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State and national events AUGUST 2010 Wednesday-Friday, August 18-20 CAMB 2010 Annual Convention & Grand Exposition Hyatt Regency Long Beach & Long Beach Convention Center Long Beach, Calif. For more information, visit Central Coast Chapter For more information, contact CAMB Central Coast Chapter Coordinator Sandy Shillington at (805) 816-6899 or e-mail Central Valley Chapter For more information, contact CAMB Central Valley Chapter Coordinator Sarah Simmons at (559) 419-9098 or e-mail

Greater Monterey Bay Chapter For more information about Greater Monterey Bay Chapter events, call (831) 427-2262 or e-mail

Greater Sacramento Chapter For more information on Greater Sacramento Chapter events, call the Chapter Hotline at (916) 848-3390.

For more information on Los Angeles Metro Chapter events, call (310) 4645930, or contact Chapter Coordinator Teri MacCrea at (562) 804-2345 or e-mail North Bay Chapter For more information, contact North Bay Chapter President-Elect Chris Salese at (702) 265-9006 or e-mail North Central Coast Chapter For more information on North Central Coast Chapter events, contact Eric Christianson at (805) 688-1010 or e-mail North Los Angeles Chapter For more information on North Los Angeles Chapter events, contact Chapter Coordinator Deborah Sable at (877) 6234211 or e-mail Orange County Chapter For more information about OrangeCounty Chapter events, visit or contact Chapter Coordinator Lauri Tarango at (714) 879-2188 or e-mail

DECEMBER 2009 Thursday, December 3 CAMB San Diego Chapter Holiday Party Location to be determined 6:00 p.m.-11:00 p.m. For more information, visit For more information on San Diego Chapter events, call (619) 869-6817, e-mail or visit San Diego North County Chapter For more information on San Diego North County Chapter events, contact Chapter Coordinator Lauren Pasion at (858) 523-9990, ext. 203 or e-mail San Francisco Peninsula Chapter For more information about San Francisco Peninsula Chapter events, call Chapter Coordinator Linda Collantes at the Chapter Hotline at (650) 634-9400, visit or e-mail San Gabriel Valley Chapter For more information about San Gabriel Valley Chapter events, contact Chapter Coordinator Darla Lucido at (909) 349-0906, e-mail, or visit San Joaquin Chapter For more information about San Joaquin Chapter events, contact Cameron Pannabecker at (916) 484-6905 or e-mail

DECEMBER 2009 Wednesday, December 9 Silicon Valley Chapter Board Meeting Santa Clara County Association of Realtors 1651 North First Street, 2nd Floor San Jose 9:00 a.m.-11:00 a.m. Guests are welcomed. For more information, contact CAMB Silicon Valley Chapter President Cathy Warshawsky at (408) 371-2172 or e-mail For more information on Silicon Valley Chapter events, call the Chapter Hotline at (408) 404-5202, visit, contact Chapter Coordinator Diana Liffengren at (408) 263-3555 or e-mail Southern Los Angeles County Chapter For more information on Southern Los Angeles County Chapter events, contact Chapter Coordinator Teri MacCrea at (562) 215-0280 or e-mail


Inland Empire Chapter For more information about Inland Empire Chapter events, contact Chapter Coordinator Darla Lucido at (909) 349-0906 or e-mail

NOVEMBER 2009 Friday, November 27 CAMB Los Angeles Metro Chapter Board of Directors Meeting GB Mortgage Solutions 407 South La Brea Avenue Inglewood, Calif. 8:30 a.m.-10:00 a.m.

NOVEMBER 2009 Wednesday, November 11 CAMB San Diego Chapter Board of Directors Meeting Stewart Title of California 7676 Hazard Center Road, 14th Floor San Diego 5:00 p.m.-7:00 p.m.

NOVEMBER 2009 Wednesday, November 11 Silicon Valley Chapter Board Meeting Santa Clara County Association of Realtors 1651 North First Street, 2nd Floor San Jose 9:00 a.m.-11:00 a.m. Guests are welcomed. For more information, contact CAMB Silicon Valley Chapter President Cathy Warshawsky at (408) 371-2172 or e-mail


Greater Northstate Chapter For more information on Greater Northstate Chapter events, contact Chapter Coordinator Deanna Mercurio at (530) 226-6080 or e-mail

OCTOBER 2009 Friday, October 23 CAMB Los Angeles Metro Chapter Board of Directors Meeting GB Mortgage Solutions 407 South La Brea Avenue Inglewood, Calif. 8:30 a.m.-10:00 a.m.

Wednesday, October 7 CAMB San Diego Chapter Board of Directors Meeting Stewart Title of California 7676 Hazard Center Road, 14th Floor San Diego 5:00 p.m.-7:00 p.m.

Silicon Valley Chapter OCTOBER 2009 Wednesday, October 14 Silicon Valley Chapter Board Meeting Santa Clara County Association of Realtors 1651 North First Street, 2nd Floor San Jose 9:00 a.m.-11:00 a.m. Guests are welcomed. For more information, contact CAMB Silicon Valley Chapter President Cathy Warshawsky at (408) 371-2172 or e-mail O

East Bay Chapter For more information about East Bay Chapter events, visit the CAMB East Bay Chapter on the Web at

Los Angeles Metro Chapter SEPTEMBER 2009 Friday, September 25 CAMB Los Angeles Metro Chapter Board of Directors Meeting GB Mortgage Solutions 407 South La Brea Avenue Inglewood, Calif. 8:30 a.m.-10:00 a.m.

San Diego Chapter OCTOBER 2009 Friday, October 2 CAMB San Diego Chapter 2009 Annual Trade Show Location to be determined 11:00 a.m.-5:00 p.m. For more information, visit

CA 1

CAR Reports July Sales Increased 12 Percent Home sales increased 12 percent in July in California, compared with the same period a year ago, while the median price of an existing home declined 19.6 percent, according to the California Association of Realtors (CAR). “The federal tax credit for first-time buyers played a critical role in the purchase decision of many buyers,” said CAR President James Liptak. “Nearly 40 percent of first-time buyers said they would not have purchased a home if the tax credit was not offered. Because the tax credit has helped so many first-time buyers become homeowners, it is critical that Congress extends the credit beyond the Dec. 1 deadline, and includes all buyers, not just first-timers.” Closed escrow sales of existing, single-family detached homes in California totaled 553,910 in July at a seasonally-adjusted annualized rate, according to information collected by CAR from more than 90 local Realtor associations statewide. Statewide home resale activity increased 12 percent from the revised 494,390 sales pace recorded in July 2008. Sales in July 2009 increased 8.1 percent compared with the previous month. The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the July pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. The median price of an existing, single-family detached home in California during July 2009 was $285,480, a 19.6 percent decrease from the revised $355,000 median for July 2008, CAR reported. The July 2009 median price rose 3.9 percent compared with June’s $274,740 median price. “July marked the fifth consecutive month of month-to-month increases in the median price,” said CAR Vice President and Chief Economist Leslie AppletonYoung. “This was the largest increase on record for the month of July based on statistics dating back to 1979. The yearly decline in July also was the smallest in the past 19 months. Favorable home prices in the low end of the market continue to propel sales of homes priced less than $500,000. This price segment now accounts for 74 percent of the market share compared with just 43 percent prior to the start of the credit crunch. The high-end segment continues to experience elevated inventories and declines in the median price as financing for jumbo loans and unrealistic sellers challenge the market.”

O The median number of days it took to sell a single-family home was 39.9 days in July 2009, compared with 47.8 days (revised) for the same period a year ago.

The delinquency rate for mortgage loans on residential properties in California was 9.41 percent at the end of the second quarter of 2009, an increase of 19 basis points, according to the Mortgage Bankers Association (MBA). The delinquency rate excludes loans in the process of foreclosure. The percentage of loans in California on which foreclosure was started during the quarter fell 15 basis points to two percent, while the percentage of loans in the foreclosure process at the end of the quarter rose 56 basis points to 5.77 percent. These rates are not seasonally adjusted. Mortgage delinquency rates normally drop in the first quarter of the year and begin to climb again in the second quarter due to a variety of seasonal factors. The delinquency rate for prime adjustable-rate mortgage (ARM) loans decreased 25 basis points to 14.32 percent and the rate for prime fixed-rate mortgage loans increased 70 basis points to 4.64 percent. The delinquency rate for the sub-prime ARM loans increased 69 basis points to 25.54 percent, while the rate for sub-prime fixed-rate loans increased 137 basis points to 20.89 percent. The delinquency rates for FHA and VA loans were 7.43 percent and 5.36 percent, respectively—up 34 basis points for FHA loans and up 17 basis points for VA loans. The foreclosure start rate for prime ARM loans in California increased seven basis points to 3.43 percent, while the rate for prime fixed-rate loans increased four basis points to 0.76 percent. The foreclosure start rate for sub-prime ARM loans decreased 205 basis points to 6.82 percent, while the rate for sub-prime fixed-rate loans increased 17 basis points to 3.42 percent. The percentage of prime ARM loans in foreclosure increased 194 basis points to 10.08 percent and increased 41 basis points to 1.66 percent for prime fixed-rate loans. The rate for sub-prime ARM loans increased 15 basis points to 27.96 percent, while the rate for sub-prime fixed-rate loans increased 115 basis points to 8.01 percent. The percentage of FHA loans in foreclosure increased 18 basis points to 1.57 percent. The percentage of VA loans in foreclosure increased 17 basis points to 1.5 percent. Among the 50 states and the District of Columbia, California ranked 12th in delinquencies and fourth in foreclosures started. Mississippi ranked first in delinquencies with a rate of 13.04 percent and Nevada ranked first in foreclosure starts with a rate of 3.70 percent. California has 15 percent non-prime borrowers (FHA and sub-prime) versus a national average of 19 percent. On a national level, the delinquency rate for mortgage loans on one- to fourunit residential properties was 8.86 percent on a non-seasonally-adjusted basis, up 64 basis points from 8.22 percent in the first quarter of 2009. The seasonallyadjusted delinquency rate on residential properties was 9.24 percent in the first quarter, up 12 basis points from last quarter’s seasonally-adjusted rate. The nonseasonally-adjusted percentage of loans in which foreclosure was started during the quarter fell one basis point to 1.36 percent, while the non-seasonally-adjusted percentage of loans in the foreclosure process at the end of the quarter rose 45 basis points to 4.3 percent.

For more information, visit

For more information, visit

Highlights of C.A.R.’s resale housing figures for July 2009:




O C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in July 2009 was 3.9 months, compared with 6.9 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

CA 2

Mortgage Delinquencies in California Rise in Latest MBA National Delinquency Survey

O Thirty-year fixed-mortgage interest rates averaged 5.22 percent during July 2009, compared with 6.43 percent in July 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.82 percent in July 2009, compared with 5.24 percent in July 2008.

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The NAMB Perspective


FHA Insider: FHA and the New Condo Approval Process: Will Lenders Take Advantage of This Change? By Jeff Mifsud


Partnering and Power Networking: The Double “P” Principle


By Laura Lynn Burke

Forward on Reverse: HECM at 20: Leaders and Pioneers in U.S. Reverse Mortgage Series … A Visionary Non-Commercial Entrepreneur By Atare E. Agbamu, CRMS


Value Nation: Mortgage Professionals Living in Harmony With the HVCC By Charlie W. Elliott Jr., MAI, SRA








Viva Las Vegas: A Message From NAMB/WEST 2009 Committee Chair Joe Camarena


FTC’s New Leadership Making Aggressive Moves in Consumer Protection By Terry W. Clemans


NMP Mortgage Professional of the Month: Thomas R. Sirico, Executive Business Director of mortgageNOW inc.


The Secondary Market Overview: From Bonds to Production By Dave Hershman



Regulatory Compliance Outlook: September 2009 … New Category of Sub-Prime Mortgage Loans By Jonathan Foxx



The Birth of an Agency By Jonathan Foxx


NMP’s Market Barometer By David Beadle


Ask Brian: Are You Mentally “Melted Down?” By Brian Sacks


Ask Tommy: Your QC Expert By Tommy A. Duncan


Trend Spotter: Is This Time Different? By Gibran Nicholas


A View From the “C” Suite: What Lies Ahead for Mortgage Lending? By David Lykken


The Future of Mortgage Banking By Tommy A. Duncan


Online Lending for the New Decade By J.P. Kelly


The Future of the Mortgage Industry: A discussion with the executive team at Residential Finance Corporation


Maximize Your Profits: Adopt Orphan Customers








By Gary Opper






September 2009 Volume 1 • Number 5



Your source for the latest on originations, settlement, and servicing

1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 / (888) 409-9770 Fax: (516) 409-4600 Web site: STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312 Andrew T. Berman Executive Vice President (516) 409-5555, ext. 333 Domenica Trafficanda Art Director Karen Krizman Senior National Account Executive (516) 409-5555, ext. 326

ARTICLE SUBMISSIONS/ PRESS RELEASES To submit any material, including articles and press releases, please contact Editor-in-Chief Eric C. Peck at (516) 409-5555, ext. 312 or e-mail The deadline for submissions is the first of the month prior to the target issue. SUBSCRIPTIONS To receive subscription information, please contact Office Manager Beatrice Marcus at (516) 409-5555, ext. 301, e-mail or visit Any subscription changes may be made to the attention of Beatrice Marcus via fax to (516) 409-4600 or e-mail Statements of fact and opinion in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply an opinion on the part of NMP Media Corp. National Mortgage Professional Magazine reserves the right to edit, reject and/or postpone the publication of any articles, information or data. MO






ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact Senior National Account Executive Karen Krizman at (516) 4095555, ext. 326 or e-mail





Beatrice Marcus Office Manager (516) 409-5555, ext. 301



A Message From NMP Media Corp. Executive Vice President Andrew T. Berman The future of mortgage banking This month, we take are taking a look at the future of mortgage banking. I really wish I had a crystal ball to read into the future of the mortgage banking industry; however, there are certain factors you can almost guarantee will impact this industry. These factors include such things as an increase online lending. J.P. Kelly’s article “Online Lending for the New Decade” reveals some interesting facts on the world on Internet lending, and J.P. makes a good case for why you should be spending company resources on building your online presence (and I am not talking about the “virtual brochures” that we all had in 2001). We also hope that the landscape of warehouse lending improves. David Lykken’s latest installment in this “A View From the C-Suite” series tackles the topic of “What Lies Ahead for Mortgage Lending?” David also covers whether it’s even a good time to get out of the industry and how the industry is facing extreme irrational regulation. Tommy A. Duncan also contributed a great piece looking toward the future of the industry with his article, “The Future of Mortgage Banking.” As someone who works with some of the industry’s top mortgage firms, Tommy reveals his perspective on how to use technology to enhance customer service and deal with current and future regulations. Lastly, you will find some interesting point of views from executives of Residential Financial Corporation as they take part in a roundtable discussion as the dissect many aspects of the future of the mortgage banking industry. The NAMB Perspective Be sure to check out this month’s “The NAMB Perspective” feature. In it, you will find informative articles on how certification can positively impact your business and increase your bottom line, and update on the Red Flags Rules that go into effect on Nov. 1, and the use of a Twitter power tool that is EASY to use (yes, even for those who hardly know why Twitter even exists). Viva Las Vegas! NAMB/WEST 2009 Committee Chair Joe Camarena shares with our readers why this year’s NAMB/WEST at the MGM Grand could be the most important industry conference you have even been a part of. From powerful sessions on social networking, a full seminar on video marketing, an economic update by Stewart Information Services’ Ted Jones, plus various networking events and an exhibit hall, so you should be sure that you book your room by Tuesday, Nov. 10 to take advantage of the deeply discounted NAMB group rates. NAMB has added some great content to the event this year, and in the process, has made the cost to attend much more affordable, that it’s a no-brainer to optimize this quick getaway to Vegas. Mortgage Professional of the Month This month, we selected Thomas R. Sirico, Executive Business Director of mortgageNOW inc. as the NMP Mortgage Professional of the Month. Tom discusses the tools and tactics that keep him in business, from how his firm is dealing with the Home Valuation Code of Conduct (HVCC), to what it takes to be successful in this marketplace. And in the world of valuation ... Charlie W. Elliott shares with our readers how some mortgage professionals having been “Living in Harmony With the HVCC” in this month’s Value Nation column. While we are on the subject of appraisals, this month’s “Ask Tommy: Your QC Expert” By Tommy A. Duncan reviews some powerful uses of automated valuation models (AVMs). Getting more loans! Be sure to check out Laura Lynn Burke’s “Partnering and Power Networking: The Double ‘P’ Principle.” Laura shares lots of back-to-basics sales tips, plus some new ideas that can be helpful to any originator. You can find more back-tobasics in Gary Opper’s “Maximize “our Profits: Adopt Orphan Customers.” If you just think it’s too tough out there to generate loans, then this month’s “Ask Brian” column from Brian Sacks is required reading. The future of mortgage banking certainly has no shortage of regulation National Credit Reporting Association (NCRA) Executive Director Terry W. Clemans talks about the Consumer Financial Protection Agency (CFPA) in his article, “FTC’s New Leadership Making Aggressive Moves in Consumer Protection.” Jonathan Foxx provides further detailed CFPA coverage with an item-by-item breakdown in his piece, “The Birth of an Agency.” Mr. Foxx also authored this month’s “Regulatory Compliance Outlook” on “New Category of Sub-Prime Mortgage Loans” as created by revisions to Regulation Z. A new series on reverse mortgages I just recently learned from “Forward on Reverse” author, Atare E. Agbamu, CRMS, that this year, the Home Equity Conversation Mortgage (HECM) turns 20! As a tribute to HECM, Atare is launching his new “HECM at 20: Leaders and Pioneers in the U.S. Reverse Mortgage Industry Series.” In his first installment, Atare interviews the father of the HECM program and reverse mortgages, Ken Scholen. Using FHA on condos? In this month’s “FHA Insider,” Jeff Mifsud reviews “FHA and the New Condo Approval Process: Will Lenders Take Advantage of This Change?” Jeff provides a detailed overview of the 14 things you need to know about these changes through Mortgagee Letter 09-19. The future of home pricing to rise? Gibran Nicholas, in this month’s “Trend Spotter: Is This Time Different?” column, provides you with four powerful arguments why housing prices should be headed up over the next few years. Was is the “Great Housing Bust” or the “Great Housing Boom?” Gibran dissects the factors that impact the housing market and just where these factors are heading. I thank you again for taking the time to review the latest copy of National Mortgage Professional Magazine. Our print publication, in addition to the strength of our Web site,, strives to bring you, the mortgage professional, the latest in industry news and trends. The sea known as the mortgage industry has become a tough one to navigate as of late, as we must sail through an up-and-down market, a struggling economy and a laundry list of regulatory changes and federal proposals designed to “fix” the economy. Let us serve as your guide through these seas, as we head into the latter part of 2009 and close out the first decade of the 21st Century. Sincerely,


National Mortgage Professional Magazine is published monthly by NMP Media Corp. Copyright © 2009 NMP Media Corp.

Andrew T. Berman, Executive Vice President NMP Media Corp.

The National Association of Mortgage Brokers

National Association of Professional Mortgage Women

7900 Westpark Drive, Suite T-309 O McLean, VA 22102 Phone: (703) 342-5900 O Fax: (703) 342-5905 Web site:

P.O. Box 140218 O Irving, TX 75014-0218 Phone: (800) 827-3034 O Fax: (469) 524-5121 Web site:

NAMB Board of Directors Officers President—Jim Pair, CMC Mortgage Associates Corpus Christi 6262 Weber Road, Suite 208 O Corpus Christi, TX 78413 (361) 853-9987 O President-Elect—William Howe, CMC, CRMS Howe Mortgage Corporation 9414 E. San Salvador Drive, #236 O Scottsdale, AZ 85258 (602) 200-8100 O Vice President—Michael D’Alonzo, CMC Creative Mortgage Group 1126 Horsham Road, Suite D O Maple Glen, PA 19002 (215) 657-9600 O Secretary—Penny Fagan, CRMS P. Fagan Mortgage Inc. 222 East Moulton Street O Decatur, AL 35601 (256) 355-5505 O Treasurer—Don Frommeyer, CRMS Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D O Carmel, IN 46032 (317) 575-4355 O Immediate Past President—Marc S. Savitt, CRMS The Mortgage Center 115 Aikens Center, Suite 20-B O Martinsburg, WV25401 (304) 267-9040 O


Donald E. Fader, CRMS SMC Home Finance P.O. Box 1376 O Kinston, NC 28503-1376 (252) 523-5800 O

Denise Leonard Massachusetts Mortgage Association 92 High Street, Unit T-41C O Medford, MA 02155 (781) 393-9400 O Walt Scott Excalibur Financial Inc. 175 Strafford Avenue, Suite 1 O Wayne, Pa. 19087 (215) 669-3273 O

Senior Vice President Sharon Patrick, MML, CMI (386) 985-1620 Vice President/Northwestern Region Jill M. Kinsman (206) 344-7827 Vice President/Western Region Tim Courtney (760) 792-5620

Vice President/Southeastern Region Jessica Edmonston (919) 414-3028 Secretary Laurie Abisher, GML, CMI (661) 283-1262 Treasurer Kay Talley, MML (919) 846-4294 Parliamentarian Hulene Bridgman-Works (972) 494-2788

Vice President/Central Region Candace Smith, CMI (512) 329-9040

National Credit Reporting Association Inc. 125 East Lake Street, Suite 200 O Bloomingdale, IL 60108 Phone: (630) 539-1525 O Fax: (630) 539-1526 Web site:

Board of Directors President—Judy Ryan (800) 929-3400, ext. 201 Vice President—Marty Flynn (925) 831-3520, ext. 224 Treasurer—Daphne Large (901) 259-5105 Ex-Officio—Nancy Fedich (908) 813-8555, ext. 3010

Director—Dave Miller (317) 573-0667 Director—Donald J. Unger (303) 670-7993, ext. 222 Director—Tom Swider (856) 787-9005, ext. 1201 Director—Donovan Williams (714) 638-2855

NCRA Staff Director—Thomas Conwell (248) 313-1000

Executive Director—Terry Clemans (630) 539-1525

Director—Don Goldammer (661) 398-4700

Office Manager/Membership Services—Jan Gerber (630) 539-1525

Director—Sanford (Sandy) Lubin (805) 481-3155

Legal Counsel—James Sutton (972) 680-2665


Don Starks D.C. Starks Mortgage Associates Inc. 141 South Main Street O Bourbonnais, IL 60914 (815) 935-0710 O

President-Elect Gary Tumbiolo, CMI (919) 452-1529

Vice President/Greater Northeast Region Colleen-Therese McKeever, CMI (646) 584-8332


Ginny Ferguson, CMC Heritage Valley Mortgage Inc. 5700 Stoneridge Mall Road, Suite 150 O Pleasanton, CA 94588 (925) 469-0100 O

President Liz Roberts-Fajardo, GML (702) 498-8020 O

Joe Camarena The Mortgage Source 10120 Southwest Nimbus Avenue, Suite C-7 O Portland, OR 97223 (503) 443-1060 O

National Board of Directors


For more information on the National Association of Mortgage Brokers, visit

A Message From NAMB President Jim Pair, CMC Awash in a sea of issues We are beginning this year by swimming through an ocean of turbulent legislative and regulatory issues. Some of the issues that will have serious implications for our industry are: O O O O O




The Home Valuation Code of Conduct (HVCC); HR 3126 (the Consumer Financial Protection Agency Act of 2009); Federal Reserve Board proposed changes to regulation; RESPA reform; Healthcare reform efforts and the potential negative impact on small business; and O The Senate companion bill to HR 1728 (Mortgage Reform and Anti-Predatory Lending Act).


To learn more about these legislative and regulatory issues, visit the National Association of Mortgage Brokers Web site ( and watch for e-mail updates from NAMB and how we are going to bat for you and our industry. Fortunately, we have a very able and effective Government Affairs Committee, comprised of volunteers who represent all sections of our nation, a legislative NAMB staff headed by our Executive Director Roy DeLoach, and a very experienced and capable lobby team. Our strongest asset to address these issues is our “grassroots” efforts. You have responded in the past to our calls-to-action and have made a significant impact with your representatives and senators and various governmental agencies. We need to keep our grassroots efforts strong and continually engaged for the challenges we will face this year.

Certification? Certainly! A Message From NAMB Certifications Committee Chair Pava J. Leyrer, CMC, CRMS, CMP Borrowers, money and trust Are you looking for ways to earn more money in an economy and legislative climate that definitely does favor a mortgage broker and loan originator? I am “old school” and learned quickly, 32 years ago, that referrals and reputation were the keys to my success or failure. Moving through various positions and companies in my background, as with many I think, it became clear that education was and still is a key component to becoming a true trusted professional. As I heard about and learned what certification was, I spoke to many people whether it really made a difference. The answer was always a resounding yes! Bill Howe, CMC, CRMS, spoke of the many referrals and consumer confidence as he taught the first workshop I attended several years ago. Ginny Ferguson, CMC, spoke of specific borrowers who chose her over others in her area because of her designation. I made the decision to become certified, but thought one would be enough. Working up the courage and time at the height of the mortgage boom seemed crazy, but I was committed to getting it done. I realized in speaking with others

One way to strengthen our grassroots campaign is for every member to visit with their representative or senator while they are at home in your district. Since Congress is now on their summer recess, this is the perfect time to take action. Please call their district office and make an appointment to discuss our industry and the benefit and services we, as mortgage professionals, provide the consumer. You will be surprised at how little many of our representatives know about our industry. This is your opportunity to provide them with a better understanding of the role of the mortgage broker and the benefits provided by us to the economy and the consumer. If you will do this on a consistent basis, you will have a positive response when you have to contact them on a specific topic. As I stressed in my last message to you, we must step up and support those who have supported us. This means that we need a Political Action Committee (PAC) fund to help re-elect those who have supported our industry. Please log on to, click on the “Government Affairs” tab, click on “NAMBPAC” and click on “Donate to NAMBPAC” and make a donation now. Last but just as important, you need to participate in NAMB’s Lobby Day in Washington, D.C. This is where we hear from some of the major people who are proposing legislation or new rules and regulations. You have the opportunity to go to Capitol Hill and visit your congressman and senators about the issues of most concern to our industry and to the consumer. Our success this coming year depends upon all these parts working together. Members working with our Government Affairs Committee, staff and the lobby team, the support of our PAC, you participation in our calls-to-action for our grassroots efforts, and most importantly, visiting and working with your representative and senator while they home in district. If we work together on all these fronts, we will continue to achieve the success we have enjoyed in the past. Congress may be in recess, but it’s time we got to work! Jim Pair, CMC is with Mortgage Associates Corpus Christi and is president of the National Association of Mortgage Brokers. He may be reached by e-mail at

that is one of the hardest parts to obtaining a certification … time and procrastination (plus a small amount of fear.) Yes fear. We are a highly competitive breed and the fear of possibly failing was not something I looked forward to even with many years experience. Making a public announcement to my office and family about my goal was the best thing I did. I was constantly asked had I taken the test yet, when was I going to do it. I ended up taking the Certified Residential Mortgage Specialist (CRMS) exam, and than less than three weeks later, the Certified Mortgage Consultant (CMC) exam. Looking back, I would not have done it any other way. I have personally had referrals directly from the National Association of Mortgage Brokers Web site ( where borrowers looked for someone in Michigan and chose me “Because I had more initials behind my name, I must have more knowledge.” I have had many other NAMB colleagues refer borrowers because of my certifications. I very recently sent a referral to someone in San Jose because he was the only one with a certification. It does make a difference in how you are perceived, but more importantly, how you feel about yourself. Take the challenge to obtain more than one. The next step to more referrals and commitment to yourself and our industry is to become certified today. Contact any certified mortgage professional and we will gladly assist you. Pava J. Leyrer, CMC, CRMS, CMP is president and owner of Heritage National Mortgage Corporation in Grandville, Mich., and Certifications Committee chair for the National Association of Mortgage Brokers. She may be reached by phone at (616) 534-4993 or e-mail

The Credit Corner Red Flag Rules Update By Dave Wheeler

You may have seen the latest press releases indicating that the Federal Trade Commission’s (FTC) Red Flag Rule enforcement is now set to begin on Nov. 1, 2009. For those who have been following closely, you are also probably aware that all brokers were supposed to be compliant with the rules as of Nov. 1 of last year. While it may seem like this affords you additional time to get compliant, it was only the enforcement date that was pushed back. That means that you still need to act quickly if you have yet to get your plan in place. As a reminder, the Fair and Accurate Credit Transactions Act (FACTA) requires you to have a written Identity Theft Prevention Program in place in your office. There are no exceptions to this regulation. The main point is that the FACT Act requires companies to: O O O O

Develop a written plan to detect and respond to potential identity theft. Train employees on detection and use the proper tools. Update and review your program annually. Your plan should outline your company’s potential to have identity theft occur, what warning signs exist (Red Flags), how you detect those signs, and what responses are appropriate (do you call the FBI if you can’t get a marriage license showing a name change?).

The Communications Corner A Powerful Mortgage Marketing Web 2.0 Strategy: TweetGrid By David Orsini

And all of these examples are just from right now as I type this blog. I may not be a big fan of the concept of Twitter, but as a business owner, I know that if people want to talk about needing my services then I certainly need to listen. David Orsini is vice president of Top of Mind Networks and oversees the CRM division of the company. David specializes in building systems that help mortgage professionals maximize their relationships with their client base without having to lift a finger. He may be reached at (404) 943-9910 or e-mail


1. Someone thinking about buying another house as a rental … maybe they need financing.

2. Three people house hunting in my home town of Atlanta … maybe they need financing as well. 3. About 11 days before their scheduled closing, someone is getting some bad vibes from their mortgage company … maybe they could use a second opinion, you may not win the business this time since it is so close to closing, but you could use this opportunity to earn their trust, then maybe add them to your marketing campaign and be there to earn their business next time. 4. Someone who thinks they are being taken by their broker because they were quoted a 0.5 higher interest rate because of the county they live in … come in with an honest quote and educate this prospect and I bet the business is yours.


As you can see; at the time I was writing this blog post, there was:

Dave Wheeler is a regional account executive with Credit Plus Inc. and a member of the NAMB Credit Scoring Committee. He may be reached by phone at (610) 462-3763 or e-mail O

How powerful would it be if, as a mortgage professional, you could tell when someone looking to refinance their home was unsatisfied with their current mortgage professional? Or, if another person is questioning something about the rate they got from the broker they are currently with? Or, what if you could tell when someone was interested in buying a home in your city? This type of information is invaluable to any mortgage professional. These are extremely hot leads to pursue … people who need your help right away! Well these same people are putting this information right out there on the Internet for anyone to see; you just have to know where to look. I will be the first to admit; at first, I thought Twitter was stupid. In fact, I am still not 100 percent sold on it. I have found ways to make it work for me for my business, but why hundreds of thousands of regular people use it every day to announce to the world what they are doing at that moment in time really does not make sense to me. That being said, if people want to tell the world they need the service I provide and I know how to find them telling the world that, then that is a positive thing for my business. So without much further adieu; I introduce to you the TweetGrid. There are multiple social search engines designed to search your various social networking sites that can, in some form or another, yield similar results as TweetGrid. However, TweetGrid does not function like a normal search engine, other than the fact that you don’t need to set up any kind of an account to use it and it is completely free. It is (as the name suggests) a grid where you can type in multiple search phrases and the results are fed in to the grid in real-time. In other words, you don’t search for one thing, see your results, and then search for another thing (refreshing the page), see your results, and so on. With TweetGrid, you can have up to nine searches taking place simultaneously and in real-time. So as someone “Tweets” (I really hate saying that word, and hate typing it even more) the question “Am I being taken by my broker?,” you can be one of the very first people to see it. Take a look at the included grid image. I have blurred out the screen names of the “Twits” (users of Twitter?) to protect the innocent; but you can see what they are typing that match my search criteria.

Examples of red flags include not only obvious signs, like a fraud alert on a credit report, but also more subtle signs, such as a borrower only wanting to conduct business via phone, fax and e-mail, refusing to meet with third-party involved in the loan. This doesn’t mean the borrower is a thief! It means that the potential for identity theft exists, and you are required to take additional steps to verify identity before proceeding with the loan. How you choose to verify that identity should be written in your plan. The National Association of Mortgage Brokers has partnered with Microbilt LLC ( and Majestic Security LLC ( to offer two different solutions to you. Information on both companies can be found at Click on the “Red Flag Compliance” graphic to view their solutions. These are meant to offer you two different ways to start becoming compliant. Please read the information carefully and select which option is best suited for your business. Part of the proceeds will help NAMB continue to fight for you, and bring the latest information as it happens. Once you have your plan written, you must train your appropriate staff on any operational changes and tools that you will be using. The additional identity verification tools are usually readily available through our partners, as well as your current credit report provider. Many lenders require that these be submitted with each loan. Please check with your lenders for their specific details. And finally, remember to update your program at least annually.


Partnering and Power Networking: The Double “P” Principle By Laura Lynn Burke




FHA and the New Condo Approval Process: Will Lenders Take Advantage of This Change?


In the late 1990s, I did a lot of condo financing. I developed a niche for myself, and a reputation for being able to successfully get builders’ condominium conversions approved for Federal Housing Administration (FHA) financing. It was a mark of separation from the competition, and it paid off well. Previously, only the FHA could grant approval to condominium projects for FHA financing. However, with the recent Mortgagee Letter 09-19, this changes. Now, “… FHA will allow lenders to determine project eligibility, review project documentation … The requirements of this Mortgagee Letter are effective for all case numbers assigned on or after Oct. 1, 2009.” Lenders must have unconditional Direct Endorsement (DE) authority and staff with knowledge and expertise in reviewing and approving condominium projects. This FHA update is quite lengthy; I will provide you with the highlights here. Here are the 14 things you need to know about these changes: 1.New guides are applicable to Proposed/Under Construction; Existing Construction or Conversions. 2. The Spot Loan Approval (SLA) process, as defined in Mortgage Letter 1996-41, is eliminated. 3. Project Approval is not required for FHA-to-FHA streamline refinance transactions or properties being sold by the U.S Department of Housing & Urban Development (HUD). 4. If a lender elects to approve the project, then environmental reviews will not be required, but any known or discovered hazards (such as proximity to a highway, landfill, railroad or airport) may make the project ineligible unless remedied. 5. Association by-laws may now have a Right of First Refusal clause, unless it violates discriminatory conduct under the Fair Housing Act.

6. Property may utilize 25 percent of the total floor area for commercial purposes. 7. No more than 10 percent of the units may be owned by one investor. 8. No more than 15 percent of the total units can be in arrears (more than 30 days past due) of their condominium association fee payment. 9. At least 50 percent of the total units must be sold prior to endorsement of any mortgage on a unit. This means you won’t be able to close the loan until this presale requirement has been met. Valid presales include an executed sales agreement and evidence that a lender is willing to make the loan. 10. At least 50 percent of the units of a project must be owner-occupied or sold to owners who intend to occupy the units. On multi-phased projects, the owner-occupancy percentage is calculated on the first declared phase and cumulatively on subsequent phases if the ownership of the condominium project remains the same. If multi-phasing includes separate ownership per phase, each phase is calculated individually. No more than 30 percent of the total units can be encumbered with FHA insurance. 11. Condo conversions no longer require the homeowners to be in control of the association for one year. This means condo conversion units will be eligible once the 50 percent presale requirement is met. 12. Manufactured housing condominium projects are now eligible for FHA mortgage insurance. 13. Condominium project approvals will expire two years from the date they are placed on the list of approved condominiums. If a project has been previously approved, lenders must certify that they are not aware of any change in circontinued on page 11

Staying connected and adding services is for life insurance and disability insurthe new way of marketing and staying in ance. My clients were going to call business. Many mortgage brokers someone, so why not my colleague? (bankers typically aren’t allowed to) are I decided to go to school to learn tax looking for ways to service existing preparation. Why not, I already had a clients or attract new clients with multi- client base and I have seen and worked ple crossover products. If you are a mort- with their tax returns already. Tax gage banker, you too can do this through preparation is a great feature to tell networking and building a team of other your first-time homebuyers that you individuals you respect and trust to work offer. When you close, you can tell them together with your clients. how to prepare their amended tax As for the mortgage broker, some return so they can get their tax credit products you may look into could be tax (up to $8,000) now instead of waiting preparation or tax negotiating services until next year. (referred out), mortgage insurance, life Diversifying myself actually saved me insurance, disability insurance, legal a client. A past client referred his sister services, credit repair, loan modifica- to me, she had been calling the wrong tions, commercial loans, bi-weekly plans number for days leaving messages I and other financial related services. Offer never got. Finally, one of the realtors I your customers a center for one-stop work with called and said she had called shopping of all their finanher and left messages at cial needs. You will need her office that she didn’t to educate yourself in get either. The realtor who many of these areas, take made the initial contact a few classes, pass a test or found out that she lost the two, but you have now credeal and gave me her ated additional marnumber. She said she was ketable skills and knowltalking to another loan edge. Everyone wants to officer, but I called and work with knowledgeable there was a chance that I people. could possibly save the The idea of “one-stop deal. I called her and told shopping” is important her she was calling a “It has been my these days since, as a society, wrong number and I was experience that if we have become extremely sorry she missed me. I impatient and time-sensi- you offer a service of told her it didn’t matter to tive, so the bundling of servme if she was working true value, your ices and products is a welwith another loan officer, clients will tend to come solution. but to call me when she rely on you for your It has been my expericlosed and I would amend expertise and ence that if you offer a her tax returns and get service of true value, your professionalism.” her money now. clients will tend to rely on My point is … what you for your expertise and professional- ever you do, simply offer it and don’t ism. Only market what you have the push it. If you feel the extra steps of classexpertise to handle, unless you team up es and tests aren’t for you, then partner with another individual or group to mar- with others who mirror your ethics. ket services together. We cannot do it all by ourselves, and I have teamed up with many individ- this is where partnering comes into uals in the past. I had a co-worker who play. Through partnering, we become marketed legal plans to human resource stronger by offering a greater array of department heads. They would allow products and services. In today’s valuehim to come into their company and based market, the need to partner has make a presentation on his products. He become even stronger. always added that a “mortgage expert” There is marketing strength in numwould come along with him to answer bers when you create partnerships. The any questions related to first-time new terminology for partnering is “the homebuying, purchasing investment packaging of services and affinity property, refinancing, funding college groups.” The salesperson who utilizes tuition and adjustable rate mortgages. partnering becomes a more complete We did presentations with multiple com- resource to their clients. Learn how to panies and some organizations as well. choose a partner who mirrors your ethics Through this partnership, I did conduct and maximizes your strengths, by creatbusiness that I normally would not have ing a synergy that increases the produchad. He also brought me into a couple of tivity and profitability of both parties. churches as well, a great place to meet A partner is similar to a marriage, so people looking to buy homes. choose wisely. They will be speaking to Another colleague of mine sold insurance. I referred all clients to him continued on page 9

HECM at 20: Leaders and Pioneers in the U.S. Reverse Mortgage Industry Series

A Visionary Non-Commercial Entrepreneur type for the U.S. Department of Housing & Urban Development’s (HUD’s) HECM counseling protocol. He also collaborated in developing three software programs for analyzing and comparing reverse mortgages. After almost two years of trying, I recently had the opportunity to catch up with Ken Scholen. The following are his preliminary reflections on the program and the industry his vision and work have created. What attracted you to reverse mortgages, and why did you commit to the business? While working for the Wisconsin Board on Aging in the mid-1970s, I met homeowners who needed a way to convert their home equity into cash

How has the industry changed since you came in? The reverse mortgage industry did not exist when I got started, so everything that’s happened since then has been a change. Broad major developments have been the enactment of the HECM program, the development of a secondary market, the creation of the National Reverse Mortgage Lenders Association (NRMLA), improvements in the counseling program, the encroachment of financial predators

into this market, the Great Recession’s credit implosion, which has stalled product development, and the collapse of house prices, which may lead to HECM principal limit factor reductions for FY 2010. What are some lessons you have learned about seniors, the market, and the business? It’s not enough to assert that the predators only operate on the fringes of the market or that the loan product per se is not the problem. The reality is that the predators wield an enormous influence over the public image of the product and the market and, therefore, the health of the industry. And the existence of the product is, in fact, the necessary precondition for the financial

How many news stories about such cases would it take for the public to begin associating reverse mortgages with “losing your home?” —Ken Scholen abuse that is perpetrated on reverse mortgage borrowers. So the health of the industry is directly tied to the safety of the consumer, and halfway measures to restrain the predators will only result in halfway protection for consumers and the industry. A strong HECM counseling program can be a major factor in protecting consumers and the industry. But all the efforts to strengthen the program will mean little unless an independent source of reliable and adequate funding can be created to support it. Loan costs are a serious barrier to market growth. Consumers who would be willing to accept lesser loan benefits of various types in exchange for much lower costs are the major untapped segment of the reverse mortgage market. continued on page 10 O


History matters. As HECM (Home Equity Conversion Mortgage), and the multibillion-dollar* reverse mortgage industry it has spawned, turn 20 this year, it is fitting that we take a moment to reflect on the industry’s first two decades through the eyes and work of those who were not only present at its creation, but also made significant contribution to its growth. Nelson Hayes of Deering Savings & Loan made the first reverse mortgage in U. S. history to Nellie Young of Portland, Maine in 1961 (, but it would be 28 years before a product and an industry would emerge. Substantial and sustained research and development (R&D) activities began in the late 1970s due to the work of a visionary non-commercial entrepreneur: Ken Scholen, the father of the HECM program and of reverse mortgage industry in the U. S. Ken Scholen directed the first three federally-funded reverse mortgage research and development projects, organized the first three national conferences on reverse mortgages, and authored the first three books on reverse mortgages. Also, Scholen led efforts to pass the HECM program into law and developed the TALC (Total Annual Loan Cost) process in use to this day. For his pace-setting work in HECM and reverse mortgages, Scholen received the Federal Housing Administration (FHA) Commissioner’s Award in 1995. As a consultant to AARP in the 1990s and as director of the AARP Foundation’s Reverse Mortgage Education Project from 1998 to 2007, Ken Scholen led more than 200 HECM counselor training and consumer education sessions in 47 states and coordinated the creation of the national HECM counselor examination and the proto-

without having to sell or make monthly loan repayments. Some quick research uncovered a few largely theoretical ways of doing this, but the concept was sufficiently promising that I left the Board to run a series of government-sponsored R&D efforts over the next few years. So my initial goal was to spur the development of programs and products to meet this need. The most important outcome of the R&D work was the initial HECM program proposal, but AARP was the only national organization that actively supported it. HUD issued a report opposing it and it took six years to gain Congressional approval. After the HECM legislation was enacted, my emphasis switched to helping get the program off the ground and providing consumer information and education about reverse mortgages. When the market started to grow, and it became apparent that the HECM counseling program was not ready to meet this need, my focus changed to expanding and improving the counseling program. It took a lot longer than expected, but now there appears to be broad support for a more detailed counseling protocol and individual counselor standards, including an exam and continuing education requirements, and a strong program of individual counselor performance evaluation (a.k.a. “secret shopping”).


By Charlie W. Elliott Jr., MAI, SRA




Mortgage Professionals Living in Harmony With the HVCC


The change that we in the mortgage and loans are very popular right now, and housing industries have experienced with- they are not affected by the HVCC. This in the past year is amazing. As a result of is something for those of us consumed last fall’s elections, we have gone from a by all of the HVCC negativity, to take relatively conservative government to a heart about. significantly more liberal one. The economy has tanked in a way that most of us The other half have never witnessed. Now with the To listen to some loan officers out Home Valuation Code of Conduct (HVCC) there, one would think the only way and other regulatory manthey can make a living is dates, some of us have to influence appraisers been less than positive into appraising property about our profession and for more than it is worth. our jobs. I have too much confiEven the more sober dence in the integrity of among us must acknowlour mortgage professionedge that things in our als and too much confiindustry going forward dence in our system to will be at least different, believe that. Fannie and if not more challenging. Freddie are going to be Since I am generally an buying large numbers of optimistic person, I tell mortgages. Many if not myself that there must most will be approved “Even the more sober be a silver lining up there without having to be among us must behind those clouds. For readdressed in regard to acknowledge that things the appraisals. At times every door that closes in our industry going another opens. It is just when the appraisal must my job to interpret all of forward will be at least be questioned, there is a this and move in the proper procedure for different, if not more right direction. challenging. Since I am doing this. If the appraisSince most of us do generally an optimistic al is wrong, it will most not want to change prolikely get changed. That person, I tell myself that fessions, I am going to leaves a few potential there must be a silver take the position that loans that cannot and lining up there behind should not be made. Is someone has to do mortthose clouds.” gages and that the marthat not what appraisals ket will take care of any are suppose to be about excesses imposed upon us by the gov- and the way it should be? ernment. Looking at it this way: I have come to the following conclusions and In conclusion, the sky is not falling. encourage you to do likewise. To the extent that we think we see pieces of the sky falling, it will not all Half of the market be caused by the HVCC. Our worst The HVCC only applies to mortgages enemy right now is the economy and sold to Fannie Mae and Freddie Mac. the sluggish housing market. Home valThey only make up part of the market. ues are truly at a critically low level and That changes on a daily basis, so let’s this is contributing to the fallout of say they are involved in half of the cur- many of our deals. Until the market starent market. That leaves 50 percent of bilizes the road will be rocky. the market not affected by HVCC. continued on page 12 Federal Housing Administration (FHA)

NAMB reps meet with FHA Commissioner David Stevens The National Association of Mortgage Brokers (NAMB) recently attended a meeting with newly-appointed Federal Housing Administration (FHA) Commissioner David Stevens to discuss mortgage broker participation in the FHA program, among other important FHA issues. “NAMB appreciated the opportunity to meet with Commissioner Stevens to discuss the mortgage brokerage industry and its involvement with FHA,” said NAMB President Jim Pair, CMC. “We believe it was an informative meeting for both parties.” During the meeting, Commissioner Stevens discussed a number of issues and fielded questions from NAMB officials. Implementation of recent changes to the Real Estate Settlement Procedures Act (RESPA), a potential nationwide FHA loan limit, risk-based premiums, reverse mortgages (HECM), and condominium concerns were all topics of discussion during the meeting. NAMB officials requested that the FHA release additional “frequently asked questions” on the new Good Faith Estimate (GFE) document to avoid further confusion in the industry. “Commissioner Stevens clarified several issues and was able to expand more on FHA policy,” said Pair. “NAMB looks forward to working with Commissioner Stevens in the future.” For more information, visit or

Murin and Montgomery form advisory firm The Collingwood Group Former President and Chief Executive Officer of the Ginnie Mae Joseph Murin, and former Federal Housing Administration (FHA) Commissioner Brian Montgomery have announced the formation of The Collingwood Group LLC. The firm will provide business advisory services to boards of directors and senior executives of companies in the financial services industry. In launching the new company, the two former government officials also announced the immediate merger of

the new company with Capital Financial Solutions LLC (CFS), a consulting firm cofounded by Brian O’Reilly and Tim Rood. Established in 2007, CFS has provided services to companies in the financial services industry, including those requiring strategic business development, business and risk management, and business and technology systems design and development services. “There has never been a time more important for the financial services industry to work hand-in-hand with the federal government to help restore stability and liquidity to the markets,” said Murin. “We will advise our clients on how they operate strategically in this environment, as markets continue to shift and the regulatory landscape inevitably changes.” O’Reilly and Rood will serve as managing directors and members of the management committee in The Collingwood Group. “Our purpose is to help new clients and existing CFS clients to continue to grow their business and to effectively navigate the business and public policy environment in some of the most challenging economic conditions the nation has ever known,” said Montgomery. Murin was appointed CEO of Ginnie Mae in 2008. Prior to that time, he served as chief executive officer of Lender Services Inc. He also served as chief executive officer of Basis100, a Toronto-based publicly traded technology company. Earlier, he served as president of Century Mortgage Company. Montgomery was Assistant Secretary for Housing-Federal Housing Commissioner from 2005-2009. He served as Acting U.S. Department of Housing and Urban Development (HUD) Secretary earlier this year. He joined HUD from the Executive Office of the President, where he served as Deputy Assistant to the President and Cabinet Secretary. According to Murin, the firm will focus on serving clients’ business development needs in the federal government arena. “Americans are looking to Congress and the Administration to provide strong leadership and innovative solutions to the financial crisis,” Murin said. “To be a successful enterprise in the financial services industry will require the ability to work collaboratively with policymakers.” Montgomery said while the financial continued on page 10

the double “p” principle

Send a note or monthly/bi-monthly newsletter to every past client. Every time you put your name in front of them, they will associate your name with your business. They will perceive you as an expert in your field. This must be done regularly; as if it is done sporadically, you will lose your impact. Send to all of your clients, past, present and future. It doesn’t matter whether you send e-mail notes, newsletters or postal mail. The Internet, however, is cost-effective and efficient. It will depend on your

Future clients I bet you’re wondering how future clients can be a source of referrals? It’s easy: Give the best potential customer service and go that one step above what is expected. They will remember the effort and time you invested. Many

times, I have received referrals from future clients. This is the referral you have the least control of, you never asked for it, you never expected it, and you have not cemented a true relationship with the referring source yet. continued on page 12


Shared Vision, Shared Success.SM Make Your Way With A Lender Committed To Leading Responsible Change Wells Fargo Wholesale Lending is dedicated to working with mortgage brokers who are committed to five key principles for long-term industry success: Responsibility: Ensure fair and responsible lending and borrower education are top priorities. Quality: Produce high quality loans. Controls: Better manage our collective risk and eliminate fraud. Excellence: Create, promote and adhere to industry-leading standards of excellence. Efficiency: Develop capabilities that drive greater efficiency and ease of use between our companies. Together, we will lead the way, helping to establish a foundation for a stronger, healthier and more responsible industry. Share in this vision. For more information, tools, ideas and market insights visit our Shared Vision, Shared Success.SM web site located on







This information is for use by mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2009 Wells Fargo Bank, N.A. All Rights Reserved. #64153 4/09


1. Past clients 2. Present clients 3. Future clients 4. Your own backyard!

Past clients

“Offer your customers a center for one-stop shopping of all their financial needs. You will need to educate yourself in many of these areas, take a few classes, pass a test or two, but you have now created additional marketable skills and knowledge.” O

your clients and you will be speaking to theirs. Make it a two-way street. This opens new doors for both of you … or all three or four. You determine who will be a party to your bundling of services network. Those are new ideas of marketing, now remember the old ways … .it may be painful to remember calling on realtors, builders, businesses, past clients, old clients and yes, the cold call. Today’s market calls for “Fall Back to Basics” planning. For those if us who have been around for a while, we are familiar with the old ways of marketing, while some newer loan officers are used to relying on technology and rates themselves to bring the clients to our doors. Not in today’s market, you need to bring the client to your door. I have made myself get out and call on realtors. I started hosting “Realtor’s Open Houses.” I got two buyers for sitting in a house on a Saturday afternoon serving cookies. No, it doesn’t always work that easy, but if you don’t do it at all, it won’t work at all. I hosted a “Broker’s Open House” the following Tuesday. Twenty realtors came through whom I never met before. I brought lunch, a nominal cost to meet 20 new brokers who had time to talk and listen to me. For starters, I was invited by one of their peers, so instant respect was received. Second, they wanted to eat my food, so they were nice to me. I showed off some of the products I thought they might not have and I did. Sure enough, most of them didn’t know those programs still existed. I am hoping to get some business from these new contacts, and I enjoyed meeting new people. Sure, you can send e-mail marketing or purchase lists, but this cost was nominal and gained instant rapport. Don’t get me wrong, I send postcards out on a regular basis to my past clients and future clients. I also send cards telling each broker how much I enjoyed meeting them along with a business card. Staying in front of new people is key to a strong marketing plan. They don’t know me, so I would be easy to forget, but not if I don’t let them. Don’t be obnoxious, but subtitle reminders are great. Stop and talk to builders in open houses, as many have an inventory they need help moving. Offer them your services and marketing plans. You are the expert in helping to keep the industry moving forward. Stop being a naysayer, no one needs to hear it any more. Enough is enough. Moving forward is the key and having additional sources of income helps. In marketing to past present and future clients, there are four key referral sources:

continued from page 6

market and the availability of Internet addresses for e-mail contacts in choosing which method to use. Even if you choose one over the other, I recommend crossing the two. Send thank you cards, birthday cards and other special notes in the mail because it is a tangible reminder of who you are. E-mails are great, easy and get messages across, but are usually read one and then deleted. Some aren’t even read.





forward on reverse


continued from page 7

What are the prospects and some stories to select just one, so here’s a tidchallenges for the reverse mortgage bit from the political realm. At the HUD industry, and why? press conference announcing the origiThe credit implosion is the most serious nal launch of the HECM demonstration, immediate problem, and there’s no way of one of the program’s Congressional knowing how long its effects will be felt. But, sponsors was asked what would hapuntil credit conditions improve, it will be dif- pen at the end of a HECM’s loan term: ficult to create the much lower-cost products Would the borrower be forced to sell that have the most potential for meeting a the home to repay the loan, or would broader array of needs and expanding the the lender take on the risk of extending market. Other important goals include erad- the term? Apparently unaware that icating the predators HECMs would have who have harmed an open-ended “A strong HECM counseling pro- term and the prime the market’s public image and fully fund- gram can be a major factor in pro- purpose of the proing the counselors tecting consumers and the indus- gram was to insure whose work is so vital try. But all the efforts to strength- against the related to safeguarding conrisk, he answered en the program will mean little sumers and the unless an independent source of that it was a very industry. reliable and adequate funding can good question and The HECM prohe would ask his be created to support it.” gram has some staff to look into it! —Ken Scholen long-festering problems that need to be *According to resolved. The structure of Ginnie Mae’s HUD data, outstanding value of HECM securitization program and the re-emer- loans stand at $55.42 billion. Since gence of other secondary sales venues will 1989, 544,300 HECMs have been origiincrease the likelihood of borrowers los- nated, and 431,025 HECMs were outing their homes via HECM-related proper- standing. Numbers are as of June ty tax delinquencies. How many news sto- 2009. ries about such cases would it take for the public to begin associating reverse mort- Author and columnist, Atare E. Agbamu, gages with “losing your home?” On anoth- CRMS is director of reverse mortgages at er front, will more stories about negative Minneapolis-based AdvisorNet Mortgage creditline growth generate a class action LLC. A member of the BusinessWeek before this long-term problem is finally Market Advisory Board, Agbamu is resolved? And thanks to you, Atare, the author of Think Reverse! and more than problems created by the “clarification” of 100 articles on reverse mortgages. the non-recourse limit have become more Through his advisory firm, ThinkReverse widely recognized. LLC, Agbamu advises financial profesWe also need to learn why borrowers sionals, institutions and regulators have been voluntarily ending their across the country. In a 2007 national HECM loans so much sooner than any- report on reverse mortgages, the AARP one had expected and to seriously con- cited Agbamu’s work. He can be reached sider adjusting reverse mortgage bene- by phone at (612) 436-3711 or (612) 203fit structures and risk premiums accord- 9434, and e-mail at aagbamu@advisoringly. Skewing any such changes toward or lower loan costs would be one way to address the cost barrier. Visit author Atare E. Agbamu’s blog at What is your favorite reverse mort for gage story? his thoughts and insights on There are too many unique borrower the reverse mortgage marketplace.


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services industry faces complex challenges, the new firm’s approach will be simple. “We call it The Collingwood Model and it boils down to three things: Bring integrity and talent to the table; find opportunities for clients to grow and become more competitive; create value for clients and the people they serve. That’s how we look at our mission,” said Montgomery. For more information, visit

New FHA-Making Home Affordable loan mod guidelines announced U.S. Department of Housing and Urban Development Secretary Shaun Donovan has announced that the Federal Housing Administration (FHA) has implemented changes to its loan modification program to ensure consistency with the Obama Administration’s Home Affordable Modification Program. Beginning Aug.15, FHA borrowers are able to significantly reduce their monthly mortgage payments by seeking a loan modification through their current mortgage company or loan servicer under the new FHA-Home Affordable Modification Program (FHAHAMP). The Helping Families Save Their Homes Act of 2009, signed into law on May 20, allows the FHA to give qualified FHA-insured borrowers the opportunity to reduce their monthly mortgage payment by modifying the mortgage through FHAHAMP. The FHA expected all servicers to implement the changes by Aug.15. The program permanently reduces a family’s monthly mortgage payment through the use of a partial claim, which defers the repayment of mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off. FHA has used the partial claim option in the past, which allows a lender to advance funds on behalf of a borrower, to reinstate a delinquent loan that was up to 12 months delinquent. Now, this program will allow HUD to bring the borrower’s payment down to an affordable level. This will be accomplished by bringing the mortgage current, buying down the loan by up to 30 percent of the unpaid principal balance and deferring these amounts in a partial claim. FHA will pay an incentive to loan servicers for each FHA loan modified under this program. Mortgagee Letter 2009-23, along with detailed requirements for the FHAHome Affordable Modification Program, was distributed to all FHA lenders as well. The implementation of this program will further the Obama Administration’s efforts to stabilize the housing market by helping homeowners stay current on their mortgages and stay in their homes, therefore preventing the impact of foreclosures on families and communities. For more information, visit

Federal Reserve Board approves TALF extension The Federal Reserve Board and the Treasury Department have announced the approval of an extension to the Term Asset-Backed Securities Loan Facility (TALF) and that, at this time, they do not anticipate any further additions to the types of collateral that are eligible for the facility. Conditions in financial markets have improved considerably in recent months. Nonetheless, as deemed by the Fed and Treasury Department, the markets for asset-backed securities (ABS) backed by consumer and business loans and for commercial mortgagebacked securities (CMBS) are still impaired and seem likely to remain so for some time. To promote the flow of credit to businesses and households and to facilitate the financing of commercial properties, the Federal Reserve and Treasury approved extending TALF loans against newly issued ABS and legacy CMBS through March 31, 2010. Because new CMBS deals can take a significant amount of time to arrange, the Federal Reserve and Treasury approved TALF lending against newly issued CMBS through June 30, 2010. The Board will continue to monitor financial conditions and will consider whether unusual and exigent circumstances warrant a further extension of the TALF to help promote financial stability and economic growth in the future. The Federal Reserve and Treasury had previously authorized TALF loans through Dec. 31, 2009. After having conducted a thorough analysis of a number of potential candidates, the Federal Reserve and Treasury announced that they are holding in abeyance any further expansion in the types of collateral eligible for the TALF. The securities already eligible for collateralizing TALF loans include the major types of newly issued, triple-A-rated ABS backed by loans to consumers and businesses, and newly-issued and legacy triple-A-rated CMBS. The Federal Reserve and Treasury are prepared to reconsider their decision if financial or economic developments indicate that providing TALF financing for investors’ acquisitions of additional types of securities is warranted. For more information, visit

CMAC details the five most common mortgage violations Approximately 98 percent of all mortgages are potentially eligible to be renegotiated due to Truth-inLending Act (TILA) violations, according continued on page 13

manufactured housing condo projects. This is a huge marketing opportunity, since this is now a wide open market continued from page 6 and controlled by the banks … but not for long. Just make sure you have a cumstances since initial approval of the overcome for me to overcome when funding source for the types of units the project which would result in the proj- educating developers on the benefits of developer will be offering. ect no longer complying with FHA getting their condo approved with FHA. requirements. Condo financing is a great niche to 2. No longer requiring that owners be have, and I had a lot of fun when I did 14. Whoever knowingly and willfully in control of the association for one it. A word caution … if you develop a makes or uses a document containing year on condo conversions. good reputation for getting condos any false, fictitious or fraudulent state- This change makes it a lot easier to get approved, make sure you have a true ment or entry, in any matter in the juris- in with a developer that is converting relationship with the developer that diction of any department or agency of apartments to condos. I chose this as will bring you in to get their project the United States, shall be fined not my niche because it lacks the time to approved, and that the developer isn’t more than $1 million or imprisoned for close on new construction. just using you for the approval with the not more than 30 years, or both. intention of then using their long3. The allowance of FHA financing on standing lender (i.e., that does FHA Some perspectives on the new process: O Although the FHA has now given lenders the ability to process their own condo approvals, it’s not a carte blanche to go out there and start financing condos. The lender must have staff knowledgeable about the process and very few DE lenders have staff familiar with the condo approval guides. In addition, what lenders are going to want the extra liability in processing and certifying their own condo approvals? The last thing lenders are looking for is more liability. Given this reality, I foresee very few lenders participating in this offer. Lenders like Countrywide and Flagstar may utilize this guide, since for years, they have had their own internal condo approval departments apart from FHA. I can see lenders involved in the re-certification, since the lender will only be certifying that they know of no changes to the project that would disqualify it. It will be interesting to see how the lenders actually react to this guide.

fha insider

loans but lacks the know-how to get condos approved). As you might guess, this once happened to me, and I don’t want it to happen to you. Go FHA! Jeff Mifsud founded Southfield, Mich.based Mortgage Seminars LLC in 2004, has been an FHA originator for 12 years, is a contributor to and is a former FHA underwriter. Jeff may be reached at (877) 342-9100 or e-mail Visit author Jeff Mifsud’s Web site at for tips and information on FHA loans and details from some of the nation’s top FHA specialists.

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1. The elimination of the environmental review. This was a huge deterrent for builders due to the expense involved, and one of the main objections that was difficult to

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O If you do work for a lender that is willing to take the risk in this program, the great advantages I see with these changes are: O

O The decision to eliminate Spot Loan Approvals (SLAs), in my opinion, will deny ownership to thousands of potential condo purchasers and will negatively impact condo sales across the country. I think this was a poor decision and the SLA should be reinstated. SLAs allowed people to purchase a condo in a project without having to go through the project approval process. To have to approve an entire project for one buyer is not practical. I actually did this once for a buyer and it was a lot of effort for just one loan. In addition, there’s inherently less risk to HUD, since SLAs are typically done in already-established condominium projects. It doesn’t make sense that HUD would insure a higher risk unit in a new project (that has only a 50 percent presale requirement) and yet and not insure a unit in a well-established project with an SLA, which is clearly a lower risk. If HUD truly wants Hope for Homeowners, then they should bring back the SLA.


the double “p” principle Three important rules Rule #1 If a past, present, or future client refers you, take action now while the lead is hot. Remember, it is always easier to talk to someone expecting your call, warmed up for you by someone they know, like and trust than someone who has not been referred to you. You come highly recommended—don’t let your referral source down. This is critical for future business. Make sure you take the time to either personally call or handwrite a special thank you note for the referral. Treat them like gold and with the utmost respect because they thought enough of you in their busy day to refer you! Rule #2 Present clients are hot! Ask for referrals now! Right now, they think you are wonderful and want the world to know they made the best choice by choosing you. They will toot your horn. They have a high level of trust in you at this point. No matter what the product or service might be, they made a choice to buy from you. This is the best time to ask for a referral!

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Rule #3 Be prepared to network with future clients. Always give two business cards to everyone you meet! I always found it amazing that other people will pass out your business cards for you.

A personal thank you It is very important to remember to thank the referring party. Keep them in the loop. Remember this person thought enough of you to refer you. This automatically qualifies them for a personal thank you. The first choice is always by phone. A simple: “Thank you for the referral, I spoke with Mr. Smith today. I think I can help him. I just wanted you to know how much I appreciated your referral.


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continued from page 9

Let’s get together for coffee or lunch.” Don’t leave them hanging as to whether or not you ever contacted or spoke to their referral. Sometimes, it is difficult to reach someone. You can leave a brief message on voicemail if available. “Hi, Joe, I received a call from Mr. Smith. He said you referred me to him. I just wanted to say thank you for the referral and for thinking of me. I hope you are doing well. Let’s get together soon.” End of conversation. You made the referring person aware that you spoke to Mr. Smith and that you appreciated the referral. I also follow up with a written thank you as well. These are basic skills that have worked and I believe will continue to work, so won’t you try partnering and falling back to basics? Laura Lynn Burke has been selected from a nationwide search to be featured in Stepping Stones to Success, a highly successful book series. The book features bestselling authors Deepak Chopra (The Power of Purpose), Jack Canfield (Chicken Soup for the Soul), Dr. Denis Waitley (featured in The Secret) and Laura Lynn Burke (Networkolog) who are joined by other well-known authors each offering time-tested strategies for success in frank and intimate interviews. Laura is also the CEO and founder of Footprints International d/b/a The Mortgage Institute, a training and consulting company designed with you in mind. For more information, call (708) 692-6199 or e-mail Visit author Laura Lynn Burke’s Web site at where she arms readers with the information to “Prepare today for tomorrow’s changes to stay one step ahead of the competition.”

continued from page 8

The new administration, whether you support it or not, is pumping a record-shattering amount of money into system to stimulate the economy. Much of this will help the housing market. This will occur in the form of tax incentives and more jobs available to would-be homeowners. So it is about time that we all quit complaining and go to work doing what we do best, serving our customers. Appraisers too have been dealt a financial blow within the past few months, so we are in the same boat. Most appraisers are more than willing to take a second look at an appraisal that has come under question. We are not talking merely about the appraisal validating

each and every loan application, but also flawed appraisals. There is a proper way to challenge appraisers who do sub-par work, and it is our responsibility to do it. For those properties that do not qualify as collateral for a given loan, then is it not proper to find another deal and move on? My glass is half full and not half empty. I hope that yours is also. Charlie W. Elliott Jr., MAI, SRA, is president of Elliott & Company Appraisers, a national real estate appraisal company. He can be reached at (800) 854-5889, email or visit his company’s Web site,

news flash

continued from page 10

to a review of thousands of mortgage documents undertaken by the Consumer Mortgage Audit Center (CMAC). According to CMAC, a majority of the violations tend to take the form of missing paperwork, bad Good Faith Estimates (GFEs), hidden and misrepresented payments, double-dipping brokers, and the lack of documentation of income for borrowers. “Every day, the Consumer Mortgage Audit Center conducts comprehensive audits of mortgage documentation, and every day we find egregious and occasionally intentional mortgage violations,” said Sylvia Alayon, vice president of operations for CMAC. “While not all mortgage violations are necessarily malicious acts on the part of financial institutions, there are some basic areas every consumer should look at before signing a mortgage.” CMAC is a due diligence and consulting company specializing in the field of mortgage forensic research and analysis. CMAC boasts a highly specialized team of mortgage experts who are also members of the American College of Forensic Examiners Institute and represent a combined experience of over 80 years in mortgage finance and law. “Paperwork is never fun to deal with, but there are ways homeowners

can tell if they’ve been victim to a mortgage violation,” said Alayon. “Comparing the HUD-1 document, which buyers get at settlement to outline most costs, with the same lender’s good faith estimate is a great first step. If the figures on your HUD-1 and your GFE look different, it may be time to call an attorney.” For more information, visit

HOPE NOW reports 25 percent surge in workouts in June HOPE NOW, the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, announced that in June, the mortgage lending industry helped 310,000 homeowners complete workout solutions to stay in their homes—a 25 percent increase over May. In June, HOPE NOW members and the mortgage lending industry modified 96,000 mortgages compared to 101,000 in May, a 5.1 percent drop and initiated 214,000 repayment plans up from 148,000 in May, a 44.9 percent increase. Since January 2009, more than 1.5 million homeowners have been helped through mortgage workout plans.

For a second straight month, HOPE NOW’s participating servicers in June reported a slight drop in modifications and a significant increase (more than 40 percent) in repayment plans. This increase is primarily attributed to servicer participation in the Obama Administration’s Home Affordable Modification program (HAMP). “I am proud of the continued progress made by HOPE NOW servicers and am confident that they are aggressively and proactively using HAMP, as well as other successful foreclosure prevention programs, to help as many homeowners as possible,” said Faith Schwartz, executive director of the HOPE NOW Alliance. “We continue to work with the Administration on the successful implementation and outcome of HAMP for at-risk homeowners. These efforts are in the best interest of consumers as well as the U.S. economy overall.” There were 93,924 foreclosure sales in June, an increase of more than 13 percent from the prior month. For the first time since HOPE NOW began collecting data, prime foreclosure sales in June outpaced subprime sales by a twoto-one margin. HOPE NOW survey data suggests a peak in subprime foreclosure sales occurred a year ago during the second quarter of 2008. The largest gain in reported prime loan foreclosure sales occurred in the recently ended second quarter of 2009 at 154,108. For more information, visit

Administration and servicers commit to faster relief via loan mods Senior Obama Administration officials recently met with top executives from servicers participating in the Making Home Affordable (MHA) loan modification program to discuss ways to improve effectiveness and efficiency of the program. The meeting—led by Treasury Assistant Secretary for Financial Institutions Michael S. Barr, Treasury Assistant Secretary for Financial Stability Herb Allison, Federal Housing Administration (FHA) Commissioner David Stevens and U.S. Department of Housing & Urban Development (HUD) Senior Advisor to the Secretary William Apgar—addressed challenges to modifications, strategies for improvement, and collective goals that the servicers and Administration are committed to reaching. “With over 200,000 trial loan modifications already under way, we are on track to meet our goals,” said Treasury Secretary Tim Geithner. “Still, too many homeowners are at risk of foreclosure right now. This meeting was an opportunity to identify ways to accelerate the program and bring relief faster.” Servicers in attendance committed to significantly increasing the rate at which they are performing loan modifications. The Administration has estab-

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A Message From NAMB/WEST 2009 Committee Chair Joe Camarena Saturday-Tuesday, December 5-8 • MGM Grand Hotel

NAMB/WEST will hold its third annual conference at the MGM Grand Hotel in Las Vegas, Saturday-Tuesday, Dec. 5-8. As in the past, we anticipate a large turnout with a slate of exciting speakers and programs. This year’s theme is “Today’s Changes for Tomorrow’s Opportunities.” There has never been a better opportunity in our mortgage industry to build up the tool chest to secure our future businesses and further ensure the protection of consumers. Some of key highlights of the conference include:




O Face-to-face communication with hundreds of high quality brokers O Lower registration fees O Great low hotel rates O Exhibit booth prices at $500 less than last year’s rate O The best speakers in the mortgage market O Lots of social networking O And a fun, fun, fun conference!!!


sion to find out critical updates to NAMB’s lawsuits and other regulatory updates. Join the panel of experts as they share updates on NAMB lawsuits, including NAMB President Jim Pair, Past President and Government Affairs Committee Chair Harry Dinham, Chief Executive Officer Roy DeLoach, and other key NAMB Government Affairs team members.

11:00 a.m.-11:45 a.m. The SAFE ACT, MDIA, HVCC, Red Flags and Other Regulatory Updates RESPA: New GFE and HUD-1, MDIA, HVCC, SAFE Act, Red Flags...Now What?

This year, with all of the legislative and regulatory changes, an hour hardly seems like enough time to cover all of the updates the rules governing the industry, but it will provide an opportunity to give an overview of what has happened and what you need to do to make certain you understand the new regulations and how they affect your business. This will be one of the most important and informationalpacked sessions of the NAMB/WEST! You will want to attend this session! This year’s will be as exciting as it gets. We have a full list of nationJoin expert panelists including: Theresa C. Ballard, president of ally-recognized speakers that will keep every one on top of their proBFO Solutions; Ken Perry, president of Broker Knowledge and Ginger fession! This year’s speakers program will be different than in the past. Bell, CEO of Go2Training for this session. We have decided not to provide the continuing education (CE) curricuTheresa C. Ballard’s BFO Solutions Inc. is a compliance compalum since the Secure and Fair Enforcement for Mortgage Licensing Act ny offering compliance audits, post secondary closing audits, and (SAFE Act) will be coming down the pipeline and will facilitate the loan delivery and loan guarantee services. Her professional experinational requirements. Our goal this year is to break down the mortence spans 30-plus years in the mortgage banking industry, primagage industry training and development into three segments: rily in operations, underwriting and secondary marketing. Ballard’s experience includes quality control trainer for various 1. Mortgage Industry Regulatory Update Sessions industry organizations, including AllRegs, the National Association 2. Sales and Marketing “There has never of Mortgage Brokers and the California Association of Mortgage 3. Social Media been a better oppor- Brokers. Theresa works closely with state and federal auditing tunity in our mortagencies and has acted as an advisor to several state and federal gage industry to build agencies, including the Conference of State Banking Supervisors (CSBS), the American Association of Residential Mortgage up the tool chest to Regulators (AARMR) and the Nationwide Mortgage Lending System secure our future & Registry (NMLS&R). Theresa’s most recent focus has been on the Sunday, December 6 businesses and furdevelopment and implementation of quality control policies and Regulatory update sessions ther ensure the proprocedures for mortgage brokers, retail and wholesale lending The year 2009 has been one of change and regulation and keeping up with all of it is all quite confusing. That is why we have scheduled a full tection of consumers.” operations and several community banks, as well as the actual execution of quality control audits. session to cover the topics that are affecting you most in your business. Ken Perry is president/CEO of Broker Knowledge Group, a training and consulting firm that specializes in all matters related to real estate and finance. Ken believes 9:00 a.m.-9:45 a.m. education should be fun and has successfully taught thousands of people nationEconomic Update wide, speaking to all facets of the real estate industry including real estate agents, Dr. Ted Jones, Chief Economist, Stewart Title Join Dr. Ted C. Jones Ph.D., senior vice president and chief economist for Stewart Title mortgage brokers, bankers, title and escrow agents, as well as lenders. He is viewed Guaranty Company, as he addresses the state of our industry and the economy. Dr. as an expert on the national real estate market and current credit crisis, having been Jones will provide information regarding his ongoing research and support of the eco- one of the few experts to accurately forecast this current real estate market, and nomic and financial analysis of what is affecting the economy today. Jones earned a being one of the few who can deliver the information in a way most can understand. Ginger Bell is CEO of Go2Training, a Web-based solution to locate, track and manPhD in finance with a minor in statistics and a master’s degree in land economics and age continuing education and training. Ginger has more than 20 years of experience real estate from Texas A&M University. He holds a bachelor of science degree from writing and leading workshops in public speaking, leadership, customer service, Colorado State University. You will want to be sure to attend this information session. He is also the director of investor relations for Stewart Information Services Corporation. sales and continuing education. Ginger works with industry professionals, such as Barry Habib, Todd Duncan, Edward Jamison Esq., Sue Woodard and wholesalers to write and obtain state approval for continuing education courses. 10:00 a.m.-10:45 a.m.

NAMB WEST agenda at-a-glance

NAMB’s Regulatory & Legislative Panel On Monday, Feb. 23, the National Association of Mortgage Brokers, with the support of Baker & Hostetler LLP, filed a lawsuit with the United States District Court for the District of Columbia against the Federal Housing Finance Agency (FHFA) Director James B. Lockhart over the controversial Home Valuation Code of Conduct (HVCC) included in the appraisal agreements between the FHFA, Fannie Mae and Freddie Mac (GSEs), and New York Attorney General Andrew Cuomo. Attend this ses-

1:00 p.m.-2:00 p.m. HUD/RESPA Rollout We have scheduled one of the key HUD representatives to present the HUD/RESPA Rollout that will take place on Jan. 1, 2010. This is a must-attend event for all mortgage professionals, and the session will detail how the new HUD RESPA form will be used and processed.

2:15 p.m.-4:00 p.m. Speed Dating Mortgage Style: Learn Who/What is Available Speed dating is a formalized matchmaking process whose purpose is to encourage people to meet a large number of new people. Its origins are credited to Rabbi Yaacov Deyo of Aish HaTorah, originally as a way to help Jewish singles meet and marry. The first speed dating event took place at Pete’s Café in Beverly Hills in late 1998. Supporters argue that speed dating saves time, as most people quickly decide if they are romantically compatible and first impressions are often permanent. Join NAMB as speed dating is matched with mortgage lending, providing a platform for you to meet a wide selection of vendors who are “available” to help you in your business. It’s really simple … 10 tables, 10 chairs, 10 min., 10 chances to meet the vendor of your dreams … or at least one who may be able to help you with your business! Move quickly from one table to the next to find out who will best fit what you are looking for. Matches may include: Lenders, technology companies, or providers of marketing or compliance tools. It’s a fun way to find out what is new out there. Lenders will be available to discuss files too so bring your questions. Fun, games and prizes will be included in this action-packed section. Be sure to join in the fun and excitement and who knows … maybe you will find that “perfect match.”

was created to perfect and refine business tools and practices that take a minimum of effort or training, but that deliver significant, predictable results. During a four-month study of nearly 1,000 industry professionals in 2008, the users of TBWS’s Video Marketing Engine 2.0 showed a 67 percent increase in production over a control group during the same period. One small change in how they stayed in contact with their databases, through video, made all the difference for these real estate and mortgage professionals. With version 3.0 due on the market in the fall of 2009 and TBWS’s newest product, Rate Alert, quickly becoming one of the most utilized and trusted rate monitoring services in the world, TBWS has moved from an interesting concept to a proven success story in less than two years.

Exhibits and trade show This year’s trade show is geared to drive in the affiliates and mortgage industry partners. We have discounted the exhibit booths to make sure businesses across the country can afford and come to the conference. Booth prices are $500 less than last year and include a hotel room for two nights, advertisement in National Mortgage Professional Magazine and special recognition at the reception at the conclusion of the trade show.

Conference standards

Sunday, December 6 2:15 p.m.-4:00 p.m. Double Your Profits Without Doubling Your Workload Join Fred Arnold, president of American Family Funding and immediate past president of the California Association of Mortgage Brokers, as he leads this powerful session on breakthrough business-building action steps and superior selling techniques that will position you to: O Boost your business sales to the next level; O Create sustainable business profits; O Build your referral base; O Create a sales machine and close sale after the sale; O Put more money in your Pocket, and O Much, much more! It’s worth an hour of your time to find out what the top loan originators are doing to create their success in this market. Fred Arnold, throughout his 15 years in the mortgage industry, has held many roles. His top producing team maintains a profitable and thriving loan origination business, based 100 percent on referrals. While managing his mortgage team in Southern California, Fred is also a highly sought-after speaker, trainer, writer and consultant for the mortgage industry. Fred has his own financial radio show.

Monday, December 7

Everyone is a-twitter about Twitter, Facebook, Blogging and video. Questions run the gamut from “What is it all about?” to “How do I use it for business?” Well, Mark Madsen is the expert when it comes to social media! In this jam-packed session, you will learn how to use these social media applications to:

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Join Frank Garay, co-creator of Think Big Work Small, as he shares the secrets to successfully utilizing video and the Internet to grow your business. (TBWS) was founded in 2007 by a group of successful real estate and mortgage industry entrepreneurs. Born in the most battered market in the real estate and mortgage industry’s history, was conceived after decades of observing how the most successful professionals always seem to work smarter not harder. It was the little things they did that made all the difference. TBWS

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O Network with others in your industry or community O Stay connected to customers and prospects O Monitor what is being said about your company, products, services, industry and competition O Gather valuable feedback about products or services O Raise awareness about the company, product or service O Find answers and get advice O Offer proactive customer service O Promote events, products and services O Drive traffic to your Web site or blog O Share helpful content such as articles or blog posts O Generate leads

Joe Camarena is a member of the NAMB Board of Directors and chairman of the NAMB/WEST 2009 Committee. Joe is president of The Mortgage Source in Portland, Ore. and can be reached by phone at (503) 443-1060 or e-mail O

9:00 a.m.-10:50 a.m. Social Media: How to use Facebook, Twitter and Blogging to Build Your Business

We are going to continue to have the standard activities at the conference as in the past. However, we will bring back the national committee meetings during the first two days of the conference. In addition, we are going to have an Opening Reception on Saturday, Dec. 5 to bring our fellow mortgage friends together and provide some social entertainment before we start the training and development. We will have the NAMB Delegate Council Meeting and Board Meeting towards the end of the conference so everyone can concentrate on the rest of the conference! As in the past, our goal is to bring you a mortgage industry conference that will give you the tools to keep you updated in our ever-changing industry and allowing the networking opportunities we welcome to stay in touch with our fellow friends. We are offering lower registration fees, great hotel rates and a slate of speakers and learning opportunities for everyone who attends. Oh, and do not forget about those “after hours” parties that will be lining up by the time you unload your suitcases! We hope to see you in Vegas this December!


Saturday-Tuesday, December 5-8, 2009 MGM Grand Hotel • Las Vegas Don’t miss out on a great lineup of education and networking events. Scheduled Sessions




Overview of schedule of events


• Economic Update by Dr. Ted Jones, Director of Investor Relations, Stewart Information Services Corporation • Update from NAMB’s Government Affairs Team • SAFE Act, MDIA, HVCC, Red Flags and Other Regulatory Updates Panel

Saturday, December 5 NAMB/WEST Opening Reception

• FHA the Best and Fastest Mortgage Finance Option for Your Clients Today, presented by Nancy West of FHA

Sunday, December 6 Speakers, Education and Committee Meetings

• Speed Dating Mortgage Style – Learn who/what is available

Monday, December 7 Speakers in the Morning/Exhibit Hall in the Afternoon Tuesday, December 8 Delegate Council Meeting in the Morning/NAMB Board Meeting in the Afternoon

• Double Your Profits Without Doubling Your Workload, presented by Fred Arnold

• Social Media: How to Use Facebook, Twitter & Blogging to Build Your Business, presented by Mark Madsen

Exhibitors: Enjoy face-to-face communication with hundreds of high quality brokers New bonuses for NAMB/WEST exhbitors: • Free hotel room at the MGM Grand for two nights • Free ad in National Mortgage Professional Magazine • Free Monday Exhibitor Recognition Reception • Opportunity to participate in “Speed Dating Mortgage Style” roundtables for all exhibiting companies • Booth prices $500 less than last year

• Using Video to Build Your Business, presented by Frank Garay, Co-Creator of Think Big Work Small

Visit for more details.

Make sure you book your hotel before November 10th to take advantage of the fabulous group rates offered at MGM Grand Hotel.

FTC’s New Leadership Making Aggressive Moves in Consumer Protection By Terry W. Clemans

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We proudly maintain a reputation of getting your deals done fast and getting you paid quickly. O O SEPTEMBER 2009

While Congress is debating the future of of dollars by scammers who are exploitthe proposed centralized federal ing the economic downturn.” The FTC enforcement agency for the financial also recently announced two major conservices sector, one thing regarding sumer protection enforcement actions: enforcement has already been estab- One involving a nationwide crackdown lished: With or without the proposed against scammers and the other resultConsumer Financial Protection Agency ing in a $3.7 million penalty. (CFPA), the Federal Trade Commission In one of the actions, the FTC and (FTC) is aggressively pursuing violations. Equifax subsidiary TALX Corporation, The FTC’s new Director for the Bureau has agreed to settle charges that it vioof Consumer Protection is David lated federal law by failing to provide Vladeck, and in a little more than one certain disclosures to users of their conmonth on the job, Vladeck’s actions have sumer reports and to entities that promade some strong statevide information for conments about consumer sumer reports. The proprotection. In his first 45 posed settlement requires days, there has been the TALX to pay the governcreation of a task force to ment a $350,000 civil help repair consumer penalty and bars future credit and prevent quesviolations. tionable lending practices, TALX sells income and as well as multiple settleemployment history ments and litigations filed, information about conmany in the financial servsumers to lenders, preices sector. This confirms employment screeners, his claim that the first priand others for use in ority at the agency will be determining their eligibil“If these early dealing with the rise of ity for credit, employannouncements are consumer financial fraud ment or other purposes, any indication, the as a result of the economwhich makes it a conFTC’s new Director ic downturn. sumer reporting agency of Consumer On July 1, Director subject to the Fair Credit Protection Vladeck Vladeck used his first Reporting Act (FCRA), press conference as head may be just what the according to the FTC. The of the Bureau of consumer watchdogs company allegedly violatwere looking for.” Consumer Protection to ed the FCRA by not proannounce a nationwide, viding the “Notice to joint federal/state law enforcement ini- Users of Consumer Reports: Obligations tiative against scammers attempting to of Users Under the FCRA,” which notitake advantage of consumers made vul- fies users of consumer reports of their nerable by the poor economy. Thus far, statutory obligations, including notify“Operation Short Change” includes 15 ing individuals if the user takes adverse FTC cases, 44 law enforcement actions action against them based on their conby the Department of Justice, and sumer report. The company also failed actions by at least 13 states and the to provide the “Notice to Furnishers of District of Columbia. In its cases, the Information: Obligations of Furnishers FTC alleged that defendants made false Under the FCRA,” which notifies furnishand unsubstantiated claims via the ers—entities that furnish information Internet, infomercials, telemarketing, for consumer reports—of their obligarobocalls or print advertisements to tions to provide accurate information, market get-rich-quick and other similar correct and update inaccurate informaschemes. Several of these schemes tar- tion, and reinvestigate consumer disgeted consumers with mortgage- and putes. credit-related problems. Also in July, the FTC and California At the press conference, Director Attorney General Jerry Brown, Vladeck noted that “thousands of peocontinued on page 20 ple have been swindled out of millions





Thomas R. Sirico, Executive Business Director of mortgageNOW inc.


Each month, National Mortgage Professional Magazine will focus on one of the industry’s top players in our “Mortgage Professional of the Month” feature. Our readers are encouraged to contact us by e-mail at for consideration in being featured in a future “Mortgage Professional of the Month” column. This month, we had a chance to chat with Thomas R. Sirico, executive business director of mortgageNOW inc., Red Bank, N.J. Born in Brooklyn, N.Y., Tom established Lindenhurst, N.Y.-based Mortgageline Financial Corporation in 1989, quickly becoming one of the New York area’s top lenders. In 2000, he opened Amerihome Mortgage Corporation. Amerihome became a top lender for new construction sites in the New York area. Sirico’s experience and contacts helped him develop a vast branch network for HCI Mortgage Corporation, producing more than $500 million in sales. Currently with mortgageNOW, Tom is part of an executive team overseeing the expansion of sales. As a seasoned mortgage industry veteran with 20-plus years invested in the industry, he has been responsible for more than $1 billion in sales over his career. He currently resides in Holmdel, N.J. with his wife, Linda, and son, Thomas Michael.

What attracted you to the mortgage industry? Back in the late 1980s, right after the crash of ‘87, I was introduced to the mortgage industry by an attorney friend of mine. At the time, I was operating a men’s and women’s clothing store in Bensonhurst, Brooklyn, a borough of New York. Owning a women’s store during the disco era as a 20-year-old had its perks. One day, I will put it all down on paper, and I do believe it will make a great sitcom. Anyway, through the years, I had made quite a name for myself dressing the ladies and the men. The many contacts I made served me well as I transitioned into the business. It was pretty surprising to everyone when I started writing mortgages as my clothing business was doing quite well. Then came October of 1987. I had speculated in real estate, so I was familiar with the mortgage process. I started working at a Long Island company called Mortgage Plus Bankers. Within in the first year, I was closing 20 loans each month with an assistant. I was hooked. In Staten Island, I worked primarily with builders. I would sit on new construction sites on the weekends and qualify people as they walked through the model. I loved the interaction with help-

ing people buy a home. I would make appointments on the spot to do applications at their homes, sometimes I’d get three applications done per night. One night, I took my wife with me on an evening of applications because she didn’t believe I was at people’s houses until midnight. When I came down to the car after the third appointment at 12:30 a.m., with tears in her eyes, she said, “I will never doubt you again.” Having her support over the years has been invaluable. Most of my business was comprised of purchase transactions. I always went to my closings. I thought, what better place to network than at your own closings? You have the buyer and seller, two attorneys, a title closer, and a selling and listing real estate agent all at the same table! I quickly earned a reputation as a reliable and trustworthy loan officer. As my business grew, so did my enthusiasm. So, I opened Mortgageline Financial Corporation with a co-worker. We knew what it took to be successful, and I had a book of business ready to go. We got off to a great start and never looked back. Mortgageline became one of the premier mortgage bankers in New York. What keeps you in the business through decades of good and bad markets? Answering that question at this moment in time makes one pause before they answer. I like searching out opportunities and building relationships. I believe the challenges in our lives make us the people we are today. The decisions we make influence the quality of the lives we lead. That being said, I enjoy the relationships I have established and issues I learn about and deal with on a daily basis. Like every industry today, we need to adapt, improvise and overcome. Personally, I have benefited in helping people through these challenging times. In this industry, when business is good, it’s great! When it’s bad, let’s just say it’s challenging.

We know there are a lot of independent mortgage brokers considering joining a larger firm like mortgageNOW inc. What are some of the factors that should go into making that decision? Mortgage brokers face a lot of challenges now and in the future. Regulation will continue to direct them on how to conduct business, restrict access to capital and ultimately affect profit margins. Aligning themselves with a fully-certified direct lender, it my opinion, is the best way proceed. For instance, we are a Federal Housing Administration (FHA) Direct Endorsed Lender, which allows us to underwrite all files in-house and has enabled us to have some of the fastest turn times in the industry. We at mortgageNOW know that in this market, the speed associated with closing is essential. We are confident that we will increase one’s business by at least 50 percent based on our model. That is evidenced that most managers earn well over six figures at mortgageNOW. As a mortgage banker, we are well-versed on all of the new regulations being presented to the industry. Compliance, cutting-edge technology, and access to investors are all elements that are in place to support the transition from broker to banker.

“We at mortgageNOW know that, in this market, the speed associated with closing is essential.” How has the recent Home Valuation Code of Conduct (HVCC) regulations impacted business at mortgage NOW? This regulation has certainly caused some controversy, but adapt we must. We have currently adopted the changes in a compliant and seamless manner. Our COO has implemented innovative

policies to minimize the delays due to the disclosure rules, along with each investor requirement, it has been challenging. But we feel our procedures have met all regulatory requirements and without interrupting our course of daily operations to close loans.

How has mortgageNOW addressed the decline in warehouse line providers? I believe this has been a challenge for everyone in the industry … some more than others. We fortunately have always maintained an excellent track record and have maintained compliance with our providers. So much so, mortgageNOW has added capacity which, in turn, has increased our volume on average of 75 percent month-over-month. How does mortgageNOW view the future of mortgage banking? We believe that some changes were needed for the most part. We have to remember that there were some excesses that the market took advantage of. The corrections have been made and all signs point that the worst is behind us. FHA will continue to provide the financing the country needs as exampled by the government’s commitment of $350 billion to the program over the next five years. As a direct lender of these funds and one of the top closing FHA lenders in the country, we are moving forward with some exciting additions that will increase our business and make us an attractive option for any mortgage professional who wishes to attain success in the industry.




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First, I would like to welcome you to The Secondary Market Overview, designed not only to keep you informed with regard to what is happening in the markets, but more importantly, how it relates to loan officer production within our industry. What good is being knowledgeable about what is happening if you don’t know how it will affect your business? To that end, we will try to make this message as non-technical as possible. My good friend, Eric Holloman, a secondary expert and chief executive officer of RateLink, will advise me on the technical aspects where necessary. I have been writing about the mortgage industry consistently for more than five years now and have been teaching loan officers how to become an expert in all areas, including the secondary markets for 30-plus years. The secondary market led the real estate boom earlier this decade. It also led the collapse of real estate. And that is the message I want to give you in this opening column—what caused the issues we faced and where might these issues lead us in the future? With regard to the future, I asked Eric Holloman what are the most pressing issues that could have a major impact upon the secondary market in the coming months. Eric, pointed out three such issues that we will be following closely— O The fate of Fannie Mae and Freddie Mac. First, Moody’s Investors Service predicted the “winding down” of the agencies. Then, the Mortgage Bankers Association (MBA) called for the agencies to be replaced by private “cooperatives.” Of course, the major members of the MBA have always competed with the agencies. O Will the industry be able to replace the warehouse capacity it has lost? The credit and banking crises has crippled the industry in this regard. Will the government provide a solution through Ginnie Mae or another entity? O As the real estate market begins its recovery, will the secondary market, and thus lenders, be able to loosen credit standards somewhat. We know we are not going back to the

“fog the mirror” days, but it would be good for lenders not to require pristine credit in order to purchase a home for anything but FHA. What happened to cause these things? Many trace the rise and fall of the real estate debacle to the subprime industry. Actually, it goes back further than that—much further. I could trace it back to the Great Depression, but I will start with a more contemporary event. The Savings & Loan (S&L) Crisis of the late 1980s set the stage for what happened 20 years later. How? Before the mid-1980s, the S&L industry was the major player in real estate lending. In the mid-1980s, we had a real estate boom and a refinance boom driven by low rates. Sound familiar? Of course, back then, low rates were defined as eight percent! A little perspective … earlier that decade, rates rose to above 15 percent. The bond market collapsed in March of 1987 and rates went back to double digits overnight. After overbuilding, we had a collapse in the real estate market. To exacerbate the problem, most S&L institutions held loans in their portfolio. There was little guidance from the feds on how to value these mortgages. Back then, we charged points on all mortgages, and it was not unusual for the S&L to book the points as income and put these loans, many of which were adjustable, on the “books” at 100 percent of the value of the mortgage. We now know what happens to the value of mortgages that are held by an investor when rates go up. The values go down. Defaults increased and that also lowered the value of the holdings of the S&Ls. Many of the buildings defaulting were commercial. Perhaps an S&L had a $10 million loss on a large building. When that S&L needed to raise assets, they turned to sell mortgages in the portfolio, but when these were assessed, it turned out that they were tens of millions of dollars lower than their “booked” value. So, a $10 million loss all of a sudden turned continued on page 27



Your source for the latest on originations, settlement, and servicing

Where we have been and where are we heading


What tools must a mortgage originator have to compete in today’s competitive marketplace? First and foremost, one must have a rich knowledge of the business. Understanding what service you provide is paramount. Respecting your position as either a mortgage broker or mortgage banker dictates that you know what you are talking about. As you can see, you have struck a nerve with me. As an originator, you are responsible for the largest investment in one’s life, a house. Giving our branches the support they need is a top priority for us. For instance, our LoanX system helps our orig-

“As an originator, you are responsible for the largest investment in one’s life, a house. Representing and explaining the process properly is an obligation not to be taken lightly.”

Secondary Leads the Trends (Part I) O

As someone who manages a large network of branches, where do you see your branch managers and their loan officers getting their business from? Originations vary on a number of conditions, location, the economy, and of course, rates. Currently, we are happy to see the media has noticed the bottoming out of home prices and low interests rates. This has sprung a resurgence in purchase business that is primarily directed toward mortgageNOW’s branches through our vast real estate network. With the many short sales occurring, it is not unusual that we can close that transaction, as it is time-sensitive, generally within a week, much to the delight of our real estate agents. We have increased our referral purchase business 85 percent, we believe by our “speed to close” process. Our business model also provides our branches with some of the best leads in the business, as we were recognized by LendingTree and previewed in National Mortgage Professional Magazine. We utilize a direct dialing service allowing live transfer contact to magnify the volume of calls that the branches can make. All leads are entered in our LoanX engine, which allows easy access to track leads and manage their pipelines in an efficient and organized manner. It’s all part of our state-of-the-art technology that has set’s us apart from our competition.

inators provide service and information to the consumer in a quick and concise manner. It will price, pre-approve, track and upload conditions on each loan supplying unsurpassed customer service. These systems allow us to close our loans, on average, of five to seven days, making our customers happy and increasing the referral business of our branches. I am proud to say that our loan officers are some of the highest paid originators in the industry. We are also very cognizant of the fact that presenting and explaining the process properly is an obligation not to be taken lightly. I am proud to say that mortgageNOW’s interview and training process has helped us become successful in this aspect.


2. Income tax returns 3. Payroll receipts 4. Records from banks and financial institutions 5. Other supporting, verifiable documentation C. Assure that prepayment penalties, where permitted by law, meet all these criteria: 1. The amount of the periodic payment of principal or interest (or both) does not change during the loan’s first four years 2. The penalty does not apply after the loan’s first two years 3. The prepayment penalty does not result from a refinancing by the same creditor (or an affiliate of the creditor)

issue that you’d like to see addressed in the Regulatory Compliance Outlook Column? If so, e-mail your issue or concern to Jonathan Foxx at Jonathan Foxx, former chief compliance officer for two of the country’s top publicly-traded residential mortgage loan originators, is the president and managing director of Lenders Compliance Group, a mortgage risk management firm devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456 or by e-mail at


New Category of Sub-Prime Mortgage Loans Effective: October 1, 2009 O On and after Thursday, Oct. 1, 2009, creditors will be required to implement new rules, pursuant to revisions to Regulation Z issued by the Federal Reserve Board (FRB) on July 14, 2008.1 O Regulation Z (12 CFR 226.35) defines a higher-priced mortgage loan as a consumer credit transaction secured by the consumer’s principal dwelling with an annual percentage rate (APR) exceeding a certain percentage.2




O Higher-priced mortgage loans include closed-end purchase money, refinancing and home equity loans.


O Exclusions: Home equity lines of credit (HELOCs), reverse mortgages, construction-only loans and bridge loans with a term of no more than 12 months.

Average prime offer rate O The classification as a higher-priced mortgage loan is based on the following: O First liens: The APR exceeds the average prime offer rate for a comparable transaction as of the rate-lock date by 1.5 percent or more. O Subordinate liens: The APR exceeds the average prime offer rate for a comparable transaction as of the rate-lock date by 3.5 percent or more. O On a weekly basis, the FRB will publish the average prime offer rate for a wide range of transaction types on its Website ( Initially, the FRB will base these rates on Freddie Mac’s Primary Mortgage Market Survey (PMMS), which contains weekly average rates and points offered by a representative sample of creditors to prime borrowers seeking first-lien, conventional, conforming mortgages who

D. Establish escrow accounts: 1. Prior to loan consummation (to collect for property taxes and property insurance) 2. With a provision to allow the borrower to opt out after the first year by giving written notice to the creditor, if the creditor is offering an opt out provision (although the creditor is not actually required to offer an opt out provision)

would have at least 20 percent equity. You can view the PMMS at: www.fred- Submit your questions … Do you have a regulatory compliance play/PMMSOutputYr.jsp.

Four key consumer protections O Borrower ability: Lenders must take a borrower’s ability to repay the loan from income and assets other than the home’s value into account when making the loan. A lender complies, in part, by assessing repayment ability based on the highest scheduled payment in the first seven years of the loan. A borrower does not need to demonstrate a “pattern or practice,” in order to show that a lender violated this prohibition. O Verification of income and assets: Lenders must verify the income and assets they rely upon to determine repayment ability. O Prepayment penalty: Prepayment penalties are prohibited if the mortgage payments can change in the first four years; and, for other higher-priced loans, a prepayment penalty period cannot last for more than two years. O Escrow accounts: Lenders must establish escrow accounts for property taxes and homeowner’s insurance for all first-lien mortgage loans.

Action steps Develop policies and procedures to: A. Determine a borrower’s: 1. Current and expected income 2. Employment 3. Assets (other than the collateral) 4. Current obligations (i.e., credit, mortgage related payments) B. Determine a borrower’s income by utilizing: 1. IRS Form W-2 and other income reporting forms

ftc’s new leadership

1—The FRB has delayed the mandatory compliance date for escrows for covered loans secured by site-built homes until April 1, 2010 and until Oct. 1, 2010 for covered loans secured by manufactured housing. 2—I have written extensively on this in several Advisory Bulletins for our clients. These can be found in the Archive of Lenders Compliance Group at See, inter alia, “FRB Finalizes Revision to Regulation Z (TILA),” 07/28/08.

continued from page 17

announced “Operation Loan Lies,” a coordinated national law enforcement effort to crack down on mortgage modification scams. The operation involves 189 actions by 25 federal and state agencies against defendants who deceptively marketed foreclosure rescue and mortgage modification services. The FTC actions, which affect consumers throughout the nation, were announced in southern California, where the scams originated. “These con artists see the high foreclosure rates as an opportunity to prey on people in distress,” FTC Chairman Jon Leibowitz stated in the release. “They promise to rescue homeowners in troubled financial waters, but after they take their money, they throw them an anchor instead of a lifeline. People facing foreclosure should avoid any company or individual that requires a fee in advance, guarantees to stop a foreclosure or modify a loan, or advises the homeowner to stop paying the mortgage company.” The FTC announced four other lawsuits, bringing the number of mortgage foreclosure rescue and loan modification scam cases the Commission has brought to 14 since April. Twenty-three state attorneys general and other agencies are participating in the operation, taking action against 178 companies engaged in these types of deception. To say Director Vladeck has hit the ground running is putting it lightly! The new director was named to the position

after a handful of consumer watchdog groups called for FTC Chairman Leibowitz to appoint someone with “a track record as a genuine champion of consumer rights.” Prior to being named to the FTC post Vladeck was co-director of Georgetown Law Center’s Institute for Public Representation, a program for civil liberties, open government and regulatory litigation. Prior to his time at Georgetown Law, he spent nearly 30 years with the Public Citizen Litigation Group, a national, non-profit consumer advocacy organization that represents consumer interests in Congress, the executive branch and the courts. Vladeck has argued a number of First Amendment and civil rights cases before the Supreme Court, and more than 60 cases before the Federal Courts of Appeal and State Courts of Last Resort. Let these actions serve as notice to mortgage originators about being in compliance with Federal laws. If these early announcements are any indication, the FTC’s new Director of Consumer Protection Vladeck may be just what the consumer watchdogs were looking for. Terry W. Clemans is the executive director of the National Credit Reporting Association Inc. (NCRA). He may be reached at (630) 539-1525 or e-mail Visit the National Credit Reporting Association Inc. (NCRA) on the Web at

news flash

continued from page 13

The Mortgage Bankers Association (MBA) has released its mid-year ranking of commercial and multifamily mortcontinued on page 22

Why some Mortgage Professionals fail in Credit Repair while others Make Serious Money Mortgage Professionals make money in credit repair while getting borrowers Mortgage Ready!

You don’t need to be a credit expert to they couldn’t close before due to bad credit! It means more loans and more revenue for my loan start your own Credit Repair business Fortunately, with HTDI Financial’s Credit Services Organization (CSO) program, you will be able to handle ALL aspects of your business except having to do the actual repairs; we do that for you! We will train you on how to handle these customers and you will have the support you need every step of the way. We will make you look like a Fortune 500 company even if you work from home! YOU control how much money you make. In fact, through our CRM, we give you the tools and resources to harvest leads, manage prospects and monitor their progress.

You don’t have to spend tens of thousands of dollars for start-up costs for your own Credit Repair Company Once you are set up in our system, you will get access to software and tools that HTDI has spent over $1 million on research and development. You don’t need to spend an arm and a leg to start building your own credit repair business. Here is a quote from a mortgage company located in upstate New York who spent months of research before choosing HTDI:

“Until last year, I owned a large mortgage company in upstate NY with over 125 employees. We got hit hard during the mortgage industry crash and had to close our doors. I was stuck in a position with thousands of leads and customers that couldn’t get qualified for anything. I decided to start looking for a way to capitalize on my left over resources and help people in the process. I called many other credit repair companies and was very unimpressed. One west coast based company was charging $15,000 and had nothing but negatives written about them on the Internet. Then I found HTDI. They helped me to get started at the beginning of this year and it has been great. I have not only made great money helping people to repair their credit, but I have refinanced 8 of them and helped 6 buy houses that would have never qualified with the new guidelines. The software is very user friendly and all of my clients, affiliates and Brokers have increased business because of it.”

Get those impossible to close deals CLOSED! As the number of loan programs are shrinking, the bar on credit scores keep rising. This program will allow your borrowers to become “Mortgage Ready” as soon as 45 days. As one of our CSO stated:

“I have many loan officers that are now able to send their clients through the credit repair, raise their scores, and then close the client’s loan that

officers. Even better than that, it is very rewarding to be able to help a client regain their credit and be able to get the loan they need.”

Get started in a business that is booming and shows no signs of slowing The credit industry, as a whole, is one of the most powerful and profitable industries in existence. With loans, insurance and even employment taken into consideration individuals’ credit picture, the credit industry is getting bigger every day. Inside the credit industry, Credit Services is helping by assisting consumers with getting back on track by removing unverifiable and inaccurate negative items from their credit reports. As a CSO, you can benefit in being in a profitable industry and helping clients with their futures.

“I’ve been in the mortgage business over 22 years. A year ago, as the mortgage crisis worsened, I began trying to find a way to help clients who needed a better credit profile in order to get a mortgage. Fortunately for both me and my clients, I stumbled on HTDI. After a year of experience, I can honestly say the success rate is 100% and client satisfaction is through the roof. All of my clients have seen significant improvements, and some have experienced breathtaking jumps in their credit scores, even on the first round! From Day One you can be sure your “back office” (HTDI) has you covered. They will execute their part of the job seamlessly, with precision, on time, and with total consistency. All you have to do is SELL the service! Just sign people up, collect the money, and send HTDI the paperwork they need to get started. If you simply focus on selling the service, you will make lots of money, the work will get done, and you will never have to worry about unhappy customers. Although I got into it as a part timer, I now realize this is an excellent full time business opportunity. (Frankly, these days it’s probably a better business than the mortgage business!) You could easily make six figures in the first year with a minimal investment of money. How many opportunities like this exist these days? What you must invest is your time – SELL, SELL, SELL & SELL some more! Ultimately, what you are selling is the professionalism of HTDI, which is why this really rocks as a business opportunity.”

Industry Leading Results 46.95%

20.44% 17.32% 14.21%

Round 1 Round 2 Round 3 Round 4 We average one of the highest fix/deletion rates in the industry for the first 45 days of service. Shown below, in real-time, is the average percentage of fix/deletes per round.

If you are going to get involved in Credit Repair, be VERY CAREFUL First you have “Fair Credit Reporting Act” (FCRA). The FCRA holds credit bureaus and creditors to their reporting methods and has guidelines they must comply with. There are numerous techniques that are used along with similar laws to maximize results for each client. You must know these laws inside out. You can’t forget “Credit Repair Organizations Act.” (CROA). Just like the FCRA, the CROA hold credit repair companies to specific guidelines as well. If you choose HTDI Financial for your backend processing, we will ensure you maintain compliance. Lastly, you have applicable State Laws. Depending on the state you wish to conduct business in, you may have a state Credit Services Organizations act to comply with. As an active member in good standing of the National Association of Credit Services Organizations, you can be sure that we take our job very seriously, making sure you stay compliant and your clients.

FREE demo available

There is only one step you need to take; visit or call us at 877-877-4834 option 5.


The Commercial Mortgage Securities Association (CMSA) has issued a white paper on the White House’s overall regulatory reform proposals, emphasizing that the government’s financial recovery and reform efforts should maintain a consistent view towards addressing the unique challenges facing the $3.5 trillion commercial mortgage market. “CMSA continues to fully support policymaker efforts to help restore liquidity in the CMBS [commercial mortgage-backed securities] and broader commercial real estate market and, at the same time, hopes that any financial reform efforts put forth do not distract from getting credit flowing again for

MBA report: Wells Fargo/Wachovia tops commercial/multifamily servicers


CMSA issues white paper on Obama Administration’s regulatory reform plan

the broader market economy,” said Patrick Sargent, president of CMSA. The trade group’s white paper underscores several distinctions between CMBS and other asset-backed securities markets, both relative to the structure of the securities and the underlying collateral, as well as the type and sophistication of the borrowers themselves. The white paper also recommends that any Administration financial reform proposals should be customized to reflect some of these distinctions. “The new and unprecedented finan-

originators and sponsors, the elimination of the immediate recognition of “Gain on Sale” by originators for a securitization, ratings differentiation, ABS issuers to disclose loan level data, and a prohibition on the hedging of the retained risk portion. For more information, visit O

lished a goal of reaching 500,000 trial modifications begun by Nov. 1, 2009. “I am confident that the best practices shared today, combined with more transparent reporting methods, better communication among all parties, and a strong commitment from servicers, will ensure that we can ramp up the MHA program’s pace to meet these ambitious goals,” said HUD Secretary Shaun Donovan. Administration officials detailed their plans to take three important steps to improve the program’s performance. First, to begin publicly reporting results under the program based on servicer-specific performance. This will include the number of trial modification offers each servicer has extended to eligible borrowers, the number of trial plans that are underway, the number of final modifications, and eventually, the long term success of those modifications. Second, to work with servicers to set more exacting operational metrics to measure the performance of the program, such as average borrower wait time for inbound borrower inquiries, the completeness and accuracy of information provided applicants, document handling, and response time for completed applications. Third, in order to minimize the likelihood that borrower applications are overlooked or that applicants are inadvertently denied a modification, the Administration has also asked Freddie Mac, in its role as compliance agent, to develop a “second look” process pursuant to which Freddie Mac will audit a sample of MHA modification applications that have been declined. Freddie Mac will coordinate with servicers to address specific cases that arise and to address general operational weaknesses where errors prove more systematic. For more information, visit

cial regulatory reform proposal would undoubtedly change the nature of all securitized credit markets at the heart of the Financial Stability Plan,” CMSA’s paper stated. “At a time when policymakers hope to restart the CMBS market, certain aspects of such proposal could have the opposite and unintended result of stalling recovery efforts by making lenders less willing or able to extend loans and investors less willing or able to buy CMBS bonds—two critical components to the flow of credit in the commercial market.” In the white paper, CMSA describes the five specific issues it believes the Obama Administration should customize to reflect the unique nature of the commercial market, including: a five percent retention by





news flash


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gage servicers as of June 30, 2009. Topping the list of firms is Wells Fargo/Wachovia Bank with $476.2 billion in U.S. master and primary servicing, followed by PNC Real Estate/Midland Loan Services with $308.5 billion, Capmark Finance Inc. with $248.7 billion, KeyBank Real Estate Capital with $133.1 billion, Bank of America with $132.2 billion, and GEMSA Loan Services LP with $104.8 billion. A primary servicer is generally responsible for collecting loan payments from borrowers, performing property inspections and other property-related activities. A master servicer typically serves in a fiduciary capacity and is generally responsible for collecting cash and data from primary servicers and then providing that cash and data, through trustees, to investors. Unless otherwise noted, MBA tabulations that combine different roles do not double-count loans for which a single servicer performs multiple roles. Wells Fargo/Wachovia Bank, PNC/Midland, Capmark, and Bank of America are the largest master and primary servicers of commercial/multifamily loans in the U.S. CMBS, CDO and other ABS; GEMSA Loan Services, Prudential Asset Resources, PNC/Midland, and Northwestern Mutual are the largest servicers for life companies; PNC/Midland, Wells Fargo/Wachovia Bank, Deutsche Bank, and Capmark are the largest Fannie Mae/Freddie Mac servicers. JPMorgan Chase Bank ranks as the top master and primary servicer of commercial bank and savings institution loans; GEMSA the top credit company, pension funds, REITs and investment funds servicer; PNC/Midland the top Federal Housing Administration (FHA) and Ginnie Mae servicer; Wells Fargo/Wachovia the top for mortgages in warehouse facilities; and Capmark the top for other investor type loans. The MBA survey also collected servicing volumes for loans on commercial/multifamily properties located outside the United States. Hatfield Philips International ranks as the largest master and primary servicer of non-U.S. commercial/multifamily mortgages, followed by Deutsche Bank and Capmark. For more information, visit

Obama Administration releases first loan mod progress report The Obama Administration has released its first monthly Servicer Performance Report detailing the progress to date of the Making Home Affordable (MHA) loan modification program. The purpose of the report is to document the number of struggling homeowners already helped under the program, provide information on ser-

vicer performance and expand transparency around the initiative. On Feb.18, the Obama Administration announced its comprehensive plan to stabilize the U.S. housing market. Two weeks later, the Administration published detailed program guidelines and authorized servicers to begin modifications immediately. MHA provides $75 billion for sustainable mortgage modifications through the Home Affordable Modification Program (HAMP). MHA has made rapid progress in a few short months. Servicers covering more than 85 percent of loans in the country are already modifying loans under the program. More than 400,000 modification offers have been extended and more than 230,000 trial modifications have begun. This pace of modifications puts the program on track to offer assistance to up to three to four million homeowners over the next three years. The report discloses performance on a servicer-by-servicer basis in order to increase transparency for participating institutions. The data show that servicer performance has been uneven. The Administration has asked servicers to ramp up implementation to a cumulative 500,000 trial modifications started by Nov. 1, 2009. This would more than double in three months the number of trial modifications started in the first five months of the program. The Administration is taking additional steps to improve performance. On July 9, Treasury Secretary Tim Geithner and U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan wrote the CEOs of participating servicers calling upon them to redouble their efforts to increase staffing, improve borrower response times and streamline the application process. Senior Administration officials discussed the importance of these steps in a face-to-face meeting with servicer executives on July 28. The Administration will develop more exacting metrics to measure the quality of borrower experience, such as average borrower wait time for inbound inquiries, completeness and accuracy of information provided applicants, and response time for completed applications. As an additional protection for borrowers, the Administration has asked the program compliance agent, Freddie Mac, to develop a “second look� process to audit MHA modification applications that have been declined on an ongoing basis. The Servicer Performance Report is available online at For more information, visit continued on page 28 O







We are about to get a new federal agency. Historically speaking, federal agencies come into existence infrequently. A recent agency, the Financial Crimes Enforcement Network (FinCEN), was founded in 1990. Yet, the Federal Aviation Administration (FAA) was founded in 1958, the Food and Drug Administration (FDA) came into existence in 1937, and the Federal Reserve in 1913. The Federal Deposit Insurance Corporation (FDIC) was founded 76 years ago. Often, federal agencies are founded as a reaction to, rather than in anticipation of, a crisis. Regulation follows where the supposedly unpredictable has happened. But there is a kind of arrogance about our ability to predict, given our proclivity to believe narratives, basing our actions on retrospective considerations, or relying solely on precedent to foresee the future. Regulation follows where the dangerously obvious has been obscured by the opacity of politics and power. We seek the comfort of a government protector, a means to be kept safe (or safer) when we take an airline flight, eat our food, ingest our medicine, bank our money or borrow money to buy a home. And when the protector fails to protect, as when the Securities and Exchange Commission (SEC), founded in 1934, fails to enforce existing regulations, resulting in the loss of billions of investors’ dollars in a Ponzi Scheme, the government’s response is still reactive—still not anticipatory—and thus likely to result in many more regulations. We are about to get a new agency, called the Consumer Financial Protection Agency (CFPA),1 yet another reactive response to the dangerously obvious. There will be turf wars between

the federal agencies to keep their complex financial institution could respective, existing authorities away have on the economy; from the CFPA; there will be debates 3. Supervisory authority of large firms about what and who will be regulated; was granted among many agencies and and politics and power will work very amongst a number of bank charter hard to obscure the facts and muddle types, causing industry fragmentation the solutions. Though Congress will now and uncoordinated oversight between debate when it will become law and the regulators; and, how much authority it 4. Insufficient or no spewill have, the CFPA is on cific oversight of signifithe way. As it makes its cant non-bank financial ascent on the regulatoenterprises, such as ry horizon, let’s take a investment banks, money close look at what we market funds, hedge have been told about it. funds, lenders, mortgage The Treasury released a originators, and other white paper, on June 17, private pools of capital. 2009, in tandem with President Barack Obama’s It is this fourth regulaannouncement of a compretory deficiency that meets hensive plan for regulatory the mortgage industry reform. Entitled “Financial “Often, federal agen- directly and unequivocalRegulatory Reform—A New cies are founded as a ly through the creation of Foundation: Rebuilding the CFPA.4 reaction to, rather Financial Supervision and than in anticipation Regulation”2, the proposal A new of, a crisis. outlines the Administration’s framework Regulation follows The fourth aspect of the requirements to reform where the supposedly plan, indicated above, the U.S. financial regulaunpredictable has centers on building a contory system. If adopted happened.” sumer protection agency in its entirety, this robust to oversee the kinds of and complicated document will become the blueprint for financial products heretofore outside of significant changes to the financial the purview of banking regulations. world.3 The goal of the plan is to Such products as non-traditional and remediate the following four per- sub-prime mortgages, it is alleged, ceived, regulatory deficiencies that were often unsuited for consumers’ purportedly caused the recent finan- needs. Banks and thrifts offered these products, leading to widespread abuse. cial crisis: The plan, in effect, asserts that the mis1. Regulators imposed insufficient cap- sion of federal and state bank regulaital and liquidity requirements (off-bal- tors to promote safety and soundness potentially conflicts with consumer ance sheet and trading assets); 2. Regulators did not take into account protection goals. Thus, the remedy prothe harm that the failure of a large, posed is a new framework, consisting of

regulatory, legislative, and administrative reforms. Its goal will be to “reduce gaps in federal supervision and enforcement; improve coordination with the states; set higher standards for financial intermediaries; and promote consistent regulation of similar products.” 5 This single, regulatory agency, to be known as the Consumer Financial Protection Agency, will be a federal consumer advocacy agency, focused on consumer protection with respect to financial products and services. By becoming the primary federal financial consumer protection supervisor, the new agency is expected to provide accountability. The plan seeks for the agency broad authorities to enable the fulfillment of its mission, such as by expanding jurisdictions and implementing new regulatory guidelines to eliminate abuse, extending even to providing new authorities to the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC).

The CFPA structure The plan’s recommendations to implement the CFPA are premised on granting “consolidated authority over the closely related functions of writing rules, supervising and examining institutions’ compliance, and administratively enforcing violations,” with the goal being to “reduce gaps in federal supervision; improve coordination among the states; set higher standards for financial intermediaries; and promote consistent regulation of similar products.” 6 There are eleven (11) features of the plan, which can be summarized in the following table.7



Authorities and Benefits

2. Broad jurisdiction to protect consumers in consumer financial products and services such as credit, savings and payment products.

Consumers have the information they need to make responsible financial decisions, and be protected from abuse, unfairness, deception or discrimination. Markets operate fairly and efficiently with room for sustainable growth and innovation, and traditionally underserved consumers have access to lending, investment and financial services.

Jurisdiction covers consumer financial services and products (i.e., credit, savings and payment products), as well as institutions that issue, provide, or service these products and provide services to the entities providing the financial products.

3. An independent agency with stable and robust funding.

Director and a board, with the board representing a diverse set of viewpoints and experiences. At least one seat on the board reserved for the head of a prudential regulator.8 A stable funding stream could come in part from fees assessed on entities and transactions.

Appointments and compensation of officers and professional, financial, and technical staff on terms commensurate with those currently used by other independent financial regulatory agencies.

4. Sole rule-making authority for consumer financial protection statutes, as well as the ability to fill gaps through rule-making.

Sole authority extends to promulgating and interpreting regulations under existing consumer financial services and fair lending statutes (i.e., Truth-in-Lending Act [TILA], Home Ownership and Equity Protection Act [HOEPA], Real Estate Settlement and Procedures Act [RESPA], Community Reinvestment Act [CRA], Equal Credit Opportunity Act [ECOA], and Home Mortgage Disclosure Act [HMDA] and the Fair Debt Collection Practices Act [FDCPA]).

Rule-making authority under any future consumer protection laws addressing the consumer credit, savings, collection or payment markets. Broad authority to adopt tailored protections—such as disclosures or restrictions on contract terms or sales practices—against unfairness, abuse or deception, subject to the notice and comment procedures of the Administrative Procedure Act.

5. Supervisory and enforcement authority and jurisdiction over all persons covered by the statutes that it implements, including both insured depositories and the range of other firms not previously subject to comprehensive federal supervision. Work with the Department of Justice to enforce the statutes under its jurisdiction in federal court.

O Supervisory, examination and enforcement authority over all entities subject to its regulations, including regulations implementing consumer protection, fair lending, and community reinvestment laws (i.e., Community Reinvestment Act [CRA]), as well as entities subject to selected statutes for which existing rule-writing authority does not exist or is limited (i.e., Fair Housing Act to the extent it covers mortgages, the Credit Repair Organization Act, the Fair Debt Collection Practices Act, and provisions of the Fair Credit Reporting Act). O Promote compliance by publishing supervisory guidance indicating how it intends to administer the laws it implements. O Able to use other tools to promote compliance, such as publishing best and worst practices based on surveys, mystery shopping, and information collected from supervision and investigations.

O Assumes all responsibilities from the federal prudential regulators for supervising banking institutions for compliance with consumer regulations (federal- or statechartered). Jurisdiction extends to bank affiliates that are not currently supervised by a federal regulator.9 O Interaction between itself and all prudential regulators of major matters and share confidential examination reports with them, with action taken by the CFPA or regulators. O Supervisory and enforcement authority over non-banking institutions, including enforcement powers (with subpoena authority), over non-banking institutions within its jurisdiction. O Able to request that the U.S. Attorney General bring any action necessary to enforce its subpoena authority or to bring any other enforcement action on its behalf in the appropriate court.

6. Regulatory reviews: O Pursue measures to promote effective regulation, including conducting periodic reviews of regulations, an outside advisory council, and in coordination with the Council.10 O Establish an outside advisory panel, akin to the Federal Reserve’s Consumer Advisory Council, to promote the CFPA’s accountability and provide useful information on emerging industry practices.

Required to complete a regulatory study of each newly enacted and existing regulation at least every three years after the effective date, to assess the effectiveness of enacted regulation, and allowing public comment on recommendations for expanding, modifying or eliminating a regulation.

Interact with other agencies through the Council to promote consistent treatment of similar products and to assure no product goes unregulated merely because of uncertainty over jurisdiction. Through the Council, coordinate efforts with the SEC, the CFTC, and other state and federal regulators to promote consistent, gap-free coverage of consumer and investor products and services. Agencies required to report their work to Congress.

7. Strong rules promulgated to serve as a floor, not a ceiling. States have the ability to adopt and enforce stricter laws.

Federally-chartered institutions to be subject to non-discriminatory state consumer protection and civil rights laws to the same extent as other financial institutions. States to be able to enforce these laws, as well as regulations of the CFPA, with respect to federally-chartered institutions, subject to appropriate arrangements with prudential supervisors.

States to have concurrent authority enforce regulations of the CFPA. CFPA promulgated federal rules under a preexisting statute or its own organic rulemaking authority should override weaker state laws, but states should be free to adopt stricter laws. With respect to state banks supervised by a federal prudential regulator, the CFPA to be the primary consumer compliance supervisor at the federal level.

8. Coordination of enforcement efforts with the states.

Maintain consistency among the 50 states’ supervisory and enforcement efforts. The CFPA assumes responsibility for federal efforts to help the states unify and strengthen standards for registering and improving the quality of providers and intermediaries.

Authorized to establish or facilitate registration and licensing regimes for other financial service providers and intermediaries (i.e., debt collectors, debt counselors or mortgage modification companies). The CFPA and state enforcement agencies to use registration systems to help weed out bad actors.


Supervisory, examination and enforcement authority. Should have the ability to act comprehensively to address emerging consumer protection concerns.


Better promote accountability and help prevent regulatory arbitrage. Federally-supervised institution no longer able to choose its supervisor based on any consideration of real or perceived differences in agencies’ approaches to consumer protection supervision and enforcement. O

1. A single primary federal consumer protection supervisor to protect consumers of credit, savings, payment and other consumer financial products and services, and to regulate providers of such products and services.


the birth of a new agency

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O Research and data: Information used to improve regulations, promote compliance and encourage community development. O Complaints: Responsible for collecting and tracking complaints about consumer financial services and facilitating complaint resolution with respect to federally-supervised institutions. States retain primary responsibility for tracking and facilitating resolution of complaints against other institutions. O Financial education: Streamline existing financial literacy, educate consumers about financial matters, improve their ability to manage their own financial affairs and make their own judgments about the appropriateness of certain financial products. O Community affairs: Promote community development investment, fair and impartial access to credit.

Engage in a wide variety of activities to help financial institutions, community-based organizations, government entities and the public understand and address financial services issues that affect low- and middle-income people across various geographic regions.

10. Improve incentives for compliance by restricting or banning mandatory arbitration clauses.

Gather information and study mandatory arbitration clauses in consumer financial services and products contracts to determine to what extent, and in what contexts, they promote fair adjudication and effective redress. If CFPA determines that mandatory arbitration fails to achieve these goals, establish conditions for fair arbitration, or, if necessary, ban mandatory arbitration clauses in particular contexts, such as mortgage loans.

Authority to restrict or ban mandatory arbitration clauses, since consumers often waive their rights to trial when signing form contracts in taking out a loan, and that a private party dependent on large firms for their business will decide the case without offering the right to appeal or a public review of decisions.

11. The Federal Trade Commission (FTC) given better tools to protect consumers.

FTC retains authority for dealing with fraud and sale of services like advance fee loans, credit repair, debt negotiation and foreclosure rescue/loan modification fraud.

CFPA authority is in coordination with FTC, with FTC remaining the lead federal consumer protection agency on matters of data security. Front-end privacy protection on financial issues moved to the CFPA.11



The Plan suggests a “proactive” approach to consumer disclosures, with an emphasis on transparency, consisting of three dimensions:


Authorities and Benefits

9. A wide variety of tools to enable it to perform its functions effectively: O Research and data O Complaints O Financial education O Community affairs




1. Make mandatory disclosure forms clear, simple and concise, and test them regularly. 2. Require that disclosures and other communications with consumers be reasonable. 3. Use technology to make disclosures dynamic and relevant to the individual consumer. The CFPA would be authorized to require that all disclosures and other communications with consumers be reasonable, balanced in their presentation of benefits and clear and conspicuous in their identification of costs, penalties and risks. Consequently, the plan calls for all mandatory disclosure forms to be clear, simple and concise. (The CFPA would determine which risks and costs should be highlighted.) The plan also recommends that the CFPA establish standards and procedures for testing disclosures (including immunity from liability) for providers of consumer financial products and services. A reasonable communication would balance the presentation of risks and benefits and have a clear and conspicuous description of significant product costs and risks. This standard would apply to communications with cus-

tomers, marketing materials, and all mandatory disclosures. The CFPA would be authorized to implement a process under which a provider, “acting reasonably and in good faith,” could obtain the equivalent of a “no-action” letter for disclosures and other communications for new products. For example, the CFPA could adopt a procedure under which a provider petitions the CFPA for a determination that its product’s risks were adequately disclosed by the mandatory model disclosure or marketing materials. The CFPA could approve use of the mandatory model or marketing materials, or provide a waiver, admissible in court to defend against a claim, for varying the model disclosure. Violations would be subject only to administrative action, rather than civil liability. Finally, the plan recommends utilizing technology to improve disclosures, such as requiring Internet (online) calculators to compare the overall cost of a mortgage. The CFPA is expected also to promote adoption of innovations in point-of-sale technology (i.e., allowing consumers who use a credit card to choose a payment plan for the purchase).

The CFPA would assume responsibility for the Federal Reserve Board regulations that impose extra protections and higher penalties on alternative or higher cost loans. For instance, the CFPA could be authorized to add other mortgage types to the class of products that receive additional scrutiny, leaving only products which meet the “plain vanilla” standards in the less scrutinized class. And the CFPA would be empowered to impose a strong warning label on alternative products, require applicants to fill out a financial experience questionnaire, or mandate that providers obtain a written opt-out to “plain vanilla” products.


A new fairness doctrine

The proposal recommends that the CFPA be authorized to define standards

The CFPA would have the authority to regulate unfair and deceptive acts or

for “plain vanilla” products, such as “standardized” fixed term mortgages without prepayment penalties and require financial institutions to offer such “plain vanilla” products alongside the institution’s other products. Such standards are to be “simpler and have straightforward pricing,” and these products are to be disclosed “prominently, alongside whatever other lawful products” a provider chooses to offer.

Higher cost loans

practices for all credit, savings and payment products. The proposal also calls for the CFPA to have the authority to address overly complex financial contracts. Perhaps this should be called the “New Fairness Doctrine.” It consists of the following three authorities, in which the CFPA is authorized to: 1. Regulate unfair, deceptive or abusive acts or practices. 2. Impose empirically justified and appropriately tailored duties of care on financial intermediaries. 3. Apply consistent regulation to similar products. The CFPA could ban certain practices, such as prepayment penalties, for certain types of contracts or payments to mortgage originators, including yield spread premiums, if disclosures were found to be an inadequate protection. The CFPA could also adopt a “life of loan” approach to mandate consumer protections through the servicing and loss mitigation stages of the loan. Indeed, the plan even suggests that the CFPA could consider requiring mortgage originators to receive a portion of their compensation over time, contingent on loan performance, rather than in a lump sum at the time of origination. There are recommendations in the plan to grant CFPA the authority to impose “duties of care” on financial intermediaries (i.e., a duty of ‘best exe-

cution’ on mortgage brokers with respect to available mortgage loan types and pricing). The proposal also calls for CFPA to apply consistent regulation to similar products, taking into consideration “consumer perceptions” of such products.

Community Reinvestment Act (CRA) and access

Reinforcing consumer protection

For more information on author Jonathan Foxx, visit Lenders Compliance Group on the Web at


the secondary market overview into a $40 or a $100 million loss. From a bank’s perspective, if an asset is lower in value than previously indicated, this turns into a loss when the valuation changes. This played out all over the country, and basically, the whole industry collapsed. Many changes came as a result of the S&L crisis. For one thing, appraisers were now required to be licensed for the first time. Also, the Financial Accounting Standards Board (FASB) adopted “Mark-toMarket” rules. Without going into the technical aspects, these rules basically discouraged financial institutions from putting mortgages in their portfolio. The way to avoid future risk in valuation was to sell the loans. And that is where it started. Stay tuned for the conclusion as to what happened and some clues as to what will happen in the future and how it may affect your business. In the meantime, let’s address more current events. We have several factors still impacting the markets and they are conflicting. For one thing, the recovery is starting to take shape, and as long as there is positive economic news, this will put upward pressure on rates. Also exerting upward pressure on rates is the

continued from page 19

tremendous amount of money the government is borrowing. On the other side of the coin, the credit markets have not recovered. Though the feds are slowing their purchases of Treasuries, they will continue to purchase mortgages. This will continue to keep the spread between Treasuries and mortgages more narrow than they should be considering the credit crisis. With unemployment hovering close to 10 percent and tons of foreclosures still hitting the real estate markets, the government cannot afford for rates to increase too fast and thereby jeopardizing any recovery on the horizon. These conflicting forces are expected to keep volatility in the markets high for the foreseeable future, with more risk to the upside than down. That risk changes only if we get significant poor economic news in the next 30 days … Dave Hershman is an author for the mortgage industry with eight books and several hundred articles to his credit. He is also head of OriginationPro Mortgage School and a top industry speaker. He may be reached by phone at (800) 581-5678 or email



1—Consumer Financial Protection Agency Act of 2009, House Bill 3126. 2—U.S. Department of Treasury, June 17, 2009, TG-175: President Obama to Announce Comprehensive Plan for Regulatory Reform. 3—Examples of substantial revisions, to name but two, include altering or eliminating the so-called “functional regulation” regime of the Gramm-Leach-Bliley Act (1999) and the interstate branching approval process of the Riegle-Neal Interstate Banking and Branching Efficiency Act (1994). 4—The discussion provided herein is based on a review of the Financial Regulatory Reform: A New Foundation: Rebuilding Financial Supervision and Regulation, issued by the U.S. Department of Treasury on June 17, 2009, and updated on August 11, 2009. 5—Ibid. Pg. 55. 6—Ibid. Pg. 56. 7—Ibid. Pp. 57-63. 8—Prudential regulation is regulation of deposit-taking institutions and supervision of the conduct of these institutions and set-down requirements that limit their risk-taking. The aim of prudential regulation is to ensure the safety of depositors’ funds and keep the stability of the financial system. 9—In a departure from the current framework of federal bank charter preemption of state laws, the plan recommends that federally-chartered institutions be subject to nondiscriminatory state consumer protection and civil

eral banking and consumer protection agencies proposed in the plan itself. 11—It is asserted that the FTC has a clear mission to protect consumers, but generally lacks jurisdiction over the banking sector and has limited tools and resources to promote robust compliance of nonbank institutions. To quote the plan itself, “mortgage companies not owned by banks fall into a regulatory ‘no man’s land’ where no regulator exercises leadership and state attorneys general are left to try to fill the gap.” Op. Cit. Note 3, Pg. 56. 12—“Strengthening Consumer Protection,” a synopsis of the five principles, is available on the Web site. It is one of several additional resources to the plan.


By creating the CFPA, the Obama Administration hopes to bring new means to bear on consumer protection, allowing it broad authority to implement its initiatives through various enforcement mechanisms. There are five principles that guide its formation: transparency, simplicity, fairness, accountability and access.12 To accomplish these principles, consumer protection mandates will be transferred to the CFPA from the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System (FRB), Office of Thrift Supervision (OTS), Federal Trade Commission (FTC), and the National Credit Union Administration (NCUA). The regulations impacted by the CFPA’s new authorities will include the Equal Credit Opportunity Act (ECOA), Fair Credit Reporting Act (FCRA) (except sections 615(e), 624, and 628), Alternative Mortgage Transaction Parity Act

Jonathan Foxx, former chief compliance officer for two of the country’s top publicly-traded residential mortgage loan originators, is the president and managing director of Lenders Compliance Group, a mortgage risk management firm devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456 or by e-mail at

rights laws to the same extent as other financial institutions. States would have the ability to enforce these state laws against federally-chartered institutions as well as state-chartered institutions and the ability to enforce the regulations of the CFPA against federally-chartered institutions. 10—To address the need for coordinated agency oversight and identification of emerging risks, the Plan would create a Financial Services Oversight Council (Council). The Secretary of Treasury would serve as the Council’s Chairman, and membership would include representatives of a many agencies, including the SEC, the Commodity Futures Trading Commission (CFTC), the Federal Housing Finance Agency (FHFA), and the new fed- O

As described in the above-outlined table, a key feature of the CFPA would be the administration of the CRA, and the plan recommends that the CFPA should have sole authority to evaluate financial institutions for CRA compliance. This is in keeping with the claim that a critical part of the CFPA’s mission is to promote access to financial services, especially households and communities that traditionally have had limited access. The CFPA, therefore, would now determine if a financial institution had a record of meeting the lending, investment and services needs of its community under the CRA, and in connection with the approval of a merger application by the institution’s prudential supervisor. Additionally, the plan calls for the CFPA to maintain a fair lending unit with attorneys, compliance specialists, economists and statisticians; and, importantly, it is to have primary fair lending jurisdiction over federallysupervised institutions and concurrent authority with the states over other institutions. To promote fair lending, the CFPA would have the authority to collect data on mortgage and small business lending, including expanding the required data to be reported under HMDA. Critical new fields would be added to HMDA data, such as a universal loan identifier that permits tying HMDA data to property databases and proprietary loan performance databases, or a flag for loans originated by mortgage brokers, or information about the type of interest rate (i.e., fixed vs. variable).

(AMTPA), Electronic Funds Transfer Act (EFTA), Fair Debt Collection Practices Act (FDCPA), Federal Deposit Insurance Act (FDIA) (subsections 43[c] through [f]), the Gramm-Leach-Bliley Act (GLBA) (sections 502 through 509), Home Mortgage Disclosure Act (HMDA), Community Reinvestment Act (CRA), Real Estate Settlement Procedures Act (RESPA), Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), Truth-in-Lending Act (TILA), and the Truth-in-Savings Act (TISA). Given such broad and sweeping responsibilities and authorities, the new Consumer Financial Protection Agency will bring about new modalities of regulatory guidance and enforcement methodologies, fundamentally altering the financial products and services industries.


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NAHB report: Remodeling market activity builds momentum

market conditions improved across all regions: 36.9 in the Northeast (from 35.7 in the first quarter), 38.3 in the Midwest (from 36.1), 39.7 in the South (from 34.3), and 40.5 in the West (from 32.8). A significant portion of the market improvement came from the measure for major additions and alterations (jobs worth $25,000 or more) with a leap to 38.2 (from 32.7). Smaller growth was observed in the indicators for minor additions and alternations (less than $25,000) at 41.5 (up from 39.1), and maintenance and repair at 33.6 (grew from 30.4). All measures for future expectations in the remodeling market increased significantly. Remodelers reported growth in calls for bids at 38.8 (from 34.2 in the first quarter). The backlog of remodeling jobs jumped to 34.4 (from 28.5). And appointments for proposals climbed to 40.3 (from 35.3). “While remodelers remain cautious, they report business is looking a little better after several challenging quarters,” said NAHB Chief Economist David Crowe. “Conditions for this quarter have returned to nearly the levels of this time last year. The uptick in the expectations component suggests this trend will continue as the entire housing market begins its recovery.” For more information, visit


A reading of “1” has the lowest impact on rates, while “10” has the highest. Although carefully verified, data are not guaranteed as to accuracy or completeness. BestInfo Inc. cannot be held responsible for any direct or incidental loss or liability incurred by applying any of the information or opinions in this feature. Provided exclusively to National Mortgage Professional Magazine by David Beadle, president of BestInfo Inc., the BestRates cell, pager and e mail rate alert service for mortgage industry subscribers. Send your inquiry to for full details on a free two-week trial subscription. MO







August Consumer Prices Rate Impact

September 24 August Existing Home Sales Rate Impact

September 24 Weekly Jobless Claims Rate Impact

September 29 September Consumer Confidence Rate Impact

Second quarter 2009 commercial and multifamily mortgage loan originations were 50 percent higher than during the first quarter of 2009, a quarter with very little activity, but remained 54 percent lower than during the same period last year, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. “Commercial and multifamily mortgage originations continue to feel the effects of the recession and the credit crunch, with volumes 54 percent below last year’s second quarter, and 83 percent below the peak seen in the second quarter of 2007,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “A 50 percent increase in volumes between the first and second quarter of this year follows a traditional seasonal increase in the second quarter. It also likely signals that commercial and multifamily mortgage originations bottomed in the first quarter of 2009.” The 54 percent overall decrease in commercial/multifamily lending activity during the second quarter was driven by decreases in originations for all property types. When compared to the second quarter of 2008, the decrease included an 81 percent decrease in

loans for office properties, a 77 percent decrease in loans for hotel properties, a 70 percent decrease in loans for healthcare properties, a 65 percent decrease in loans for industrial properties, a 51 percent decrease in retail property loans and a 21 percent decrease in multifamily property loans. Among investor types, commercial bank portfolios saw a decrease of 83 percent compared to last year’s second quarter. There was also a 57 percent decrease in loans for conduits for commercial mortgage-backed securities (CMBS), a 54 percent decrease in loans for life insurance companies, and the dollar volume of loans for governmentsponsored enterprises (or GSEs—Fannie Mae and Freddie Mac) saw a slight increase of two percent. Second quarter 2009 mortgage originations were 50 percent higher than originations in the first quarter. Due to the low base of originations in the first quarter, the percentage increases seen in the second quarter are quite dramatic. Among investor types, loans for conduits for CMBS saw an increase in loan volume of 471 percent compared to the first quarter, loans for life insurance companies saw an increase in loan volume of 46 percent compared to first quarter 2009, GSEs’ volume increased by 39 percent during the same time span, and originations for commercial bank portfolios increased six percent from the first quarter to second quarter 2009.

Indicator Summary

September 16





Residential remodeling showed modest gains during the second quarter of 2009 with increases in all indicators, according to the recently released National Association of Home Builders (NAHB) Remodeling Market Index (RMI). The current market conditions measure grew to 38.1 from 34.5 in the first quarter. Future expectations rose to 34.2 from 30 in the previous quarter. The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view market conditions as improving. The RMI has been running below 50 since the final quarter of 2005, following decreasing remodeling expenditures since that time. “With more calls from home owners and more projects under way, remodelers are seeing better activity in their businesses,” said NAHB Remodelers Chairman Greg Miedema, a remodeler from Tucson, Ariz. “Although remodeling jobs are still harder to find, homeowners are showing more interest in remodeling spending.” Indicators for current remodeling


MBA survey: Q2 2009 commercial/multifamily originations up from Q1

7 8 6 5

The argument has been that “inflation is not a problem” at the present time. This is because the Federal Reserve historically has focused upon the Consumer Price Index (CPI) or the Personal Consumption Expenditures (PCE) index as the “gold standard” for determining the level of price inflation. But, the true “early warning” system of what lies ahead may be found in commodity prices. When they move into a bubble phase, there is likely to be trouble ahead. Currently, many economists are very worried about the stubbornly high level of oil prices in relationship to weakness in demand. And they are also concerned about the fact gold has remained in the area above $900 for a considerable period of time. While these commodities may be reacting to weakness in the dollar, that is also a major risk factor to a continuation of lower inflation levels. The real estate sector has been on the rebound in recent months, with one-third of transactions related to the $8,000 federal tax incentive to first-time buyers. It is set to expire on Nov. 30, which is creating a powerful impetus to having a signed contract in hand by the end of this month. In fact, this could turn into a “Cash for Clunkers-style” frenzy as the deadline approaches. It has also been noted that the main sales push is at home prices below $250,000. The “move-up” market is reportedly very weak and jumbo loans remain hard to find at attractive rates. Therefore, when one looks at the home sales statistics, they have to be viewed in terms of this bifurcated marketplace. In other words, considerable additional progress will be required before the housing market can be declared to have recovered from its deep slump. New home sales will be released on Friday, Sept. 25. The trend in new claims for state unemployment benefits has been relatively steady in the area near 566,000 for the past month. This is still well above the peak level of 400,000 seen in the previous recession of 2001. As for continuing claims, they have now declined to six million from what had been just shy of seven million earlier in the summer. While some optimists have said this shows the employment situation is improving, the skeptics say it is merely evidence that many folks have been losing their benefits without finding a new job. The continuing claims figure followed by most economists is the one which tracks payments for the standard 26-week period. Congress has extended benefits due to the length of the recession. But even those receiving the extra money are seeing their payments run out, which could lead to more hardship as the current year comes to an end. A key barometer of attitudes about employment is found in the monthly consumer confidence data, because the surveys ask questions about whether jobs are hard to find or easy to obtain. While there was a small improvement in the August data, employers are remaining cautious. For one thing, some employers sought to avoid outright layoffs by cutting back on hours for existing workers. So, the first order of business in a recovery phase will be to restore those workers to true “full time” status. This may delay the hiring of new employees beyond what was seen in past recessions. Furthermore, there has been a strong trend toward engaging the services of temporary workers, just in case a double-dip recession takes place. These trends may further delay a drop in the national unemployment rate until any recovery has developed a full head of steam.

Compared to the first quarter of 2009, second quarter originations for healthcare properties saw a 173 percent increase. There was a 129 percent increase for hotel properties, a 93 percent increase for retail properties, a 73 percent increase for multifamily properties, a 28 percent decrease for office properties and a 46 percent decrease for industrial properties. For more information, visit

FDIC advances in Legacy Loans Program testing The Federal Deposit Insurance Corporation (FDIC) is taking the next step in the development of the Legacy Loans Program (LLP). The LLP is part of the Public-Private Investment Program announced in March by the Secretary of the Treasury, the Federal Reserve, and the FDIC, and was designed to help banks remove troubled loans and other assets from their balance sheets so that banks could raise new capital and be better-positioned to provide lending to further the recovery of the U.S. economy. In June, the FDIC indicated that it would continue to develop this program by testing the LLP’s funding mechanism through the sale of receivership assets. This step will allow

the FDIC to be ready to offer the LLP to open banks as needed. The first test using the LLP funding mechanism commenced in late July. In the transaction to be offered, the receivership will transfer a portfolio of residential mortgage loans on a servicing released basis to a limited liability company (LLC) in exchange for an ownership interest in the LLC. The LLC also will sell an equity interest to an accredited investor, who will be responsible for managing the portfolio of mortgage loans. Loan servicing must conform to either the Home Affordable Modification Program (HAMP) guidelines or FDIC’s loan modification program. Accredited investors will be offered an equity interest in the LLC under two different options. The first option is on an all cash basis, which is how the FDIC has recently sold receivership assets, with an equity split of 80 percent (FDIC) and 20 percent (accredited investor). The second option is a sale with leverage, under which the equity split will be 50 percent (FDIC) and 50 percent (accredited investor). The funding mechanism is financing offered by the receivership to the LLC using an amortizing note that is guaranteed by the FDIC. Financing will be offered with leverage of either four to one or six to one, depending upon certain elections made in the bid submitted by the private investor. If the bid incorporates the six to one leverage alternative, then performance of the

underlying assets will be subject to certain performance thresholds including delinquency status, loss severities, and principal repayments. If any one of the performance thresholds is triggered over the life of the note, then all of the principal cash flows that would have been distributed to the equity investors would be applied instead to the reduction of the note until the balance is zero. The performance thresholds will not apply if the bid is based on the lower leverage option. The FDIC will be protected against losses on the note guarantee by the limits on the amount of leverage (both in terms of a maximum ratio and dollar amount), the mortgage loans collateralizing the guarantee, and the guarantee fee. The FDIC will analyze the results of this sale to see how the LLP can best further the removal of troubled assets from bank balance sheets, and in turn spur lending to further support the credit needs of the economy. For more information, visit

Home prices climb with 1.2 percent rise Integrated Asset Services LLC (IAS), a default management and residential collateral valuations company, has released its IAS360 House Price Index (HPI). Based upon the timeliest and most granular data available in the industry, the index for national house

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prices moved ahead another 1.2 percent in June. The IAS360 House Price Index is a comprehensive housing index tracking monthly change in the median sales price of detached single-family residences across the U.S. The index, based on all arms-length transactions, tracks data of 15,000 neighborhoods, that roll up to report on the changes in 360 counties, nine census divisions, four regions and the nation overall. The IAS360 House Price Index is delivered on a monthly basis. With June’s gains—the fourth consecutive positive month—the U.S. housing benchmark advanced 2.7 percent for full second quarter 2009, virtually offsetting the 2.6 percent decline across the first three months of the year. The IAS360 HPI is still down 16.7 percent from its high in June 2007. Like May, all four U.S. census regions reported positive numbers for the month and in like order. For June, the northeast was up 1.9 percent, the midwest 1.8 percent, the south 1.2 percent, and the west 0.4 percent. While values showed improvement in neighborhoods across the country, most upper end counties remained mired in a deep slump. In June, price declines continued to accelerate for Putnam County, N.Y.; Morris County, N.J. and Howard County, Md. “I think that a lot of this valuation



Are You Now Mentally “Melted Down?”




Dear Brian: I don’t mean to sound too sad here, but I am struggling. For years, I did really well, and then, like everyone else, my business just sort of disappeared. It has taken me many months just to try keeping my head above water. But I have to confess … my heart and mind are really off somewhere else most of the time. I am not sure if this is the right place to ask you, but how do you stay positive even during a meltdown? Thanks. Anonymous, Maine


Dear Anonymous: I would suggest carefully reading this article. In fact, you probably should read it several times and maybe share it with your office and staff. The big difference between a successful person and an unsuccessful one is how they deal with failure and defeat. I have told you many times that one of my strongest attributes is that I am persistent. See, I don’t ever feel defeated. Sure, I fail and not every-

thing goes as planned all the time. Sure, I will work hours, days and weeks, on a campaign and not get the results I expected. That’s a terrible feeling. By the way, Thomas Edison tried hundreds of experiments and he said the only reason he succeeded was because he ran out of things that didn’t work! But, what you do next is the critical thing! Do you say, “Boy, that was a lot of work and I spent a lot of money with no result. Let’s never try that again.” Or, do you say, “That didn’t work, but yet I know others succeed with that strategy, so let me go back and dissect this to see what went wrong and try again.” The questions you ask yourself and the responses you give back are critically important. I personally have spent 15 years doing poorly to average and only the last eight years earning high six to seven figures each year. Sure, it is much easier to give up, but that is not where the money is. The real money and success can be found by going deeper and

National Mortgage Professional Magazine Presents ... The 40 Under 40 The 40 Most Influential Mortgage Professionals Under 40

We are seeking nominations from our readers for the National Mortgage Professional Magazine’s “40 Under 40” feature, slated to appear in our November 2009 edition. Who qualifies: Anyone who is under the age of 40 and has had a major impact on the industry. This could be through innovation, association participation, sales force automation, community activism, management techniques, technology or any other significant method that has influenced our industry. We would need a short, three-line bio on you, along with a color photo and company contact info to complete the profile.

To be considered for the 40 Under 40 feature, visit to submit your nominations.

realizing that every failure, when properly reviewed, is just another bump on the road to success and what you want to accomplish. Let me make it even more basic. Have you ever gone for a bike ride? Well that is a prime example of what I am trying to tell you here! If everyone who fell off their bike when they first started riding quit riding bikes, then we would have zero bike riders! But, there is one more big lesson here … It is the idea of limited thinking … the idea of focusing on all of the negative aspects of this meltdown …the idea of thinking too much about your competition. Of dwelling on all of the unethical things they may be doing to take away “your business,” as if there is such a thing as “your business.” It reminds me of the Insiders Seminar II we hosted a few years ago in Chicago. One of my fellow “gurus” who is a great marketer decided to come to my seminar to learn. Again … another lesson. Although he is a very successful marketing guru, he is still learning and from a competitor for that matter. Or, am I really a “competitor?” I don’t see us as “competitors” and there is certainly more than one way to succeed in any field. But the feedback I got when he left hurt and depressed me. It seemed that everyone in attendance, almost without exception, were upset that he showed up. The problem … limited thinking. I was personally thrilled that he came and wanted to learn, as it seemed like a great compliment to me. But, everyone in the audience felt that it was a threat. Here is what I was thinking, and he probably was too. I am not right for everyone … there are 150,000-plus originators out there and I can only handle 5,000 of them successfully.

news flash

That is considered “abundant thinking.” It’s the mentality when one thinks: “I have no competition.” It reminds me of the question I am continually asked by originators who are looking into becoming a member of our systems at Their question is usually, “How many others in my area have your system?” My answer is always: “Who cares?” Let’s suppose there are 500 transactions that occur in your market each month. How many could you possibly handle? Maybe 10, maybe 20, maybe even 30? That leaves more than 470 for your competition. So stop the idea of “limited thinking” and never give up! Newsflash … There is business being done right now in your town … now go ahead and get your share of it! Dedicated to having buyers chasing you … If you have a question you would like Brian to answer in this column, please send an e-mail with “Ask Brian Question” in the subject line to Brian Sacks is CEO of He has been an industry expert for more than 25 years, closing 6,000-plus loans totaling $1 billion. You can read Brian’s 32-page special report entitled “The Death of Mortgage Origination as We Know It” and “The 10 Things You Must Do Now to Survive and Thrive” at This report sells for $97 and has been downloaded by more than 9,200 originators and company owners, but is free for a limited time for readers of National Mortgage Professional Magazine. He may be reached by e-mail at

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disparity reflects the immediate effects of Washington‘s housing rescue plan,” said Dave McCarthy, president and CEO of Integrated Asset Services. “Everything so far has helped spur sales of lower-priced homes, which, at least in the short run, is producing winners and losers.” Among the nation’s 10 largest metropolitan statistical areas (MSAs) reported, only the Las Vegas housing market continued to slide with a drop of another 1.8 percent for the month. Boston and Chicago followed solid May numbers with increases of 2.9 percent and 1.3 percent, respectively, as did the big California MSAs, with Los Angeles gaining 2.2 percent, San Francisco up 1.7 percent and San Diego at 1.4 percent. “The improvement in the more traditional neighborhoods is encouraging,

but it’s easy to think there may be trouble lurking further up the food chain,” said McCarthy. For more information, visit

Your turn National Mortgage Professional Magazine invites you to submit any information on regulatory changes, legislative updates, human interest stories or any other newsworthy items pertaining to the mortgage industry to the attention of:

NMP News Flash column Phone #: (516) 409-5555 E-mail: Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

BB&T assumes all deposits of Colonial Bank


Kroll Factual Data forms partnership with Prime Alliance Solutions


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Kroll Factual Data, a provider of business information solutions to financial organizations, announced that it has partnered with Tukwila, Wash.-based, Prime Alliance Solutions Inc., a provider of iMortgage solutions for credit unions, to bring an integrated offering of Kroll Factual Data’s credit and flood technology services through Prime Alliance Solutions’ loan origination software (LOS) platform. The official launch is slated for September and will be available through Prime Alliance Solutions’ Retail Lending Center and Loan Fulfillment Center platforms to the 1,600 credit unions it serves nationwide. Utilizing Kroll Factual Data’s flood and credit technology, credit unions will experience a seamless process with reduced costs, while benefiting from a more user-friendly credit report format. “Kroll Factual Data’s stability and longevity in the industry made them a perfect preferred partner for us,� said Joe Brancucci, chairman and CEO of Prime Alliance Solutions Inc. “Creating relationships such as this one with Kroll Factual Data provides our credit unions with additional mortgage fraud protection without the need to manage additional vendor relationships.� Credit unions can directly order flood and credit reports from Kroll Factual Data through Prime Alliance Solutions LOS. The convenience of not having to leave their system saves both time and money. “The partnership with Prime O

Colonial Bank of Montgomery, Ala., has been closed by the Alabama State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking and Trust (BB&T) of Winston-Salem, N.C., to assume all of the deposits of Colonial Bank. Colonial Bank’s 346 branches in Alabama, Florida, Georgia, Nevada and Texas have reopened and are operating as branches of BB&T. Depositors of Colonial Bank will automatically become depositors of BB&T. Deposits will continue to be insured by the FDIC. Customers should continue to use their existing branches until BB&T can fully integrate the deposit records of Colonial Bank. As of June 30, 2009, Colonial Bank had total assets of $25 billion and total deposits of approximately $20 billion. BB&T will purchase approximately $22 billion in assets of Colonial Bank. The FDIC will retain the remaining assets for later disposition. The FDIC and BB&T entered into a loss-share transaction on approximately $15 billion of Colonial Bank’s assets. BB&T will share in the losses on the asset pools covered under the lossshare agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement is also expected to minimize the disruptions for loan customers. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $2.8 billion. BB&T’s acquisition of all the deposits was the “least costly� resolution for the FDIC’s DIF compared to alternatives. Colonial Bank is the 74th FDIC-insured institution to fail in the nation in 2009. “The past 18 months have been a very trying period in the financial services arena, but the FDIC and its staff have performed as Congress envisioned when it created the corporation more than 75 years ago,� said FDIC Chairman Sheila C. Bair. “After protecting almost $300 billion in deposits since the current financial crisis began, the FDIC’s

guarantee is as certain as ever. Our industry funded reserves have covered all losses to date. In fact, losses from today’s failures are lower than had been projected. I commend our staff for their excellent work in assuring once again a smooth transition for bank customers with these resolutions. The FDIC continues to stand by the nation’s insured deposits with the full faith and credit of the U.S. government. No depositor has ever lost a penny of their insured deposits.� For more information, visit


heard on the street

By Tommy A. Duncan




Tommy: When performing reviews on appraisals, do you recommend an automated valuation model (AVM)?


Lately, there is a lot of press about large mortgage banks that used AVMs to determine property values for reducing Home Equity Lines of Credit (HELOCs) and now these financial institutions are faced with class-action lawsuits based on incorrect values as part of the allegations. One such suit, Michell Kimball v. Washington Mutual Bank alleges that the bank used faulty AVMs to create a pretext for its credit limit reduction and account suspension. After Ms. Kimball learned that her HELOC was frozen, she called customer service and was informed an AVM showed the property value had significantly declined. In disbelief, she challenged the bank. She was required to use the bank’s “preferred” appraiser and a full residential appraisal was performed and the results of the appraisal valued the property was worth 1.5 times the AVM’s estimate. Mark one up for the appraiser and the consumer. There are several other lawsuits in the works with similar type of claims where faulty AVMs were used. The adverse affects of the AVM product and the impact it is having on the consumer is beginning to surface, and I expect there will be more outcry from industry leaders as consumer complaints surface. The Home Valuation Code of Conduct (HVCC) lists the AVM as a form of quality control on appraisals during the 10 percent sampling of Section VI. The AVM is much more affordable than a Field Review Appraisal however, I learned during my year deployment in the Global War on Terrorism that modeled data used in intelligence was often skewed and incorrect. We found ourselves having to use human intelligence to validate information that later discredited the data models. I see the AVM having the same type of effect as I saw during the war. One must know its limitation and for the best results, have a human to verify the information. Yes … an appraiser. Use an appraiser to validate collateral. A Field Review Appraisal or a drive-by is what we use, and yes it costs more than an AVM, but it puts an eye on the target and fills the gaps in performing appraisal audits. I believe there should be a balance in technology and the way it is applied in the mortgage industry. However, the AVM product has its place, but shortcuts may end up being the long way. In the mortgage fraud cases Quality Mortgage Services have performed, AVMs were never used. An appraisal, whether a full appraisal or a field review, was used because the appraiser is the subject matter expert and places more credibility on a licensed professional. An AVM cannot testify in a court of law and will not hold up in court because of problematic flawed information. I believe the AVM is probably a good product during pre-funding and underwriting as something to support a desk review. However, a Field Review Appraisal is my product of choice during post-closing quality control. But, I have also seen where a Field Review Appraisal or another appraisal was ordered during underwriting. It is difficult to say which method, desk review or AVM, was used to provoke the underwriter to order another appraisal or Field Review Appraisal. What I do know if you want stronger supporting evidence, an appraiser is required. Tommy A. Duncan is executive vice president of Quality Mortgage Services LLC. For answers to your QC and FHA questions, please contact Tommy at (615) 5912528, ext. 124 or e-mail You may also visit Quality Mortgage Services LLC on the Web at

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continued from page 31

Alliance Solutions Inc. allows credit unions to transfer risk and increase profitability, while offering products that are known for their safety and soundness,” said Jeff Gentry, vice president of Kroll Factual Data. “Kroll Factual Data has been in the business for 25 years and continues to forge synergistic partnerships demonstrating our stability in this volatile market.” For more information, visit or

Lenders One sets production record for first half of 2009 Lenders One Mortgage Cooperative, a national alliance of more than 135 independent mortgage bankers, announced that it has experienced a record level of originations during the first half of 2009. Lenders One member companies originated $21.2 billion in loans during the second quarter, which surpassed first quarter volume of $17.3 billion. Broken down regionally, new and existing members in the western states originated $7.9 billion of the recent quarter’s total volume. Midwest lenders followed with $7.6 billion, and east coast member companies recorded $5.7 billion in production. “Heavy refinance volumes, coupled with low interest rates and the dedication of our members have all contributed to this continued success,” said Scott Stern, chief executive officer of Lenders One. “These factors were complimented by our collective buying power that creates revenue-enhancing, cost-saving and market-share expanding opportunities for all members.” As the secondary market progresses toward recovery and investors begin to revisit mortgages as viable investments, the Federal Housing Administration (FHA) remains a strong part of the industry, accounting for 43 percent, or $9 billion, of Lenders One’s second quarter originations. Conventional products made up 52 percent, or $11 billion, with jumbo loans rounding out the remaining five percent. Stern also attributes some of the production volume to the similar increase seen in Lenders One membership. At mid-year, the cooperative had already attracted 21 new members from all across the country, which is in line to compete with the record 42 total members it on-boarded in 2008. “By staying committed to consumers with products to refinance and purchase homes, our members continue to be leaders in their market,” Stern said. For more information, visit

Two firms join NRMLA’s Wholesale Lender Program The National Reverse Mortgage Lenders Association (NRMLA) has

announced that Live Well Financial Inc. of Richmond, Va., and Generation Mortgage Company of Atlanta as charter members of the association’s new Wholesale Lenders Program. Launched in July, the Wholesale Lenders Program provides information to lenders and brokers on delivering reverse mortgages to reputable investors. Other Wholesale Lender Program participants include Senior Lending Network, Bank of America Home Loans, Metlife Home Loans and Genworth Financial Home Equity Access Inc. “Live Well Financial is pleased to join NRMLA’s Wholesale Lender Program as a charter member,” said Chris Palumbo, senior vice president and COO of Live Well Financial. “We look forward to partnering with NRMLA and all of its members to help the reverse mortgage industry continue its impressive growth.” Sherry Apanay, senior vice president of wholesale lending at Generation Mortgage Company, said, “Generation Mortgage is pleased to support NRMLA and our industry in this new endeavor. Wholesale lenders working together for the good of the reverse mortgage industry should make us all stronger.” For more information, visit

NexBank and The Funding Source create NexBank Mortgage Dallas-based NexBank, a banking and financial services company and commercial mortgage lender, has announced the establishment of NexBank Mortgage through a partnership with The Funding Source, a residential mortgage operation based in Dallas, Texas. NexBank Mortgage, which offers several residential loan programs, from traditional mortgages and Veterans Affairs (VA) loans to reverse mortgages, operates several field offices with seasoned loan counselors. The Funding Source also has a mortgage technology platform that allows consumers to simplify the mortgage application process online, while still receiving service from local experts. This partnership allows NexBank greater gains of scale in originating loans as it joins its current commercial and wholesale mortgage lending activity with the residential mortgage operation. “NexBank is honored to have the opportunity to build a single operating alliance with The Funding Source and the company’s founder, Tish Ashley,” said NexBank President and Chief Executive Officer Davis Deadman. “Together, we have the capability to offer consumers outstanding knowledge of the local market, expertise in crafting custom loan decisions and assurance to provide mortgages of nearly any amount.” continued on page 40


Is This Time Different?

According to the US Census Bureau, the population of the United States has grown by an average of 1.27 percent every single year since 1900. At current population levels, this means that we are adding about three million people to our population annually. As our population grows, we have about 1.3 to 1.5 million new households that are formed each year. Over the last 30 years, the average growth in new households has been about 1.4 million each year. These can include people who graduate from college and enter the workforce, and adults who are currently living with their parents who decide to move out on their own. Of course, these people will need a place to live. The growth in population isn’t the only thing that will increase the demand for new housing. In fact,

approximately 300,000 housing units are demolished each year. This is primarily due to functional obsolescence because houses become old and outdated. This means that the demand for new housing is about 1.7 million new units each year in order to replace the demolished homes and accommodate the new households being formed each year.

Number four: Less homes are being built It’s no secret that many home builders are going out of business and building less homes. In fact, the number of new housing units being built went from a peak of 2.1 million in 2005 to less than one million in 2008. New housing starts for 2009 are also scheduled to come in below one million as the market contincontinued on page 40 O

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Once upon a time, the housing market to some charts that contain the results and economy at large was full of of Professor Mayer’s research. euphoria and excitement. The Great During the real estate boom years of Housing Boom (GHB) of 2003-2006 was 2003-2006, the index values went way rumored to be different than any other above the historical average in markets boom in the entire history of the world. like San Diego, Los Angeles, Phoenix and House prices were never expected to Miami. During those boom years, it was come down from their lofty levels. “This much more affordable to rent a home time is different,” said all wise people versus owning a home. Now that house in Everyoneisaguruland. Well, we’ve all prices and mortgage rates have declined seen how THAT turned out … so much, the index values have broken So, let’s try it again … far below the historical Once upon a time, the average. This means that housing market and econit is now much more omy at large was full of affordable to own a home distress and depression. versus renting a home in The Great Housing Bust those markets. (GHB) of 2007-2009 was rumored to be different Number two: than any other downturn Housing is more in entire history of the uniaffordable now verse. House prices were than at any never expected to go up point in recent from their modest levels. memory “The great investor “This time is different,” The National Association of Sir John Templeton said all the wise people in Realtors (NAR) has a nifty Everyoneisaguruland. I statistic they publish called once remarked: The wonder how THAT will the Housing Affordability four most expensive turn out? Index (HAI). The HAI measwords in the English The great investor Sir ures whether or not a typilanguage are ‘this John Templeton once cal family could qualify for time is different.’ I remarked: a mortgage loan on a typiThe four most expen- agree; and hopefully cal home. A typical home sive words in the English is defined as the national you will too …” language are “this time is median-priced, existing different.” single-family home as calI agree; and hopefully you will too culated by NAR. The typical family is when you look at these four reasons defined as one earning the median famwhy house prices are poised to (gasp) go ily income as reported by the U.S. Bureau up at some point over the next few of the Census. The prevailing mortgage years. interest rate is the effective rate on loans closed on existing homes. Number one: It costs less An affordability index value of 100 to own a house than it means that a family making the median does to rent one income has exactly enough to qualify for One way to figure out whether housing an 80 percent mortgage on a medianis over or undervalued, is to compare priced home. For example, the index what it costs to buy a home versus what value of 107.6 in the year 2006 meant that it costs to rent a home. In fact, Professor a median-income family had 107.6 perChris Mayer, a world-renowned econo- cent of the income necessary to qualify for mist from Columbia University, has cre- a conventional loan covering 80 percent ated a very simple method of doing just of the home values at that time. So far in that. His method, called STATA, uses a 2009, the index value has averaged series of calculations to compare the around 171.6. This means that a mediancost of renting a home versus owning a income family has 171.6 percent of the home in a certain marketplace given income needed to qualify for a mediancurrent house prices and mortgage priced home. In other words, owning a rates. Visit my blog at www.gibranni- home today is a whopping 59.48 percent or “Facebook me” for a link more affordable than it was in 2006!

Number three: The U.S. has a growing population


cycle. Again, all of this is the result of an industry that has been largely unregulated. Gone are the “fog-the-mirror-and-signhere” easy-qual loan programs. The Obama Administration has already set forth “new and improved” Regulation Z rules. If these proposed rules go unchalan abundance of “low hanging fruit” lenged and unchanged, they will be effecfound it relatively easy to make an tive Nov. 23, 2009. One of the provisions of amazing amount of money. Our industry the new Regulation Z rules will allow the was overrun in the last business cycle by federal government to regulate what loan what I refer to as “white collar migrant originators can make. This is both a threat workers” … those who saw an opportu- and an opportunity. This is the result of nity and “made hay while the sun what many outside observers viewed as shined.” For that migrant group, their loan originators steering consumers into mortgage “career” was more of a career loan programs/products that were riskier of convenience than a career of choice and resulted in an epidemic of defaults and foreclosures. Whether rooted in commitment. or not you agree or disBack then, it was easy and agree with this assessment, convenient to have so the argument for or against many calling you to refithis issue is moot at this nance that you couldn’t point. The new rules and get to all the calls. It was regulations have been at a time when you had so already written and are quimany “easy-qual” loan etly going through the U.S. programs that you could Department of Housing & get almost anyone a mortUrban Development’s 120gage. It was when the day comment period. Loan commission splits were at originator compensation historical highs and you will be regulated within were making a fortune “We are going from Regulation Z. What is a bit and thought you deserved being a non-regulatsurprising to me is how few every dollar of it because ed industry to know about the new of what a genius you potentially being a Regulation Z rules and that were. It was a time when grossly over-regulateven fewer are making any you would go to a party ed industry.” protest. It makes me wonand your friends envied der if our industry is fightyou pulling up in an expensive car and “living large.” Only ing so many battles on so many fronts that later did we discover that the car, house they are distracted or maybe have simply and lifestyle were financed to the max. resigned themselves to the fact that all of But all of that was a mirage … it wasn’t this is happening with the mistaken real and our economy is suffering from thought that “there’s nothing they can do the consequences of that season of about it.” We are talking about topics such as excess. Not surprising, regulators are showing up like firemen to a five alarm these every week on my weekly Internet fire that has long since burned itself out. radio program called “Lykken on Lending.” Nonetheless, they are determined “to do To listen, go to and something” to make sure this never hap- type in “Lykken on Lending” in the “Search” pens again. Hmmm … what are the box. You will be able to listen to each “live” broadcast, as well as all the archived prochances of them getting it right? grams. I welcome you to tune in and listen to us discuss the new HUD Regulation Z Rules and regulations The pendulum is swinging back from the rule and what you can do about it. We also extreme of “irrational exuberance” to an talk about all the other pending rules and extreme of “irrational regulation.” New regulations that are coming down the road. obstacles, the likes of which this industry We are going from being a non-regulated has never before seen, are coming in the industry to potentially being a grossly overform of new rules and regulations that we regulated industry. Most of us recognize will have to deal with in this next business that regulation is not the answer. It will ulti-

A View From the “C” Suite: What Lies Ahead for Mortgage Lending?




By David Lykken


Many today are asking themselves: “What is the future of mortgage lending?” Given the onslaught of new rules and regulations, and a seemingly endless number of stories chronicling the closures and/or failures of banks, warehouse lenders and mortgage companies, it is easy to understand why almost every C-level executive is wondering what the future holds for the industry. In a time when the obstacles seem to be multiplying and opportunities fading, it is important that the C-level maintains an intense focus on the course they chart for their company. But be encouraged C-level executive, as there are unprecedented opportunities such as haven’t been seen in four decades. In fact, I will make this bold statement at the front end of this article … “More wealth will be created in the next five years in mortgage banking than in the past 25 years!” “How can this be?” you may ask. The answer is this threefold: 1. The need for a viable mortgage industry has never been stronger for the health and healing of our economy. 2. The industry has been decimated over the past couple of years and many companies, even some of the biggest, have closed their doors. 3. The barriers of entry to our industry have increased as a result of obstacles facing our industry, the two biggest of which I have outlined below. The foundation for my bullish view for our industry is based upon the fact that (1) homeownership/housing is the foundation and fabric of the United States economy and that (2) this requires a vibrant and healthy mortgage industry. This article is dedicated to those of you who have made the mortgage industry a “career of choice” as apposed to a “career of convenience.”

The mortgage industry … a career of choice or convenience? Those who entered the mortgage industry in the “good times” when there was

mately result in increased costs and delays to consumers. We only have to look to the Home Valuation Code of Conduct (HVCC) fiasco to know this to be a fact. HVCC was rushed into law. Then, in less than a year, there were significant efforts to put a moratorium on it or rescind it altogether; at least that is what appears to be happening at the time this article was written.

Warehouse liquidity If the reports of new rules and regulations weren’t enough, our industry is experiencing one of the worst warehouse lending liquidity droughts on record. In August, the takeover of Colonial Bank by the feds sent shockwaves across an industry already traumatized and fragile by a litany of failures and closures. Colonial Bank had quietly and steadily grown to become the largest warehouse lender in the country, providing $4 billion in warehouse financing to a large number of independent mortgage bankers. Think what could have happened if Colonial’s warehouse lending facility had suddenly been shut down when the feds took over the bank. The thought of that possibility raised the anxiety levels to an all-time high for those independent mortgage bankers who had a Colonial warehouse line. And if Colonial’s warehouse unit had been shut down, the consequences could have impacted almost everyone in the industry. The significance of the Colonial Bank failure more vividly comes into focus when doing the following math … If Colonial’s $4 billion in warehouse financing were to have suddenly gone away, and if the average loan amount on the line was $175,000, it would have immediately resulted in 22,857 loans not funding. And it is possible that this number (22,875 loans) would go up by the same multiple as the rate at which the mortgage banker was “turning” their warehouse line in a month. Please note that a fair number of mortgage bankers successfully ‘turn’ their warehouse line anywhere from one and a half to two or even three times a month. The expression “the number of times a mortgage banker can ‘turn’ their warehouse line” means the number of times they can use the same warehouse line dollars to: (1) Fund a loan, (2) Sell that loan and then (3) Fund another loan. For example, if a mortgage banker turns their $10 million line

industry need to return to putting ethics over earnings, principles over profits and re-centering the American Dream of Homeownership on the age old firm foundation of “secure at home” ownership, rather than “size of home” ownership. Where obstacles abound, opportunities much more abound. In the next five years, we are going to have an abundance of both. Remember, the greater the obstacles, the greater the opportunities … and the greater reward! David Lykken is president, mortgage strategies and managing partner with Mortgage Banking Solutions. David has

more than 34 years of industry experience and has garnered a national reputation. David has become a frequent guest on FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman and Dave Asman with additional guest appearances on the CBS Evening News, Bloomberg TV and radio. He may be reached by phone at (512) 9779900, ext. 101 or e-mail To listen to author David Lykken’s online radio show, log on to and type in “Lykken on Lending” in the “Search” box on the right-hand side of the page.

The Future of Mortgage Banking By Tommy A. Duncan

My company, like so many others, is changing the way we conduct business to keep up with the ever-changing market and environment. We are focusing on several tenants in our business: Customer service, technology and quality.

Customer service/phones

mation is secure and protected, which is why every data center should make an SAS-70 Type II Certificate available. Customers want seamless integration and processes, and providing this through a variety of technologies in order to reduce work load efforts for efficiency is what today’s customers expect.



Make it a point that all The end result or the final phone calls are answered, product must be of great even if someone dials a quality from the perspecdirect line. After four rings, tive of the customer. If the lines hunt and the you have the best cusphone dials the all lines that tomer service and have are available or forwards integrated the best techthe call on to an on-call repnology, it will not matter resentative. Customers want if the final product has to speak to a person regardnot met the customer’s less if they are helped or expectations. Two years “Yes, we are all impactnot. When customers call, it ago, my company (Quality ed by regulatory and is usually a sense of urgency Mortgage Services), rebecause they are trying to legislative changes, but evaluated these three tenthere will continue to get approved with Federal ants of customer service, Housing Administration be a demand for home technology and quality, (FHA) loans, a line of credit and property financing. and set goals to strive to with an investor or they are The professionals who make this our core combeing audited. These things petency. The results have plan and prepare for are important to the cusenabled us to gain more these regulatory tomer, and because they business and grow as a are routine in daily opera- changes will be the ones respectable business in tions, every customer who will be able to per- the industry. form the financing.” must be treated as if they are the company’s sense of On the horizon urgency to support them The change that we see on in resolving their problems or concerns. the horizon that may be necessary to keep up with an ever-changing market is Technology change itself. Everything is changing in Customers want to feel that they are the industry. Those who do not change getting the best when they ask for serv- with the industry will surely fail. In order ices. Show them the additional value of to stay current with the changes, one technology in providing their results. Customers want to feel that their inforcontinued on page 36 O

two times in a month, then, in effect, score this point, consider the closure of they could fund $20 million of mort- TB&W in August. The takeover of Colonial gage loans in a month and if they could Bank was the catalyst of this very large turn is three times a month, they could independent mortgage banker to close its doors. TB&W’s closure had a huge impact fund $30 million dollars a month. If Colonial’s warehouse banking cus- on many smaller independent mortgage tomers turned their warehouse lines companies who were selling them loans, two times a month, then more than $8 the impact of which is still having an effect. Again, this is a serious crisis that not billion dollars of funding would have been immediately removed from the only threatens the survival of many indemarket. Without this happening, the pendent mortgage bankers today, but also mortgage lending industry is already a significant percentage of the funding experiencing a capacity issue because capacity that is badly needed to fuel and of so many lenders going out of busi- facilitate the economic recovery this ness, or if still in business, they are nation so desperately needs. It has been already operating at maximum funding suggested that the lack of warehouse line capacity. Is it any wonder when the liquidity in the residential financial marFederal Deposit Insurance Corporation kets could be the Achilles tendon of an (FDIC) negotiated BB&T taking over economic recovery. As a result, the U.S. Colonial’s branches that FDIC required Treasury has been meeting with mortgage as a part of the deal that BB&T keep bankers and warehouse lenders. There Colonial’s warehouse banking unit has been talk of letting Fannie Mae, operational for a minimum of one Freddie Mac and Ginnie Mae get involved year? If they hadn’t, it would have ugly. with warehouse lending for a season, but that now has lost Taylor Bean & momentum with the Whitaker (TB&W) “In fact, I will make this bold departure of Joe had to close its statement at the front end of this Murin as president doors as a result of article … “More wealth will be of Ginnie Mae. The the Colonial Bank created in the next five years in Treasury could do failure. Many mortgage companies mortgage banking than in the past much to alleviate this crisis without 25 years!” would have either spending one dollar been forced out of business or forced to significantly of tax payer money in the form of another bailout. One such possibility is to get reduce their funding capacity. Because of a serious warehouse funding the Federal Home Loan Bank involved. shortage in our country, it can take three to Bottom line is that we need leadership six months at a minimum to obtain a new and action from the number one “C-Level warehouse line. Not only that, every ware- Suite” in the country, the White House … house lender still in business has “raised specifically, President Barack Obama and the bar” of minimum requirements. Sadly, his administration. many independent mortgage bankers would not qualify today for a new ware- The opportunity and the challenge house line if they lost their existing line. For the most part, most warehouse At the beginning of this article, I made this bold statement: “More wealth will lenders require the following: be created in the next five years in 1. Higher “tangible” net worth levels. mortgage banking then in the previous Tangible is synonymous with cash or a 25 years.” As outlined above, the road very liquid asset. With the exception of to these potential treasures may be a few remaining “capture” warehouse treacherous and tumultuous, but it will line providers, it is difficult to get a come to pass … mark my word. My warehouse line with less than $1 mil- hope is that for those of you who have lion tangible net worth. Most won’t talk made mortgage banking your career of unless there is a minimum tangible net choice, will see these “obstacles” as “opportunities” to be overcome knowworth of $3 million, preferably more. ing that doing so will position you to be 2. Almost without fail, every warehouse one of the few that make so much. The lender requires a company be prof- good times typically don’t bring about itable for the past two years. Many com- enduring riches. Hardships, while never panies have struggled with profitability pleasant for the season, cause our roots over the past two years. As a result, to grow down deep, positioning us for many otherwise good companies are that which endures … something that being turned down even if they have involves much more than just riches. Above all else, and even more turned the corner and are profitable important than any riches that could be today. earned, I challenge each of you to leave The warehouse liquidity crisis isn’t limit- a legacy of excellence for the next gened to just smaller companies. To under- eration of mortgage bankers. We as an


must stay informed. Stay active with local, regional and national mortgage professional trade organizations, and receive industry updates. Attend trade shows and luncheons. Read, read and read some more because different trade publications may take certain points of view and you need to balance it all out. Be flexible and have the ability to look ahead to see how change will impact your operations.




The changing regulatory landscape


New laws and policies are shaping the industry. Whether you agree or disagree with these changes, we all must adjust and adapt. All of the new policies and laws will impact us all. Look at what occurred in 2008 and 2009: Red Flag Rules, the Home Valuation Code of Conduct (HVCC), the Consumer Protection Financial Agency (CPFA), Truth-in-Lending and loan modifications are just a few. There are more changes that will require more flexibility and adjustment such as: How will the CPFA affect bank mortgage originators versus mortgage broker originators? Will the new proposed changes to HVCC affect the larger lenders who control appraisal management companies (AMCs) or who dictate to brokers which AMC to use? In 2010, I personally think the banks and large lenders will be mostly affected by the proposed policies and laws that went into effect in 2009. I also feel that with Fannie Mae and Freddie Mac coming out of conservatorship, making loans will become easier. We have yet to see the impact on the industry and the consumer as a result of the new Truth-in-Lending laws, CPFA, the Troubled Asset Relief Program (TARP) and the Term AssetBacked Securities Loan Facility (TALF).

Technology leading the charge There are many new technologies available that will take the mortgage banking market to the next level. A few of these technologies lie in pre-funding and post-closing quality control and quality assurance. Some lenders have started passing some pre-funding costs and responsibilities to the broker, such as ordering tax transcript and verifying Social Security numbers. The Mortgage Bankers Association, in conjunction with Mortgage Industry Standards Maintenance Organization (MISMO), is making benchmark progress with document standardization and data transfer consistency. An example is Freddie Mac Announcement 09-14, which requires the appraisal to be uploaded in XML (Extensible Markup Language). As MISMO continues to maintain technology standards within the industry, the

closer we get to the seamless networking of data in business transactions between entities. The majority of vendors who support the industry seek MISMO approval. Those vendors who are not MISMO-friendly will not be able to perform services in the future. With the industry so focused on compliance and fraud prevention, more technology will fall in line to support those who are most at-risk, such as investors and lenders. With the CPFA coming online, the broker will have more skin in the game, and many of these technologies will be pushed down at the origination level in order to prevent fraud and maintain compliance. An example of this is the Financial Crimes Enforcement Network (FinCEN), who recently announced that it is looking for an advance notice of proposed rule-making (ANPRM). FinCEN is looking to solicit public comment on a wide range of questions pertaining to the possible application of anti-money laundering (AML) program and suspicious activity report (SAR) regulations to non-bank residential mortgage lenders and originators. This new initiative was brought about to target foreclosure rescue scams and loan modification fraud. These initiatives are helping in the coordination of information and resources across agencies to maximize targeting and efficiency in fraud investigations, alert financial institutions on emerging schemes, step up enforcement actions, and educate consumers to help those in financial trouble avoid becoming the victims of a loan modification or foreclosure rescue scam. FinCEN has never included the originator in their efforts because it was focused on banks or larger financial institutions. Because of the sheer number of loan officer and brokers, FinCEN just increased its capability. Every mortgage professional has a responsibility to report fraud. I believe that trade organizations will fully support FinCEN’s efforts. Having the brokers participate in this type of technology will lend greater credibility to the retail side of the mortgage industry. To view the ANPRM, log on to E9-17117.pdf. To comment, log on to, select “Submit a Comment” and type “RIN 1506” in the keyword search box. In order to survive, adaptation to the endless stream of regulatory and legislative changes that are impacting the industry is a must. The old saying “the strong will survive and the weak will be devoured by the strong” applies to the mortgage industry. As a leader in your operation, you must write out your core competency and revaluate them often. Analyze what technologies work and

which do not work. Evaluate what can be more efficient in workflow process and other processes, and find or develop the technology to support it. Do not become complacent in anything, and always treat the customer as if they are your sense of urgency. Know the law … policies and changes that are taking place around you. Be involved in the industry and support the trade organizations. Work toward credentials and require the same of your staff. Read, read and read some more … stay informed so that you can plan and prepare for the future. Keep the vision of the industry, regardless if you embrace this vision or not. Yes, we are all impacted by regulatory and legislative changes, but there will continue to be a demand for home and property financing. The professionals who plan and prepare for these regulatory changes will be the ones who will be

able to perform the financing. The race has already begun, and some have already quit or lost. Some have restarted with a new team. I am encouraged that we will continue forging onward by adapting and adjusting because business is going to get better. This is an exciting time in the mortgage industry and a very interesting time to be part of it. Tommy A. Duncan is executive vice president of Quality Mortgage Services LLC. He may be reached by phone at (615) 591-2528, ext. 124 or e-mail Visit author Tommy A. Duncan’s Quality Mortgage Services LLC Web site at for more information on quality control programs and compliance solutions.

Online Lending for the New Decade By J.P. Kelly

to provide a phone number and physical address. But when it has come to Our cell phones, our cars, our games, using a Web site to solicit and foster our stores, our homes, and of course, loan applications, most lenders have our computers … we don’t just use the missed the gravy train. Estimates on the Web, we are the Web. The Internet is so numbers of loans originated online vary pervasive, so much an between seven and 12 integral part of our daily percent. Instead of initiatlives, it’s hard to believe ing the transaction online, that just eight years ago, these lenders are missing half of the families in the out on the opportunity to United States did not close loans. have Internet connecThis is not to say lenders tions. Now, according to are completely at fault. Nielson NetRatings, more Early on, security concerns than 72 percent of houseabout private data required holds have Internet conwhen applying for a loan nections. No wonder the made consumers skittish. Web has become the However, as technology dominant source of security has grown, the “What was once a research, social interacvirtual brochure and convenience of initiating tion and commerce for channel for just deliv- transactions from the combusiness. ering information has puter, and the lower cost of And consumers have managing accounts online, become an online adopted the Internet as many lenders see this chanplayground where more than just an infornel growing as more users interact with mation source. According lenders offer online mortfriends, family and to the United States gage capabilities. Census Bureau, electronic However, the days of places of business.” commerce generated simply slapping an Adobe more than $3.3 trillion in PDF version of a 1003 or a sales in 2007, the most recent data short form to be followed by a series of available. Don’t believe me? Google it. follow-up calls by a loan officer are long See what I mean? It has worked its way gone. People want answers, including into our language as well. rates, payments and whether they are Like many businesses, mortgage approved, now. lenders have traditionally used the There are two primary keys to makInternet only as a way to provide basic ing a lender’s Web site a growth channel company contact information content for online mortgages. The first is creating

a site that is useful, informative and easy for potential borrowers to find. The second is creating a work-flow to your backoffice that removes obstacles and enables interested borrowers to begin the loan process immediately and prevents rekeying or a laundry list of follow up questions from your originators.

Where are you on the Web?

Today’s market is about making money, and that begins on the Web with a wellbuilt consumer-facing Web site. But what then? Lenders have several choices when it comes to lending platforms. The overwhelming favorite choice? You guessed it—the one they have in place now. No one likes change, and most lenders tend to use software they know, warts and all. But the constant flow of costs on developing, implementing and maintaining the software have prompted even the most change-averse lenders to consider changing to a Webbased lending platform that saves them time and makes them money. Only online loan origination software (LOS) systems can offer all that. When selecting a mortgage software partner, verify that the system will truly make the loan application process more efficient. Many online lending programs only provide nice-looking Web sites. When a customer needs to contact the lender, the forms generate e-mails, which then must be processed by a loan originator before the customer can move to the next step in the loan process. At best, this means time-consuming and error-prone data re-entry

J.P. Kelly is president of operations for OpenClose, a developer of Web-based mortgage lending software. For more information, e-mail or visit


The biggest challenge in turning the online mortgage portal into an origination channel is converting Web site visitors to borrowers. Visitors to a lending

Choosing an online lending system

into the LOS. At worst, this can mean a delay in contacting the customer, enabling them to originate the loan with a more responsive competitor. These days, all online lending systems should tie directly into the LOS, eliminating the data re-entry and pushing the loan directly into the workflow. The best systems also support eMortgages, providing paperless options for disclosures, closing documents or even the signing. Lenders should also seek an online partner who will provide the tools needed improve SEO. These tools include keyword testing and Web pages enhanced to promote relevant search terms. Lenders should also expect their online lending system to provide the tools needed to build relationships with the customers. Tools to manage e-mail newsletter systems, online referral programs and consumer-focused articles are all available in today’s online lending programs. The World Wide Web has evolved significantly over the past two years—and it has changed us all. What was once a virtual brochure and channel for just delivering information has become an online playground where users interact with friends, family and places of business. Build an online lending channel that truly saves time and money while simultaneously building relationships with borrowers.


Converting window shoppers to buyers

loan is immediately entered into the underwriting workflow. Though you can’t generalize about age, in general, the older the borrower, the less likely they are to apply or do any transaction online. Going after firsttime homeowners or reverse mortgages? Build your Web site accordingly. O

The number one method borrowers use to locate information online is the search engine. While Google is the current market leader, Microsoft’s Bing, Yahoo! and other sites also provide search results to millions of Web surfers each day. When you are sitting at your computer, do a search for “Mortgage Lenders,” followed by your state and/or city. If you’re not on that first page, you will not be found by potential borrowers. So how can you ensure that your Web site appears high on the results list of your potential customers? By utilizing simple techniques, referred to by online marketers as Search Engine Optimization (SEO), that makes your site search engine friendly. These are not tricks or unscrupulous methods but focused marketing. It’s like a tall man wearing a red cap in a crowd. Easy to find. A lot has been made of those “red hats” that Web site developers who create your Web site put in the code. But that’s just a small part of it in today’s search engine-crazed world. Relevant content is more crucial, which means placing articles, information and tools that are useful for a potential homebuyer on your site. This can include items such as mortgage preparation checklists, daily interest rates, advice on the mortgage process and a selection of calculators. It is not difficult to create this kind of content … it’s just time consuming. Lenders can partner with online content providers to assist with developing a site that is search engine friendly and contains content relevant to borrowers. These partners can provide articles, calculators, daily rate updates and other tools that help borrowers quickly find the information they need. This content must be kept fresh with updates as often as possible. But like most things in technology, the devil is in the details. Two sites might look identical with the same images, colors and content. Build it right and you’ll rise to the top of the searches. Build it wrong, and you’ll never be found. Scary but true.

Web site ultimately seek one of three things from the Web site: Research, contact information for initiating a loan in person or an online loan application. Most visitors to the Web site are merely seeking research. They may be comparing rates, learning about the lending process or vetting local lenders to see whom they wish to contact. The best way to keep these borrowers tied to your lender is to encourage them to take action. Offer an informational email newsletter with tips on buying a home or regular rate updates. Invite them to subscribe to an educational blog or social networking page, such as Facebook or LinkedIn. The next level of loan shopper is uncomfortable completing a transaction online, but they are interested in using your loan office to originate the loan. There are two things that this shopper needs. The first is simple instructions on how to call or visit the office to being the loan application. The second is an online pre-qualification form, which also requests that the loan officer to contact the borrower. Online lending software should be able to provide a form that links this form directly into the sales channel, so that originators can follow-up on a qualified lead. The final level is the online buyer. This borrower demands an online system that lets them search for the loan they want, provides a full mortgage application online, supports the uploading of financial documentation and initiates the underwriting process. The online lending system should be able to confirm receipt of the application and ensure that the


The Future of the Mortgage Industry A discussion with the executive team at Residential Finance Corporation

Michael Isaacs President of Residential Finance Corporation

David Stein Vice President of Residential Finance Corporation




In the past 18 months, the mortgage industry has undergone the greatest changes and challenges since the Great Depression. With the industry poised at the crossroads of financial services and housing—the nation’s two most challenged sectors of the economy—mortgage professionals everywhere are concerned about the future. In the following feature, the executive team at Residential Finance Corporation discusses the current state of affairs and where the mortgage industry may be headed in the coming months and years.


Regulatory issues Michael Isaacs: We are very optimistic about the industry’s future. Offsetting every challenge are tremendous opportunities for the companies that are both well-prepared and flexible enough to weather unforeseen obstacles that will continue to crop up. Challenges such as the rapid influx of new legislation require lenders to keep up with all regulatory and legislative changes— including those looming on the horizon. Regulatory compliance with these new laws can impact your business on a daily basis. Some of the recent laws affecting our operations leave gray areas and inconsistencies that need further clarification and simplification. Until the stream of new laws and regulations stabilizes, it will be difficult for us to deliver the range of services that we want to provide, lower pricing and shorten time-to-close. We need to see stabilization on both the legislative and regulatory fronts. David Stein: Regulatory challenges are creating so many new hurdles for mortgage bankers and brokers that compliance is almost out of reach. Each arm of Congress, each regulatory body of the federal government, and each state has

Darren Fleishman CFO of Residential Finance Corporation

their own agendas. Unfortunately, these regulatory bodies sometimes work at cross purposes. As regulatory requirements become more onerous, many good companies won’t be able to comply and will disappear. Rates go up when competition goes down. As fewer lenders are left standing, consumers will suffer. Government regulators need to partner with the industry to avoid a credit crunch. Large industry investors need to buy and sell mortgages so bankers and brokers have a market to sell to investors and consumers. Once regulators can learn to create better opportunities for the industry, consumers will win. Darren Fleishman: We are all struggling with the increasing difficulty of understanding and complying with the rapid evolution of state and federal regulations. Most agree that some level of regulation is necessary, but the current combination of state and federal statutes makes compliance much more difficult than it needs to be. Due to heavy compliance burdens, marginal lenders will continue to drop out of states that are no longer economically viable for them. Over the next year, statutes and processes should firm up and we can better understand the cost of doing business in this evolving market. However, it still remains to be seen how this component of the mortgage arena will play out. If done correctly, consumers will be protected by regulations ensuring mortgage professionals are qualified to serve them. But, if done incorrectly, onerous fees and regulations will push out quality companies from competing in multiple markets, regionally limiting choices for current and potential homeowners. It seems like we are headed towards “incorrectness,” but we will see.

Obi Egbuna Vice President, Sales of Residential Finance Corporation

Obi Egbuna: Rapidly changing state and federal regulations require loan officers to be more diligent than ever. Special training and regular refreshers have long been a primary focus of our sales department. Now it’s even more important. Regulators need to realize that some of their well-intentioned legislation designed to help consumers could actually be hurting them. If more companies are choked out by unrealistic legislation, the consumer is the ultimate loser.

Licensing Isaacs: With licensing and compliance undergoing such drastic changes, we’ve invested a lot of time and money strengthening our compliance department, adding staff and increasing our budget. Egbuna: Licensing is another serious issue facing our industry that can potentially constrain sales. We do business in 27 states and must stay on top of each state’s licensing changes. Lack of standardization means requirements vary widely. Managing so many disparate compliance obligations adds to our cost of business. Doug Harris: From an operations standpoint, shifting investor and secondary market requirements creates additional complications. As a private mortgage banker, we sell our loans into the secondary market. We balance a group of investors and have to meet their multiple, frequently-changing requirements. And when the ultimate secondary investors, Fannie Mae, Freddie Mac and Ginnie Mae each change their requirements, we face even further operational changes. We’re constantly juggling to maintain the highest levels of efficiency and quality amidst managing ongoing changes.

Doug Harris, COO of Residential Finance Corporation

Stein: Lack of securitization and a smaller pool of institutional investors means mortgage bankers and brokers must sell their paper to a less competitive market. This small group of institutions has the ability to manipulate or restrict the market, which again can hurt consumers.

Warehouse lines of credit Fleishman: Availability of warehouse capacity is a serious industry-wide concern. The recent exit of major players has only exacerbated the issue. While credit availability is likely to expand slowly, industry players will still face restrictions in their ability to fund loans amid an environment of increasing fees and more restrictive covenants. It’s no longer a question of having the capability to fund additional growth, but rather of maintaining the same-sized pipeline at a significantly reduced capacity. Lenders must take a very hard look at how they operate to maximize what capacity they do have in this area. This step enabled us to do significantly more business under our own set of warehouse limitations. Isaacs: Warehouse lines have been our top issue over the past two years. There needs to be more liquidity in this area of our business. Although obtaining warehouse lines has eased somewhat, the leverage banks are providing is much different now. Lenders left standing in the future will be the responsible ones that built balance sheets, focused on profitability and increased net worth to maintain the necessary warehouse lines to keep their funding at capacity to meet their demand. Harris: Lack of investor confidence is one of the reasons we don’t have adequate warehouse lending capacity and that the securitization of secondary markets is so disrupted. As the economy

begins to rebound and investor confidence returns, these troubles will subside. I’m always looking for efficiency. Warehouse capacity challenges require me to be hyper-efficient. When production outpaces my ability to fund, I have to turn the warehouse line faster to support that funding capability. I’m always working to increase our quality and ensure that we have the right investors to purchase those loans quickly. Looking forward, I expect warehouse capacity to shrink in the short term. This situation will be exacerbated by Colonial Bank’s recent issues, since they represented approximately 20 percent of existing warehouse capacity in the industry. Egbuna: From a sales standpoint, being a correspondent lender is one of our competitive advantages, so having warehouse capacity and rapid turnaround directly impacts our sales force. Fortunately we’ve extended our current line and added another line to strengthen our competitive advantage.


Egbuna: Some compliance guidelines will have to loosen for the benefit of borrowers. For example, if a borrower with a lower credit score has historically made timely payments, they should not be shut out of a loan today.

Fleishman: The competitive landscape continues to change, with the shakeout of weaker players of all sizes. Overwhelming industry challenges will perpetuate this trend over the short term and unprepared lenders will fold very quickly. But the future is bright for those that prepare for sudden and unforeseen business interruptions as partners change credit criteria, underwriting standards, and the ability to write loans—coupled with the availability of warehouse capacity and other essential elements of operating a successful franchise.

Conclusion Stein: Successful companies will compete using advanced marketing techniques to ensure new prospects daily.

The real estate market Fleishman: While the recession may cause fewer people to move or restrict the ability for potential borrowers to refinance or purchase a home, mortgages remain an essential part of the mobility of American society. People will always continue to move, so the companies left standing in a less competitive environment will do very well. Stein: Our nation lives and dies by its real estate markets as we’ve seen in the past couple of years. That will always continue because real estate is so important. To own real estate, people will always need mortgages, so the future is very bright. In the near term, the government needs to

Harris: Mortgage professionals must maintain operational agility, especially in this environment. You’ve got to be able to change on the fly, operate with plug-and-play components, cross-train your people, and have the ability to linebalance your operations. In today’s marketplace, operational agility is critical. Isaacs: Looking ahead as the economy turns around, there will be fewer, albeit more heavily-regulated, players serving a growing pool of home buyers. For organizations that have taken steps to manage the impact of the critical issues facing our industry today, I believe that the future looks bright. For more information on Residential Finance Corporation, visit

Harris: I expect continued consolidation, with the industry bifurcating into large and small factions. The survivors will be those who are nimble enough to quickly respond to the next challenge and the very large institutions that can absorb changes and consolidate mid-tier lenders. Egbuna: Under-capitalized lenders will struggle with the additional expense of compliance. Those that fail will leave a less competitive marketplace behind, to the detriment of the consumer left facing a smaller set of mortgage product options. Isaacs: The competitive landscape of today’s mortgage industry looks very different than it did two years ago. And three to five years from now, it will look very different than today, with less competition from fewer lenders and brokers. There will be a lot of consolidation because many lenders and brokers cannot profitably operate with the additional overhead to support compliance, licensing and staff to deal with regulatory and legislative issues. Surviving companies will be larger and better regulated. Companies that have survived the past couple of years and are well-prepared for today’s more challenging business environment will find lighter competition and a more stable business climate in the long run. In some ways, this cleansing process has been healthy for the industry, eliminating many bad and

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Stein: Companies must devote significant resources to compliance and licensing over the coming years to stay ahead of regulations and remain completely compliant with state and federal laws. Companies that don’t make this commitment will likely be shuttered. Anyone planning to work in this industry over the coming years should

Sizing up the competition

artificially keep interest rates low to stimulate real estate markets. Over the next year, I expect the industry will continue to enjoy historically low rates which can help strengthen business.


Isaacs: Staying abreast of all current and pending regulatory and legislative changes on the horizon requires daily dedication.

Fleishman: For lenders that not nationally chartered, dealing with state-by-state regulations has become an excessive and expensive proposition posing unique and difficult compliance challenges. Consistency needs to be developed in a reasonable manner to effectively protect consumers without creating a businessending burden for lenders.

unscrupulous brokers and lenders. Looking forward, the industry will consist of responsible companies that have proven their ability to survive through the worst of times, and they’ll capitalize on less competition. O

Harris: Compliance issues always present an operational challenge. Every new directive requires changes to workflow, embedding new procedures into our operations—changing forms, processes, checklists and everything, including controls. The new MDIA [Mortgage Disclosure Improvement Act] regulations on disclosing information to borrowers really impacted our operations. A healthy future must include the national standardization of regulatory compliance and technology standards to allow the streamlining of operations. With the help of the Mortgage Industry Standards Maintenance Organization (MISMO), I believe that esign technology will be standardized and our future will be paperless.

thoroughly investigate their (perspective) employers to ensure they are committed enough to remain compliant. Otherwise, the company may not provide them with a secure future.


heard on the street

continued from page 32

The new partnership provides The Funding Source with the resources of a strong local lender and the stability of being part of a large and dynamic financial company. All employees formerly with The Funding Source will transition to NexBank Mortgage; 14 jobs in total. This brings NexBank’s employee total in its mortgage business lines to almost 40, up from zero at this time last year. For more information, visit




LPS Real Estate Group signs agreement with eight HomeServices of America companies


counsel to the U.S. Department of Housing & Urban Development, has joined the banking and financial services practices group of the law firm, Arant Boult Cummings.

Lender Processing Services Inc. (LPS), a provider of integrated technology and services to the mortgage and real estate industries, has announced that it has signed a multi-year agreement to provide its rDesk Broker Suite of products, offered by its LPS Real Estate Group division, to eight operating companies that are part of the HomeServices of America Inc. (HSoA) network. These eight companies have signed contracts for a variety of rDesk Broker Suite products, including broker and agent Web sites, lead and contact management, comparative market analysis (CMA) and document management. The HSoA companies currently leveraging rDesk are: Edina Realty (which services North Dakota, Minnesota and Wisconsin); Kansas City-based Reece & Nichols; Prudential California Realty; Long Realty Company in Arizona; CBSHome Real Estate in Omaha, Neb.; Champion Realty Inc. in Maryland; and Home Real Estate and Woods Bros Realty, both in Nebraska. “Over the years, the rDesk Broker Suite’s depth and breadth of content and functionality have evolved, in great part, from input offered by innovative, market-leading brokers and thought leaders like the HSoA companies,” said John Hensley, chief product and technology officer with LPS Real Estate Group. “Since its inception, the rDesk platform has leveraged new technology and standards to deliver brokers and agents a Web-based integrated solution that meets their growing business needs and keeps them ahead of their competition.” An affiliate of Berkshire Hathaway Inc., Minneapolis-based HSoA is a provider of homeownership services and has a nationwide network of companies in 19 states that offers integrated real estate services, including brokerage services, mortgage originations, title and closing services, property and casualty insurance, home warranties and other homeownership services. “These companies are leaders in their respective markets,” said Ron

Peltier, HomeServices chairman and CEO. “To further that leadership position, they must offer products and services that set them apart from the competition. rDesk is a product that both strengthens market presence and enhances the customer experience.” For more information, visit or

Your turn National Mortgage Professional Magazine invites its readers to submit any information, events, passages, promotions, personal or professional occurrences that seem appropriate and/or other pertinent data to the attention of:

Mortgage Professionals to Watch O President Barack Obama has appointed Ben Bernanke to a second term as Federal Reserve chairman.

O The Appraisal Institute has hired William T. Zimmerman as chief financial officer. O USA Funding Corporation of Brookfield, Wis. has added Mark Swan and William Diehl as mortgage advisors.

Robert Couch

O Universal Mortgage Inc. has added commercial loan expert Howard Abrams to its team. O Resource Title Agency Inc. has appointed Linda M. Short and David J. Kozicki senior vice presidents. O Realty Capital Securities LLC has announced the appointment of Jeff Kinney and Steve Williams as sales managers.

Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail: Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

Ben Bernanke

O LoanModDVD has signed John Ulzheimer of as an advisor.

trend spotter

continued from page 33

ues to work off the excess supply of the boom years. Here’s an interesting breakdown of new housing starts since the year 2000:

John Ulzheimer

O The U.S. Department of Housing & Urban Development has appointed Shelley Poticha to the position of senior advisor for sustainable housing and communities.

Shelley Poticha

O Freddie Mac has named Bruce M. Witherell chief operating officer. O Karen Binder has been named assistant vice president of marketing and special projects for Integrated Mortgage Solutions. O Willie Bren has joined Chicago Bancorp as senior mortgage banker in the firm’s Naperville, Ill. branch. O Stuart M. Dorf has been named senior vice president of XSite Validation. O Dan Nissenbaum has been elected chairman of the National Housing Conference (NHC). O Robert M. Couch, former general


2000 = 1.6 million new units 2001 = 1.7 million new units 2002 = 1.7 million new units 2003 = 1.9 million new units 2004 = two million new units 2005 = 2.1 million new units 2006 = 1.8 million new units 2007 = 1.3 million new units 2008 = less than one million new units O 2009 forecast = less than one million units As you can see, from 2000-2002, the supply of new housing units each year was just about right in order to meet the demand of 1.7 million as outlined above. However, things started to get a bit out of whack with some oversupply in the market between 2003 and 2006. Home values went into decline from 2007-2009 as the market started working through this oversupply. However, sometime during the next 12-24 months, the oversupply of housing units will be completely absorbed due to the demand issues that we outlined above. In fact, if the trend continues, there could even be a housing shortage at some point in the future unless home builders start building new units at a much quicker pace! Do the math yourself: O Annual demand for new housing units: Approximately 1.7 million new units

O Annual supply of new housing units: Less than one million O Bottom line: Demand will become greater than the supply at some point in the future, and house prices will rise. Remember, there is no “national housing market.” All real estate markets are local. Therefore, a state like Michigan that is losing population may take longer to see house prices recover and increase, while a state that is gaining population, like Texas, may see house prices go up much sooner. So there you have it! This time is not different, house prices will recover, and you should be the one to gain more business by communicating this to everyone you know. Gibran Nicholas is the founder and chairman of the CMPS Institute, which administers the Certified Mortgage Planning Specialist (CMPS) designation. The CMPS Institute has enrolled more than 5,500 members since its founding in 2005. Gibran is also the chairman of Published Daily, a customizable online magazine, newsletter and marketing service that helps professionals transform their clients and prospects into a referral-generating sales force. He may be reached at (888) 608-9800, ext. 101 or e-mail Visit author Gibran Nicholas’s blog at where he shares his insights on economics, real estate and financial issues, including the current mortgage and credit crises.

Informative Research enhances its Red Flags Toolkit Informative Research has added a sample “Policies and Procedures” to its Broker Red Flags Toolkit to facilitate compliance with Red Flags Rules. Also included in the Toolkit are summaries of the Red Flags regulations, background information from the Federal Trade Commission (FTC), and a step-by-step checklist, specific to brokers, for getting through the process with a comprehensive detection, prevention and mitigation program. For brokers who do not service loans, the scope of identity theft procedures is more narrow than for that of a traditional lender. However, all brokers large and small must create and document their own program and the sample policies and procedures will get them started. As part of its suite of fraud and compliance solutions, Information Research also offers mortgage-specific identity theft solutions including fraud alerts, direct to the SSA social security verification, as well as its own Red Flags Risk Addendum to the credit report. For more information, visit

ity assurance (QA) and quality control (QC) user roles; enhanced integrations for pricing adjustments from product eligibility and pricing engine (PPE) partners; and improvements to better support

commission calculations in a manual fashion or with Microsoft Excel, either of which can be time consuming and often, lead to inaccurate payments. CommissionTrac automates every aspect of the variable compensation workload so that salespeople stay motivated and focused on originating and accounting staff can both save time and be more accurate with commission calculations. CommissionTrac 2.0 enables lenders to deliver a 24/7 Web-based commission pipeline, where sales agents can continuously monitor estimates and time disbursements. “Nothing de-motivates a sales rep faster than messing up their commissions,” said Rob Katz, president of DMD. continued on page 42


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DMD releases DataTrac Version 9.0 and CommissionTrac 2.0 Del Mar DataTrac Inc. (DMD), a provider of loan automation solutions for mortgage lenders, banks and credit unions, has released version 9.0 of its workflow automation platform. The 9.0 release encompasses the core products within the suite, including new versions of DataTrac, WebTrac, DocumentTrac, InTrac, TracTools, AutoPrice and the Vendor Services Platform (VSP). This release addresses 246 product requests. Version 9.0 is designed to facilitate faster loan processing and underwriting, while reducing lenders’ risk in the face of regulatory uncertainty. It features streamlined user screens, new user roles and builtin compliance features. Enhancements in Version 9.0 include: Updated underwriting worksheets with reorganized decisioning, credit and property information fields; improved new fields for appraisal, property and flood certification information; revised county management with new Fannie Mae loan limits, county specific fields and a built-in administrative utility to mass update county-level data; refined underwriting, condition sign off (prior to funding), qual-

underwriting functionality, specifically Federal Housing Administration (FHA) underwriting. Version 9.0 also includes enhancements to DMD’s other software solutions, including DocumentTrac, an electronic document management solution for mortgage bankers; InTrac, a point-ofsales solution and WebTrac, a Web-based originator portal. DMD has also announced the release of CommissionTrac 2.0, the company’s next generation commission solution. CommissionTrac 2.0 automates the calculation, timing, communication and reconciliation of commissions. The solution is a flexible and configurable application that eliminates costly and time-consuming commission calculations. Lenders traditionally complete





Maximize Your Profits: Adopt Orphan Customers


new to market

continued from page 41

“Accurately and quickly calculating, com- address changing market conditions.” municating and paying sales commis- For more information, visit By Gary Opper sions is important for lenders who want to keep good loan officers focused on Lender Processing Services “You shall not ill-treat any … orphan.” need of a mortgage. Encourage them to selling. This next generation of launches RediRefi suite and —Exodus 22:21-23 share your business cards with those in CommissionTrac will enable managers to deploys HMP functionality resolve problems before the checks get need of your services. Lender Processing Services Orphan mortgages and customers are written, ensuring that no trust or producInc. (LPS), a provider of previously closed and unclosed loans of Wine and dine tivity is lost over sales commissions.” integrated technology mortgage brokers that are no longer Have a barbecue, dinner party or a For more information, visit and services to the mortemployed by your company. When these social event for these abandoned indigage and real estate industries, has brokers leave, they usually do not take viduals. Use holidays to your advan- Zoot launches credit risk announced its RediRefi suite of solutions is their loans or customers with them. tage. Welcome these people to your management solution now available to help lenders manage capacTake advantage of these leftovers and office or a local establishment. Be Zoot, a provider of ity challenges associated with loan refinancturn them into a gourmet feast for you! sure to bring plenty of information on instant credit-decision- ing. LPS’ RediRefi program is a customizable, Systematically review each unclosed your company to hand out. Make sure ing and loan origination solutions, has full-service solution that can help lenders loan in your office. Think of creative to mark on the invitation to bring a unveiled the company’s newest solution, improve the success rate of their refinance ways to close these orphans in a way in friend. Zoot’s Credit Risk Lab. The solution was campaigns. RediRefi includes tools that autowhich your former colleague did not designed to give credit risk managers the matically identify the loans that are eligible think. Review each unclosed loan to Design a flyer ability to rapidly respond to changing for and likely to refinance, pre-qualify those establish a new relationship with them. Create a flyer that is specifically market and consumer behavior. In a non- loans for a refinance offer, and execute a tarDo not underestimate the potential designed to target your orphans. Make production environment, managers are geted marketing campaign. LPS then couples of these orphans. Frequently, these your flyers are fun, creative and inform- now able to experiment with new credit those tools with fulfillment services to provide orphans may find themselves in need ative. Holidays are good themes to use risk policy strategies to make better credit a complete streamlined refinance solution. of refinancing or may when creating flyers. decisions, faster. “RediRefi has the flexibility to support a have relatives and friends “The concept of the Credit Risk Lab orig- wide range of lenders’ needs, and is These flyers can be with similar needs. mailed, faxed or even e- inated when Zoot was approached by a designed based on industry best practices,” Nurture these orphans so top-five financial institution that had been said Grace Brasington, executive vice presimailed to your orphans. they will be apt to close looking for several years, without success, dent of LPS’ strategic consulting services. with you and recommend for a way to deliver the most accurate, pre- “Regardless of whether you implement the Free souvenirs you to those in need of Take some time to pro- dictive scorecards to the marketplace end-to-end solution or specific compoyour services. duce magnets, pencils, quickly and more efficiently,” said Tom nents of RediRefi, lenders can expect to see Reestablish a relapens, notepads, etc. with Johnson, vice president of product develop- dramatic improvements when they reengitionship with these indiyour company name, logo, ment at Zoot. “The financial institution neer their processes by leveraging LPS’ viduals. Before adopting contact information and wanted to be able to create a new set of technology and consulting services.” this project, check with other important company unique, predictive credit characteristics RediRefi has been developed in a modyour office manager for facts. These items can be without the significant time and cost delays ular fashion, allowing lenders to select the approval. Once you have “Do not underestimate displayed in your office of its current process. The Credit Risk Lab specific services they need to improve their the potential of these their permission, here and/or handed out at the allows institutions to quickly evaluate con- current refinance process. RediRefi includes orphans. Frequently, are a few suggestions as functions earlier suggest- sumer behavior against new ideas, using data and analytics models to identify loans these orphans may to how to adopt these ed. The souvenirs will serve their own performance data, and deter- at risk of prepayment; LPS’ powerful find themselves in strays: as take home “gifts” so that mine whether or not the proposed policy eSignature platform, ClosingStream; and need of refinancing or your orphans have a will be effective. This helps financial institu- tools to optimize the refinance offer that O Send holiday and may have relatives reminder of your services. tions learn from experience, rather than can increase capture rates, manage the birthday cards to your simply react to their environment.” and friends with solicitation process and streamline the loan orphans Zoot’s Credit Risk Lab provides lenders fulfillment. Through strategic partnerships, Conclusion similar needs.” O Set a date each month These marketing strate- the ability to shorten the cycle of making LPS provides customer follow-up to ensure to phone these individuals gies will efficiently target these orphans changes to attributes and scorecards to that refinances are successfully completed. O Arrange a dinner party or event for and could greatly increase your determine what is most predictive in the LPS has also announced the release of these orphans income. Your profits could increase sig- current environment. Business users have Home Affordable Modification Program O Design a flyer, brochure or card to nificantly if you implement these tac- complete control over the entire cycle of (HMP) functionality for its LPS Desktop prompt your potential customers tics. These are only a few suggestions developing an idea, coding attributes in Loss Mitigation application. LPS Desktop O Produce magnets, pens, pencils, etc. as to how you may successfully market the tool, running the attribute tests and Loss Mitigation is a component of the as a reminder of your company to orphans. If you are the mortgage evaluating the results. The solution has an Web-based LPS Desktop enterprise workcompany owner, have a meeting with intuitive interface allowing users to experi- flow solution that enables servicers to Holidays and birthdays your employees and see if they can ment with unlimited variations of attribute streamline business processes and manHave a special calendar specifically come up with other effective market- definitions to evaluate which will be the age documents and invoices online. LPS designed to keep you aware of cus- ing strategies. Help your company most effective (this can all be accom- incorporated the HMP functionality in tomers’ birthdays and holidays. On become the Daddy Warbucks of the plished without IT/programmer involve- response to the Homeowner Affordability these occasions, send a card wishing mortgage industry by adopting these ment). Using the data from that analysis, and Stability Plan (HASP) introduced by them well. Be sure to include two busi- orphaned mortgages. credit risk managers can then identify a President Barack Obama in February ness cards (one for them and one for a new strategy in less than 48 hours. 2009. HMP is the loan modification initiafriend). Delegate someone in your Gary Opper is president of Weston, Fla.“The first financial institution to imple- tive of HASP, the government-sponsored office to be in charge of this calendar so based Approved Financial Corporation. ment Zoot’s Credit Risk Lab projects savings effort to stabilize the housing market by that you don’t forget these important Gary has been a mortgage lender and of more than $2 million in the first 12 aiding at-risk homeowners in danger of dates. note buyer since 1984, in addition to months following deployment,” said James losing their homes to foreclosure. As a mortgage consulting. He has a CPA and a A. Franklin, chief sales officer for Zoot. result of HMP, it is expected that servicers Pick up the phone CFP license. Opper is past president of the “There is a high demand within our prospect will process approximately three to four Each month, set aside a day to tele- Florida Association of Mortgage Brokers and client base for a solution that addresses million home loan modifications. phone your orphans. Be sure to rein- Miami Chapter and the Florida Institute market volatility in a timely way. This soluLPS Desktop Loss Mitigation is a Webtroduce yourself, your company and of CPAs Gold Coast Chapter. He may be tion brings increased operational efficiency, based tool that can be deployed and scaled remind them of your services. Ask these reached by phone at (954) 384-4557 or e- consistency in credit risk policy across all to manage any loss mitigation activity volindividuals if they know of anyone in mail lines of business and the ability to quickly ume. It also provides servicers an afford-

able, permanent solution that integrates with major servicing platforms. LPS Desktop Loss Mitigation enables a servicer to automate its loan modification process, including loan assignment, queuing and delivery of optimized workout options, loan modification document generation and online document execution. LPS Desktop Loss Mitigation incorporates a comprehensive rules engine that allows servicers to automate the entire loss mitigation process according to their specific business requirements. Loan files are automatically assigned and sent to servicer work queues, where net-presentvalue (NPV)-based decisioning tools help the servicer’s home retention specialists to provide the best workout options for borrowers. Workout agreements flow through an automated, rules-based approval process, again based on servicer-specified requirements, that ends with automated document creation and online document execution. The application is configurable by client, investor, portfolio and loan type. For more information, visit

LenderLive Network develops contract underwriting system for Radian

MRG’s eConsent streamlines Regulation Z compliance

Your turn National Mortgage Professional Magazine invites you to submit any information promoting new “niche” loan programs, new products or any other announcement related to the introduction of a new program, to the attention of:

New to Market column

Note: Submissions sent via e-mail are preferred. The deadline for submissions is the 1st of the month prior to the target issue.

The Red Flags Rules and Guidelines implement Section 114 of FACTA, which applies to “financial institutions” and “creditors” (including all Mortgage Brokers and Mortgage Bankers), require the implementation of methodologies to detect, prevent and mitigate identity theft in connection with covered accounts and to establish policies and procedures to assess the validity of a change of address. The Red Flags Rules became effective January 1, 2008, with full compliance by the enforcement deadline of November 1, 2009. This is your last chance to comply. There will be no more extensions of the deadline. You must be ready by November 1, 2009. On Thursday, Septmber 24 and again on Thursday, October 15 (both dates at 12:00 p.m. EDT), please be our guest to hear featured National Mortgage Professional Magazine author, Jonathan Foxx, present a 60 minute webinar that will give you a comprehensive look at what you need to do to be prepared for Red Flags enforcement. This is a FREE webinar for National Mortgage Professional Magazine readers. Jonathan Foxx, former chief compliance officer for two of the country’s top publicly-traded residential mortgage loan originators, is the President and Managing Director of Lenders Compliance Group, a national and well-respected mortgage risk management firm devoted to providing regulatory compliance services, guidance, and counsel to the mortgage industry. Jonathan Foxx

In this 60 minute webinar, you will learn: What are the REAL deadlines that I need to be ready for? What are the applicable statutes and definitions? What are the components of an Identity Theft Prevention Program (ITPP)? How do I assess my risk? How do I administer the program? What are the risk factors and the indicators of identity theft? The 26 Red Flag components and what applies to you! What is the structure and contents of an Identity Theft Prevention Program? How to implement your ITPP? What should be management’s response to suspicious activity and violations? Why it is important to maintain and update your policy? What are the penalties for violations of the ITPP?

Jonathan will also be available for a brief question and answer session.

For more information visit


Phone #: (516) 409-5555 E-mail:

In November 2007, the federal banking agencies, the NCUA, and the FTC issued the final rules and guidelines regarding the Identity Theft Red Flags Rules and Address Discrepancies, under the Fair and Accurate Credit Transactions Act of 2003 (FACTA), implementing Sections 114 and 315 of FACTA, that amended the Fair Credit Reporting Act (FCRA).


MRG Document Technologies (MRG), a provider of mortgage technologies to banks, credit unions and other lenders, announced that its eConsent electronic disclosure delivery system is now available to help lenders comply with changes to Regulation Z that took effect July 30th to implement the Mortgage Disclosure Improvement Act of 2008 (MDIA) resulting in an expansion of the Truth-in-Lending (TIL) disclosures. The new changes expand the scope of TIL disclosures for mortgage transactions to include the need for disclosures for refinances and for mortgage loans on dwellings other than borrower’s primary residence, in addition to the disclosures already required for purchase and initial construction loans. Revised disclosures are required if the annual percentage rate (APR) changes to outside of the tolerance during the loan process. As a result of redisclosure, lenders must delay closings for three additional days, for a total of six days, while they wait for borrowers to receive the revised disclosures. MRG’s eConsent allow lenders to have verifiable proof that borrowers received re-disclosures on the day they were delivered if the borrowers consent to the re-disclosure. MRG supplies the lenders with verifiable reports of when the borrower actually consented; this can shorten the disclosure delivery time, with closings occurring three days after delivery date instead of six. “Speeding up the closing process is a benefit to both lenders and borrowers,” said Marsha Williams, an attorney at MRG. “For lenders, it locks in interest rates, prevents borrowers from switching to another lender and generates interest sooner. By delivering the revised disclosures electronically, borrowers close their loans sooner.” MRG offers a browser-based system for the preparation and delivery of compliant document packages, electronic disclosures, loan modifications and other services for mortgage lenders, banks and credit unions nationwide. MRG guarantees that its products are in compliance with the most recent legislative and regulatory changes. For more information, visit O

LenderLive Network Inc., a provider of business process outsourcing and technology to the financial industry, announced that it has deployed a comprehensive system for Radian Guaranty Inc.’s nationwide network of contract underwriters. “With such an extensive group of underwriters that span the entire country, Radian needed a single system in place to manage data and better distribute information to lenders,” said Rick Seehausen, president and CEO of LenderLive. LenderLive has developed an enterprise class system to serve as a workflow tool that will help Radian consolidate and streamline its underwriting and cost-effectively meet fluctuating market demands. The end product is an enhancement of LenderLive’s existing contract underwriting platform and will be private-labeled with the Radian brand. “By automating our contract underwriting processes within a single system, we enable Radian’s contract underwriters to input and manage loans faster and more accurately,” said John Brady, vice president of business solutions at Radian. “In addition, LenderLive provides Radian with the ability to add additional services and processes as needed in the future.” LenderLive’s contract underwriting services provide clients the ability to engage the company to perform either pre-purchase loan underwriting to determine eligibility and adherence with underwriting guidelines, or to manage loan underwriting from conditional approval through final approval. Contract underwriting is one of the component services available through LenderLive’s contract services division, which offers a variety of outsourced services, such as quality control, closing coordination and contract processing. The company has several other channels of business that provide comprehensive mort-

gage-related outsourcing services, including retail, wholesale, specialty origination and settlement services. For more information, visit or


SEPTEMBER 2009 Tuesday, September 15 2009 Kansas Association of Mortgage Professionals Trade Show Harrah’s North Kansas City Hotel & Casino 1 Riverboat Drive North Kansas City, Mo. For more information, call (913) 7645600 or visit

Monday-Tuesday, September 21-22 20th Annual Illinois Association of Mortgage Professionals Fall Conference “Raise standards. Be accountable. Increase your knowledge.” The Sheraton Hotel 3400 Euclid Avenue Arlington Heights, Ill. For more information, call (630) 9167720 or visit

Thursday-Friday, September 17-18 Mortgage Bankers Association Human Capital Management Symposium MBA Headquarters 1331 L Street NW Washington, D.C. For more information, call (800) 793-6222 or visit

Tuesday, September 22 New York Association of Mortgage Brokers 21st Annual Convention “It’s Not Just Business as Usual!” Melville Marriott 1350 Old Walt Whitman Road Melville, N.Y. For more information, call (914) 3326233 or visit




ACC Mortgage .................................................. ............................................29 All Real Estate Solutions LLC.............................. ................................................15 BestRates ....................................................................................................................................37 Elliott and Company Appraisers Inc. .................. ................................27


Emigrant Mortgage Company ............................ ..................................13 Entitle Direct Group.......................................... ......Inside Front Cover



To submit your entry for inclusion in the National Mortgage Professional Calendar of Events, please e-mail the details of your event, along with contact information, to

Quality Mortgage Services ................................ ....................................10 & 32


Wednesday-Friday, Sept. 30-Oct. 2 22nd Annual New England Mortgage Banking Conference Rhode Island Convention Center 1 Sabin Street • Providence, R.I. For more information, call (617) 5709114 or visit

Friday, October 30 Oregon Association of Mortgage Professionals 2009 Annual Convention “The Best of the Best” Location to be determined For more information, call (503) 6708586 or visit

OCTOBER 2009 Friday-Saturday, October 2-3 Kentucky Association of Mortgage Professionals 2009 Annual Convention Belterra Casino & Golf Resort 777 Belterra Drive Belterra, Ind. For more information, call (270) 9292836 or visit

NOVEMBER 2009 Monday-Tuesday, November 2-3 Virginia Association of Mortgage Brokers 21st Annual Convention Williamsburg Lodge 310 South England Street Colonial Williamsburg, Va. For more information, call (804) 2857557 or visit

Monday-Tuesday, October 5-6 Washington Association of Mortgage Professionals 2009 Real Estate Lenders Conference Meydenbauer Center 11100 NE 6th Street Bellevue, Wash. For more information, call (866) 4257250 or visit

Tuesday, November 17 2009 Missouri Association of Mortgage Brokers Trade Show & Convention St. Charles Convention Center and Embassy Suites Hotel 2 Convention Center Plaza St. Charles, Mo. For more information, call (314) 9099747 or visit

Sunday-Wednesday, October 11-14 Mortgage Bankers Association 96th Annual Convention & Expo San Diego Convention Center 111 West Harbor Drive San Diego For more information, call (800) 793-6222 or visit

DECEMBER 2009 Saturday-Tuesday, December 5-8 NAMB/WEST MGM Grand Hotel & Casino 3799 Las Vegas Boulevard South Las Vegas For more information, call (703) 3425900 or visit

Thursday, October 15 Florida Association of Mortgage Brokers Jacksonville Chapter 2009 Annual Trade Show Hyatt Regency Riverfront 225 Coastline Drive Jacksonville, Fla. For more information, call (800) 2899983 or visit Tuesday-Wednesday, October 20-21 Arizona Association of Mortgage Brokers 2010 Outlook & Expo “Expand Your Mind & Expand Your Business” 100 North Third Avenue Phoenix, Ariz. For more information, call (480) 423-7334 or visit

First Source Capital Mortgage Inc. .................... ......................................33 Flagstar Bank .................................................. ......................Back Cover Franklin First Financial .................................... ................................39 Frost Mortgage Banking Group ................................................................................Inside Back Cover Guaranteed Home Mortgage.............................. ......................................12 HTDI Financial ................................................ ........................21 Informative Research........................................ ..................................7 Mortgage Now Inc. .......................................... ................................................23 NAMB/West ...................................................... ....................................................16

Wednesday-Thursday, October 21-22 Indiana Association of Mortgage Brokers 2009 Annual Expo & Educational Conference Sheraton Indianapolis Hotel & Suites 8787 Keystone Crossing Indianapolis For more information, call (317) 9641225 or visit

NAPMW .......................................................... ..................................................22 New York Appraisal Management Services Inc..... ..................................................41 Platinum Credit Services Inc. ............................ ............................31 Presidents First Mortgage Bankers .................... ........................................11

United Wholesale Mortgage .............................. ..................................................17 Wells Fargo Home Mortgage.............................. ..............................................9

Wednesday-Friday, October 21-23 Pennsylvania Association of Mortgage Brokers and New Jersey Association of Mortgage Brokers Regional Conference Trump Taj Mahal Casino Resort 1000 Boardwalk at Virginia Avenue Atlantic City For more information, call (973) 3797447 or visit

FEBRUARY 2010 Monday-Thursday, February 1-4 Mortgage Bankers Association CREF/Multifamily Housing Convention & Expo Mandalay Bay Resort & Casino 3950 Las Vegas Boulevard South Las Vegas For more information, call (800) 7936222 or visit Tuesday-Friday, February 23-26 Mortgage Bankers Association National Mortgage Servicing Conference & Expo Manchester Grand Hyatt 1 Market Place • San Diego For more information, call (800) 7936222 or visit APRIL 2010 Sunday-Wednesday, April 25-28 Mortgage Bankers Association National Technology in Mortgage Banking Conference & Expo Hyatt Regency Chicago 151 East Wackler Drive • Chicago For more information, call (800) 7936222 or visit AUGUST 2010 Wednesday-Friday, August 18-20 California Association of Mortgage Brokers 2010 Annual Convention & Grand Exposition Hyatt Regency Long Beach 200 South Pine Avenue Long Beach Convention Center 300 East Ocean Boulevard Long Beach, Calif. For more information, call (916) 4488236 or visit

“I joined Frost Mortgage and immediately saw my revenue get back to what it used to be. I now have the tools I need to be successful in today’s market place.” - Bill Morris Lancaster, OH I’ve known about Greg Frost for 20 years. I trusted him, joined his division and he has delivered on his promise. His model works great! - Jerry Cox Tallahassee, FL Greg is doing what he promised. Great pricing, fast underwriting, on time closings! That’s all I needed and that’s what Greg has delivered. - David Hoffman Westlake Village, CA

Very competitive rates, common sense underwriting in 48 hours, wet funding with docs...what more can I say? - Jason Roberts St. Louis, MO Our semi-annual BranchPartner Master Mind Meetings are what really motivate me. Great mentoring and loads of business building ideas coupled with the hands on “How to.” - Momi Pointer Tustin, CA Is there another company that has as many Underwriters has Loan Processors? Greg has turned that proverbial bottleneck into a slick funnel. Two days for a decision. Great! - Kevin Hodge Hunt Valley, MD

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If you would like to learn more about our BranchPartner business model, please inquire: Regulation and Licensing Department, Financial Institutions Division #621 • Branch License #00621