LenderCity Launches Net Financial Protection Bureau (CFPB), an Branch Alternative With independent bureau within the Federal Unique Franchise Program Reserve System created by the Dodd-

JULY 2011 

CONNECTICUT MORTGAGE PROFESSIONAL MAGAZINE

 NationalMortgageProfessional.com

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LenderCity has announced that it has completed its Uniform Franchise Disclosure Document (UFDD) and plans to sell franchises nationwide. The company, which has been in business since 1997, was founded by President and Chief Executive Officer Gregg Harris. “I see a growing trend for smaller independent mortgage brokerage offices,” said Harris. “Recent regulatory changes in the industry that restrict a loan officer’s income are making it more conducive for them to go into business for themselves. However, the franchise model allows them to benefit from being part of a larger organization while maintain complete control over their business.” Although franchising has been offered previously, there is virtually no company currently offering franchising in the United States mortgage market, making LenderCity a true pioneer. LenderCity is bucking the trend, with the only current offering being a “net branch” model. This means that a loan officer or mortgage broker who wants to become a net branch really just becomes an employee of the company. LenderCity will allow a maximum of 20 franchises in 2011, and look to double that number to another 40 in 2012. For a mortgage broker, this also means surrendering their license and giving up their corporate identity. Under the franchise model, the franchisee is independently owned and operated. They maintain autonomy and control their business, but have the backing of a national brand, marketing, and lead generation. LenderCity also provides back-end administrative support so franchisees can focus on doing what they do best, originating loans.

Jonathan Foxx Announces the Launch of the CFPB Forum The CFPB Forum has b e e n launched by Jonathan Foxx, president of Lenders Compliance Group, as a “discussion forum” for news and views regarding the new Consumer

Frank Act. The CFPB Forum is not associated or affiliated with the Consumer Financial Protection Bureau. “My firm, Lenders Compliance Group, is making this commitment to administer, monitor, maintain, and continually update the CFPB Forum,” said Foxx. “If you are interested in the CFPB, this forum is for you.” The CFPB Forum, located at cfpbforum.blogspot.com, has interactive discussion facilities and is shared through LinkedIn, Facebook and Twitter. Informative articles and news will be separately published. “I welcome proposals for news and articles to be posted on the CFPB Forum. Please contact me via e-mail at JFoxx@lenderscompliancegroup.com to make arrangements.” There are many ways to use the CFPB Forum, including: Joining the Discussion Forum; posting articles (special feature); posting news (special feature); suggesting site enhancements; Share It; subscribing; and following by e-mail. “This is a unique discussion venue,” said Foxx, “providing a Web space for participants to better their understanding and become more informed about the CFPB.”

Quality Mortgage Services Launches ADDP to Stamp Out Appraisal Fraud Quality Mortgage Services LLC (QMS) has announced the release of its Appraisal Defect Detection and Prevention (ADDP) product, a solution can be deployed by a lender or by QMS on an outsourced basis that seeks to eliminate appraisal report errors and defects. QMS will provide free mortgage repurchase defense or mortgage put back rebuttals regarding loan collateral if any such request is made by an investor on a loan where ADDP was used. “We’ve been in the quality control business since 1992 and we know that many appraisal related issues are not the result of increased valuation fraud, but rather defects in the appraisal report,” said Tommy A. Duncan, presi-

dent of Quality Mortgage Services. “We developed the ADDP technology and related methodology to empower our own loan auditors, but in today’s environment, every underwriter should have access to this tool.” Duncan maintains that most underwriters are not trained to find every possible appraisal defect and that leaves lenders open to increased risk. As appraisal-related rules and regulations continue to impact the industry, ADDP is expected to be used by more underwriters, especially since it is available at a low per-loan cost. In addition to underwriters working in mortgage companies, ADDP is also expected to be adopted by appraisers interested in ensuring the quality of their product without relying on expensive AMC quality control (QC) personnel; community banks and credit unions that don’t have trained QC staff in house but don’t want to pay high outsourcing fees; and appraisal management companies (AMCs) interested in performing QC on the valuation reports they provide to their lender clients. “There are a lot of community banks and banks that are doing their own underwriting and I feel many of them are becoming complacent,” said Duncan. “ADDP would provide them with a stronger underwriting decision. We have some community bank clients that are small and basically, ADDP enables the underwriter to reduce their risk.”

PMI Launches MODEL Servicer Program to Recognize Top Mortgage Servicers The PMI Group Inc.’s principal operating subsidiary, PMI Mortgage Insurance Company, has announced the launch of its MODEL Servicer Program designed to recognize and reward high-performance mortgage servicers. “Since the beginning of the housing crisis, PMI has seen that the use of certain mortgage servicing best practices plays a central role in maximizing the level of home retention and achieving positive results for borrowers, communities and mortgage investors,” said Chris Hovey, PMI SVP of servicing operations and loss management. “PMI believes servicers that have demonstrated effective use of these best practices deserve recognition for the positive impact they have in preserving homeownership in communities nationwide.” In order to be eligible for the program, servicers must exhibit superior foreclosure prevention results on PMI’s “Servicer Scorecard.” In addition, they will be asked to affirm that their operations substantially adhere to industry best practices as outlined in PMI’s Best Practice Principles, which were developed in collaboration with mortgage servicing industry leaders. “Our new MODEL Servicer Program is designed to recognize best-in-class servicers for the work they’re doing to prevent foreclosures,” said Hovey. “These servicers will receive multiple benefits to reward their excellent performance in sustaining homeownership.”

Lead Generation Meets Mortgage Calculator on the iPhone Zillow has announced the launch of its Zillow Mortgage Marketplace iPhone App, bringing the loan shopping experience of the Zillow Mortgage Marketplace to the mobile marketplace. The Zillow Mortgage Marketplace App for iPhone combines personalized loan quotes with advanced calculators and tools to help borrowers understand how much home they can afford, what their monthly payments would be, and whether refinancing their current home makes financial sense. The Zillow Mortgage Marketplace App allows for instant, personalized loan quotes from lenders, as well as gauging home affordability and monthly payments on the spot. “The user interface (UI) is well thoughtout. Some folks in the comments are mentioning they don’t get it, but I’ve played with a lot of iPhone mortgage calculators and this UI is good,” said Jason Berman of Mortgage Tech Summit. “Here’s the problem as I see it, dozens of free slider mortgage calculators already available in the iTunes Store. The rate chart is well done but do folks really need to get instant rates? Don’t they already know what they qualify for by the time they look at a house? Or do real estate agents like driving around with clueless potential borrowers?” The Zillow Mortgage Marketplace App allows borrowers to easily fill out a loan request by providing information about the home they want to buy or refinance, and their own financial situation. Borrowers do not enter any personally identifiable information, but just enough data for lenders to return custom quotes. Users receive an average of 25 loan quotes per request, and can compare rates and lenders side by side, including scanning more than 8,900 consumer-submitted lender reviews. With one touch of a finger, the borrower can then immediately connect with lenders of their choice and begin the process of securing a home loan, right from their iPhone. “It’s a cool app, however, based on some local searches I did in Louisiana, they are way off on property taxes and insurance,” said Mike Anderson, CRMS of Essential Mortgage and vice president of the National Association of Mortgage Brokers (NAMB). “This is typical of online and out of state lender and leads quotes to be very misleading. Also, I noticed they lacked local lenders.” The Zillow Mortgage Marketplace iPhone App design streamlines the user experience for mobile and uses its Webbased counterpart Zillow Mortgage Marketplace to provide a transparent lending marketplace where borrowers can connect with reputable lenders to find personalized loan options and get a variety of competitive mortgage rates. “If I was an originator paying Zillow for leads, I’d be slightly annoyed at the iAds continued on page 42