and firemen, “so a loan officer can go to the police department or to a school and already have marketing material that allows them to stand out and network”. And in this day and age, corporate also recognizes the importance of social media. Open Mortgage, for example, creates syndicated marketing content to be published on its loan officer’s own blogs. Because these blogs are included under Open Mortgage’s network of blogs, the loan officers get better search engine optimization (SEO) than an independent originator might, Gordon says. In other words, the chances of their blog being ranked highly in internet searches can be increased by using the Open Mortgage platform. What syndicated blog content also creates is corporate oversight of social media marketing content. And this is a major benefit, says Jason Klaskin, district manager for Academy Mortgage in Pennsylvania. Not only does it get crucial messages across to clients, it also eliminates the possibility of a loan officer saying the wrong thing in the blogosphere. “Nothing will get you in hot water more than inappropriate marketing material, so you want support so you don’t say or do something that will get you in trouble,” Klaskin says. He adds, being part of a known brand is also important and, in his case, the support he received from Academy in creating brand awareness was vital. Since Academy is not concentrated on the east coast, Klaskin had to start from scratch in establishing the brand’s presence in the area, but the corporate assistance offered to him in getting the Academy name out there to clients, borrowers, realtors and recruiters was key to building the business.
BRANCH NETWORKS BY THE NUMBERS COMPANY
NO. OF BRANCHES
Residential Finance Corporation
IMPORTANCE RANKINGS RANK
Underwriting/processing support, and turn time speed
Technology, software and CRM support
Autonomy with support
WHAT TO LOOK FOR IN A BRANCH MODEL Sean Clark, vice president, Advisors Mortgage Group, offers his top tips. CULTURE: Our number one selling point is corporate culture. No one wants to get lost in a corporate world. We also know every single one of our branch managers and originators. Our motto is big bank capabilities without big bank issues. Look for somewhere you aren’t just going to be a number. STABILITY: Have they changed their name three times in the past few years? Have they had to reinvent themselves multiple times? Look for a stable company you know will survive anything. Advisors has been here 14 years, we survived the worst of it. COMMUNICATION: It’s king in the mortgage world. If you can’t get a hold of someone at corporate or you can’t get anyone on the phone, what is the point of being part of their network?
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SPECIAL REPORT / BRANCHES
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6. TRAINING AND EDUCATION Nowadays, ongoing training and education simply isn’t an optional element of being a successful mortgage originator. As well as staying on top of regulatory requirements and fulfilling obligatory education criteria, today’s top originators take professional development as essential. In this respect, having access to continuing companyprovided education you would otherwise have to seek out yourself as an independent originator is one major benefit of running a branch. When it comes to training and education, the benefits are twofold, says Helen Ivatorov, branch manager at Residential Home Funding in Brooklyn, New York. Being up to speed with the latest requirements provides a form of protection for loan officers, she says, but ongoing training is also what keeps them at the “top of their game.” Like marketing, some organizations will offer regular training and some will not, depending on how structured they want branches to be. There will always be some type of orientation, but continued education can differ greatly. More often than not, however, the amount of education that can be gained by following the branch path is higher than originators would receive by going it alone. “Our corporate office provides support and training webinars two to three times a month,” says Scott Schang, branch manager of Broadview Mortgage in Orange, California. “This is incredibly helpful for catching everyone up to speed with new programs, guideline changes or upcoming events that may affect the way we do business.” It’s easy to put off continued education, so having reminders, material and the ability to get it done is crucial, says Jason Klaskin, branch manager for Academy Mortgage in Pennsylvania. “Independent folks don’t know what they don’t know,” he says. “Having the interaction to be able to make sure you are staying in compliance with you education is important. “How many people do their continuing edu-
“ Our corporate office provides support and training webinars two to three times a month” - Scott Schang
cation the last week it’s due?” Scott Gordon, CEO of Open Mortgage, chooses trainers with unique backgrounds to make sure his staff receives diverse training. Their sales manager, for example, does not come from the mortgage industry. “When he is training with branches, it’s not the same old rut,” Gordon says. “He doesn’t get into how do you do a mortgage. “He’s focused on pro sales techniques, which is something many people never professionally studied.” There are also cost considerations to bear in mind when looking at independent training courses, he says. A one-day course could cost an originator $299, argues Gordon. Alternatively, they could take the branch route and have the backing of a team behind that wants to teach them, see them grow and see them perform better.
AUGUST 2013 | 25
PROFILE/ ALLYSON KRECYIK
STAR Allyson Kreycik has had a good year. She had a baby and became the seventh highest female originator in the country, with $164m in originations in 2012. She jumped ship from a failing mortgage business, joined Guaranteed Rate, a franchised mortgage banking company, and started a new life in Boston.
Where did you begin your career in the mortgage industry? A. I started in 2002, as an assistant to a high-producing loan officer. I moved to Boston, not knowing anyone, and I learned the industry by being thrown in the fire. Business was busy, and I learned by taking applications and putting the packages together. I did this for a few years. 26 | AUGUST 2013
“I learned the industry by being thrown in the fire.”
What was your next move? A. I started to do my own sales and, in 2007, I became a loan officer. I didn’t have much volume, so I worked for Wells Fargo in its new construction division. It was difficult to establish real estate agent referrals at that point because I was so new, so new construction seemed like the right fit. Plus, it was kind of an untapped market at the time. How did you get to Guaranteed Rate? A. I chose Guaranteed Rate last year because of its incredible condo department in Chicago. Guaranteed Rate is expert in condominiums and it has helped a great deal when we are trying to get condos approved by the GSEs. It would be very difficult to do [condominium lending] without it. Lenders just can’t get it done. Condo lending is always changing and Chicago knows how to structure its documents. How is its model different? A. Most banks take a loan, send it to a processor, which needs to meet the conditions of the underwriter, and then goes back to the processor for any missing conditions. It’s like a volleyball game. At the correspondent model, which has still been a challenge learning what real mortgage banking is, I have a team and my assistant processor, a mortgage consultant in-house… it never goes back to the processor, it goes to a coordinator and then underwriter for sign-off. The main idea is the process is always forward moving and everyone is under strict timelines. The only way I know how to describe it is a widget manufacturer, where if you put ’em in and put ’em in right, production is a smooth process. What are the biggest future challenges? A. The biggest current challenge in this market is shifting to a purchase market. Refinances have been a huge chunk of originators’ business and some won’t be doing any at all anymore, following huge rate rises. There will be irrational pricing on purchases in the market because there are originators out there that won’t be able to sustain the loss of refinances. Some will still do a deal they can’t make money on just to get the client. This could be a good thing, though, because it might signal they are on their
way out of the industry. We will also see interest rates continue to rise and FHA be a less viable option for consumers. It is also becoming a major challenge to get condo approvals from HUD. Sellers sometimes will drop out because of FHA’s slowness. What does the current mortgage market look like to you? A. Rates and supply are the two main factors right now. Over the past few years, demand has been pent-up, but there is still not enough supply in the market. I’m very optimistic, but both mortgage professionals and real estate agents have to do more work. They have to run pre-approvals on 10 or 20 buyers because it is difficult to get an offer accepted [since supply is so low].
TOP NEW CONSTRUCTION MARKETING TIPS As supply remains low, Kreycik suggests taking the following steps to get better referrals: Customize flyers: Do joint marketing campaigns with top referral partners in targeted neighborhoods. For example, having your name on flyers sent out by real estate agents (sell-side) to get the seller’s next home purchase referral. 1
2 Market to apartment complexes: Kreycik will send out post cards to people in certain areas where she is doing sales. For example, for a fashionable area near Fenway Park, she sent out postcards with pictures of the stadium and recent sales in the area. 3 Stay old-school: Do hand-written notes. Referrals all come back to the basic of sales. Kreycik doesn’t do any online or magazine advertising.
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FEATURE/ COMMERCIAL LENDING
THE COMMERCIAL LENDING
28 | AUGUST 2013
Commercial lenders took a hit during the recession, but the market is rebounding and can expect to see robust growth in the next few years. As long as lenders are able to navigate maturing loans and increased capital requirements, originators are set to be in the thick of the action. Kelli Rogers investigates.
Is the commercial lending industry due for a comeback? With declining delinquency rates, robust growth and new players entering the market the signs certainly point in that direction. Equity levels may have taken a hit during the financial crisis, but commercial lending is once again on the upswing, and industry professionals say they expect the growth to continue. “The industry has been gaining traction since 2010,” says Mary Davenport, executive vice president of Freedom Mortgage, which recently launched a commercial lending division in the $2m to $10m loan space. Jamie Woodwell, vice president of real estate research for the Mortgage Bankers Association (MBA), echoed this statement, noting there is
currently a strong appetite among lenders to lend money on commercial properties. “We saw $244bn last year and are anticipating about a 10% to 11% increase this year,” Woodwell said. “When you look across different investor groups – GSEs, banks, the CMBS market – really all of them, again, have a strong appetite to lend.” Commercial and infrastructure, or C&I, loans provide an important source of working capital for businesses to fund inventory and equipment, usually in the sectors of multifamily, office, retail, industrial and hotel. In some cases, commercial lending can take the form of a revolving line of credit a business can utilize to handle operational costs and other types of working capital needs. And, at other times, commercial lending will AUGUST 2013 | 29
FEATURE/ COMMERCIAL LENDING
“If a bank turns down a deal for any reason at all and the loan amount is below $3m, I’ll save the client three or four points and 5% on rate” - Joe Cowell, Velocity Commercial Capital
involve the extension of bank loans with a fixed or variable rate of interest and a set of terms. Banks, mutual companies, private lending institutions, hard money lenders and other financial groups all have stakes in the commercial lending game, though they have widely varying standards on how they base their loan criteria and evaluate potential borrowers.
PRIVATE MARKET Commercial loans are often focused exclusively on the private market and have more lenient financial qualifications than banks. This increased flexibility makes them more attractive for those deals that can’t be taken straight to a traditional financial institution, says Jon Hornick, president of Navesink River Capital. The flexibility, just as with hard money loans, usually comes with higher interest rates. “We perform the same loan functions as a bank, we just charge more,” Hornick says. But Joe Cowell, senior vice president of Velocity Commercial Capital, which funds deals between $100,000 and $3m, says this is just the position to be in. If someone can qualify at a bank, then they should head to the bank. Otherwise, they should find a commercial lender who can exercise their own discretion to make a deal. “Rates are higher than banks and lower than private equity,” he says. “We can get comfortable with a lot of borrower issues. Owner-occupied, self-employed, if a bank turns down a deal for any reason at all and the loan amount is below $3m, I’ll save the client three or four points and 5% on rate.” Rates can vary from 3.5% to 6.5% depending on floating or fixed and the term of the loan, whether five, seven, 10 or 30 years. 30 | AUGUST 2013
The small balance space has been troubled over the past few years, Cowell says. With banks limited to the origin they can take on, Velocity has stepped in and is facilitating a lot of pent-up demand.
MULTIFAMILY ON THE UP That demand, says Cowell, is mainly in multifamily, which is seeing a huge comeback. The multifamily market has heated up due to a decline in overall homeownership rates following the financial crisis, according to Fitch Ratings, though this growth has been offset by a decrease in office and retail property loans. While Cowell and other portfolio lenders fill the niche of smaller commercial loans, big banks are posting big gains in C&I. Bank of America reported $209bn in C&I loans at the end of March for a 24% gain from year-ago levels, according to FDIC data. The bank is the number one C&I lender, followed by Wells Fargo at $149bn, JPMorgan Chase at $136bn and Citigroup at $134bn, FDIC data shows. This surge in C&I loan growth and fewer restrictions worried some top Federal Reserve officials during this spring’s Federal Open Market Committee meeting, where a few Fed policymakers expressed concern conditions in certain US
COMMERCIAL LENDING CHALLENGES Some properties may still be “over-levered” in the context of current maximum loan to value ratios, so refinancing upcoming balloon maturities presents a challenge if property owners do not have additional capital to contribute to the loan balance payoff deficiency.
While the large volume of loan workouts has been reduced since the height of the crisis, there remains a backlog of these negotiations that need to work their way through the resolution process.
Increased capital requirements for commercial lending activities may contribute to continued tighter credit availability in some sectors of the industry.
Source: Mary Davenport, Freedom Mortgage
AUGUST 2013 | 31
FEATURE/ COMMERCIAL LENDING
“We saw $244 billion last year and are anticipating about a 10 to 11% increase this year” - Jamie Woodwell, Mortgage Bankers Association
financial markets were becoming too buoyant; a survey of senior lending officers revealed a greater percentage of banks easing standards and reducing spreads on C&I loans to firms of all sizes. “We expect deterioration from the currently low levels of delinquent and noncurrent C&I loans and reversion to higher historical averages,” says analysts at Fitch Ratings, in a recent research note. But delinquency and charge-off rates remain well below historical levels, Woodwell says. “Commercial and multifamily mortgage performance continues to improve,” he says. “The improving economy and property fundamentals are supporting loan payments and fewer loans are maturing this year than did last year or the year before. With interest rates still low, property
incomes improving and property values on the rise, those loans that are maturing are facing an easier environment in which to refinance.”
COMMERCIAL PRICES DOWN Though values are coming back from the trough of the great recession, nationwide commercial real estate prices are still about 20% down from the levels they were in 2006 and 2007, Woodwell says. “With low interest rates in general, lenders are looking to commercial mortgages as a good solid place to put money and get a return,” he says. With competition in the market, lenders must make choices between the risks and rewards they’re willing to take on. And, as competition heats up, Hornick says originators play an extremely important role in bringing in business. “I rely on good relationships with brokers to bring solid deals,” Hornick says. Davenport of Freedom Mortgage agrees, saying Freedom appreciates and wants to build originator relationships. “This type of lending is a distinct broker network, which makes it a core component of our business,” she says. There are several things originators should keep in mind when bringing deals, she says. It’s important they understand exactly what the
RECENT LOANS FUNDED BY VELOCITY COMMERCIAL CAPITAL
32 | AUGUST 2013
SUBJECT PROPERTY CITY
SUBJECT PROPERTY STATE
ORIGINATION % TO BROKER
AUGUST 2013 | 33
FEATURE/ COMMERCIAL LENDING
LENDER SHARE OF MULTIFAMILY MORTGAGE DEBT
US and foreign banks
Sources: American Banker/Federal Reserve, Trepp LLC
collateral of the property is and what their borrower’s expectations are as well as what they are trying to accomplish. “You have to make sure you understand if the property is in transition or a short-term type of hold for a particular owner of a property,” Davenport says. “A long-term fixed rate isn’t necessarily the best execution in all cases.” Velocity also works with a nationwide mix of mortgage originators. Once they have signed an agreement and provided license verification, it comes down to the quality of deals they bring, Cowell says, noting Velocity gets a good portion of business from originators with repeat customers.
BE PREPARED Pouyan Broukhim, president and CEO of PB Financial Group Corporation, which issues loans in the $250,000 to $5m range, also says he does the majority of his business with originators, but recommends they check submission requirements online in order to come to the table prepared. “Brokers who like to bring us their loans to close quickly should know we are very hands on with our commitments,” Broukhim says. “Once we make a commitment, we like to close the loan within seven to 10 business days. Calling or emailing us with a full scenario is the best option.”
34 | AUGUST 2013
On average, originators can collect between one and two points, Cowell says, which is typical of the industry. And opportunities abound, Davenport says, noting Freedom Mortgage is projecting exciting growth 12, 24 and 36 months down the road for their new division, as commercial markets in general have clearly been very active across the board in all property types. In its second annual forecast of the commercial/ multifamily real estate finance markets, the MBA projected originations of commercial and multifamily mortgages will grow to $254bn in 2013, an increase of 11% from 2012 volumes, and continue to rise to $289bn in 2015. Originations of multifamily mortgages are forecast at $100bn in 2013. As for the next few years, Davenport says the overall biggest impact on all areas of lending is going to be the slowing and elimination of QE. “Interest rates may rise somewhat with the proposed elimination of the government buying program, which has been supporting the markets,” she says. “Once that is waning down, the markets will likely go back into supply and demand mode and stabilize on their own.” But that doesn’t mean industry professionals expect a slowing in demand. “We expect to see more competition in the first quarter of 2014,” Cowell says. “Demand is definitely up.”
BIG BANKS POST C&I GAINS IN Q1 Bank of America
Wells Fargo JPMorgan Chase Citigroup
$209 billion $149 billion $136 billion $134 billion Source: FDIC
COMMERCIAL PROPERTY PRICE MOVEMENTS 250.00
Source: Moody’s/RCA CPPI – Composite Indices. Printed with permission.
AUGUST 2013 | 35
PROFILE/ BRETT MILLS
GOOD FOR BUSINESS Brett Mills stepped outside the world he knew – one driven by numbers, competition and ego – and into a small village in Guatemala. Today, he says the lessons he learned from the welcoming people he encountered there have inspired the balanced way he runs his branch and what he looks for in new employees Brett Mills couldn’t have foreseen that beginning his career in the mortgage industry in 1998 would lead him to pulling children’s teeth in Central America in 2012. But that’s just what he was doing last year in a small village in Guatemala as part of Academy Mortgage’s yearly service trip for its elite producers. Mills, who previously owned his own brokerage, joined Academy in 2002 and currently works as a branch manager and senior loan officer in Utah. Recognized as one of the top 14 loan officers in the nation over the past several years, Mills has a passion for helping consumers achieve their financial goals and obtain financial peace. He also has a passion for humanitarian work, as he demonstrated during Academy’s week-long service trip, where employees helped dig trenches and aid a local dentistry in pulling children’s wisdom teeth. At Academy, the hard work to achieve ‘President’s Club’ status – which translates to $20m 36 | AUGUST 2013
in purchase business or $40m in total volume – is rewarded not with a plush resort stay in a tropical locale, but with a week of challenging manual labor in a developing country. And, according to Mills, the latter is preferred. “That’s the trip to be on,” Mills says. “That’s what we’re fighting for. We’re going to go sit in tents in a village and be hot and dirty and sweaty. We literally give the shirts off our backs, and it’s so rewarding.”
CORPORATE RESPONSIBILITY The trip is part of Academy’s extensive corporate social responsibility model, which involves local activities as well as international volunteer expeditions. In Guatemala, suddenly the fact that Mills is the only certified mortgage lender with a Masters of Business Administration with an emphasis on finance in the western US mattered less than whether he was willing to pick up a pick axe and get to work digging a trench.
“It creates a whole different culture among people in President’s Club because we end up having different discussions on what matters – in our careers and in our families” JULY 2013 | 37
PROFILE/ BRETT MILLS
“Everything that we are often battling for in the business world goes away and we can see the daily necessities of life,” Mills shares. “It creates a whole different culture among people in President’s Club because we end up having different discussions on what matters – what matters in our careers and in our families.” Mills and other members of the club spent a week clearing ground and moving rocks to lay pipe for a new system that would bring fresh mountain spring water to the village of Secanquin, working side by side with men of the village. The volunteers also aided a local clinic that offered much-needed dentistry work for residents near and far with tooth issues. Mills himself pulled 30 or 40 teeth in one day. He says the trip helped break down barriers between Academy colleagues, a hard thing to do in a world driven by competition. “We all have pretty big egos,” he says of Academy’s top producers. “We are all ranked in the top 200 producers in the nation. We are pretty selfcentered and focused on our business. But in Guatemala, we could forget where we were, what day of the week it was … we had no phone or internet access, the outside world was shut off.” Back in the business world, he says the group is now more comfortable with sharing advice and tips with each other rather than seeing one another as strictly competition. “It’s a whole different culture,” he explains.
CREATING BALANCE Mills says lessons learned in Guatemala have definitely manifested in the workplace at his branch
38 | AUGUST 2013
“I want my employees to go home; I want them to have a happy home life, which will only mean they provide a better experience for our customers” as well. Always an advocate for balancing life and family, he says the experience reemphasized those practical lessons. “I want my employees to go home; I want them to have a happy home life, which will only mean they provide a better experience for our customers. I learned that from the Guatemalans: when it was time to work, we worked hard, but every night it was about family and relaxing.” Aside from personal lessons, Academy as a whole sees concrete results from giving back. Its total funded volume increased from $3.5bn in 2010 to $4.6bn in 2012 after the formal addition of a corporate social responsibility program, and total units closed increased from 20,073 in 2010 to 25,939 in 2012. Mills says Academy’s focus on giving back also serves as a great filter when searching for new talent, and has even attracted top producers. “I interview people all the time, and one of the gauges I use now is whether someone is intrigued by our culture. When they are just ‘me me me’, I can tell they aren’t going to be a good fit.” Mills is looking forward to visiting Naivasha, Kenya, the site of Academy’s 2013 service trip.
MILLS’ TOP TIPS FOR SUCCESS n We are in a
relationship business: Just as in a marriage or friendship, relationships are strengthened by serving each other and being genuinely engaged in others’ lives. Find ways to build relationships and stay dedicated to building the relationship with realtors, builders and clients. n Set realistic expectations so you can outperform them: I see too many loan officers promise clients, realtors and builders commitments that are unrealistic in hopes that it will open the door for them. You are guaranteed to have your last transaction from the referral source when you do not hit the unrealistic expectation. n Be the expert: Earl Nightingale often stated the experts in their fields will write their own tickets to success. I believe that. Know how the business was started, why laws have been created, how mortgages are securitized, why products were created, etc... the more you know the more your value will be sought out.
JULY 2013 | 39
FEATURE/ MORTGAGE INSURANCE
A CHANGING LANDSCAPE
40 | AUGUST 2013
As the FHA scales back its presence in the mortgage insurance market, private players are entering the fray. What does this mean for originators and their clients? Diana Aqra investigates. Back in 2011, the FHA signaled it would begin scaling-back its mortgage insurance volumes, claiming that they were no longer sustainable. Evidence for the unsustainability of its mortgage insurance presence came just months later when, in 2012, the FHA reported that its Mutual Mortgage Insurance Fund – the fund used for the FHA singlefamily programs – was essentially bankrupt. As of December 2012, the fund was at -1.44% with an economic value of -16.3bn, according to FHA figures. Between 2007 and 2009, the fund owed approximately $70bn in FHA insurance claims alone. The FHA estimated that it would need to draw nearly $700m in assistance from the US Treasury to cover its expected obligations. Drastic changes were needed, and came in the form of raising annual premiums (which have now risen five times in the last four years), and raising down-payment requirements for borrowers with
lower credit and larger loan balances (see the ‘FHA loan programs tightening actions’box). With the FHA having explicitly stated that it could continue to tighten its requirements and raise premiums if necessary in order to save the fund, the mortgage insurance market appears to be going through a seismic shift.
CHANGE AHEAD One of the most important changes the FHA has made recently refers to its mortgage insurance cancellation policy. Beginning June 3, 2013, certain FHA-insured mortgages will no longer offer the mortgagee the option of cancelling mortgage insurance for the life of the loan – regardless of the loan’s LTV. Historically, mortgage insurance dropped off once the loan reached 78% LTV. But now, for any AUGUST 2013 | 41
FEATURE/ MORTGAGE INSURANCE
loans that start their life with an LTV of between 78% and 90%, insurance will remain in place for 11 years – regardless of whether the LTV eventually drops below the 78% mark. What’s more, for loans that start out with an LTV of more than 78%, mortgage insurance premiums will remain in place for the entire life of the loan, regardless of any changes to the loan’s LTV that take place during its lifetime.
FHA LOAN PROGRAMS TIGHTENING ACTIONS Changes effective April 18, 2011
Loans with 15-year term or more - Annual mortgage insurance premium (MIP) increased from 90bps to 115 bps for loans with 95% LTV or higher Loans with 15-year or less term - MIP increased from 25bps to 50bps for loans with 90% LTV or greater.
Effective April 9, 2012
Loans with 15-year term or more - MIP increases to 125bps for loans with 95% LTV or greater. - MIP increases to 120bps for loans with 95% LTV or less. Loans with 15-year or less term - MIP increased to 10bps to 60bps for loans 90% and higher. - MIP increased 10bps to 35pbs for loans with 78% - 90% LTV or higher. - MIP increased 25bps for loans above 15-year term and exceeding US $625,000 to 150bps. - Minimum down-payment increases from 3.5% to 5% for loans exceeding US 625,000.
Effective June 3, 2013
MIP Cancellation policy changed - For loans that have between 78% and 90% LTV, MIP can be cancelled in 11 years, whereas previously it could be cancelled at 78%. - For loans that have greater than 90% LTV, MIP cannot be cancelled for the entire loan term, whereas previously it could be cancelled at 78%. Source: Housing and Urban Development. List not inclusive of all changes.
42 | AUGUST 2013
These changes make the FHA mortgage insurance option far less appealing to consumers than it once was, especially when compared to private options that don’t require insurance on loans with LTVs below 80%. The long-term cost to the consumer of taking on an FHA mortgage insurance premium has increased dramatically, and the homebuyers that are most affected are the oneswho are struggling to amass a down-payment sufficient to take their loan out of mortgage insurance territory. With the changes to FHA mortgage insurance premiums representing one of its most important moves in recent years, discussion has ramped up surrounding the comeback of private mortgage insurers who are expected to fill the void as FHA steps back.
THE PRIVATE PLAYERS Many mortgage insurers were swept away following the financial crisis after having to carry the financial burden of paying out on an increasing number of defaulted mortgages. Lenders strongly pursued mortgage insurance companies to foot the bill on the piles of mortgage defaults that were mounting up on their books. Private insurers were required to cover approximately 20% to 30% of the defaulted loans’ losses. Given the scale of defaults that took place during the financial crisis, many private mortgage insurers were eventually put out of business. However, some private mortgage insurers battled through the crisis and remain in operation to this day. Radian Guaranty has become the top private mortgage insurer in the US, with roughly 30% of the private insurance market, while United
PRIVATE MORTGAGE INSURANCE MARKET SHARE (END OF 2011) 1.7% 15.9% 21.1%
5.03% 30% 25.3%
Radian Guaranty Inc
Mortgage Guaranty Insurance Corp
United Guaranty Corp
Republic Mortgage Insurance Co
AUGUST 2013 | 43
FEATURE/ MORTGAGE INSURANCE
FHA LOSES OUT Analysis of the numbers indicates that the government is expected to lose money on FHA-insured loans that were issued in the years surrounding the financial crisis. The latest estimated credit subsidy rates for these loans, as laid out by the Congressional Research Service (CRS ) are shown below. Estimated subsidy rates that are in negative territory are expected to make money for the government. Those in positive territory are expected to lose money for the government. 1992 1993
THE PROBLEM FOR ORIGINATORS
2009 2010 2011
1.07 -1.28 -4.53 Expected to make money for the government
Expected to lose money for the government
Source: CRS. Based on Office of Management and Budget figures.
Guaranty (an arm of AIG Corporation), Mortgage Guaranty Insurance Corp. (MGIC), and Genworth Financial are also big players in the private mortgage insurance market.
PRICING Private mortgage insurers base rates on downpayment and credit score. Radian, for example, has a minimum 620 credit score and 5% down for any type of private mortgage insurance, while conventional loans require a 680 credit score. That leaves borrowers with a score lower than 620 no options except FHA, according to Chad Melin, branch manager for Academy Mortgage in Chandler, Arizona. “They will be stuck with the high monthly 44 | AUGUST 2013
premium rates for the life of the loan, under the newest changes, which they will eventually want to escape from,” he says. For borrowers who do meet private mortgage insurance requirements, the monthly insurance premium is directly tiered based on credit score and down-payment. For example, a borrower with a 759 credit score who put 15% down would pay approximately 0.59% annually, or $1,180, for a house that costs $200,000.
In general, pricing is very similar nowadays across the main mortgage insurance companies, so lenders are looking at criteria such as financial strength and claims-paying ability when it comes to choosing their preferred provider. Mortgage insurers that are struggling for capital are less likely to pay out on mortgage insurance claims, which will increase the likelihood of an investor triggering a mortgage buy-back, says Clem Ziroli, president of First Mortgage Corporation in Ontario, California. An aggregator would then have the right to pursue the originator who used that private mortgage insurance company. As a correspondent investor, Ziroli said he was hurt considerably when Fannie Mae, Freddie Mac and other investors began making massive buyback requests from originators. Ziroli said he would either have to buy back the loan himself, or go after the correspondent that orginated the loan, costing him a considerable amount of time and money. What this means, says Ziroli, is that mortgage insurance companies must again earn the trust of originators. He claims that, during the financial crisis, mortgage insurers tried to “waffle out” of paying out to lenders on mortgage insurance claims because they were on the verge of heading out of business What mortgage originators should do now, he says, is look at a private mortgage insurer’s capital backing and claims history to evaluate whether it’s worth “giving them a second shot.” Another issue to be aware of, says Radian Guaranty spokesperson Emily Riley, is that, while most of the time the larger lenders and investors choose a mortgage insurer on an annual basis, originators are required to offer different preferred options to their customers.
KEEPING IT SIMPLE The mortgage insurance landscape is very
FHA MARKET MOVEMENTS The US government has played a huge part in reviving the housing and mortgage markets throughout the financial crisis. In 2008, it bailed out both the mortgage giants, Fannie Mae and Freddie Mac, for $187bn. The Fed began aggressive mortgage bond purchasing programs and created special conduits to purchase distressed mortgage-backed securities from troubled companies. Most importantly, the government strengthened the FHA’s role in supporting affordable home financing. The FHA’s book of business has grown substantially since the financial crisis. According to Housing and Urban Development figures, in 2004 the FHA’s book sat at $84.1bn, or about 3% of the total originations market. In 2009 the FHA’s book went on to peak at $357.5bn, or about 18% of total originations. By 2012 the FHA had dropped its origination value to approximately $227bn, or approximately 12% of all originations. But the era of government-backed mortgages is far from over. The US continues to directly guarantee or back roughly 90% of all mortgages. FHA ORIGINATIONS 400
competitive, but “that keeps us energized,” says Vance Edwards, marketing manager with Mortgage Guaranty Insurance Corp. (MGIC), and both he and Riley explain that their companies have vast sales forces that go out to originators to advocate for their products. In the case of MGIC, says Edwards, it relies primarily on its national sales force to be local experts to loan officers in their market. “The main thing we sell is getting MI from the company they know and trust,” says Edwards. “Secondly, we try to make it simple. The last thing loan officers want is for MI to be complicated.” In that regard, private mortgage insurance companies will have a clear understanding of investors’ underwriting guidelines that makes it easy to line up options for mortgage originators, he explains. Training is also on offer to help loan officers to deal with complicated problems, such as the tax return requirements of self-employed customers, and appraisal issues.
350 300 250 200 150 100 50 0
2012 Source: FHA
AUGUST 2013 | 45
BUSINESS STRATEGY / MOTIVATION
WHEN THE GOING Ensuring your team stays productive when the pressure’s on can be a challenge for any manager. Leanne Faraday-Brash highlights nine ways to keep your people motivated
In the space of three days, the unthinkable happened. I read that China’s annual economic growth had slowed to 7.7%. Goldman Sachs was quick to point out the market must shed expectations continued double-digit growth could be sustained. Then, after digesting that one, I was sent reeling again when Apple reported its first profit decline in a decade. As someone who’s mad for an allegory, it got me thinking about those individuals and teams who sustain extraordinary performance for an extended period, so much so that the unexpected is what we come to expect. What pressure is there on a manager and team members when the extraordinary becomes ordinary? How do you continue to inspire and how do you keep your staff’s hunger burning without burning out yourself in the process? In the course of a typical working week, I found that four separate clients were puzzling over this same issue in very different contexts and which they described in very different ways (see box page 46). In all these situations, an almost idyllic past has been replaced by a fraught, stressful state of play that requires balancing the needs of the team with the needs of the organization, and the needs of the team with the needs of the individual.
HOW TO KEEP A TEAM ON TRACK The most critical balance to strike is between relationship and outcomes. If we’re too soft on relationships, teams can run amok. If we’re too hard on relationships and only serve profits, targets, senior management and our own careers, we will have a target on our backs long after any problems have abated. As a leader of people, you have a responsibility to strike this balance effectively. These nine strategies will help you manage your people effectively 46 | AUGUST 2013
GETS TOUGH… and keep their momentum heading in the right direction. Communication is critical. If you are asking the team to shift gears, make sure you spend more time on the why than the what. The former is more likely to be heard as inspirational, while the latter will be viewed as transactional. You will also need to be more accessible and visible, as your team will resent and disrespect any hint of abandonment.
Be honest when you’re asking a lot from them. They know it, but need to know you know it so they can feel less exploited.
Be compassionate, but don’t let anyone get away with murder. Don’t let anyone jeopardise good culture because they’re bringing home the bacon. That’s how we create vulture cultures that ravage the organisation.
Don’t get sucked into doing other people’s jobs for them. Resist the temptation to do so, and take every opportunity to coach your people. Astute managers have worked out it is more sustainable and impactful to get everyone to do 5% more than for you to do 60% more on your own. Besides, stepping in or stepping on your people can result in one of two untenable outcomes: either communicating a lack of trust that stifles initiative and innovation, or allowing the lazy to take a leisurely ride on a titanium road bike while you wear yourself out running alongside them.
Distinguish between those who want to and can’t right now, and those who can but won’t. The former deserve our compassion; the latter, an enunciation of potential consequences. I am not suggesting we ever become threatening or punitive for its own sake, but individuals who are not living up to the team code need to understand this is not acceptable. Ensure they see the line in the sand you’ve drawn before you
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BUSINESS STRATEGY / MOTIVATION
Leanne Faraday-Brash is an organisational psychologist and principal of Brash Consulting. She is the author of Vulture Cultures: How to Stop Them Ravaging your Performance, People, Profit and Public Image.
ever penalise them. Set them up to win, but penalty box them if they refuse to take the field or play dirty.
stressed if you walk in the door and someone says, “Oh, it’s you.”
Don’t be too proud to bring in reinforcements. Unless you have advanced training in mental health first aid (and even if you do), don’t give struggling employees gratuitous advice, or tell them they should be at home when perhaps only work is getting them up in the morning, or pretend you have the answers or know how they feel. Let those who aren’t coping tell you what support they need and defer to expertise while checking in with your staff tactfully, discreetly and often.
Adopt a stable yet flexible style. Too many of us lurch from a relaxed management style (aka team neglect) to authoritarian when people “take advantage of our good nature”. Sometimes we lash out with exaggerated intensity because we got told off for seemingly letting the lunatics take over the asylum. The professional embarrassment alone may make us want to pay out on team members when, in effect, we were asleep at the wheel and blamed the tree when we crashed.
Put on your oxygen mask first. Don’t be selfish, but don’t assume you must be selfless. Martyrdom isn’t attractive and is often self-serving anyway. This is a time to take care of yourself. Opt for peer support over beer support, get a coach, have a confidant, and don’t ruin your relationships at home or become sick with guilt because you gave your life to the workplace and your kids don’t recognize you any more. Unless you really want to travel incognito, you’ll only get more
Finally, don’t get too bogged down in the day-to-day. You’ll miss the bigger picture. This might be convenient and less confronting but not helpful to you or your team. If you’re a people manager, the best you can do for all concerned is to embrace the role and truly manage your people. Ensuring roles are clear and meaningful, expecting excellence, and providing compassion when required, balances what you want from your team and what your team needs from you.
WHEN THE STATUS QUO CHANGES Every team is different, and every stressful situation requires a different approach. How would you tackle these situations?
the smooth way in which the new recruit has masterfully made rain in a short space of time, but this one is truly a law unto himself.
THE CREATIVE COWBOYS
THE MARGIN SQUEEZE
Manager One is a full-blown creative and runs a loose confederation of creative cowboys (yes, they are all boys). They have enjoyed lots of trust and freedom for several years. Our manager’s issue is his team has become so accustomed to a permissive, supportive and encouraging regime of loose leadership that they’ve become entitled and precious. They haven’t adjusted to a more constrained fiscal environment. They pout and tantrum when told “we can’t afford this”, and now bicker with each other over whose project should be supported. The executive has said this team doesn’t want to be handled, and they forget they are part of a bigger organization. This manager is upset and disappointed that this mutually supportive team has morphed over time into a kindergarten cohort who now won’t share and are more likely to want to hit others over the heads with their buckets and spades when no one is looking.
Manager Three runs a tax team in a second-tier firm. The firm has always been profitable, but some of their clients are doing it hard. Margins are squeezed, bills are contested, write-offs are up, and two associates who left within weeks of each other have not been replaced. While the team is not traditionally known for oozing excitement out of every pore, the manager can see the beginnings of real disgruntlement and withdrawal. Some staff are quietly telling others they’re feeling vulnerable to layoffs. Others are resentful about workloads increasing but do the work anyway. Others are working to rule, having acquired a profound interest in watching the clock.
Manager Two runs the trading floor. She is used to mavericks and would peg herself as one. However, in the wake of several scandals in other organizations, she has always instilled some notion of the importance of boundaries in the team. While living on the edge of their authorities, they haven’t stepped over the line, until she hired her latest recruit; that is, a tiger that doesn’t want to be tamed. They all see the brilliance, the flair and
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Manager Four had a dream team, albeit a small one; cohesive, friendly, purposeful and focused. Regrettably, one supervisor separated from their life partner some five months ago. This took everyone by surprise as there had not been any hint of problems until it was blurted out at a team meeting. People didn’t know where to look or what to say. It’s obvious to all, even without clinical qualifications, that the supervisor’s mental health has been in steady decline since then, and the manager freely admits she’s out of her depth. The supervisor is barely functioning and the rest of team are having to make major allowances.
BUSINESS STRATEGY/ ETIQUETTE
MANNERS Business etiquette is still a vital consideration for 21st century originators, and the way you conduct yourself at work can have a huge effect on how successful you are, argues Nikki Heald
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MATTER Have you ever been in a business situation and witnessed an event that was so cringe-worthy, it left you saying “Really?” If so, think about the impression that behaviour left on you and the negative connotation attached to it. Perhaps you think the way you conduct yourself at work doesn’t really matter too much. Well, think again. Understanding correct etiquette (or protocols) not only provides you with an edge over competitors but influences whether or not you eventually make the sale. Your conduct can also mean the difference between whether you stand in line to receive a promotion or not. Savvy business people appreciate this and ensure they incorporate business etiquette into their daily interactions to ensure success. While the word ‘etiquette’ may seem out-ofdate or even old-fashioned, the simple fact is common courtesies still prevail. Etiquette is about respect, good manners, and good behavior. It is not just about one of these but is a combination of all of them rolled into one. Clients and colleagues have an expectation that you will conduct yourself professionally, civilly and appropriately. Bad manners leave an unfavorable impression, and this can be difficult to shake.
MAKE TIME FOR MANNERS Unfortunately, in today’s high-tech, fast-paced world, our belief may be that we are too busy or have more pressing things to do than practise correct protocol. Sending a simple ‘thank you’, replying on time, exchanging business cards correctly, and returning a call appear to have gone by the wayside.
Clients and colleagues have an expectation that you will conduct yourself professionally, civilly and appropriately Business etiquette tips Let others speak, and don’t monopolise conversations. No one appreciates a whinger, whiner or bragger. Stick to appropriate eye contact. Flirtatious and intimate glances may lead to trouble. Avoid getting intoxicated at business functions – it can be career limiting. No one likes a bone-crusher or wet fish. A firm, professional handshake will do. Avoid brandishing cutlery when speaking during a meal. Your companions may become scared of where it might end up.
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BUSINESS STRATEGY/ ETIQUETTE
You might assume manners are automatic or ingrained in us by the time we become adults, but that may not always be the case. Some do not place a high priority on implementing common courtesies. Of course, we all know we should use ‘please’ and ‘thank you’; however, people in the business world need to appreciate there’s more to business protocol than that. During the first few seconds of meeting someone, perceptions are formed, and first impressions can be long lasting. Presentation, body language, and behavior are critical as there’s only a small window of opportunity in which to impress. Do you have confidence and integrity? Are you friendly and self-assured? Are you capable and knowledgeable? Do you appear trustworthy and ethical? These are just some of the assumptions clients and colleagues will form about you.
Nikki Heald is a corporate trainer, presenter, businesswoman, founder of Corptraining, and co-author of Views on the Way to the Top.
Here are my to p correct busine 10 tips for ss protocol:
1. Deliver a well-
executed, firm handshake 2. Ensure you in troduce yourse lf and others 3. Be well groom ed and dress su itably for your ro le 4. Learn the art of conversatio n and small talk 5. Carry sufficie nt, clean-lookin g business card s 6. Be mindful of your table man ners
7. In business, if
you invite, you pay
8. Switch off mob 9. Keep emails sh 10. Avoid the ha rd
ile phones and
put them away in
ort and to the po int
-sell or being to o pushy
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Indeed, Sir Richard Branson in his book Losing My Virginity says, “I tend to make up my mind about people within 30 seconds of meeting them.” Interestingly, a lot of research has been conducted that supports Sir Richard’s proposition. Etiquette is also essential at work functions. From a management perspective, employees are professionally on display when they are networking, and attending client meetings and conferences. Senior managers often observe the way staff conduct themselves at these gatherings as behavior that may reveal their true character. In this day and age, many business functions are surrounded in social occasion; however, they are not a social event. For those seeking career progression, be mindful that work functions are strictly business and not the time to gain a reputation as the office stripper or party animal.
FROM WORKPLACE ETIQUETTE TO ‘NETIQUETTE’ What about workplace etiquette? Perhaps you have a team member who likes to shout across partitions, talk loudly on the phone, or constantly interrupt others. Alternatively, you might know of the serial CC’er – the team member who likes to copy all staff into their emails. Thankfully, such behaviors can be fine-tuned and refined. Professional conduct is by no means limited to face-to-face transactions but also extends to your online behavior or ‘netiquette’. The use of social media in business is ever-increasing, so knowing the correct rules in this arena is just as crucial. Websites, Twitter, blogs and LinkedIn are an extension of your brand, and again any content or comments must be appropriate. Unfortunately, most behavior perceived as disrespectful is actually unintentional, and the person who practised it didn’t quite understand the rules for that situation. I really believe most people don’t purposely set out to embarrass themselves or others. Implementing the correct rules for networking, client entertainment, meet and greet, handshaking and distributing business cards may seem a little daunting if you’re not sure what to do. However, the great news is business protocol can be learned and, with practice, will become second nature. Good manners cost nothing; however, the value comes in increased credibility, confidence, and, ultimately, your bottom line.
FASTEST-GROWING LARGE CITIES The speed of population growth in a city is a lead indicator of a potential increase in demand for its housing. Originators in these cities will be pleased to read, therefore, that they’ve made the US Census Bureau’s list of fastest growing ‘large cities’. Those cities that qualified as ‘large cities’ had to have a population of at least 50,000. Texas dominates the list, containing eight of the top 15 cities that make the grade as well as the fastest grower – Sam Marcos city. Utah, Tennessee, Georgia, California, Arizona, Alabama and Kansas are the other states that feature in the list.
San Marcos city
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South Jordan city
Cedar Park city
Clarksville city 142,519 4.43%
Conroe city 61,533 4.01%
MPAMAG.COM Source for all graphics: US Census Bureau, population division, vintage 2012 population estimates. Released May 2013
LARGEST POPULATION INCREASES In terms of sheer numbers, the list of cities who have seen the largest population increases contains some more familiar names. New York leads the pack by some distance with a 12-month population increase of 67,058, while second-placed Houston and third-placed LA are practically neck and neck with 34,625 and 34,483 respectively. Texas is once again well-represented in the list, but only with four out of the top 15 cities in this case, closely followed by California, which contains three of the top 15.
12 month numeric growth
70000 60000 50000 34,625
New York city New York
Los Angeles city California
Austin city Texas
Dallas city Texas
San Diego city California
Houston city Texas
San Antonio city Texas
Phoenix city Arizona
Charlotte city North Carolina
Fort Worth city Texas
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Source: LendingTree, May 2013
New data suggests borrowers are managing to gain loan approval with smaller downpayments than they were two years ago. According to recently released figures, the average down-payment dropped 9.4% in two years for 30-year fixed rate purchase mortgages. Top of the list for average down-payment percentages was New Jersey, with an average down-payment of 20.5%. This was 4.4% above the national average. Next up were California (19.1%), and New York (19%). At the other end of the scale, the lowest average down-payment percentages were seen in Mississippi (11.9%), followed by West Virginia (12%) and Alabama (12.4%).
BOTTOM 5 Missouri
New Jersey National Average
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GOOD TIME TO BUY? Buyer sentiment is a vital ingredient of any healthy housing market, but it’s been in short supply in recent years. So what are potential buyers thinking now? Data from Fannie Mae’s latest National Housing Survey provides some insight into the issue. Survey respondents were asked the following question: “In general, do you think this is a very good time to buy a house, a somewhat good time, a somewhat bad time, or a very bad time to buy a house?”. Encouragingly, only 11% of respondents said now was a ‘very bad time’ to buy, while 36% opted for ‘somewhat good time’ and 34% ticked the ‘very good time’ box. Mortgage holders were the most optimistic, with 42% saying now was a ‘very good time’. Thirty-four per cent of outright homeowners and 23% of renters agreed.
Source: Fannie Mae National Housing Survey – Q3 2012. Released June 2013 in partnership with Penn Schoen Berland.
4% 34% 11%
Very good time Somewhat good time
GENERAL 15% POPULATION
Somewhat bad time Very bad time
34% 33% 23% 11%
OWNS HOME OUTRIGHT
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LIFESTYLE/ DAY IN THE LIFE
Day in the life of... Mary Kladde, CEO and co-founder, Titan Capital Solutions and Titan Lenders Corp. 12.00pm: I am negotiating pricing with vendors’ compliance software for Titan Lenders. This is a normal contract renewed every year, some have to do with fraud, some have to do with credit reports compliance.
2.00pm: I am having lunch with operational leads to touch base with what is happening with new clients and any operational changes they are experiencing.
3.00pm: Around this time I am reviewing Titan
children (2), leave the house by 7 o’clock.
Capital’s correspondent lender applications. Usually we review about three new correspondents several times a month. We make sure they are compliant, do quality control on them and then it goes to committee for approval. Usually the whole process to approve a correspondent takes about 90 to 120 days, depending on how fast they submit their information.
8.00am: At the office, getting ready for my first
3.45pm: Fresh coffee and I lock myself in an office
meeting, a Titan Capital Solutions credit policy governance meeting. This is where I review vendors’ credit to make sure they are within compliance.
to catch up on some emails.
5.00am: Get up, get ready for work, wake up the
10.00am: I am reviewing different technology solutions for our internal and external communication systems. We are hoping to adopt an internal ticketing system that helps us communicate between customers of Titan Capital (correspondent lenders), Titan Lenders Corp. (back-office fulfillment providers), and customers.
11.00am: I am reviewing contracts with my legal team for a new software platform. We are hoping to bring new services that do not currently exist in the market. Since the service itself does not exist, neither does the software to support it. So, we are entrepreneurial and if we see a gap in the market that we can offer, we will build the software ourselves to support it. 58 | AUGUST 2013
4.00pm: I am huddling with my CFO and CTO to review our weekly expenditures.
5.00pm: Tying up any loose ends. Responding to emails at the end of the day.
6.00pm: After work I am involved with my kids. They are very active in soccer and baseball, so I am usually attending some sort of sporting event. Or, I go home at that point, sometimes do more work.
7.00pm: Dinner with the family, we chit-chat and make plans for the next day and for the weekend. This weekend, my son has a baseball tournament, so we will be talking and planning that. Once they are driving, I will be free of taking them back and forth to practices.
“We are entrepreneurial and if we see a gap in the market that we can offer, we will build the software ourselves so we can support it”
Favorite things Raymond Brousseau, EVP Mortgage Lending Division, Carrington Mortgage Services Ray Brousseau brought extensive consumer finance experience to Carrington when he joined the team in 2011. Though he’s now based in southern California, the east coast still has his heart, and he’ll go out of his way for New England lobster tail Vacation spot: We don’t get a chance to get to our vacation home too often since we are based in southern California. When we do get a chance to vacation, we prefer to head to Maine after all the tourists are gone in late August and early September – that time of year when the water in the Atlantic warms up and you can actually walk in and not go numb. Raymond Brousseau
Drink: I’m a simple Coors Light kind of guy. No mixed drinks, no hard alcohol, just an ice cold domestic beer and I’m happy.
Sport: Football. I played football in high school and I love to watch. I have four sons and they’ve all played too. There is a framed # 18 orange Manning jersey on the wall in my office. I’m a big Peyton Manning fan, so Denver Broncos fan by default.
Food: Nice rib eye with a side of New England lobster tail. The best place to get my favorite meal is at The Steakhouse in Wells, Maine. Their rib eye and their lobster tail are to die for. I’ve been 30 or 40 times and I’ve never ordered anything different.
Music: ‘80s rock and roll. If you flipped through my iPhone, it would give you everything from Quiet Riot and Poison to The Lumineers, so I’m all over the page, but I would best describe it as classic ‘80s.
far from Cape Cod, and I remember after seeing it, it changed how I felt about going into the water. To this day, I remember seeing it with my mom and dad and the fear that came with that movie.
vacation home we have there on the coast. We get there whenever we can. I was born and raised in New England, then moved to Indianapolis in 2002. We missed New England so we bought our place on the coast of southern Maine. It’s a simple way of life right on the ocean, just down the road from George W.
Grisham. I usually read a book a month because I spend a lot of time on planes so it’s a great way to pass the time. I just picked up the new James Patterson murder mystery.
Working in the mortgage industry: I’ve been in the
Place to be: Wells, Maine – a Movie: Jaws. I was born not too
Book: Murder mysteries by John
Celebrity: Michael J Fox – gotta love everything about that guy! His perseverance, his charisma and his sheer will. I’ve always loved him as an actor and grew up with Back to the Future. Seeing how he’s lived his life since being diagnosed with Parkinson’s is inspirational.
consumer finance industry for a long time, but I’m fairly new to mortgage banking. I have enjoyed it immensely, being able to approach the business without a preconceived notion of how it should be done because it’s not a business I was in prior to joining Carrington. It’s allowed me to have fresh perspective on how to do business and partner effectively with the senior team.
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CLASSIFIEDS AGENCY & FHA HomeBridge 855-729-2884 HomeBridge is a national wholesale lender offering both conventional and government products. We are committed to providing the highest value to our clients through competitive pricing, unique product offerings, superior customer service, and state-of-the-art technology.
Pacific Union Financial Correspondent firstname.lastname@example.org Fannie & Ginnie direct conduit offering Niche Correspondent.
United Wholesale Mortgage 800-981-8898 Discover Lending Made Easy! UWM is a Technology Leader with UW to DU Findings, Superior Customer Service, and an Expert Sales Force. The ELITE program provides the Best Conventional Rates & Pricing in the Industry! Signing up is easy! Join our valued Broker network at www.UWM.com
800-663-0997 Use our $$ to purchase distressed properties. NO DOWN PAYMENT & NO MONTHLY PAYMENTS! We put up all the $$ as your joint venture partner OR we can lend you up to 100% of the Purchase Price + Rehab Funds. Ask for Melanie.
Kennedy Funding 800-342-8500 Specializing in nationwide fast, creative short-term bridge loans ranging in size from $1 million to more then $50 million. Loan commitments in 24 hours. Fast closings. Loans are available for note purchases, acquisitions, land development, construction, workouts, refinancing, bankruptcies and foreclosures.
Master Capital Solutions NEW 630-279-5222 National & International, Business & Commercial loans from 100K - 1B, Fast Structure and Comprehensive Services. We also have conventional, down payment and collateral assistant programs.
BofI Federal Bank
888-883-9672 Jumbo and Super Jumbo Loans 5/1 - 7/1 and 10/1 options
830-331-4030 & 210-249-2111 Commercial Real Estate Finance, Business Finance and Oil & Gas Royalty Loans.
GreenLake Real Estate Fund, LLC
Alpha Funding Solultions 732-657-2014 Rehab/Fix and flip. Foreclosure bailout. Commercial bridge. We are a direct lender. 100K to 2MM. NJ, NY & PA. All property types and deals considered. Call or email us to run a deal by us. www.Alphafundingsolutions.com , info@alphafundingsolutions. com
FundingEdge 830-331-4030 & 210-249-2111 FundingEdge is a correspondent for agricultural land & ranch financing and providing commercial real estate financing options through its network for private money and conventional programs.
GreenLake Real Estate Fund, LLC 310-462-4637 Private direct commercial loans nationwide! All property types except raw land. Our latest fund was raised specifically for loans in this tough economy. We’re eager to lend, so please call today!
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JV Real Estate Partners, Inc. NEW
310-462-4637 Private direct commercial loans NATIONWIDE! All property types except raw land. Our latest fund was raised specifically for loans in this tough economy. We’re eager to lend, so please call today!
MULTIFAMILY Apartment Bank 877-442-4003 Apartment Bank, a division of BofI Federal Bank (NASDAQ:BOFI), is a Nationwide Direct Portfolio Lender that has solidified its standing as a premier multifamily lender in the small balance lending space. Apartment Bank’s flexible approach is key to freeing borrowers and brokers from the typical headaches and hassles of small loan transactions. Loan amounts from $250,000 to $10,000,000. Visit http://www.apartmentbank. com Financing may not be available in all states. The above summaries are intended for Mortgage Professionals only, and not intended for distribution to consumers, as defined by Section 226.2 of Regulation Z, which implements the Truth-In-Lending Act. Information is subject to change without notice. Refer to each lender’s information on products, program, procedures, representations, and warranties for details.
SERVICE PROVIDER CLASSIFIEDS TITLE WORK & INSURANCE CRES Insurance Services, LLC 800-880-2747 As one of the largest providers of Errors & Omissions Insurance and Risk Management Services, CRES Insurance has protected more than 75,000 real estate professionals nationwide, since 1996.
Linear Title & Closing 401-841-9991 Linear Title & Closing, Ltd., is a recognized leader and national provider of Closing, REO, Title Insurance and Settlement Services. Our streamlined RESPA compliant process utilizes flexible software tools that are easily integrated with your system.
MGIC 888-644-2872 MGIC makes MI simple with streamlined underwriting for your DU/LP eligible loans.
Scott Bond Services 800-365-0101 A leader in providing surety license bonds, fidelity, and E&O to the mortgage industry nationwide including investor required Special Mortgage Bankers Bonds. Offering a combination of expertise, service, value, and underwriting flexibility that’s second to none.
Applied Business Software 562-426-2188 The Mortgage Office is powerful and flexible Loan Servicing and Pool Software that automates your portfolio management by streamlining your collection process, printing of checks, and sending statements to both borrowers and investors. With our many Add-On Modules you can customize and grow TMO to suit the needs of your business
Byte Software 800-695-1008 Byte Software offers a complete mortgage solution from lead generation to selling loans on the secondary market enabling lenders to close more loans in less time with a SQL database, customization, enterprise scalability, compliance and security.
Calyx 800-362-2599 Affordable software that streamlines and optimizes all phases of the loan process – from loan marketing through closing.
DocMagic 800-649-1362 The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today’s complex loan document challenges.
International Document Services, Inc. (IDS) 800-554-1872 IDS is your mortgage document preparation vendor. With 20+ years experience IDS provides customers with fully compliant closing docs, initial disclosures & fulfillment. With superior customer service, in-house compliance & LOS interfaces, IDS far exceeds our competition.
TRAINING & EDUCATION Kaplan Real Estate Education 877-792-4473 Kaplan is the nation’s leading provider of licensing and exam prep courses. We offer the SAFE Licensing Course in the classroom and live online. To help you pass the SAFE Exam, we also offer exam prep courses in the classroom and OnDemand online.
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SERVICE PROVIDER CLASSIFIEDS MortgageCurrentcy.com 800-231-4787 Interpreting the complicated mortgage rules in plain language (Fannie, Freddie, FHA, VA, Compliance, Credit) that ONLY affect the loan origination side of the business. Help Desk. Rule Change Calendar. Automatic Face Book posts & Mortgage Talking Points™ for your real estate agents. Online e-zine published 2X month. Try for $1.
MARKETING & LEAD GEN
Best Rate Referrals 800-811-1402 Your mortgage marketing leader with many services available from Direct Mail & List Services, Telemarketing, Internet Leads, Mobile Marketing, and more.
MailerLeads 866-783-4053 x 14 Leader in FICO based lead generation, will help you increase your lead volume 150%. We’ve taken our highly responsive Mailer Programs and incorporated Personal Websites (PURLs) and QR Codes.
One Direct Response 800-483-5129 As a full service marketing company with over 20 years experience, we can help in all areas of your marketing needs.
Right Side Marketing 800-456-4395 Providing exceptional marketing materials for Real Estate and Mortgage professionals since 1985.
Stoneybrook Publishing Inc 800-736-3632 Monthly client newsletters proven to generate new loans from referrals and repeat business.
APPRAISAL & AMC LendersAid
866-656-8258 We are a full-service nationwide AMC and are committed to delivering exceptional customer service and the highest quality appraisal products.
United States Appraisals 866-562-0123 World-Class Service. Nationwide Coverage. Discover Confidence in Your Appraisal Partner!
StreetLinks Lender Solutions 800-778-4920 Providing lenders with a comprehensive suite of valuation solutions, including full AMC services, self-managed appraisal software, appraisal review tools and robust servicing products.
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BRANCH OPPORTUNITIES American Pacific Mortgage Corporation 866-486-8159 Established Retail Mortgage Bank, providing Managers and Originators cutting edge tools and resources to make their business a success.
Guaranteed Home Mortgage Company, Inc. 888-572-3602 We’re expanding our nationwide branch network . Join a lender who invests in YOU! 20+ years, well-capitalized, wide range of products, licensed in 28 states, immediate marketing investment in your branch, Next Day Pay(TM) to transitioning branches, on Inc. 500 list of fastest growing companies.
Hometown Lenders 888-606-8066 We help you grow your branch and skyrocket your income! Our recruiters put producers in your branch, and our proven marketing maps are guaranteed to help you double your income. Get connected with other branch managers who are crushing it. Call us today to find out why our branches aren’t going anywhere. Ask us about our sign-on bonus program!
Mountain West Financial 888-845-4530 Consistent. Reliable. Competitive. With over 20 years of experience in Retail Branching, Mountain West Financial opens doors to limitless opportunities.
Residential Finance Corporation 800-785-6277 At RFC we believe the status quo simply isn’t good enough. We’re doing retail branching a little bit differently. We start out with an award winning culture and take care of our customers, both internal and external, like family. With that basic premise met, everything else falls right into place. Partner with us!
Residential Home Funding Corp. 866-319-4442 We have a reputation of providing ongoing support and communication to every branch, every day - that is our #1 priority. Our branch offices enjoy the security of being associated with a natioanlly recognized mortgage banker. We are East Coast Experts.
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SERVICE PROVIDER CLASSIFIEDS
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