Page 1

Issue 052 November 2011

For Mortgage Origination Professionals

Advertisement Advertisement


Online Lead Generation Have you LinkedIn?


FEATURE ARTICLE! Interview with Josh Altman You haven't done anything right until someone wants you dead.


Doing business in Indian Country Know the rules or suffer the consequences.

Up 54 Bringing The Rear Neil Lipshutz, managing editor of Dow Jones Newswire.

Your Lender of Choice for Niche Jumbo Portfolio Products Portfolio Lender • Expanded Guidelines • Exception Lending Property Types: • Single family primary residences • Second homes or vacation properties • Investment properties • High land to home value • Unique properties considered Vesting Title In Entities: • Title is allowed to be vested in entities* – all types of trusts – LLCs – Sub S Corporations – Partnerships • Standard LTV Matrix applies • Expedited process with minimal paperwork Asset Depletion: • Borrowers may use their liquid assets as income in meeting full doc DTI requirements • Complex income scenarios • No age requirements • Full income documentation underwriting according to guidelines

Pledged Asset: • Up to 90%** financing available with this program • Any family member may pledge assets on behalf of a borrower in lieu of a down payment • Eligible assets include stocks, bonds, mutual funds, CDs, money market, savings, and others. Retirement accounts are not eligible. • Trading is allowed in the pledged account Foreign National: • Foreign Nationals to 50% LTV • Sourced funds from a known Financial Institution • Prove income from Country of Origin • Alternative credit required • Mortgage history or rental verification required • Must have social security number or TIN Multifamily/Commercial: • National Lender • Up to 75% LTV • Cash-out refinancing • Credit scores 680 and up • Mixed-use program, commercial, 40% or less

888.579.4462 * While title may be vested in an entity, the borrower must be a natural person who completes the loan application and whose social security number, employment, assets and credit are used to qualify for the loan. The borrower is personally responsible for the indebtedness. ** Effective 1/1/2011. The above terms and conditions are subject to change without notice.


Issue 52

November 2011


'You havent done anything right until someone wants you dead.'

NICHE REPORTS prime & FHA Commercial REVERSE MORTGAGE Construction/Rehab HARD MONEY JUMBO Service Providers

pg 45 pg 45 pg 46 pg 46 pg 46 pg 46 pg 47

An interview with Josh Altman of BRAVO TV’s Million Dollar Listing by Rick Roque. FOUNDER & PRESIDENT Robert Pegg CO-FOUNDER & PRESIDENT David Pegg MANAGING EDITOR Stewart Mednick

10 30 33 36


Online Lead Generation Chaibia Sarhrou ceo cs Social media Have you LinkedIn?



Center Stage with Best Rate Referrals The Niche Report The Niche Report talks with Raymond Bartreau.

Doing Business in Indian Country Nancy j. Appleby Princial appleby law PLLC Know the rules or suffer the consequences.

Keeping up with the Jones Chris Jones branch manager city first mortgage services Stop looking for borrowers that fir your products.

Man on The Hill marc savitt President, National Association of Independent Housing Professionals Is the FHFA protecting their Fannie and Freddie?

November 2011



note from the founder


What's your mortgage IQ?

50 54


ACCOUNTING MANAGER Shawna Ingram Advertising Director Jessica Grizzle Advertising sales Heather Bopp Production Manager Henry Suchman Production Assistant Dawn Exner Cartoonist Martin Bradford COLUMNISTS & Contributing Authors Martin Andelman Nancy J. Appleby Karen Deis Chris Jones RickRoque Chaibia Sarhrou Marc Savitt

Published monthly by BODA Publishing, LLC PO Box 494, Bentonville, AR 72712 Phone: 866.964.2695 Fax: 703.991.2362 Email:

SUBSCRIPTIONS This publication is intended for real estate finance professionals. If you are a mortgage broker, lender, loan officer, or real estate professional and you do not currently receive The Niche Report, please go to An annual subscription is $24.99 (twelve months/twelve issues.) For additional copies being mailed to the same address please call 866.964.2695 or email us at for multi-copy discount. Send address change requests to Remember to include the old address. To opt-out of receiving The Niche Report, please send your request, including name, company name, and address to

ADVERTISEMENTS To inquire about advertising in The Niche Report, please call 866.964.2695, or send an email to Visit our website, to download a copy of our Media Kit.

EDITORIALS / ARTICLES To submit an article for consideration in The Niche Report, please send an email to or call 866.964.2695. We are interested in original writings relevant to mortgage brokers and other real estate finance professionals. If you have a comment or question about an article or editorial published in The Niche Report, or if you have a suggestion for a topic you would like to see featured in a future issue, please send an email to

THE NICHE REPORT POLICY The information and opinions expressed by contributing authors and advertisers within The Niche Report do not necessarily reflect those of BODA Publishing, LLC employees and should not be considered as endorsed or recommended by BODA Publishing, LLC.

note from the founder

One of our favorite conferences is coming up –NAMB West! The first issue of The Niche Report magazine was launched in July of 2007. Back then, our readership was made up of primarily mortgage brokers. As time wore on with the collapse and over regulation of our industry, our readership eventually transformed into those who are now in correspondent and retail lending as well as wholesale and broker channels, with brokers making up about a third to one half of our circulation. It’s clear things are tough in the broker world.

Mortgage Brokers are true entrepreneurs. They want to control as much about their destiny as any business owner. One association that was born from this premise is The National Association of Mortgage Brokers (NAMB). Their best show (in my own opinion) is NAMB West being held in Las Vegas at the MGM Grand on December 3 – 5th, 2011. NAMB is the voice of the broker and anyone who is still originating loans via this channel owes it to themselves to attend this conference in December. Get out there and show your support for NAMB, mingle with others who are in your position and garner information and knowledge about what’s new and relevant to your profession. Go to https:// to register today! The Niche Report is one hundred percent behind brokers and we attend NAMB West every year. Please stop by and pick up the latest issue of TNR and say HI! We’ll be at booth 311. This issue, as always, is stacked full of great content. Including an exclusive interview with Josh Altman of BRAVO TV’s Million Dollar Listing – the super savvy, confident, professional and charming Real Estate agent talks with our very own Rick Roque in a personal discussion conducted at one of Josh’s mega million dollar listings in Los Angeles California. When my wife first found out we were interviewing Josh Altman from TV’s Million Dollar Listing, she lit up and gallantly stated that he was “bringing sexy back!” Now, I’m not sure how to take that. Maybe I should renew my gym membership ... Make sure to read the entire interview, and find out what Josh thinks of one of his co-stars and what his motto for success means – “You Haven’t Done Anything Right Until Someone Wants You Dead.” Keep up the fight!

Robert Pegg Official



online lead generation

have you linkedin?


veryone needs to get more leads, close more deals, and make more connections, especially in this tough economy where most people are struggling. We need more tools and resources that can help us achieve our goals. In this article, I’m going to show you a tool I’ve been using. It has been working great for me and for other busianess owners and professionals who have been using it the right way. It’s LinkedIn. Why LinkedIn? I’m not very fond of using statistics, however, LinkedIn has a unique audience. There are a few crucial things you should know before we begin: LinkedIn has: • A network of more than 120 million Professionals. • 75 of the Fortune 100 Companies using it as its primary recruiting tool. • A new professional joining the network every second. • An audience composed of influencers & decision makers. Let’s see how we can utilize this powerful tool to help you reach your goals.

Profile: When people Google your name, your LinkedIn 10

November 2011

profile comes in the top results making it the first impression people have about you. This is your professional identity. You want it to be a reflection of who you are in the most professional way possible. One of the first things a visitor notices about your profile is your photo. You want to have a professional picture. A photo can make or break a visitor’s desire to connect with you. Are you willing to risk, say, a hundred bucks on a professional photo – or would you rather take your chances and have that step potentially cost you unknown connections and revenues?

It is important – very important – to make sure to have your profile 100% completed. This is NOTHING to put off and have the ‘I’ll take care of it later’ attitude. When people are looking for your services, they will type in certain keywords in the search box. Your objective needs to

At Linear Title & Closing we provide customized packages of Title Insurance, Appraisal and Settlement services that are beneficial to your bottom line. Our flexible, consultative approach to solving your problems is a breath of fresh air in a world of cookie-cutter “solutions.” It’s why we are one of the fastest growing title agencies in the country.

Settlement Services


is our strength ™

Default Services Title Insurance Appraisals Bundled Service Packages Guaranteed Fees Integration Solutions

For more information, please contact:

1.877.5. Linear info@lineartitlecom

online lead generation be to show up on the first page results. One of the most common questions I get is: “How do I get my profile on the first page?” The answer is simple. Just as magnet pulls metal, search engines pull completed and optimized profiles with the proper keywords. You need to put those keywords throughout your profile.

is that you can stay updated on any changes they might make to their contact information – no matter where they work or live. If you are a PC user, there is a LinkedIn plug-in for MS Outlook. There are also other plug-ins for Gmail & Yahoo that have similar functions.

1) Headline – This is the first thing people see when they search a keyword, or your name. They will see your headline, your city, one of your current and one of your past work experiences. You want to put keywords in this area. 2) Current & Past Work Experience – Place the keywords that people are looking for in your current and past experiences. The more keywords you can add, the higher you will rank. Your current experience is more relevant, because it’s what you’re currently doing, so it helps you rank higher. 3) Summary – This is the next place you want to put keywords. You need to make a paragraph, not just keyword after keyword. Create a well-written paragraph that makes sense and doesn’t confuse people. Talk about your business goals and your passions. You want people to feel ‘connected’ to you. 4) Specialties – As you progress in your profession, you will be learning more skills. These skills should be added to the specialties section. You will find that will help increase the amount of leads and opportunities you will be receiving. Make sure to also add keywords in this section.

Recommendations We all know the power the testimonials, reviews and word of mouth marketing. LinkedIn has its very own ‘word of mouth’. It is called Recommendations. When someone is looking at your profile, and deciding whether (or not) to do business with you, having many strong recommendations will help them feel comfortable with making the decision to work with you. Your primary goal should be to get more recommendations from past and present clients, coworkers, referral partners, etc. The best way I’ve found to get recommendations is to give recommendations first. Remember, “Givers Gain!” When someone recommends you, an update will show up to their entire network, increasing your ‘Word of Mouth’ exposure. The more recommendations you have, the higher you rank and the more leads you get. Plus, it shows credibility!

Connections Your primary goal joining LinkedIn or any other social platform is to connect. Make sure that you connect with your current and past clients, referral partners and prospects. One thing you should be doing on a regular basis to help you grow your network is to bring all of your email connections to LinkedIn. People often change their information. The benefit of importing them to LinkedIn

We lend on distressed Real Estate Investments!

A program designed just for real estate investors!

• • • • • •

No Primary Residence No Pre-Payment Penalties! Loan Amounts up to $400,000* Rates: 11.5 – 14% LTV: Up to 85% of purchase price Points vary. Please see website for pricing information

Fix and Flip Financing Made Easy. California • Arizona • Nevada

Telephone 559.326.2509 Fax 866.602.8892

Visit for loan programs.

Groups After you’ve properly set-up your profile and made some connections, now it’s time to expand your network. Groups are a great tool to find potential customers and referral partners. LinkedIn allows you to join up to 50 groups. You want to look for groups that are relevant to your industry and niche. Before you join these groups, make sure they will be worth your time. A good way of doing this is to visit each group and see the type of conversations that are going on. The first thing you want to do, once you find the right group, is to listen. You want to know the theme, or subject, of your group’s conversations. Next, you need to start participating in these conversations. After you become known in a group, start creating your own conversations and answering member’s questions to bring value to the group and establish relationships and trust with the rest of the members. Remember, do not SPAM the group with promotional posts, you’re there to give value. Another great thing about being in a group is that you can send messages to the group members that allow you to do so. Approximately 93% of members will allow you to send direct messages. You can also share links to your

online lead generation blog, articles, videos, etc. with your groups which give you even more exposure and help position you as an authority figure.

LinkedIn, it’s important to keep your referral partners and buyers updated about what’s going on in the Mortgage Industry to build relationships and trust.)

LinkedIn Answers A great way to showcase your expertise and knowledge is to answer questions. You can find the ‘Answers’ section by hovering over the ‘More’ Tab. Any answer you provide, becomes part of your profile, and will demonstrate your expertise to your connections, potential business partners or buyers.

• Slide Share (This is a program that allows you to post your professional presentations on your LinkedIn profile. Another cool thing you can do with this application is add a YouTube video. You can have this video play automatically when someone visits your profile. The video can be welcoming people to your profile and showing them around, asking them to visit your website, follow you on Facebook & Twitter, or inform them about new programs or products.) • Real Estate Pro (It’s always good to know what tools are available for your Realtor Partners. Real Estate Pro allows Realtors to feature property listings and promote client transactions on their LinkedIn profile. They can also share their work and completed deals with their business connections.)

IF you try to spend just 10 minutes a day answering questions, you will connect with countless others you would have never otherwise have met. You can also earn Expertise every time your answer gets picked by the questioner as the ‘Best’ (the more your answer gets ‘picked’, the more points you earn). DO NOT underestimate LinkedIn Answers!

Website LinkedIn allows you to promote your website on your profile page. You have the ability to customize the wording and put a call to action that gets visitor’s attention and motivates them to click on your website’s link. For example, instead of keeping the “My Website” … you can change it to “Check out My Site”… or whatever suits your personality! Applications Here is a short list of some applications I think can help you. • Amazon Reading List (Allows you to Share books you’re reading and book reviews and follow what other members are reading to stay current and up to date with what’s going on in your industry.) • Wordpress or Blog Link (Sync your Blog with 14

November 2011

• Events (Find Professional Events from conferences to local Meet-ups OR you can post your own events. This will show up on your network’s home page. Once member’s RSVP, their network will see the event as well. The viral nature of this exercise will help create more exposure for your event.) • Polls (Get to know your prospects & referral partners by asking them questions) In closing, there is much to LinkedIn I did not have time or space to get to. Just as all Social Platforms do, LinkedIn is constantly evolving and changing. If you haven’t already, start NOW! If you have already started, follow these tips to maximize your efforts. LinkedIn is a FREE marketing tool that is highly underused. Start with 10 – 15 minutes a day and believe me, you will start witnessing great results in no time!

Chaibia Sarhrou is the CEO of CS Social Media, an Online & Social Media Marketing company specializing in the Mortgage and Real Estate industries. She has consulted with many top producing agents and speaks at Real Estate and Mortgage companies to educate them on monetizing their Social Media efforts. Chaibia can be contacted at chaibia@ . For a FREE webinar on “The LO’s Guide to Monetizing Facebook”, go to

Looking fo r: TO P P R O D U CER


Call for De tails!

The BEST Branch Solution, Period. 800.220.9498 NationWide FHA Lender This information is provided to assist business professionals and is not an advertisement extended to the consumer, as defined by Section 226.2 of Regulation Z. Lender NMLS: 2767. Licensed by the NJ Department of Banking and Insurance, License #9100861. Freedom Mortgage corporate office is located at: 907 Pleasant Valley Ave. Suite 3, Mount Laurel, NJ 08054. All Rights Reserved.

"You Haven’t Done Anything Right Until Someone Wants You Dead"

an interview with Josh Altman of BRAVO TV’s Million Dollar Listing by Rick Roque

What every Loan Officer needs to know about The Killer Instinct In my experience of working with sales professionals, loan officers and real estate agents are a dime a dozen. There are always excuses as to why deals don’t get done – the market, the borrower, the banks, underwriting conditions, state laws, technology, bad sales manager, companies don’t equip the loan officer with the right tools to be successful etc… The loan officers who complain to me about this will email me blaming all the above and most of all the real estate agent. The top producing loan officers, on the other hand will nod their head in agreement and close more loans. Top producers defy the odds; they are good when the market goes down and they are even better when the market goes up. Their relationships grow more solid in contracting markets while their relationships expand during periods of economic growth. These types of sales professionals are just that – they are professionally solid,

presentable and have an attitude that will always get something done; bottom line: they are competitive and strive toward success. Without compromising one’s ethics, top producers have a killer instinct. They size up every person they meet – they calculate and gauge weaknesses in their opponents and exploit them wherever necessary to get the deal or the relationship done. They work tirelessly to serve their clients. They thrive on working on days

when they know their competition is not. They also love their trade secrets – the things they do, they believe is at the heart of their success. They can be ruthless sales creators and for all the other sales professionals who are vying for the same deal, they are cold hearted (sales) killers. So, what can a loan officer learn from a top producing real estate agent? We chose Josh Altman, One of America’s top producing Real Estate Agents and coincidentally, star of the acclaimed TV series, Million Dollar Listing on the BRAVO TV network. The success of the show has increased as a result of Josh Altman’s professional demeanor whose acumen raises the bar for every real estate agent who watches. I found him alarmingly smart, quick to read an audience and on top of his game. At 32 years of age, he has mastered the ability to rise to the top. In the years to come, we will keep in touch with Josh and will reveal his recommendations at staying at the top. As for me, I have no doubt that if he maintains his sense of humor and his professional discipline, the man his peers call “the Shark,” will be wildly successful. I met Josh in Los Angeles, California at one of his multimillion dollar listings for this intimate interview. Read along to gain insight on why they call him “The Shark.”

Josh: Not a bad view - huh? : No, this view is amazing. For starters, tell us a little about this house? Josh: This is my new hottest sexiest listing - in the Hollywood Hills - $6.75M, just finished this week; it is the modern, California, bachelor dream house. Open living views to the nines; affinity views and on top of Mulholland Drive where everyone wants to be.

: How did you get in touch with the family who owns the house? Josh: We were contacted because of how well known we are for high end homes in Los Angeles. : Contacted through whom? Josh: They had read about the Altman Brothers. We were the right people for this house because of our recent sales in the area and the type of homes - modern, state of the art homes, big time houses and our clientele; they wanted to get the right people - this is important in an agent - the reach. Serious money is coming from overseas these days and we have that reach. This house by the way is an entertainers dream, we have the background in the entertainment business from the publicists, agents, artists, the actors – usually, people like this buy homes like this... : What is your network? How would you describe your reach? Do you work through your publicist (Melissa) and her relationships? Do you have other people like her? Josh: It is more about our history in the business. My brother and I have done everything from flipping homes to the mortgage business to the agent side; because of all of this in real estate, this helps in knowing people in this town. My brother was a talent agent at CAA & Hirsch and therefore we know everyone in the entertainment business in LA; the show has helped in gaining international buyers overseas : So the show was your big break? Josh: No, the show helped; I just fell into specializing in overseas buyers and it could have been in part because we work for Hilton Hyland and Real Estate - you know, they are affiliated with Christie's Great Estates. When I

list a property, it will be listed not just locally but nationally and internationally, especially these mega homes that are $20-$30M : Where are these buyers from? Josh: Asia, Middle East, Russia - mostly are where the international money is coming from. For them it is almost half off - if they are coming over with their currency because of the devaluation of the US Dollar, there are some real deals. : Tell me how long you’ve been in business with your brother? Josh: About nine years. : How is this going? Josh: It’s great - we get along but we fight just about every day…..<Laughter> : I grew up in Vermont in a family of six boys and I wouldn't go into business with any of them! Josh: So you know the relationship. You get into a fight and a second later, you move on. : That is amazing. Are you 50-50 partners? Josh: Yes, he is one of the only people I can really trust and never have to worry about. He is my older brother by three years and we both represent the company well. We are both good representations of one another actually. Whoever he meets with I can trust he would represent us the way I would. : Where did you grow up? Josh: Born and raised in Newton, Massachusetts : Really, I’m from Vermont. Josh: Growing up we had a ski house in Killington, Vermont. Then I went to Syracuse, New York - I played Football there, I was a kicker. : I mean you are a big guy but…. <laughter> to play Syracuse Football – that’s impressive. You must be like five foot tall, or something… Josh: Hey, don’t’ knock it…..I am five foot, nine and half inches! : That half means something. Josh: Yes it does. That’s how you know I am not such a big guy when I depend upon that half inch. : Having gone to University of Hartford (Connecticut), I am also from New England. I am familiar with how impressive playing football is at Syracuse - good for you. 18

November 2011

Josh: Yes, that’s ironic. Yes, after college, I moved to Manhattan for a year and a half and then came to Los Angeles. : what year was that? Josh: 2002. : No one comes to LA and immediately makes an impact -how did you get that first deal. Josh: You need a lot of time, energy and money behind you - you need some of this to support you until you can gain traction. : Did you save money before coming out here? Josh: Yes. My brother and I put some money together; we bought our first condo - we put it on the market two months after buying it - essentially as a joke, we made some improvements on this condo in West Los Angeles and we made $200K on the deal. It was during this time that you could buy a house, paint it and then sell it and make a profit. It wasn't that we were doing anything magical or impressive - So after that - we were on to something. We just make $200K in one month. So from then, we started flipping bigger and bigger properties. At one point, we asked ourselves the question: Why do I need to break off commissions to mortgage brokers and real estate agents every time we sell a property? ….. every dollar counts during a sale, so I ended up getting my real estate license. This was in 2005. : It was good timing. Josh: Yes, I didn't realize how important the timing really was. : You wanted to control more of the process? Josh: Yes, that’s right. I wanted to understand the process most importantly. I ended up breaking records for the company I was working for, and the next thing, I was running the branch and then opening up others. I did that for three and half years - I was still flipping homes on the side, at that time, the business started to get really tough the world started to fall apart; it was a perfect time to start learning the last part which was the real estate agency side of the business. I am a relationship builder most importantly. I love to go out - restaurants, bars, clubs - we always liked meeting people so we really got our arms around Los Angeles. So, it was easier for me than most people because of whom we knew. I am not like one of those kids who grew up here in Los Angeles - that is a different story. I got into Hyland - both of the owners of that

Discover Lending Made Easy Qualify and price your Borrower LIVE on up to 10 different products at once! UWM’s Broker Portal gives you the easiest loan process! Visit to discover why UWM is a Top Tech Savvy Lender!


Join UWM’s Broker Network! Sign up today at

Source: Mortgage Technology; Sept. 2011

company - Rick Hilton, grandfather of the Hilton Hotels I mean they are legends in real estate. : Do you see yourself establishing your own firm? Josh: I see myself establishing a firm under them. They are like my Fathers; with that said, I couldn't be happier. I have no plans to leave. The other guy is Jeff Hyland who wrote the book on Beverly Hill’s Great Estates - It is a four volume book you know - legends that I get to learn from. : What are the things they teach you? Josh: Something that is so important - is to surround themselves with professionals - just being around them, in the office meetings and listening to other people, listings in town and you know- the things going on in town, it is so important to soak up all of their knowledge; there are a lot of realtors who never go into an office - they are half realtors - they are less likely to truly learn and be driven by their peers. : You think going into an office is important? Josh: I’m a competitive guy; I love it - it makes me rise to the next level. That is important - working with better and more talented people. Now, when I sell a house, I can get the financing at reasonable rates and I get the highest qualities of service. : Your buyers - what are their sources for financing? Josh: I have a couple of mortgage professionals I work with - as far as mega homes, the majority is all cash buyers. If you are buying a $20M home you are writing a check for it - if a loan is taken out, it is to leverage low rates. Overseas - foreign national deals are taking a long time. They use different systems in different countries - it takes longer to trace everything. Locally - as long as you have the right documentation. The people buying homes today can afford them and should be buying them - as opposed to five or six years ago, anyone could get a house. If you

can't qualify for one, you shouldn't be buying one - there is a reason for that. As far as the Altman Brothers, we have about $150M in listings, somewhere around the $20M right now up through 2011 (June) we have another $10M in escrow - we are hoping to hit $50M this year. That is on top of taking the show and flipping homes. : What were your listings last year? Josh: $40M : The show has had a great impact on you? Are people seeing the show and then saying: Hey, if he can do that for this buyer, then he can do this for me?! Josh: Yes and No. Our business knows us and regardless we would be successful. We literally sleep with our cell phones. : I've seen that from the show! Josh: When I tell my sellers - “call the other top agents in town, at 11pm” - they won’t get a hold of them. : Availability is indeed key. Josh: The show has made it easier to get out there. It is a great platform for our business. I look at it like an infomercial. : Any downside to the show? Have people come away with an impression that you didn't want them to come away with? Josh: Those people, I don’t really want to be friends with anyway…..<laughter> : I love the confidence. Josh: In life, people either love you or hate you; you need to do what makes you happy and love what you do surround yourself with good people, It doesn't matter what other people think. : That is great. Josh: The more haters in this business you have, probably the better you’re doing. There is a famous quote from a book by Bernie Brillstein: In Los Angeles, you haven't done anything good until someone wants you dead…..It is the same thing. : I love that - You are no one in Hollywood until someone wants you dead; does anyone want you dead? Josh: well – I’m not sure. : What is your relationship with Madison (co-star of Million Dollar Listing) and Josh from the show?

We’re All Heart … not just a piece of it.

The Reverse Mortgage market is growing and changing at a remarkable pace. Banking giants rise and fall in this industry, but only Reverse it! has weathered the storms and deepened its roots. We didn’t get to the top by chance or luck because Reverse Mortgages aren’t a proverbial ‘slice’ of our business pie; Reverse Mortgages are the only thing we do. We helped pioneer this industry, so we know what works - and what doesn’t. Welcome to Reverse it! - the industry leader in wholesale lending. Nobody knows more… so nobody cares more.

NOT an FHA-approved broker? We can still help. Drop us a line at and learn how we do the work and give YOU the credit.

“reverse mortgages… simplified.”

Reverse it! is a subsidiary of Urban Financial Group, Inc. – A Knight Capital Group, Inc. Company

Josh: Our relationship is Professional - we definitely don't hang out.

: Ok - that isn't bad – and besides, it’s fast and unique. What is successful factor number three?

: So Madison has never slapped you - like he was about to on the show?!

Josh: Third, I'll do anything for my clients.

Josh: As much as Madison would like to- No. But hey, Madison has a lot of time on his hands while I am too busy selling homes. : Does Madison, from the show want you Dead? What is the deal, did you steal away his employee? Josh: She’s still my girlfriend - you'll have to watch the new season to see what happens. : I have to know - we can break the lead story….. Josh: Yes, she’s my girlfriend - she was given an ultimatum by Madison to stop dating me and so she left him. It was really stupid. She’s on her own - she will be a force to be reckoned with. : Plus she is learning from you ...what would you say to be your main reasons for success up to this date - how old are you?

: What is a memorable thing you’ve done for your clients? Josh: I have flown in people on private jets - I've done some spectacular things - I can provide people a concierge type service when they are in town. I work with the best contractors, builders, designers, and people outside of the business- car, restaurants, where to find a nice watch - with us - the Altman brothers, you get a first class service. We are a high end brand. : So, that’s your niche. Josh: We know what they want - and we get it done. : what else is key - I think in some ways you have a clear focus on what you are going after. Many companies spread themselves so thin; they are trying to get it all. Would you say your sense of clarity…..?

Josh: Thirty-two.

Josh: I know many millionaire listing agents who only sell $500-$1M properties. They are making an amazing living

: In your first ten years out of college, what has been behind your success?

: Is it the same strategy behind the $500K sale versus a $15M sale?

Josh: First, being 24x7. I say that, people laugh, but it is true. Second, I would do it regardless. I love looking at real estate on my free time.

Josh: like I said when I was a place kicker in college - you kick a 20 yard field goal the same way you kick a 50 yard field goal. If you start to tweak your style based on a difference in target, it will get in your head. It is the exact same thing. I guarantee it - that guy who is successful at standard properties is doing the same thing that I do at the 10M mark. I know how to deal with my audience - You need to know your client. People get that energy off of us- people love what I do.

: Especially if you are driving a nice car! Josh: Yes, that is definitely true! : Do you have a toy car? Josh: 1965, Shelby Cobra - it is not my everyday car it is pretty spectacular - private sale - a rebuild : How much did you pay for the car? Josh: …..<laughter> about $60K

BytePro Enterprise

Loan Origination Software Byte Software offers an end to end solution from prequalification through delivery of loans on the secondary market. We help lenders close more loans in less time with a SQL database, customization, enterprise scalability, compliance with Federal lending regulations and security.

FREE Software Trial Available • 800.695.1008

:Do you entertain your clients? Josh: Yes, I just took some clients to Las Vegas - wealthy people are great - I mean, they are knowledgeable. Someone who is buying a $20M home did something right - I can learn from that. So, I like spending time with them because I can pick their brains - geniuses in their respective business. : How do you select your deals? Sometimes you choose deals out of your comfort zone Josh: The Altman brothers are fortunate - we can be selective. Does it fit our brand? Is it priced correctly? We can be pickier. The higher end homes - realistic sellers these are the homes that fit our brand. Don’t get me wrong: I'll take an $800K condo - if it is

priced right, I’m a business man. I'll do it. : Do you have any assistants? You can only show so many properties at one time- so, if someone hires Josh Altman, how do you scalable your efforts? Josh: I deal with people face to face; the agent needs to show the property. I have four people to help me in my back office -the paper work side rather than the showing side; I am at as many showings as I can and I always negotiate all of my own deals. Now, since the success of the show, because of our brand, I just listed a $14M home in Newport Beach who lives next to Kobe Bryant, in an area called Pelican Crest, if I get a call to show it this afternoon, obviously I won’t be able to get to it if there isn't enough lead time so I work with some select people to help me in those cases. : Do you give them a benefit should the house sell? Josh: Many times I'll bring the properties to them so we'll work out a referral situation; but through us, they are getting Hilton and Hyland which is a top brand; you are also getting Christie's Great Estates - which is the best brand out there. We had 100,000 hits per week on our website during the show which is more than the company I am with - Hilton Hyland Company gets, just on the Altman Brothers. Just putting the property on that site gets attention…. Most people have to pay $5K just to put a listing on the cover on a magazine; most realtors won’t do that right now given the economy; very few will do that. Because of the show, I'll get asked to place something on the magazine without having to pay for anything - That is a nice perk. : What is the web site hit rate when the show is not going on? Josh: hmmm - I believe around 20,000 hits. : That’s fantastic. How would you describe, what you do differently for

clients? There are a lot of realtors - they are a dime a dozen here. What do you do differently - is it all of the above? Josh: It is the entire package- …In LA there are all of the actors, and then there are the actors who aren't working who are also realtors. So, it is the hard work - it is the success rate; it is our appearance; it is our company - our affiliate, who our clients are - so it is all of that. : How do you deal with a seller who’s priced out of the market? How do you get in their head about giving them a sober view of the value of their home? Josh: We pride ourselves on being very straight forward - no bull **** agents. We have to tell them some way or another and being straight forward is the best way. They don’t' like to hear that sometimes… : Yes, well there are always realtors who will say “yes” simply to get the listing…. Josh: Of course, you know what I say to them? Call me in six months when your listing agreement expires because your house will still be on the market; and at that point, if you want to talk real numbers I'd be more than happy to do your listing and represent you at that time. In our business it’s better to get the listing the second time around. I have a $4M house right now that was on the market for a year and a half - I got it and reduced it and put it into escrow three weeks later. : Tell me about the mistakes you've made. Josh: Where do I start?? : Not the people you've dated -just bad business decisions you've made… <Laughter> Josh: Here’s how I look at it - everything is not a mistake but a learning opportunity. : Tell me about a deal you've screwed up?

Are you sure you’re ready for the GSEs’ appraisal XML mandate?

This year, the GSEs will require full appraisals in MISMO XML 2.6 format. If you’re relying on PDF extraction to get the XML, your process will fail. It’s not a question of “if” PDF data extraction and scanning will fail. It’s how often, and how much it costs you. And the answer isn’t good. Do the math: The URAR form alone has over 1000 fields. Even at 98% fieldlevel accuracy, 20 or more fields will be corrupted. Some of those will be critical, and so your pipeline will stop due to bad data. You might not notice it today, because PDF extracted appraisals aren’t subjected to rigorous data analysis. But they will be, and many won’t pass. The solution? Demand “Native XML” appraisals. No conversion, no extraction, no excuses. Just clean XML straight from the appraiser’s desktop software. Then you get exactly what they typed, even on every kind of odd form or addendum. PDF extraction just can’t do that. We’re certain, because we create, transmit, analyze, store, and manage more appraisal data than anyone on Earth, including the GSEs. So when we tell you there’s a problem with PDF extraction, believe it. Protect yourself by downloading the free “MISMO XML 2.6 Appraisal Checklist” from our website. It’s a vendor questionnaire that helps you set policy now for the coming regulations. Whether you use an AMC or manage appraisals inhouse, it ensures a 100% native XML process free of pipeline problems — without changing vendors, or even paying us a dime.

Download the MISMO XML 2.6 Appraisal Checklist at

Native XML is just one of our solutions. Call us today for more.

Mercury Network 1-800-434-7260

AD CODE: MATMEMN0511 a la mode and its products are trademarks or registered trademarks of a la mode, inc. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies, and other items are subject to change without notice. Copyright ©2011 a la mode, inc.

Josh: ok ok, when I first got into the business - the number one thing you never was a huge lease, my client will do the lease, so I told the owner of the property to kick out the present tenant, because this guy was ready to go - the present tenant was month to month and my client was going to do it for a year and a half, he kicked out the tenant paying $36K per month and before I could get the contract, the client changed his mind - so I was on the hook for $36K per month until I could get someone into the lease... : How long did it take you? Josh: About… took me about three weeks. : Tell me another one. Josh: hmm… : Any deal you've pushed too hard - maybe you were being too stubborn Josh: Deals like ahh…..trying to think….the other day, I made an offer on a house for a client, in this market, I felt it was right to go in lower than the asking price to start it out - a low ball situation, the number we started at, the seller did not respond to us - they took it personally and someone else came in higher and they ended up doing the deal with them. Because we low balled them, they didn't respond. And guess what? My client would have gone higher than what the home closed at? It was just a situation that…..I always tell Sellers, always respond because you never know. Don't ever not respond to an inquiry or a lead! : What are your tips for sellers & realtors: Josh: One, Respond to all offers. And two, make sure your house is as non-cluttered as you can make it - get your house ready for a sell. Even if it is going to cost you $10-$15K

: How much should a seller spend to prepare their home? Josh: Probably one percent; cleaned, buying different pieces of furniture; appearance is everything - you get one shot. The goal is to wow them. : For a $500,000 house - $5K. Fresh paint etc… What else do I tell Sellers? Josh: I've seen people spend as much as three to four percent. You do what you need to do to sell the house. Numbers don't lie - never go for what things are listed for but what homes have sold for in your neighborhood. A listed property is not a comp for appraisal purposes. Go off of the comped sales over the last six to twelve months numbers don't lie. : you mentioned the mistakes you had made and you referred to the things realtors should never do Josh: Yes - Always get everything in writing - I had another deal - I represented the buyer and the realtor told me "ohh, yeah, I'll fix that,” told this to the buyers face, my face - the deal closed, it was never fixed. Since it wasn't in writing, it never got fixed. The response was "Ohh, you didn't have that in writing." : Do you see other realtors tripping over themselves to do a fraction of what you are doing – Could you coach them? Josh: When I coach less experienced realtors – it’s more about picking up business rather than what you do with the property you are listing. Lead generation - going after expired listings is critical; it is over fifty percent of the listings out there. It expires and they list it with someone else. Get your expired listing letter and packet ready to go; it needs to be perfect and ready to go. Social Media is key; Social Media, Twitter, Facebook etc… are key - I sold $20M last year when the buyer didn't even see the property. It was almost fifty percent of my deals. Your website needs to be incredible; people go over what they see; the picture of the property is key. You have to invest in yourself and your business and your clients - I guarantee you if you aren't doing this someone else is. I have about 12,000 Twitter followers : You have some work to do on this. Ashton Kutcher has like… Publicist: How many do you have? <laughter> : Well - you know, I have about four or 500. But I don't have a national show.

If you...

Save your clients 35% or more on title insurance with ENTITLE DIRECT

“ENTITLE DIRECT aims to undercut other insurers by at least 35%.”

“ENTITLE DIRECT has received regulatory approval to sell title insurance ... with a simple pricing strategy: Charge a flat 35% less than the going rate in the local market.”

The Wall Street Journal


“I was able to pull this deal from [another lender] because I was able to offer better fees based on the savings on the title portion. Thanks!” Loan Officer, Large National Lender

You will...

Get more referrals Get more purchase business. Combine your rates with ENTITLE DIRECT savings and more of your prequalified borrowers will convert. Capture real estate agent referrals because only you can save their clients hundreds, even thousands of dollars. Position yourself as a trusted advisor. Be the first to recommend ENTITLE DIRECT on behalf of your client (before your competitor does). We’ll guarantee our rates for your GFE in minutes. Use our closers or your own.

Get a quick online quote now at or contact our Specialist Center directly at 1-877-936-8485 M-F 8am-10pm EST. You can also e-mail our trained Specialists at

Call us at 1.877.936.8485 All title insurance policies are issued by EnTitle Insurance Company, 4600 Rockside Road, Independence, OH 44131, which holds all licenses and regulatory approvals. Lower premiums are not available in New Mexico or Washington, where the use of resident agents is required. Certain title and escrow services are not available in all states. Subject to state laws and regulations where applicable. Use of closers not affiliated with EnTitle Insurance Company subject to approval. Forbes and The Wall Street Journal are copyrights owned by their owners.

Publicist: He actually started out really fast.

Josh: Get ready to kiss a lot of ass.

Josh: It should double with this next season. With the Twitter thing - I am bad but I will improve on this.

: I actually have a question from a Niche Report Reader: "I have a $14.9M listing; I've had it outside of Philly - had it over a year; 22,000 square feet. Appraised at $19M; the problem is, the highest amount in that neighborhood sold is $10M - sellers are already selling below property values - how would you sell this property and to whom?"

: Twitter is amazing - while doing this interview, I am writing a lot of what you are saying, while I am also tweeting things down into more memorable, bite sized points. It would be interesting to have you reflect on the day and in between appointments, to tweet reflections and tips that come to mind. What you can benefit from, 700,000 other realtors could too. Josh: Right. : Because of both - the success of the show - both real and perceived, people will hang on everything you say. The Altman script, people will follow- I am going to follow this to a T - if he can be successful on this, so can I. Josh: in my book, it will be coming out when the next season comes out… : When does the next season come out? Josh: later in the year. Late 2011; we are shooting in the fourth quarter. With the book - I am doing a lot of speaking engagements - I am the new spokesperson behind a company in Minnesota called Renters Warehouse. : It is good to know. Josh: I speak at agent association(s) and at their events; conferences for new real estate agents. I love doing it. : Tricks of the trade - successful strategies? Josh: Yes - I was a speech communication(s) major at Syracuse University - so I am very comfortable speaking in front of large audiences. I just spoke to 200 Syracuse University new grads in LA - in the SU chapter last week; giving them guidance. Giving them tips on surviving in LA. : What was one of your tips?

Josh: You need to market this to a very specific audience. Knowing about the house - let’s say it has an Asian theme, it is an original that has a lot of something - ask yourself, who is into that theme? Through Christie's you can identify an audience who is into that theme. The buyer probably will not be local - if only one property has sold for $10M and this is $19M; this is a $19M property in Philly - this is an international buyer or sports star. You have to call Donovan McNabb or someone who can afford that today - who is my QB by the way. You need to go to heads of businesses - read the newspaper; identify who is making money in Philly. Think out of the box. Who is the guy who just sold his business for $200M; how do you get yourself in front of him. There are no written rules on how to do it. You have to be creative and think out of the box. : … <continuing reading from the readers question>… "I've done the usual target of CEOS, sports figures; I've marketed it to top agents and Manhattan brokers." Josh: It was good to bring in the Manhattan Brokers - by the way, properties like this sit on the market eight to twelve months if not sixteen months. So setting the right expectation with the sellers is vital to your success. Also, in a property that size- you will need to spend about $20-$30K just to market and sell it. The spelling mansion - Hilton Hyland represented both sides of it, largest sale in LA history, at $85M. It was listed for one and half years - a 22 year old girl came through and bought it - from England. Trust fund child - It was listed for $150M sold for $85M. It was worth $85M - things like this, will take a while to sell - especially if it is the highest. It will take a while but will be worth it. : The price will move it. There is always a tipping point with a price. Josh: If it is priced right, it will sell. : What are you seeing about the industry as a whole? Josh: A lot of the wealthiest people in the US live here and that reflects a bubble - I don't read the magazines that have

negative articles – everyone does but I don’t; it just gets you down. How bad the economy is etc… In LA - since January 2011 to June 2011, there have been fifteen sales over $15M the high end market is on fire right now - Jennifer Aniston's home just sold for $3500 per square foot - so the market here is on fire. I can't speak to everyone else.

The Ideal SofTware SoluTIon!

: What would you do if you weren't in real estate? Josh: real estate. : That is a great answer. Josh: Someone asked me, “Josh, what do you do for fun?” And I said "Real Estate"….."no, flip homes;"What else other than this, "Mortgages…." : I think what they mean is, what are your hobbies? Josh: I go out all of the time; I have a very active social life. I love travelling - I like staying healthy and going to the gym. I have 2 dogs that I rescued that I love and go to parks. I just got a new car - I love recreational driving and the finer things in life. I like to party when I close a big deal. When Josh gets paid all my friends get paid. We like to party with the best of them. : Have you had much feedback from other real estate agents?

• Windows or Internet based. It also runs on iPads & Smart Phones! • Instant calculations for all Conventional, FHA & VA. Automatic APR calculations. • Client Database with contact management system. • Print or email all documents in English or Spanish. • Open House Flyers with finance options and color pictures.

Josh: The most important thing to me as a real estate agent are the emails I get from other real estate agents saying "Thank you for representing the real estate agent community in such a professional way." : The other guys on the show don't portray that about the industry? Especially Madison - what was up with those boxers?! Josh: He spends more time in… well, let’s just say, his attention is on himself and not on selling real estate. : Thank you Josh for your insight, we’ll be looking forward to the next season of your show. Keep up the good work!

For questions or comments to this article, contact Rick Roque at You may also send questions to Josh Altman, at

Call us for a free demo (888) 684-9273

Doing Business in Indian Country Know the Rules or Suffer the Consequences

by nancy j. appleby


here are more than 560 federally recognized Native American tribes in the United States. They are located on what is collectively called “Indian country” – a legal term referring to tribal reservations and federal trust lands which are situated within the territorial boundaries of one or more states. The legal governance of Indian country is highly complex, encompassing treaties with the U.S. government and the standard legal characterization of tribes as being domestic dependent nations with their own sovereignty. Investors and entrepreneurs are showing unprecedented interest toward commercial development projects in Indian country. Until recently, this economic activity did not reach into the capital markets or commercial real estate. However, Indian country has experienced an economic development awakening, which has created a need for capital to match the commitment by tribes to create 21st century, sustainable economies. Coupled with federal government incentives for doing business with tribes, this has created potential real estate finance and business opportunities. While opportunities in Indian country abound, prudent investors understand that that there are legal complexities in Indian country that must be addressed when structuring a successful transaction. 30

November 2011

Governance Issues Indian nations not only are sovereign entities that have their own governing bodies, they continually interact with the federal government and its primary administrative agency, the Bureau of Indian Affairs (BIA). Pursuing commercial marketplace requires negotiating with these authorities, as well as structuring business contractual agreements and, sometimes, intergovernmental compacts with the state(s) in which tribal land is located. Real estate finance professionals, investors, developers and contractors for projects in Indian country should be familiar with federal law related to Indian tribes and with tribal law and custom. Additionally, any gaming-related project involves the Indian Gaming Regulatory Act (IGRA) and the IGRA regulations. Failing to be familiar with the entirety of this body of law invites disaster. In reality, few people are familiar with federal Indian law or tribal law, governments and dispute resolution systems, which reflect each tribe’s sovereign status and unique culture, language, laws, mores and traditions. Developing a real estate or construction project with a tribe or tribal entity, or on tribal land, is not a conventional transaction with conventional terms, conventional financing and conventional collateral. In Indian country there may be no familiar law governing the granting and perfection of security interests. Typical remedies in the event of a default

may not be available under applicable federal law and tribal law. Litigation may not be the preferred, or even an acceptable, method of dispute resolution. Tribal law may not be codified. There may be no established formal judicial system for hearing disputes. There may be no written rules of court procedure. Court opinions may not be available for review by non-tribal members. These issues are not insurmountable. However, non-Indians working with this system are likely to need assistance navigating the system and will find their way more easily if they are respectful, flexible and tolerant of differences in law, procedure, style and personality.

Sovereignty and Jurisdiction The form and substance of a tribe’s or tribal enterprise’s waiver of its immunity from suit has been, and continues to be, of critical concern for persons doing business with tribes and their businesses. In a recent case, High Desert Recreation, Inc. v. Pyramid Lake Paiute Tribe of Indians, the U.S. Ninth Circuit Court of Appeals stated that “[a]n Indian tribe is subject to suit only where Congress unequivocally authorizes suit, or where the tribe has clearly and expressly waived its immunity.” This black letter law seldom is questioned. Therefore, it is critical that any contractual arrangement with a tribe or a tribal business include an express, written waiver of its sovereign immunity from suit and that the waiver is authorized by all action required by tribal law. Investors often assume that their disputes with tribes or tribal businesses will be heard by a federal court. Often that is not the case. The basic principle in federal and Indian law is that federal courts have jurisdiction only where there is a question of federal law to be decided or where the parties reside in different states and meet the requirements for diversity jurisdiction. While the better practice is for a tribe to expressly, unequivocally and clearly waive its immunity from suit and to consent to jurisdiction and venue, it is not uncommon for waivers of sovereign immunity to be silent respecting jurisdiction, leaving the parties to argue later over jurisdiction. In those cases, the parties are able to resolve their substantive dispute only after they litigate over which court has jurisdiction – not the scenario that the non-Indian party typically will prefer. Ensuring Due and Proper Authority Questions of dispute resolution are inseparable from the fundamental issue of who has authority to act on the tribe’s

behalf. How the tribe is organized will affect how power is distributed, who can act for the tribe as borrower and what, if any approvals may be necessary to enter into a binding and enforceable transaction. Sections 16 and 17 of the Indian Reorganization Act of 1934 (IRA) address many aspects of tribal governance, including the constitution that will describe the governing body of the tribe and its authority. However, not all tribes are organized under the IRA. In those cases, reviewing the tribe’s custom and common law is critical. In each case, the investor should confirm the actual authority of any persons negotiating and executing documents on behalf of the tribe. Do not assume there is authority or rely on apparent authority. It is prudent to review the underlying organizational documents (e.g., constitution, laws, ordinances, resolutions) of the tribe and of the tribal business (e.g., charter of incorporation, operating agreement) to determine whether they limit the tribe's and/or the entity's ability to waive immunity. Any waiver made in violation of the tribe’s laws and/or organizational documents may be void. The investor’s due diligence also should include a review of tribal law, including custom, tradition and opinions of its courts. The investor should require the tribe to adopt resolutions specifically authorizing the transaction and granting authority to execute and deliver documents. The investor also should request that legal counsel for the tribe deliver opinions regarding the organization of the tribe, the organization of the tribal business and the respective power and authority of each and respecting the enforceability of the waiver of immunity.

Land Titles Similar complexities involve the issue of land titles. In many cases, title to Indian land is held in trust by the United States for the tribe’s benefit. The general rules are that tribal trust land may not be sold, taxed or encumbered and that BIA approval is required for leases of trust land. Lease terms typically are limited to 25 years with a 25-year renewal, unless otherwise provided by statute. BIA approval is also required for a mortgage on a leasehold interest in tribal land. A leasehold mortgage may permit the lender to exercise dominion and control over leased land in the event of a default, but determining the status of land requires reviewing treaties, acts of Congress, proclamations by the Secretary of the Interior (who has ultimate responsibility for the BIA), BIA title records and other sources. Lenders should thus always use a competent title company with appropriate knowledge to conduct an Indian land title search and to insure the lender’s leasehold mortgage.


Case in Point The issues of immunity, jurisdiction, organization and land title reviewed here merely touch on the complexities involved in financing an Indian country real estate project. Thorough preparation is essential for lenders, and a recent court case illustrates the type of problems that the unwary can face. In Wells Fargo Bank, National Association, as Trustee, v. Lake of the Torches Economic Development Corporation, the U.S. District for the Western District of Wisconsin declared that a bond indenture evidencing a $50 million tribal debt was void, with the ostensible result that the tribe had no obligation to repay the debt. The documents at issue in Lake of the Torches evidenced financing for a tribal casino and were subject to the Indian Gaming Regulatory Act, which requires federal approval for a management contract. In Lake of the Torches, the bond indenture provided for the appointment of a “management consultant” by the bondholders, restricted the right to remove key personnel without the bondholders’ consent, and required that the bondholders could appoint new management in event of default. Provisions like these are quite common in secured lending transactions; however, because this secured transaction was with a tribal corporation, the court concluded

that the indenture was a management contract for which federal approval was required. Sadly for the bondholders, since such approval was not obtained (or, for that matter, even sought), the court concluded that the indenture was void. The Seventh Circuit Court of Appeals confirmed the District Court’s conclusion. This was a very fact-specific case, but its message is clear. It is essential to consult with Indian law counsel to develop any business or credit proposal to ensure that obtaining necessary approvals and other issues that may sidetrack your transaction are addressed appropriately. Your project will have a much better chance of a favorable outcome if you take care of the basics and understand the rules of Indian country at the beginning of your deal. Nancy J. Appleby, principal of Appleby Law PLLC, has 30-plus years of experience in Indian law and in the real estate, energy, commercial finance and project development business sectors that seek to pursue business opportunities on Native American lands. She has been selected for inclusion in such authoritative lawyer rankings as The Best Lawyers in America and Chambers USA, and may be reached at 703-837-0001 or by email at

You’ve sharpened your edge.

Now all you need is a new arena. Is your environment too limiting? Mountain West Financial’s owners and management develop personal relationships with you and your team; giving you the opportunity to influence decisions and processes. Our local Account Managers support your team while our experts in HR, Compliance, Accounting, IT, Admin, and Marketing leave you free to focus more on production and less on operations.

With over 20 years of experience in Retail Branching, Mountain West Financial opens doors to limitless opportunities.


Mountain West Financial, Inc. is a Equal-Opportunity Employer licensed by the CA Dept. of Real Estate, Real Estate Broker License# 01090162 & NMLS# 164497

keeping up with the jones

Stop looking for borrowers that fit your products by Chris Jones


o this issue’s theme is creative financing. Since I’m writing this before the issue comes out, and I am not Stewart Mednick, I don’t know how long the issue’s going to be, but if it really were just about creative financing, it would be a pamphlet. I’ve been around long enough to remember real creative financing, where we stitched together a three-investor hard-money second at 18% on top of a HELOC 1st so the borrower could buy the property, then two months later refinanced the entire package at 85% on a non-Fannie subprime 2-28 no-doc. THAT’S creative. Time was, non-government loans were a viable part of the marketplace. Now Fannie, Freddie, FHA and VA have about 97% of the mortgage market in the US, and there isn’t a lot of variation within this product group. Still more, where there used to be wide variance from shop to shop in what products were offered, now the demise of the mortgage broker and the homogenization of the banker makes it so that everyone, with vanishingly few exceptions, offers the same money the same way. Being that this is a marketing column, and the first

one, too, I should probably get off that particular soapbox and propose some solutions to the current less-thanoptimal situation. And as it happens, I have a couple to propose. But they have less to do with creative financing – that’s in a more-or-less eternal hammerlock now beneath the federal behemoth – than with creative client creation, if that doesn’t repeat myself too much. Said a bit more intelligibly, once we could take a borrower and customize a loan package from thousands of products. Now, we have to take a loan and customize a borrower from thousands of potential clients. We used to fit the loan to the client. Now we have to fit the clients to the loan. You’re already saying – I can hear you – that’s exactly the problem. We don’t have a lot of creative loan products, and the products we do have are so narrow on approval that not only can’t we put a square peg in a round hole, we can’t even put round pegs in round holes. There is truth to this. It’s a problem that is going to get worse before it gets better. There is no question that regulatory strangulation, coupled with market seizure, has significantly complicated the loan process and shrunk the market. But I ask you in response: so what? What


keeping up with the jones can you do about it? Can you make Dodd-Frank any less destructive? Can you restart the private secondary purchase market? If you can, I don’t know why you’re reading this, so I’m assuming that you can’t. What can you do, then? Here are a couple suggestions: Stop looking for borrowers that fit your products. Right, you’re saying. Then, instead of the bit I do have, I’ll have no business at all. But this isn’t true. For a long time, the way to do business in our industry has been to walk through the orchards and pick whatever fruit happened to be ripe. That was fine, back when there was a lot of fruit getting ripe, but now that isn’t happening. Waiting for perfect borrowers to click you on Facebook is not going to pay the bills. Instead, you can start looking for borrowers that you can make fit. It takes longer to grow your own borrowers than to find them running around free-range, but it’s a lot more dependable source of income. Consider that despite the dramatic drop in completed mortgage contracts over the past few years, the demand for mortgage products is as high as it ever was. A recent study found that 80% of the population expects to need mortgage financing in the next

few years. That’s a market, folks, of 240 million potential borrowers. All right, so your four-year-old doesn’t count yet, but even so, that’s a gigantic group to target. The problem is that approximately six of those 240 million people are going to qualify just by walking into your shop. So solve that problem by targeting people that want to do something and can’t. First off, there’s less competition for those people’s attention. Second, the way things currently are, without expert guidance, they might never qualify at all. And third, if it’s you that shows them what they need to do, it’s you that is going to get the business, no matter what the Google page rank of the outfit down the block. People are hungry for this information. They’re also skeptical of the search-engine-optimized link-bait article they find when they search online. Millions of borrowers would be very grateful to talk to someone that knows the score, and how they can eventually do what they want to do. Stop looking for people that already fit. Look for people that want to fit, in any condition, and work with them until they do. Stop being boring. Tip two is a bonus, because I believe that the successful loan officer of tomorrow is going to be a self-generator of mortgage loans from a loyal

Scottie Says...

It’s time to consider Scott Bond Services!

Here’s Why:

• A Recognized Leader in Mortgage Surety Bonds - most new clients are referred by existing clients

• Extensive Underwriting Flexibility - no personal guarantees in many cases

• Fast, Professional Service - underwriting responses typically within a few hours after a brief application

• Nationwide Capability with Competitive Rates

• Also offering Fidelity and E&O including investor required Special Mortgage Bankers Bond

Please call today to put our expertise to work for you! Scott Bond Services (800) 365-0101 phone (434) 832-2287 fax


keeping up with the jones clientele (that’s a successful loan officer of yesterday, too, come to think of it), but since we’re talking about creativity here, let me encourage you to start thinking of ways to get people to ignore the fact that you’re in mortgages. Can we face facts for a second? Nobody wants a mortgage loan. Coming to see you ranks somewhere between a dentist’s visit and chemotherapy. They need you, but they need you the way they need a thoracic surgeon, not the way they need Rolling Stones tickets. It would make their decade if they could do without you altogether. So pitching rates and fees and guarantees and all that jazz is, I guess, necessary, but it also plays on the home field of the big boys, who have more money than you and can outshout you on lowest-rates-of-the-millenium. What they can’t do, or won’t do, is get creative about putting themselves in front of people that ultimately feed into the group in tip 1. People don’t want mortgages. Fine. What do they want? • They want to shop. One local Realtor does a Tour of Disaster, a look at the four or five worst-condition homes on the market. It’s quite popular, and she couples it with a visit by the local FHA 203(k) specialist, who knows what it would cost to fix the disaster and make the house a steal. Now we’re talking. Those houses move. Loans get done. Home shopping is fun. • They want inside information. I’m hearing about some seminars out there that show people the secret code to always – ALWAYS – get approved for a mortgage. You and I know that it isn’t rocket science (it’s sometimes even harder than that), but most people don’t. They know it’s hard, but they don’t know the code. You do. Offer it to them. • They want a plan and a guide. Life is increasingly complicated. There are millions of people out there right now that would buy if they could, but they may never be able to because they have no plan. They’re not constructing their credit, documenting their income, building their cash.

They’re drifting and hoping things loosen up. You can offer them a road map, and peace of mind. Even if the creativity is gone from the financing angle (and it isn’t ALL gone), there is more room than ever to be creative about finding, teaching, and training borrowers so that you have an endless supply of hand-crafted clients, all your own. It’s better business, it’s more satisfying business, and it’s more profitable business. Then you can turn that robust creativity to finding ways to spend the money you’re making. Chris Jones is a branch manager with City First Mortgage Services and a ten-year veteran spanning the best and the worst of times in the industry. He is the author of the forthcoming book Mastering the Six Channels of Marketing, a look at why most loan officers can't even get their mothers to call them back anymore. Chris arrived in mortgages after careers with tech startups, stockbrokering, and running a presidential campaign; he's a sought-after speaker and a part-time opera singer, which he insists isn't as impressive as it sounds. Chris and his wife Jeanette live in Lehi, UT with their eight children. He can be reached at 801-850-3781 or at

“Hi! I’m Meg. Job Loss Protection saved my mortgage and my credit!” Meg lost her job. We paid her mortgage payment. ... that’s what we do!

If You Know the Rules --You’ll Rule the Market! ... because it’s not about rates anymore -it’s about knowing how to get the deal closed!

7-Day Trial Subscription Mortgage Talking Points® Flyers/Email for Your Real Estate Agents Handy Charts & Checklists for you and your staff Origination & UW Rules & Regs INTERPRETED in plain language “Ask the Experts” Help Desk • 800-231-4787

Get details at 866.JOB.LOSS

man on the hill

Is the FHFA protecting their Fannie and Freddie? by marc savitt


he Federal Housing Finance Agency (FHFA) is Regulator to Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The agency was created on July 30, 2008, as part of the Housing and Economic Recovery Act of 2008, replacing the Office of Federal Housing Enterprise Oversight (OFHEO). Congress believed OFHEO failed to properly regulate the GSE’s during the housing boom, which contributed to the current financial crisis. Congress decided OFEHO needed to be replaced with a stronger regulator. Now pay close attention, because here comes the really interesting part. OFHEO’s Director at the time was James Lockhart III. The Deputy Director and COO was Edward DeMarco. Lockhart and DeMarco began their tenure with OFHEO in July and October of 2006, respectively. When the new, improved and tougher regulator took over in July 2008, Lockhart, DeMarco and just about everyone on staff at OFHEO, transitioned in to the FHFA in their same positions. The only thing that changed was the sign on the building. This article is being written to expose the sham, known as the Home Valuation Code of Conduct or HVCC. The following paragraphs depict a series of events that I’ve either personally witnessed or found in public records. 36

November 2011

In 2007, then New York Attorney General Andrew Cuomo, announced a wide spread investigation of appraisal fraud by some of the country’s largest banks. During the investigation, Cuomo discovered evidence of fraud and subsequently filed suit against Washington Mutual and “eAppraiseit,” an unregulated appraisal management company, or AMC. The investigation revealed emails between WaMu and eAppraisit, which showed the bank was pressuring the AMC to inflate property values. More importantly, the investigation also provided Cuomo with strong evidence the GSE’s knew or suspected they were buying loans with fraudulent appraisals. In May of 2008, I met with Fannie Mae General Counsel Beth Wilkinson. During our meeting, I asked Ms. Wilkinson why Fannie signed on to the HVCC agreement.” Her exact words were, “Cuomo has his foot in our throats.” NAIHP has long believed, HVCC was for all intense and purposes a “plea bargain,” designed to provide an escape for the GSE’s from further investigation and exposure. The first draft of HVCC in March of 2008 contained an important component, which would finally eliminate a serious conflict of interest. Cuomo believed bank ownership of AMC’s needed to be limited to no more than twenty percent. In my opinion, it should have been completely outlawed. However, when the final version of the code was re-signed in December of 2008, the twenty percent prohibition was removed, allowing

man on the hill banks unlimited ownership in AMC’s. I made five trips to Mr. Cuomo’s Office in N.Y., concerning HVCC. At the final meeting, we were told by a top Cuomo staffer, the bank ownership limitation was “stripped out by the federal government.” He refused to identify any specific individual, but I remember OCC Director John Dugan initially being opposed to the March 2008 draft, even calling it a “De Facto Regulation.” When the final version was released in December of that same year, Mr. Dugan had no objection. I’m sure everyone remembers the public comment period, where Fannie, Freddie and the FHFA solicited what they later called “extensive marketplace comments.” The housing industry responded with tens of thousands of comments, which were rumored to have shut down the GSE’s servers on one particular day. I’ve personally met with the FHFA’s General Counsel (Alfred Pollard), on seven different occasions. During the last two meetings, I requested copies or access to the comments. Mr. Pollard refused to release them, claiming those commenting failed to give permission for their release. I informed him, this was a PUBLIC comment period and the government had an obligation of transparency. Pollard still refused, but did confirm there were tens of thousands of comments, but most were discounted, as they were form letters. Form letters or not, they were the opinions of industry participants. It’s important to note, it was during this same time period, “Think Big Work Small” organized an anti-HVCC petition with over 122,000 signatures. Therefore, it’s reasonably safe to say, the FHFA’s embargoed comments contained similar objections to HVCC. In a May 19, 2010 letter to Andrew Cuomo, FHFA Acting Director Edward DeMarco stated, “The Home Valuation Code of Conduct deployed by Fannie Mae and Freddie Mac was implemented after taking extensive market place comments.” Refusing to release the comment letters after acknowledging they relied upon them when

implementing the HVCC, suggests the letters fail to support the code’s implementation and the FHFA is deliberately withholding this information from the public and Congress. On October 6, 2011, the National Association of Independent Housing Professionals (NAIHP), filed a formal complaint with the Inspector General’s Office, alleging Fannie/Freddie and their Regulator agreed to the terms of the Home Valuation Code of Conduct (HVCC) as part of a special plea bargain like agreement to avoid further investigation by the New York Attorney General’s Office. The complaint is being investigated. Since HVCC was implemented on May 1, 2009, valuation fraud has risen by over fifty percent, appraisal quality has decreased substantially, thousands of appraisal professionals have been forced out of business and home values have continued to decline. Additionally, new appraisal rules have created a sharp increase in settlement costs for consumers. The HVCC agreement expired late last year and has been replaced by similar language in the Dodd-Frank Act. The question is, if the HVCC was nothing more than a scam, sustained by covering up evidence, what does this mean for Appraiser Independence under Dodd-Frank? NAIHP will continue to push for access to the comment letters and changes to the current Appraiser Independence guidelines. Moreover, we call upon Congress and the Department of Justice to investigate those responsible for the HVCC agreement and the incredible harm still being inflicted on consumers and Main Street America. Marc is the President of the National Association of Independent Housing Professionals. Previously, he served as the 2008-2009 President of the National Association of Mortgage Brokers. He also held the positions of NAMB's Presidentelect, Vice President, Director, Chairman and Founder of the Consumer Protection Committee and was awarded NAMB's highest honor, Broker of the Year.


Center sTage

Center stage with best Rate referrals The Niche Report talks with Raymond Bartreau

by the niche report

The Niche Report interviews Raymond Bartreau of Best Rate Referrals, a highly successful and respected lead-generation company servicing the mortgage and real estate industries. I see that Best Rate Referrals has made the Inc. Magazine 500 fastest growing companies list for 2 years in a row now. What do you attribute your substantial growth to? The last few years have been pretty amazing and a lot of fun. Our growth can really be attributed to a combination of things. First and foremost it's our staff. My business partner and President of BRR, Zach South, and I have assembled a dream team of marketing specialists consisting of 20+ professionals between our sales, operations, IT, call center, media and production centers. These people are my second family and we couldnâ&#x20AC;&#x2122;t do it without them. I think in business you need a few things for success; a good staff, great products, stable and scalable platforms, innovation, and a little good luck. Lastly, we have grown our company by helping others grow their companies; with strong in-house capabilities, positive ROI campaigns, amazing vendor and affiliate relationships and our goal to make sure every client succeeds in their marketing efforts. Tell us about the mortgage marketing landscape during the last 6 months? As you know, we have been providing profitable 38

November 2011

marketing campaigns and consultation for over six years now. We have been through the ups and downs in the Mortgage & Real Estate industry and the last few years have been tough for many mortgage professionals. The fact of the matter is, a year ago, you had to spend even more money on marketing to generate the amount of business most mortgage professionals are used to. However, during the last six months, with rates dropping to all time lows, we have seen considerable increases in closing ratios and a decrease in cost per acquisition. This means our clients are closing more deals with less money than a year or even two years ago. So response rates are up on all forms of marketing? Yes, response ratios are up on all forms of marketing. In fact, I was recently reviewing the tracking reports from a recent FHA direct mail campaign that received a 5% response with a 25% closing rate. Albeit, it is rare to receive responses this high, the last six month average response on a refinance direct mail campaign is near 2%, more than double what response rates were one year ago. It's pretty typical that when rates drop, consumer confidence goes up, along with the possible benefit of a refinance. If you target your audience correctly, any form of marketing will bring you better responses. Even in the purchase market, response rates are up. To give you an idea on an overall scale, online searches for homes has increased 400% over the past four months. What has BRR done to take advantage of these increased responses?

Center sTage We have acquired new web properties, some we have launched already and some are still in development. is one of our newest properties targeted at generating new home buyer leads and purchase financing through SEO. We also recently released ShortSaleFaster. com. But at the end of the day, we have really just done what we have always believed in...strong targeted mail and calling campaigns to pre-qualified homeowners to take advantage of the lower rates in todays limited lending environments. Along with the traditional marketing we have done for years, we have moved into the internet lead generation arena. Currently we are generating about 1500 purchase loan leads per day nationwide among all web properties as well as a few hundred refinance candidates. On the real estate side, it is over 2500 buyer leads a day and around 200 seller leads. We are currently looking to leverage this traffic by building strong relationships between aggressive mortgage and real estate professionals to gain market share in their respective communities. BRR creates the traffic, the Mortgage and Real Estate professionals share and work that traffic to create the lowest cost per acquisition and gain a higher market share for both. How has niche marketing campaigns compared with broad, nationwide campaigns? Everything is niche right now! On the Refinance side of the fence we all deal with limited lending controlled by stringent but necessary guidelines. Your best bet is to target your audience for the few loans that are available then be very aggressive in spending your time and money targeting that audience. The old school "spray and pray" approach is gone with the wind. Whether you are targeting FHA, VA, Jumbo, Fannie, Freddie, Purchase, 203k, or Reverse....itâ&#x20AC;&#x2122;s all about targeting your audience first and then hitting them in every way possible, mail, phone, internet, mobile, etc. Niche marketing doesn't mean that you cannot market on a national level. Many can still have tremendous success on a national level, if they are hitting a niche and hitting it correctly. We work with you to create a marketing campaign that tends to your strengths and goals. What do you recommend the small broker shops and single loan officers do to increase their marketing? I would advise any small to midsized shop to use the 50/50 rule. Split your time evenly between refinance and purchase work. The refi side is obviously immediate revenue where as the purchase market takes more time to bring you that return. However, if you position yourself correctly by leveraging your marketing ability, you should have a real estate firm or two sending you business consistently every day. There are a lot of ways to get realtors to give you business and one of the easiest ways is to give them business. I am not just talking 40

November 2011

about actual pre-approvals; I am talking about business in the form of real time leads to keep that agent or group of agents busy. My advice would be to take a portion of your refinance marketing budget and put that into purchase marketing, then take that traffic to the agent in real time. That consistent activity is much appreciated by aggressive agents, which is who you want to be working with anyways. Whether your marketing budget is $200 per month or $2,000 per month, that budget can go a long way by using it to create real time traffic for a Realtor, especially when that same traffic needs financing by you. Itâ&#x20AC;&#x2122;s a win-win, if you leverage your marketing dollars effectively. Every time I turn around BRR has an innovative new marketing tool or product. What is BRR working on for 2012? We have a few tricks up our sleeves I cannot mention quite yet, but to give a couple insights; we will be launching our mobile marketing platform as well as purchase loan internet leads on a national level to be sold to retail mortgage shops. We will be also be enhancing our PURL and QR technologies as well as our hosted predictive dialer and online lead cherry picking system. The goal is to use our direct marketing background, technology, training modules, and web properties to bring loan officers into the purchase world and create long term relationships for them and their real estate partners. One of our company goals, which I strongly believe in, is to create profitable long term business opportunities for you, and in turn, we will create a longterm client. With all the different marketing options available to drive new prospects, how can a loan officer determine what is best for them? The first thing I ask any new client looking to start a marketing campaign is if they are more comfortable calling the prospect or if they would prefer having the prospect call them. The answer to that question usually tells me what will suit the loan officer best. If you do not mind cold calling, there are many options available to you, especially low cost options. If you would rather the prospect call you, a direct mail campaign or mobile campaign may suit you best. To maximize any marketing campaign, a combination of both should be used to create the best ROI. My team and I are available Monday through Friday to consult you on the form of marketing that will work best for you. If you would like a free consultation on what will work best for you, contact me via email at I will make sure you are put in touch with an experienced marketing consultant.


What's your mortgage IQ? BY MortgageCurrentcy

VA Assumable Loans: Is an existing VA loan assumable, and does it have to be a veteran that assumes it? Yes. VA loans are assumable. They can be assumed by either a Veteran or a non-Veteran. The current Veteran's eligibility will continue to be "tied up" with the loan, however, unless the person assuming the loan is a Veteran and chooses to substitute their own eligibility for the current Veteran's eligibility. Assumption packages have to be requested from the current loan servicer. (Mortgage Talking Points™ - “Are VA Loans Assumable? Why, Yes They Are!”) Marketing Tip: Let your real estate agents know that VA loans are assumable, whether assumed by a Veteran or not. So, they might want to check the type of loan on all of their listings, and call you for a Mortgage Talking Points™ article so they can add the option to the listing notes.

FHA/VA Pest Inspection: The appraisal asked for a termite inspection. The inspector found carpenter ants—but no termites. Does the home have to be treated? 42

November 2011

There is no difference between a termite and pest inspection. They are solely looking for evidence of wooddestroying insects. Here’s a list of the most common types: Termites are the most well-known insects that cause wood damage. These small delicate insects construct colonies within wood structures. Termites eat wood fiber, and damage usually occurs from the inside out. Termites generally damage softwoods but can damage hardwood areas as well. Lyctid powder post beetles are small and reddish brown to black in color. The beetle larvae directly infest wood, destroying it. The beetles feed on starch and cause damage mostly to hardwood surfaces such as cabinets and flooring. Lyctid powder post beetles leave small exit holes, which are covered in a dusty powder. Round-headed wood borers are large, cream-colored wood-infesting larvae with a prominent head capsule. Adults turn into large, colorful beetles with a long antenna. These beetles generally live in living or dead trees and cause damage to hardwoods and softwoods. The beetles generally cause limited damage because they do not re-infest the wood after the first generation. Horntail wasps are large insects with a long stinger.

WHAT IS YOUR MORTGAGE IQ? Horntail wasps generally emerge in newly constructed homes up to around 3 years old. Structural damage is minor and usually results in aesthetic damage to wall or floor coverings. Horntail wasps generally leave large halfinch exit holes that are easy to identify. Carpenter bees are large, heavy bees that look similar to the common bumblebee. Carpenter bees leave multiple large exit holes usually at right angles. This allows water and fungi to enter their intricate network of tunnels. Most of the damage is located around exterior trim, doors and sliding doors. Carpenter ants earned their name due to the fact that they destroy wood quite efficiently. Carpenter ants are black or reddish-black insects that nest in cavities above ground level. Damage occurs when carpenter ants attempt to expand their nests, causing structural wood damage. Other damage may occur to soft building materials and Marketing Tip: Let your agents know that in addition to termites, VA & FHA wants the pest inspector to also check for Powder Post Beetles, Round-headed Wood Borers, Horntail Wasps, Carpenter Bees and Carpenter Ants. Use the Mortgage Talking Points™ article called “6 Types of Wood-Destroying Insects to Watch Out For.”

USDA Income-Producing/Out Buildings – I have a USDA loan where the buyer is a log truck driver. The property had a metal detached outbuilding. The loan has been rejected because of the outbuilding. Why, and what’s the rule? USDA released AN 4590 addressing this very issue and has given us some rules about what outbuildings they’ll accept and which ones they won’t. They also give info about land size limits, and land values as compared to the value of the home and outbuildings. This has been an issue for quite some time now. Mortgage Talking Points™ “USDA Explains What’s an Acceptable Outbuilding!”

While not all inclusive, RD considers acceptable “related facilities” to be • garages, • storage sheds (for consumer use), • basements, • semi-basements, • underground shelters, • summer kitchens, • garden sheds, • carports, • pump houses, • recreational structures (exercise rooms, game rooms, craft or hobby rooms) and • non-commercial workshops. RD specifically points out that these “related facilities” can either be attached or detached to the dwelling and are NOT limited in total number of structures. For example, there is no restriction that limits the number of garages a home can have. In addition they point out that the RD State offices cannot impose State-specific limitations on “related facilities”. State-specific restrictions have been a

The Niche Report: Real Estate Agent & Broker Edition Launching January 2012 Send your favorite Real Estate agent

Real estate agent & bRokeR edition

a six month subscription to TNR the Real Estate Agent & Broker edition

For the serious real estate profes


with your name as the Giftee in the address label EVERY MONTH! It’s a great way to stay in front of your agent partners and makes you LOOK


Josh Altman from BrAvo Tv's 'Million Dollar Listing'


Related Facilities A portion of this administrative notice is directly geared toward the discussion of acceptable “related facilities”….in other words…besides the home itself, what other buildings (attached or detached) will RD allow? RD states, "the purpose of the loan guarantee is to acquire a dwelling and related facilities to be used by the applicant as their primary residence.”

Deadline for open Gift subscriptions will be Dec 10th 2011.


featured 'mega' listing 9 Avalon Vista. $13.9M


exclusive interview Josh altman from 'million dollar listing' talks to tnr

Scan here to send gift subscription

If you have a list of more than ten agents to add, please email us at


shhh ... frank and Brian speak When reform attacks

Bringing up 58 the rear David Stern, The Forclosure King

Follow us on Facebook and Twitter

WHAT IS YOUR MORTGAGE IQ? problem in the past and resulted in inconsistency and confusion. Hopefully this problem has been alleviated with the issuance of this AN. Income-producing properties For loan purposes, RD prohibits the purchase of income-producing land, or buildings to be used for income-producing purposes. Properties that include buildings which largely or in part have been designed for a business or incomeproducing purpose are subject to this regulation and NOT eligible. Examples of income-producing buildings include, but are not limited to, • • • •

warehouses, bed and breakfast facilities, boarding homes, buildings with mechanical equipment remaining from a prior business, • horse-riding arenas, • nonresidential buildings such as ° office buildings, ° commercial buildings or ° mixed-use properties with store-fronts that contain residential space.

FNMA Disability Income: Client is on permanent disability and has paperwork to show for the past 1 year. U/W has requested a letter from the insurance company stating the income will continue for the next 3 years. The insurance company will not write such a letter because they periodically re-evaluate the claim. What is the rule? Here is Fannie's rule. These rules will give you some breathing room for approval: 1. Verify the amount of disability payments and determine whether there is a contractual established termination or modification date by obtaining the disability policy or benefits statement. 2. Confirm the borrower's current eligibility for the benefits by obtaining a statement from the benefit's payer (insurance company, employer, or other qualified and disinterested party). 3. If the benefits have a defined expiration date, verify that the remaining term is at least 3 years from the date of the 44

November 2011

mortgage application. 4. If the borrower is currently receiving short-term disability payments that will decrease to a lesser amount within the next 3 years because they are being converted to long-term benefits, the long-term benefits must be used as income to qualify the borrower.

Universal NMLS Licensing - What is the most current information/requirement for licensing of processors through NMLS for a mortgage broker? And what are the requirements by State? The matter is not state specific. In the S.A.F.E. Act it states in 5102: “The term ‘loan processor or underwriter’ means an individual who performs clerical or support duties at the direction of and subject to the supervision and instruction of (i) a State-licensed loan originator; or (ii) a registered loan originator." In 5103 it further states "A loan processor or underwriter who does not represent to the public, through advertising or other means of communicating or providing information (including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items), that such individual can or will perform any of the activities of a loan originator shall not be required to be a State-licensed loan originator. (2) Independent contractors - An independent contractor may not engage in residential mortgage loan origination activities as a loan processor or underwriter unless such independent contractor is a State-licensed loan originator." In English this means if a processor is an in-house employee not engaged in MLO activities that processor does not need to be licensed. If the processor is an independent or is not an employee then the processor must be licensed. It is what the person does (MLO work or Processing work) not what they are called and how they are employed (employee or independent contractor). Written and contributed by Karen Deis of Provided monthly by interpreting the Rules and Regulation Changes for loan officers, processors, underwriters, and owners/managers. Mortgage Talking Points TM, charts and checklists included.


Prime & FHA 360 Mortgage Group 866-418-2997

Bank of Internet

Conv, FHA, VA and portfolio products. To become an approved broker or to view a rate sheet, visit our website

Jumbo and Super Jumbo Loans 5/1 - 7/1 and 10/1 options.

888-833-0555 ext 1508


Pacific Union Financial Correspondent

Fannie & Ginnie direct conduit offering Niche Correspondent

United Wholesale Mortgage 800-981-8898

United Wholesale Mortgage specializes in FHA, VA and Conventional Wholesale Lending. UWM prides itself on having Exceptional Customer Service and an extremely efficient process from loan submission through close!

Commercial Windvest Corporation 877-285-0777

Specializing in fix and flips, rehabs, income producing and rental investment properties throughout Southern CA. We lend on SFR residential and COMM property. Simple application process with generous broker commissions. Professional service with funding in 7 days. Call us today for a free quote or visit us online www.

ADVERTISE YOUR NICHES HERE WITHIN 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 lenderâ&#x20AC;&#x2122;s information on products, program, procedures, representations, and warranties for details.



HARD MONEY/Construction/Rehab Windvest Corporation 877-285-0777

Specializing in fix and flips, rehabs, income producing and rental investment properties throughout Southern CA. We lend on SFR residential and COMM property. Simple application process with generous broker commissions. Professional service with funding in 7 days. Call us today for a free quote or visit us online Investment Rehab Lender. We are a direct lender for Fix and Flip loans in CA, AZ and NV. Funding in as little as 7 days. Easy online submission @

ZINC Financial 559-326-2509

REverse Mortgages ReverseIT 888-777-3311

Reverse Mortgages, fastest turn times in the industry. Training and lead support available.

JUMBO Bank of Internet 888-833-0555 ext 1508

Jumbo and Super Jumbo Loans 5/1 - 7/1 and 10/1 options.

First Cal

80% LTV up to $2M. Call for Guidelines


ADVERTISE YOUR NICHES HERE WITHIN 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 lenderâ&#x20AC;&#x2122;s information on products, program, procedures, representations, and warranties for details.


November 2011

Service provider classifieds

Service Provider Classifieds Technology a la mode 800-252-6633 ext 309

Mercury Network, the premier vendor management platform for lenders and appraisal management companies. a la mode also provides the leading mortgage websites, eSignature solutions, and mortgage marketing systems.

Applied Business Software 800-833-3343

Origination and Servicing software for hard money lenders.

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 â&#x20AC;&#x201C; 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.

Mortgage Payment Protection, Inc. 866-JOB-LOSS

The leader for risk management and loss mitigation products for the residential mortgage industry. Mortgage Payment Protection, Inc. was the first to develop the MortgageGuardian concept in 1999. It is backed by "Excellent"- rated insurance companies, and widely accepted by the GSEs, FHA, and investors. MortgageGuardian provides a layer of protection on mortgages against loss of income due to involuntary unemployment.

Quick Qualifier Software 888-684-9273

Software for Loan Officers - Qualify your buyers and make Open House Flyers with finance options and color pictures. It prints in English or Spanish. It runs on a Windows computer or the Internet, including IPads & Smart Phones.

Appraisal & AMC a la mode 800-252-6633 ext 309

Mercury Network, the premier vendor management platform for lenders and appraisal management companies. a la mode also provides the leading mortgage websites, eSignature solutions, and mortgage marketing systems.

StreetLinks Lender Solutions 800-778-4947

Providing lenders with a suite of valuation services and robust lending technology solutions, including full-service & self-managed appraisal products.


Service provider classifieds

title work & insurance Entitle Direct 877-936-8485 or 877-9ENTITLE Linear Title & Closing 401-841-9991 Mortgage Insurance Agency 866-355-9944


Scott Bond Services 800-365-0101


United Guaranty 877-642-4642

Hundreds of mortgage professionals have saved their borrowers up to 35% or more on their title insurance by recommending Entitle Direct. 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. State Licensed Surety Bonds, Errors & Omissions and Fidelity Bond coverageâ&#x20AC;&#x2122;s for Mortgage Bankers and Mortgage Brokers nationally. 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 thatâ&#x20AC;&#x2122;s second to none. We provide mortgage risk management products and services, including Mortgage Insurance, to a comprehensive range of mortgage lenders.

Branch Opportunities Benchmark 972-398-7676

Freedom Mortgage Corp 800-220-9498

Mountain West Financial 888-845-4530

A community of mortgage professionals united by Benchmark core values Relationships, Success, Dynamic, Excellence, and a Positive Attitude specializing in retail branching throughout the United States.

Freedom Mortgage Corporation is a full service mortgage banker engaged in the origination of residential mortgage loans. Freedomâ&#x20AC;&#x2122;s strategy is simple; to be the best service and quality-oriented lender in the continental United States.

Consistent. Reliable. Competitive. With over 20 years of experience in Retail Branching, Mountain West Financial opens doors to limitless opportunities.

Credit Repair & Restoration SX3 Software 855-SX3-SOFT, 855-793-7638


November 2011

The most powerful windows based Credit Repair software that has taken the industry by storm!

Service provider classifieds

Compliance & Audit Accurate Quality Control, Inc. 770-931-5999

Quality Control, Training, Consulting. Post Closing, Suspected Fraud, Early Default & Repurchase Reviews, Pre-Funding, Test Cases. 49 Combined Years Working for HUD. We do the right thing right! GIVE US A TRY: 2 FREE QC REVIEWS (new clients only)!

marketing & lead Gen NEW

Best Rate Referrals 800-811-1402

In Touch Today 800-433-3755

Lead Gen Concepts


Mailer Leads 866-783-4053 ext 14

Titan List & Mailing Services, Inc 800-544-8060

Your mortgage marketing leader with many services available from Direct Mail & List Services, Telemarketing, Internet Leads, Mobile Marketing, and more. Delivering complete marketing education, valuable products to grow your business and exceptional service to make marketing an easy, enjoyable, and profitable experience. We provide full service automated marketing plans to fit your budget and business goals incorporating postcards, newsletters, greeting cards, brochures, presentations and more! Marketing consultations are available to help strategize the best marketing plan for your individual needs, whether just starting a marketing campaign, or enhancing your current plan. Lead Gen Concepts is different from our competition because we do not sell leads. We work with our customers to generate their own exclusive leads in their market using our proprietary direct-to-consumer lead generation websites and pre-build platforms. Our markets are exclusive so our customers will be on the only company in their market using our concepts to generate leads. Please visit our website at www. to learn more or sign up to use one of our concepts in your market today at! Imagine having 50 prospects per loan officer that are already pre-approved calling you within 10 days from today! Our mailers are FICO and AVM based and are prequalified based on credit data. Prospects will be ready to finance when they call you! Over 12 years of experience catering exclusively for the mortgage industry delivers consistent results from our turn-key campaigns. Our Pre-screened data, 24 hour turn around and custom pieces design continue to lead the industry for mortgage marketing efforts.

Training & education 800-231-4787


Advanced Education Systems dba TrainingPro

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 Pointsâ&#x201E;˘ for your real estate agents. Online e-zine published 2X month. Try for $1. NMLS-approved mortgage education provider, training MLOs for over a decade with the most extensive curriculum in the industry.




360 Mortgage Group National Wholesale Mortgage Lender. 866-418-2997

Accurate Quality Control Genny Kelly or Judy Nash-Ellis 770-931-5999 or

a la mode, inc. Websites and marketing tools for real estate professionals. 800-ALAMODE

Applied Business Software Origination and Servicing software for hard money lenders. 800-833-3343


November 2011

ATTENTION LENDERS!! Buyers of Distressed Debt.

Bank of Internet Darin Judis 888-833-0555 x1508

Benchmark A community of mortgage professionals united by Benchmark core values Relationships, Success, Dynamic, Excellence, and a Positive Attitude specializing in retail branching throughout the United States. Karri Vaught 972-398-7635

Best Rate Referrals Mortgage Marketing Professionals Raymond Bartreau 800-811-1402

Byte Software End-to-end Mortgage Loan Origination Software. 800-695-1008

Calyx Software Affordable software that streamlines and optimizes all phases of the loan processâ&#x20AC;&#x201D; from loan marketing through closing. 800-362-2599

DocMagic The largest dedicated loan document production company in the country, delivers a fusion of solutions guaranteed to meet today's complex loan document challenges. 800-649-1362

ENTITLE DIRECT Savings up to 35% or more on title insurance in 30 states. 877-936-8485 or 877-9ENTITLE


Freedom Mortgage Corporation Mortgage Lender. Lynn Tucker, Vice President 800-220-9498

Mailer Leads Lenders and Brokers who use our mailers are not only surviving -- they are thriving. 866-783-4053 ext 14

In Touch Today Full service automated marketing planspostcards, newsletters, greeting cards, brochures, presentations and more! 800-433-3755 Interpreting the complicated mortgage rules in plain language. 800-231-4787

Lead Gen Concepts Generate your own exclusive leads using our proprietary direct-to-consumer lead generation websites and pre-build platforms.

Linear Title & Closing Title Insurance & Settlement Services. Nick Liuzza 401-841-9991

The Mortgage Lender Implode-O-Meter Tracking the Housing Finance Breakdown... the WHOLE truth.

Mortgage Insurance Agency, Ltd. State Licensed Surety Bonds, Errors & Omissions, and Fidelity Bond coverages for Mortgage Bankers and Mortgage Brokers nationally. David Jackson, President 866-355-9944

Mortgage Payment Protection, Inc. Mortgage Payment Protection provides a layer of protection on mortgages against loss of income due to involuntary unemployment. Sandra Tabares 866-JOB-LOSS (568-5677)

Mountain West Financial Making Homeownership a Reality, Since 1990. 888-845-4530

National Association of Mortgage Brokers

Pacific Union Financial Correspondent Fannie & Ginnie direct conduit offering Niche Correspondent. Jeff Vanderluit, National Sales Manager



Quick Qualifier Software Open House Flyers with finance options and color pictures Thor Skonnord (888) 684-9273

Scott Bond Services A leader in providing surety license bonds, fidelity, and E&O to the mortgage industry nationwide. 800-365-0101 Cary McFadden

United Wholesale Mortgage Specializing in FHA, VA and Conventional Wholesale Lending. Allen Beydoun 800-981-8898

RateLink Providing mortgage professionals with timely and accurate data as a means to a competitive advantage. 800-938-5193

reverseit! 888-777-3311

SX3 SOFTWARE Business level software applications for the Credit Repair, Debt Settlement, Loan Modification & Short Sale Industries. 1-855-SX3-SOFT 1-855-793-7638


November 2011

United Guaranty We provide mortgage risk management products and services, including Mortgage Insurance, to a comprehensive range of mortgage lenders. 877-642-4642

Titan List & Mailing Services, Inc. Data provider, printing service & dirct mail house. 800-544-8060

Advanced Education Systems dba TrainingPro National Leader in Mortgage Education. Courtney Holstein 877-878-3600

Windvest Corporation Hard money lender, specializing in Rehab Loans. NMLS # 394407. Andre Jimenez/John Ermin 877-285-0777

Zinc Financial, Inc. Investment Rehab Lender. Todd Pigott 559-326-2509

BRINGING UP THE REAR - continued from page 54

fruit loop soaked in milk, or he’s just disturbed. What do you suppose he thinks “spread” to Europe and its banks? I mean, I don’t think loans can spread… loans are not germs or viruses… they don’t just spread. Someone has to spread them, right Neal? And let’s assume you’re right and within the mortgage-backed securities and CDOs that were sold to Eurobanks, there were a few loans leveraged to the hilt. So, who do you suppose might have taken them to Europe, Neal? Because it wasn’t me Neal. And then he writes: “Now that worries mount about an ever more likely return to recession amid a significant equities markets decline, we are hearing again about housing.” Hearing “again” about housing? Who's hearing again about housing? I wouldn’t worry too much about you hearing anything, Neal. I just don’t think you’ve heard anything in maybe twenty years. I think you should consider donating your head to the particle physicists at CERN’s laboratories as they’re studying the beginnings of the universe and are apparently trying to find the densest matter on earth. And Neal continues to offend… “There’s the foreclosure mess, the underwater mortgage mess, the tight mortgage lending standards and all the rest. There’s displaced construction workers. There’s consumers unwilling to spend as their perceived real estate wealth evaporates. There’s housing, traditionally the leader out of recession, still generally in decline, and harder to ignore.” It’s only my perceived wealth that’s been evaporating? Well, that’s certainly a relief. Only my perceived wealth. Well, thank goodness for that. Hey, here’s an idea, since it was only perceived wealth, how about you write an article telling the bankers to give everyone perceived principle reductions? You’d be in favor of that right, Neal? Neal’s also got some answers to our housing market problems. Here’s what he says we should consider in order to fix the housing mess he’s having a hard time ignoring… “… more people who are current on their mortgage payments have to be able to refinance their mortgages to take advantage of rates near 4%. That savings for many would go into additional spending, a stimulative measure, and would boost their economic

psychology, which is important. Even if they used the savings to pay down their own debt it would do long-term good.” What kind of a word is “stimulative,” Neal? Let me guess… were you a triple-digit SAT score kind of guy? You know, math and verbal combined, what… about 770? And then straight to the local community college to get your Associates in North American Egotistical Studies or possibly Recumbent Illiteracy? How did you ever get a job as an editor at Dow Jones Newswires using words like “stimulative?” Okay, I’m done. There’s no point in going on about Neal anyway. If I’m not going to get to kick his callous, insensitive and entirely ignorant behind around a parking lot, then what’s the point? I suppose I could challenge him to a ballet of wits, but that wouldn’t be right either because he’s unarmed. And Neal closes by saying… “Given political realities, it’s hard to imagine much of a fiscal push, in housing or elsewhere.” You know, Neal’s right about those “political realities.” The reason we’re not solving the foreclosure crisis isn’t because of economic or fiscal realities… what has doomed us to suffer the economic pain of a deflationary spiral are only “political realities,” or in other words… what people think… just thoughts. At least half the country doesn’t understand that it is a crisis. They think that irresponsible people bought homes they couldn’t afford. They do not think it right or fair to bail out those that made irresponsible decisions. But thinking something doesn’t make it true. Ours is not a housing crisis, it is a credit crisis. And the credit markets froze in 2007, not because of borrowers, but because of bankers. Those that oppose saving their neighbor from foreclosure are costing the rest of us, and themselves, trillions of dollars in aggregate losses. But the people in foreclosure have already lost. And by forcing those losses, everyone else loses too. Only by saving them from further loss do we save the rest of us And as we fiddle… Rome burns. Are you listening, Neal? Martin Andelman is a staff writer for The Niche Report, and a feature writer for, where you’ll find his almost daily column, Mandelman Matters. Questions or comments? Send them to:



Bringing Up the rear Neil Lipschutz, Managing Editor of Dow Jones Newswire BY MARTIN ANDELMAN


used to read the Wall Street Journal all the time, maybe even every day for a few years back in the days when Yuppies were king, BMWs reigned supreme, and I was still stupid enough to pay $300 a year to carry around a grey piece of plastic from American Express that I referred to as being “platinum.” These past three years, well… not so much. It’s not just because a gaggle of insensitive and insufferable cheerleaders for the banks write the paper, although that certainly is a big part of it. It’s mostly because the paper’s views are entirely predictable, and unreservedly smug … no they’re smug2. We’re not even having a recession in the Wall Street Journal, its positively surreal. So, I’m clicking around through my news alerts yesterday, and I see this headline: “We Can’t Ignore Housing Anymore.” Huh? Can’t ignore it… anymore? Well, why the heck not? It’s been working so well, thus far. Why quit on a winner? Neal Lipschutz, who first joined the company in 1982, and is today senior vice president and managing editor of Dow Jones Newswires, wrote the article. According to his bio, he “directly supervised the news staffs in the Americas and served as chief arbiter of and 54

November 2011

spokesman for news policies, coverage and standards on a global basis.” And today, Neal has global responsibility for Dow Jones Newswires editorial. So, Neal is a man with “global responsibility,” and I’m almost positive that I’ve never even met a man with global responsibility. Apparently, Neal has written articles that have appeared in The Wall Street Journal, Barron's, The Asian Wall Street Journal Weekly, The New York Times, and The Baltimore Sun among others. So, at first I thought… Neal is Journalism Man, but then I started reading what he had to say and I quickly realized… nope, he’s just another Lipschutz. Here’s how he kicked off his article on how we can’t ignore housing… “In the end, we can’t dodge housing. The U.S. recession and financial crisis of the late aughts began with housing and the scourge of subprime mortgages, which were so messily dispensed. It spread to Europe and its banks. For a few years we tried to work around the paralyzed housing sector – the drip, drip of steadily lower home prices, the unresolved status of the wounded Fannie Mae and Freddie Mac — and it seemed to be working.” Obviously, either Neal has the cognitive ability of a

- continued on page 53

Big changes are coming in how the GSEs will accept your loan files.

Are you ready for UMDP? The GSEs’ Uniform Mortgage Data Program, or UMDP is coming very soon and it will radically change how you submit loan data to the GSEs. They will require that you deliver appraisal data in MISMO XML 2.6 format. If you can’t get the XML, they’ll also accept a first-generation PDF but it’s not preferred and you’ll quickly see why. If your appraisal vendors are still only giving you PDFs or converting PDFs into the preferred XML for submission to the GSEs, you’ve probably already seen the extra expenses and pipeline delays as a result.

There’s a better way, and we can help you for free.

We create, transmit, store, and manage more appraisal data than anyone else. Over half the nation’s appraisers use our formfilling software, so we’ve prepared and trained tens of thousands of them in anticipation of this massive change in appraisal data delivery. We’re also training lenders and underwriters across the country for error-free compliance. We can help you, too. You can avoid fees, pipeline delays, closing delays, and all the headaches and hassles that ill-prepared lenders or AMCs will face. The first step is up to you. Visit our UMDP resource center at today.

Free tools and training available now at All the info you need Find all the program details, a deadline calendar, links to other resources, and much more

UMDP Readiness Checklist An .xls tool to help you prepare your organization for a smooth transition

UAD Appraisals Reference Poster We’ll mail you a poster so your underwriters can decipher the new appraisal reports

UMDP Roadmap webinars Register for free half-hour webinars for operations staff and underwriters on a variety of UMDP topics

Mercury Network 1-800-434-7260 • AD CODE: MANRMN1011 a la mode and its products are trademarks or registered trademarks of a la mode, inc. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies, and other items are subject to change without notice. Copyright ©2011 a la mode, inc.




BODA Publishing, LLC, PO Box 494,Bentonville, AR 72712

"TheNicheReport is a national trade publication dedicated to wholesale, retail and correspondent lending."

Reach New Markets and New Prospects using NextGen Technology! Our industry and technology are both changing fast. MailerLeads continues to lead the way by understanding these trends and capitalizing on cutting edge technologies that drive new business to our clients. MailerLeads was the first to introduce and properly execute PURLs in our market. Now...we are excited to be the first to integrate QR codes to reach new prospects. Top Performing Mailer Programs: • Refinance • Purchase • Debt-Consolidation • A+ Conforming/Jumbo • FHA/VA Streamline • Loan Modification • DU/Refi Plus - Relief Refi • Debt-Settlement/Debt Relief • Reverse Mortgage 1.866.783.4053

November 2011  

The Niche Report - November 2011