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n Connecticut Mortgage Professional Magazine n OCTOBER 2013





Connecticut Mortgage Association 80 Mountain Terrace Road v West Hartford, CT 06107 Phone #: (860) 922-3441

Web site: v E-mail: CMA OFFICERS & DIRECTORS Christopher Aniskovich Cara Britton Kenneth Campbell

President Vice President Treasurer

Phone # (860) 227-9257 (860) 606-0099, ext. 706 (203) 221-8242


Gilbert Ginsburg Melissa M. Hayes Kelly L. McGuinness Don Romanski John Sauro

Director Director Director Director Director

203-679-0732, ext. 11 (860) 606-0099, ext. 705 (800) 242-1032 (203) 558-5550 (203) 329-8430

Wendy Bernard Esq.

Association Counsel

(203) 790-4529


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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

table o



Lykken on Leadership: Leadership and the Current State of Mortgage Banking By David Lykken


39 Celebrating MBA’s 100th Convention: MBA Hits Milestone Anniversary By Robert Ottone

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What Awaits the Industry? By Phil Hall ..............................74 Mini-Correspondent … To Be or Not to Be? By Patti White ........................................................................76 Branding in Today’s Purchase World By Scott Compton ....78 Bridging the Gap By Amy Goldstein ......................................80 Bad Robot! By Eric Weinstein ................................................81 Entrepreneurism in the Mortgage Business By Daniel Jacobs ....................................................................82

60 Legends of Lending: American Financial Resources By David J. Coster

Mortgage Broker or Mortgage Lender? By Chris Jones ....84

FEATURES Weatherproofing Your Advertising Budget By Jake Soley ......8 The Elite Performer: Embrace Competition By Andy W. Harris, CRMS ................................................................8 The Secret Formula for Optimizing Your Mortgage Lead Campaigns By Joshua Conklin ..........................................10 ValueNation: Centennial Perspective By Adrienne Ainbinder ....16 Federal Regulators Issue Revised QRM Proposal By Laurie Spira ............................................................................18 NAMB National 2013 ............................................................20

64 Elder Financial Abuse: Prevention and Remedies By Jonathan Foxx

70 NMP Mortgage Professional of the Month: Eric Tishaw, CEO of HomeTown Lenders By David J. Coster

The Most Compliant and Effective Marketing in October ..............................................................................30 FHA Insider By Jeff Mifsud ........................................................32 NMP’s Economic Commentary By Dave Hershman ................34

V I S I T Company

Web Site


A Page

Adinta .............................................................. ..........................................................82 AllRegs.............................................................. ..................................................40 & 73 American Financial Resources Inc. ...................... ....................48 & Inside Back Cover Amerisave Mortgage Corporation ........................ ................................................11 AMX/Land Home Financial Services...................... ......................................................42 Brokers Compliance Group.................................. ....................................5 Calyx Software .................................................. ........................................40 & 59 Document Systems, Inc./DocMagic ...................... ......................................................35 Fifth Third Mortgage .......................................... ..............................25 & 54 First American Mortgage Services ........................ ..................................58 First Guaranty Mortgage Corp. ............................ ......................................33 & 43 Florida Capital Bank Mortgage ............................ ..........................................................42 Global DMS........................................................ ..............................................15 & 47 GSF Mortgage Corp. ............................................ ....................................................7 & 49 Hometown Lenders ............................................ ..........................................13 HomeBridge ...................................................... ............................51 & 63 Lenders Compliance Group, Inc. .......................... ................................41 LendLogix.......................................................... ........................................................56 Maverick Funding Corp....................................... ............................................27 Maximum Acceleration Coaching ........................ ..................................................37 McCue Mortgage ................................................ ............................................CT3 Menlo Park Funding .......................................... ............................................41 & 65 Mortgage Banking Services Direct........................ ............................................85 Mortgage Coach ................................................ ..............................................43

f contents







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Opposing Views for the Role of Government in the Housing Market By Mike Lewis ......................................36 MBA’s Mortgage Action Alliance By Amy Swaney, CMB ..........59 Marketing Compliance Corner: Wholesaler Risk By Michael J. Wallace Esq. ............................................................62 NAPMW Report: October 2013 By Christine M. Pollard ............62 Misconceptions About USDA Loans By Rich Obermeier ..........64 Technology: It’s Paramount to Managing the Appraisal Process By Vladimir Bien-Aime ............................66 Title Industry Centralization Will Happen By Andrew Liput ......68 Government Shutdown Arrives … Who in the Housing and Finance Sector Will Feel Its Impact? By Eric C. Peck ......72

An empowering resource for today’s top originators

spanning numerous mediums and covering the entire mortgage industry.

Navigating the Origination Obstacle Course: Personal & Professional Development By Robert Ottone ......86 USA Cares Mortgage Heroes: Angela Jett of Equity Missouri By Joann Muncey ........................................88 Growing Your Real Estate Agent Relationships, Grow Your Mortgage Business (Part IV) By Jean LeBlanc ......88


Why Do I Need a Compliance Management System? By Joy K. Gilpin............................................................................94

A Tough Road for the Independents By Phil Hall ....................94

COLUMNS NMP News Flash: October 2013....................................12 New to Market................................................................14 Heard on the Street ......................................................26 NMP Resource Registry ................................................90

D V E R T I S E R S Company

Web Site


Mortgage Information Services, Inc. .................... ........................................................50 Mortgage Mapp, Inc. .......................................... ........................................67 NAPMW ............................................................ ..........................................................89 National Creditors Connection, Inc. .................... ............................................46 New Penn Financial, LLC .................................... ......................................47, 77 & 87 OAMP (Oregan Association of Mortgage Professionals) ..............................................75 PB Financial Group Corp..................................... ........................................46 & 87 Quality Mortgage Services .................................. ....................................................81 REMN (Real Estate Mortgage Network) ................ ......................................17 & 55 Ridgewood Savings Bank .................................... ......................................57 & 69 Rushmore Loan Management Services LLC............ ..............................................9 & 53 Secure Settlements Inc. ...................................... ..................................51 & 85 Simple Nexus .................................................... ..................................................78 Streetlinks LLC .................................................. ......................44 & Inside Front Cover TagQuest .......................................................... ........................................................31 The Bond Exchange............................................ ..........................................79 Titan List & Mailing Services, Inc. ........................ ........................................................19 UAMP (Utah Association of Mortgage Profesionals) .... ............................................................29 United Northern Mortgage Bankers, Ltd............... ..........................45 & 96 UNMB Wholesale................................................ ................................................1 United Wholesale Mortgage ................................ ........................................52 & Back Cover Veros ................................................................ ....................................................56 & 74 Warehouse Lending Group .................................. ..................................76



n Connecticut Mortgage Professional Magazine n OCTOBER 2013

NMP Calendar of Events ................................................95

OCTOBER 2013 Volume 5 • Number 10


1220 Wantagh Avenue • Wantagh, NY 11793-2202 Phone: (516) 409-5555 • Fax: (516) 409-4600 Web site:

Benchwarmers and MVPs … This month, I am going to analogize the sports industry with the mortgage industry. The NFL is in full swing, MLB is in its post season, the NHL just started their 2013-2014 campaign and the NBA tip-off is not far behind. What do all of these sports have in common? Success in each and every one of these sports relies on a team effort. The success of one sometimes supersedes the accomplishments of a team, but a true winner is comprised of complimentary players who put forth a collaborative effort with the shared goal of victory. Much the same is true of the mortgage industry. Our industry trade associations are much like the sports teams we follow and root for. These team sports require a collaboration of talent, much as the goals of our mortgage industry trade associations. Whether you are looking at NAMB—The Association of Mortgage Professionals, the Mortgage Bankers Association, the National Association of Professional Mortgage Women, the National Consumer Reporting Association … all are collective groups assembled for the common goal of bettering the industry. There may not be a championship trophy to hoist when discussing these trade associations, but there are victories to be had and battles to be won on a daily basis. These battles are not fought on the gridiron or a sheet of ice, but in board rooms and in the halls of Congress. There is strength in numbers and this could not be any more evident in our trade associations. Membership numbers are key. Active members provide the support to the leaders and most valuable players who spearhead the efforts of these associations. Without a strong support staff, their efforts are fruitless. An army of one will face an uphill battle, while a strong force of volunteers who actively participate will surely make waves. We need a collective voice, one that has the ability to mobilize its members at a moment’s notice to jump into action and garner the attention of our elected officials. Numbers, and big membership numbers, are what will gain such attention.

STAFF Eric C. Peck Editor-in-Chief (516) 409-5555, ext. 312

Joel M. Berman Publisher - CEO (516) 409-5555, ext. 310

Joey Arendt Art Director (516) 409-5555, ext. 307

Beverly Bolnick National Sales Manager (516) 409-5555, ext. 316

Scott Koondel Operations Manager (516) 409-5555, ext. 324

Robert Peter Ottone Senior Editor (516) 409-5555, ext. 314

David J. Coster Senior Editor

Jon Blake Advertising Coordinator (516) 409-5555, ext. 301

Phil Hall Senior Editor

Brian Coleman Business Development Coordinator (516) 409-5555, ext. 311

Get off the sidelines … the coach is calling Yes, it’s your turn. The coach has come down the bench and called your number. You are wanted on the playing field to get in the game and join the action. The month of October presents the mortgage industry with two opportunities to get off the bench and join in the action. From Oct. 19-21, NAMB will be hosting its NAMB National event at Harrah’s Las Vegas. The MBA will celebrate 100 years of existence from Oct. 27-30 in Washington, D.C. at its 100th Annual Convention & Expo. And from Nov. 6-8, the NCRA will host its 2013 National Convention in Albuquerque, N.M. Each event is an opportunity to immerse yourself in the association experience, to rub elbows with the movers and shakers in the industry and make a name for yourself by becoming actively involved. These events are great opportunities to network and forge new business relationships, and share your experiences with your peers.

ADVERTISING To receive any information regarding advertising rates, deadlines and requirements, please contact National Account Executive Beverly Koondel at (516) 409-5555, ext. 316 or e-mail

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.


Batter up … It’s your time to shine. The spotlight is on you. Are you going to sit on the sidelines and be among those who stand back and let others do all the heavy lifting while you and the entire industry benefit? Or, are you going to step up to the plate and join a movement toward greater success. There is no better time than now … no better time to improve and protect your own livelihood, while also protecting the American consumer who relies so greatly on your services. Be part of fulfilling that American dream of homeownership. Be an active part of bringing mortgage financing options into the lives of the American consumer. Get up off the bench, get in the game and make an impact. Your active voice will add to the greater cause. Be a part of the cause and remember, you do make a difference … every little bit counts. Until next month …

To receive subscription information, please call (516) 409-5555, ext. 301; e-mail or visit Any subscription changes may be made to the attention of “Circulation” via fax to (516) 409-4600.

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


publisher’s desk

Statements, articles and opinions in National Mortgage Professional Magazine are the responsibility of the authors alone and do not imply the opinion or endorsement of NMP Media Corp., or the officers or members of National Association of Mortgage Brokers and its State Affiliates (NAMB), National Association of Professional Mortgage Women (NAPMW), National Consumer Reporting Association (NCRA) and/or other state mortgage trade associations. Participation in NAMB, NAPMW, NCRA, and/or other state mortgage trade associations events, activities and/or publications is available on a non-discriminatory basis and does not reflect the endorsement of the product and/or services by NMP Media Corp., NAMB, NAPMW, NCRA, and other state mortgage trade associations. National Mortgage Professional Magazine, NAMB, NAPMW, NCRA, and/or other state mortgage trade associations do not make any misrepresentations or warranties concerning the regulatory and/or compliance aspects of advertisers, products or services and/or the editorial content contained in NMP Media Corp. publications. National Mortgage Professional Magazine and NMP Media Corp. reserve the right to edit, reject and/or postpone the publication of any articles, information or data.

Joel M. Berman, Publisher-CEO NMP Media Corp. National Mortgage Professional Magazine is published monthly by NMP Media Corp. • Copyright © 2013 NMP Media Corp.


EDITORIAL CONTRIBUTORS Featured Editorial Contributors David J. Coster

David Lykken

Joy K. Gilpin

Andrew Liput

Jake Soley

Jeff Mifsud

Amy Goldstein

Joann Muncey

Laurie Spira

Daniel Jacobs

Rich Obermeier

Amy Swaney, CMB

Chris Jones

Robert Ottone

Michael J. Wallace Esq.

Jean LeBlanc

Eric C. Peck

Eric Weinstein

Mike Lewis

Christine M. Pollard

Patti White

Jonathan Foxx

Donald J. Frommeyer, CRMS

Editorial Contributors Adrienne Ainbinder

Phil Hall

Vladimir Bien-Aime’

Andy W. Harris, CRMS

Scott Compton

Dave Hershman

Joshua Conklin


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

NAMB—The Association of Mortgage Professionals

National Association of Professional Mortgage Women

2701 West 15th Street, Suite 536 l Plano, TX 75075 Phone: (972) 758-1151 l Fax: (530) 484-2906 Web site:

P.O. Box 451718 l Garland, TX 75042 Phone: (800) 827-3034 l Fax: (469) 524-5121 Web site:

NAMB 2013-2014 Board of Directors

2013-2014 NAPMW National Board of Directors and Administration

OFFICERS Donald J. Frommeyer, CRMS (t/e 2014)—President Amtrust Mortgage Funding Inc. 200 Medical Drive, Suite D l Carmel, IN 46032 Phone: (317) 575-4355 l Fax: (317) 575-4360 E-mail: John Councilman, CMC, CRMS (t/e 2014) President-Elect AMC Mortgage Corporation 10136 Avalon Lake Circle l Fort Myers, FL 33913 Phone: (239) 267-2400 l E-mail: Rocke Andrews, CMC, CRMS (t/e 2014)—Vice President Lending Arizona LLC 1996 North Kolb l Tucson, AZ 85715 Phone: (520) 886-7283 l Fax: (520) 731-3388 E-mail: Kay A. Cleland, CMC, CRMS (t/e 2014)—Secretary KC Mortgage LLC 200 South Wilcox Street, #224 l Castle Rock, CO 80104 Office: (720) 810-4917 l Cell: (720) 670-0124 E-mail: Andy W. Harris, CRMS (t/e 2014)—Treasurer Vantage Mortgage Group Inc 15962 SW Boones Ferry Road, Suite 100 l Lake Oswego, OR 97035 Direct: (503) 496-0431, ext. 302 l Cell: (503) 880-2427 E-mail:

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Jim Pair, CMC (t/e 2014)—Immediate Past President Mortgage America Corpus Christi Inc. 22800 Bulverde Road, Apt. 1402 l San Antonio, TX 78261 Phone: (361) 774-7314 l E-mail:


President Jill Kinsman (206) 344-7827 President-Elect Christine Pollard (607) 226-1046

National Consumer Reporting Association 701 East Irving Park Road, Suite 306 l Roselle, IL 60172 Phone: (630) 539-1525 l Fax: (630) 539-1526 Web site:

2013 Board of Directors & Staff Daphne Large President (901) 259-5105

Linda McCoy, CRMS (t/e 2016) Mortgage Team 1 Inc. 6336 Piccadilly Square Drive l Mobile, AL 36609 Phone: (251) 650-0805 l Fax: (251) 650-0808 E-mail:

Maureen Devine Vice President (413) 736-4511

Dick Morin (t/e 2014) Consumers First Mortgage P.O. Box 918 l Kennebunk, ME 04043 Phone: (207) 985-2895 l Fax: (207) 636-8027 E-mail: Valerie Saunders (t/e 2015) RE Financial Services 13033 West Lindburgh Avenue l Tampa, FL 33626 Phone: (866) 992-0785 l Fax: (866) 992-1024 E-mail: Rick Bettencourt, CRMS (t/e 2014) Mortgage Network 300 Rosewood Drive l Danvers, MA 01923 Phone: (978) 777-7500 l Fax: (855) 447-4350 E-mail: Olga Kucerak, CRMS (t/e 2016) Crown Lending 328 West Mistletoe l San Antonio, TX 78212 Phone: (210) 828-3384 l Fax: (210) 828-3332 E-mail:

Secretary Cynthia Nutter (360) 449-6408

Vice President (Central Region) Kelly Hendricks Treasurer (314) 398-6840 Jeanne Evans, CME (918) 431-0155 Vice President (Eastern Region) Kimberly Rozell, CME Parliamentarian (607) 229-5008 Dawn Adams, GML, CMI (607) 737-2584 Vice President (Northwestern Region) Administrator Ken Perry, CMI, CME Hulene Works (360) 936-3010 (800) 827-3034

Fred Kreger, CMC (t/e2016) American Family Funding 28368 Constellation Road, Ste. 398 l Santa Clarita, CA 91350 Phone: (661) 505-4311 l E-mail:

John Stevens, CRMS (t/e 2014) ENG Lending 11650 South State Street, Suite 350 l Draper, UT 84020 Phone: (801) 477-7111 l Fax: (866) 442-9937 E-mail:

Vice President (Western Region) Anna Mackovska (323) 331-2222

Donald J. Unger Ex-Officio (303) 670-7993, ext. 222 Mike Brown Treasurer (800) 925-6691, ext. 4350 Nancy Fedich Director–Chair Legal Committee (908) 813-8555, ext. 3010 William Bower Director–Chair Tenant Screening Committee (800) 288-4757 Tom Conwell Director–Liaison Legislative Committee (800) 445-4922, ext. 1010

Judy Ryan Director–Chair Strategic Alliance Partnership Committee (800) 929-3400, ext. 201 Renee Erickson Director–Chair New Membership Committee (866) 932-2715 Sharon Bieszk Director (262) 542-1700 Mary Campbell Director (701) 239-9977 Terry Clemans Executive Director (630) 539-1525 Jan Gerber Office Manager/Member Services (630) 539-1525

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

GSF Mortgage Corp.

Weatherproofing Your Advertising Budget By Jake Soley Henry Ford said, “A man who stops advertising to save money is like a man who stops a clock to save time.” Wise lenders that have weathered the storm don’t stop marketing and instead increase their volume to keep business flowing in. Lenders who panic and stop marketing put themselves in a bad position if their referral base slows down and are left with an empty pipeline. Even though rates are higher, there are still affective ways to generate purchase and refi business through targeted direct mail campaigns. Question: How do I successfully drive new refinance and purchase business in my doors in today’s environment? Answer: Triggers have maintained the most consistent return when market rates are both high and low. Purchase triggers are the most effective approach for new purchase business due to the fact that no lender will pull credit on a borrower without asking pre- qualification questions first. If someone is getting their credit pulled there’s a great chance that they are aware of the rates today and has some benefit to move forward. Purchase triggers take the guesswork out of who is buying a home. With refi triggers, there are overlays you can add to further target your perfect borrower like credit score, mortgage balance, loan type and LTV. Using direct mail as a vehicle to drive your offer, the borrower is calling for a second opinion to see other options. This is your chance to capitalize and offer the borrower the best deal they can receive.

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Apply the solution It is optimal to drop both refi and purchase trigger campaigns simultaneously, as the refi trigger will bring in initial revenue, while the purchase trigger pipeline builds as the borrower has to find and close on their home. By marketing in tandem, you can have a steady flow of business to feed both your refi and purchase specialists. Telemarketing will yield immediate results, however, you will experience more competition. You must be prepared for this if it is your only marketing vehicle. Through direct mail, you will hit 100 percent of the available universe and tap into those borrowers who are not bombarded with telemarketing calls. Results To obtain the best results, there a couple of things to consider. One being the amount of pieces your dropping, where you’re dropping them, and what loan officers you have fielding the calls. Any of these can affect your return-on-investment (ROI); however, the most important to consider is the loan officers fielding the calls. We have found that LOs who are savvy with Internet leads or lead transfers fare the best at handling these responders. If they are not experienced in working competitive leads, it could lead to disaster. The rule of thumb when marketing both refi and purchase triggers is a minimum of one loan for every 1,000 pieces mailed. If you can put this simple practice into place, you will keep a pipeline full of purchase and refi business that you may have missed out on. Jake Soley of Titan List and Mailing Services has specialized in mortgagespecific marketing since 2006. Jake’s commitment to educating his customers on the proper steps to take when launching direct mail programs has catapulted him as a leader in mortgage direct mail. He may be reached by phone at (800) 544-8060, ext. 209 or e-mail


elite performer

Embrace Competition By Andy W. Harris, CRMS In June of 2012, we discussed the topic of competition titled “Compete Like an Olympian” in which I want to expand on this month. If you haven’t noticed, our industry is getting increasingly competitive in recruiting originators and originators recruiting customers and referral partners. This trend will certainly continue during the last quarter of 2013 and into 2014 with rising rates, falling revenues and increased regulatory burdens. Preparing for change and adapting to an environment with shrinking prospects is critical if your goal is to grow your business in the future. Customers and referral partners expect more out of those they choose to work with. These demands and expectations will continue to grow with the sharpened skills of producing originators and those trying to take a piece of the market share. New homebuyers entering the mortgage marketplace are also beginning to do more research on their options and rates to better understand what might be available to them. It’s always important to remember that client objections or mentioning a competitor is not bad. This is a sign of a prospect confirming interest, but they just have more questions. The two most common behavioral responses from those facing competition is either by being defensive or seeing opportunity.

The defensive behavior The defensive approach can cause problems that will likely lose prospects or potential clients. Many times, a defensive response can cause ones behavior to become less attractive to the person they are interacting with. Right or wrong, defensive behavior doesn’t help anyone in a position of sales or providing a service as it deteriorates the professionalism during the interaction. So what are some signs that someone might be acting defensive? l Bashing a competitor: This one seems to be common in our industry. A loan originator hears the name of a competitor from the prospect and immediately goes on the attack (many of us can get caught in this trap). Unfortunately, this behavior doesn’t help your mission in gaining that client. l Coming across unprofessional: If you’re acting defensive, it is hard to remain professional. Usually one can seem stressed out or more intense to the opposing party with a heightened voice and feeling of being threatened. l Responding too quickly to e-mails or statements that perceive criticism: Jumping on a response, making assumptions, or using text that you might not have considered when sending to the reader can spell trouble. l Talking too much: Not listening and talking too much or over someone in response to questions or concerns can cause problems in many areas of life, including business. l Poor body or verbal language: If you’ve ever met with someone when in the market to buy or hire and they use bad language or choice in body positioning, it can be a very negative experience.

Seeing the opportunity strategy l Address your competitor: If a prospect brings up a competitor, this is an opportunity to shine. Rather than bashing or using negative comments, embrace that they are shopping and why that is important. Then use that as an opportunity to discuss your strengths, experience and share client testimonials and feedback to support your brand and suggest they also consider doing that SPONSORED EDITORIAL

continued on page 73

– Abraham Lincoln


stronger LENDING BUSINESS: yyou ou get str onger bbyy being the rreal eal gr o w with deep roots r oots the challenge to find better solutions, grow don’ t believe belie v e in standing in the shadow. shado w. and don’t

2013 © Rushmor Rushmoree Lo Loan oan Management Ser Services vices LLC LLC.. All Rights Reserved. Reserveed. Equal E Housing Lender Lender. r. Rushmor Rushmoree Loan Managementt Ser Services vices LLC, LLC, NMLS ID# 185729, 15480 Laguna Canyon Cannyon Road, Suite 100, Irvine, Irvine, CA CA 92618. 1-866-699-5600. 1-866-699-56 600. Not an offer offer for for the extension of credit credit or a commitment to lend. Intended for New York for mortgage mortgage brokers. brokers. Rushmore Rushmore does not lend in Alaska, Massachusetts, Missouri, Ne Nevada. Alabama Consumer Credit Credit (#21602); Alaska Mortgage Mortgage Lender (AK185729); Arizona Wholesale Lender Exemption; Exemption; Arkansas Mortgage wY ork o or Nevada. Mortgage Banker-BroBankerr--Broker-Servicer California Mortgage ker-Servicer (#101513); Licensed by by the Department Department of Corporations under the Calif ornia Residential Mor tgage Lending Act (#4131068); Colorado Wholesale Lender Exemption Exemption (Regulated by by the Division of Real Estate); Connecticut Mortgage Mortgage Lender (ML-185729); Delaware Delaware Mortgage Mortgage Lender (#012394); District of Columbia Mor Mortgage tgage Lender (MLB185729); Florida Mortgage Mortgage Lender-Servicer Lender-Ser vicer (MLD622); Georgia Mortgage Mortgage Lender Licensee (#24224); Hawaii Hawaii Mortgage Mortgage Loan Originator Company Company (HI-185729); Idaho Wholesale Lender Exemption; Exemption; Illinois Residential Mortgage Mortgage Subordinate Mortgage Mortgage Licensee (MB.6760723); Indiana DFI First Lien Mor tgage Lending (#18619); Indiana DFI Subor dinate Lien Mor tgage Lending (#187644); Iowa Iowa Mortgage Mortgage Banker Banker (MBK-2009-0083); Kansas Supervised Supervised Loan (SL.0026265); Kentucky Kentucky Mortgage Mortgage Company Company (MC71455); Louisiana Residential Mortgage Maryland Mortgage Mortgage Mortgage Lending (#185729), Maine Supervised Supervised Lender (SLM11886); Mar yland Mor tgage Lender (#19168), Michigan Mor tgage Broker, Brokerr, Lender & Servicer Servicer (FL0017075); Michigan Secondary Secondary Mortgage Mortgage Broker, Brokerr, Lender & Servicer Servicer (SR0017076); Minnesota Residential Mortgage Mortgage Originator (185729); Mississippi Mortgage Mortgage Lender (185729); Montana Mortgage Mortgage Lender (#185729); Nebraska Mortgage by the New New Hampshire Hampshire Banking Department Mortgage Banker Banker (#2071); Licensed by Department Mortgage Mortgage Banker Banker (#15265-MB), Licensed by by the New New Jersey Jersey Department Department of Banking and Insurance Residential Mortgage Mortgage Lender (#186729), New New Mexico Mortgage Mortgage Loan Company North Dakota Dakota Money Money Broker Broker (MB102411); Ohio Mortgage Company (185729); North North Carolina Carolina Mortgage Mortgage Lender (L-154769); North Mortgage Loan Act Certificate Certificate of Registration (SM501700.000); Oklahoma Mortgage Mortgage Broker Oregon Exemption; Pennsylvania Department Mortgage Br oker (MB001561); Or egon Wholesale Lender Ex emption; Licensed bbyy the P tgage Lender (#39094); Rhode Island Licensed Lender (#20132838LL); South Carolina ennsylvania Depar tment of Banking Mor Carolina Mortgage Mortgage Lender/Servicer Lender/Servicer (MLS-185729); South Dakota Dakota Mortgage Mortgage Lender Tennessee Mortgage Texas Mortgage Banker Exemption; Vermont Lender (#6411); Licensed by (ML.04880); T ennessee e Mor tgage License (109273); T eexas SML Mor emption; V ermont e tgage Bank er Registration; Utah Wholesale Lender Ex by the Virginia State Corporation Commission Lender License (MC-5664); Washington Washington Consumer Loan Company Company West Mortgage Mortgage Banker Wyoming Mortgage Lender/Broker Affairs Lender (#902914-00-00). (CL-185729); W est e Virginia Mor tgage Lender (ML-24836); Wisconsin Mor tgage Bank er (#185729); W yoming Mor tgage Lender/Br oker (#2250); Fannie Mae Seller/Servicer Seller/Servicer (#30519-000-4); HUD FHA Title II (#3094100002);Veterans (#3094100002);V Veterans e

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Rushmoree Home Loans w wee empo empower thing. At Rushmor w er and rise to


The Secret Formula for Optimizing Your Mortgage Lead Campaigns By Joshua Conklin

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Nine out of 19 lenders failed to attempt contact with all leads. With statistics like this, it’s no wonder a majority of all mortgage lead campaigns are destined to fail. Einstein’s definition of insanity is doing the same thing over and over, but expecting different results. Most sales organizations are reluctant to make big changes in their sales strategy, yet have the unrealistic expectation that results will improve significantly. We get it …

This calculation, coupled with a standard profit formula, can also be used to find the optimal lead volume necessary to break even, maximize profits or maximize revenues, depending on an organization’s ultimate goal. And the best news? The inputs to the formula can be specifically defined for each sales organization that wants to identify their own reps’ peak performance zones. This takes into account lifetime value, cost per lead and commission per sale for a more accurate lead assignment recommendation per rep, per day relative to these key factors. With these tools, sales managers can quickly identify the optimal balance of sales leads and reps based on their unique set of variables.

The five loan conversion tips every loan officer needs to know l Did you know that leads called within 60 seconds have a 391 percent better chance of converting? l Attempting contact at least six times can increase your contact ratio by 138 percent. l More than 50 percent of all aged leads are still interested in buying/refinancing 30 days after inquiry. l Sixty percent of loan officers make less than six contact attempts. l Making two calls versus one increases the chance of contacting a lead by 87 percent.

Remember, the key to optimizing your sales lead to sales agent ratio is a combination of identifying Peak Performance Zones and proper lead nurturing. With these key factors in mind, you will undoubtedly double your contact ratios, thus improving your pull-through conversion rates resulting in a lower cost per funded loan. Joshua Conklin is director of business development at and is an authority in the lead generation space. Joshua has more than 14 years of experience at developing strategic marketing platforms for the nation’s tops lenders and brokers nationwide. He may be reached by phone at (585) 496-7020, e-mail or visit

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

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making big changes isn’t always easy, especially when there is a lot on the line. So we put our resident sales scientists to the test, mining millions of sales calls to build out a formula for one of the most common questions we get asked from sales managers: “How many leads should I be assigning to my sales reps each day and when do I need to hire more sales reps based upon my lead flow?” After examining the relationship between the number of sales leads, the number of reps and conversion rates across hundreds of sales teams, a formula was created. This formula encompassed the optimal number of leads to assign to each sales rep to put them in what we call the “Peak Performance Zone.” Identifying this Peak Performance Zone, where utilization and conversion rate are at their optimal level, is an important factor underlying a sales organization’s efforts to meet its sales targets and support optimal revenue and profit growth. Lead conversion is a moving target, and you need to know where you stand with your lead vendors to determine where to put your marketing dollars. With so many options for buying leads, you have to find the source that works best for you and your team. Identify how the “leads” are generated, what type of traffic brought that prospect to a landing page or caused them to respond and take action. Furthermore, it’s imperative to understand other key factors, such as the number of times the lead is sold and how long after you purchase the lead is it sold again. This will have a direct impact on your contact and conversion ratios. Sending three or more purposeful text messages after contact has been made with a prospect can increase the conversion rate by 328 percent, according to a recent study conducted by Velocify. By understanding the optimal lead-to-rep ratio, sales managers can more easily staff against lead flow or scale up or down the number of leads per rep with a clear understanding of the impact on conversion rates, and ultimately, top-line revenue and profit growth. In previous studies and articles conducted by me over the years, I have shared that by simply staffing for weekend delivery can dramatically change the outcome of your lead campaign. While most companies accept weekend delivery, very few are staffed to call the leads in real-time. This puts you at a huge advantage if you are buying shared Internet leads since your competitors won’t get to that lead until Monday. This gives you a 74 percent conversion advantage right out of the gate. Little changes add up to a big difference. Leveraging your mortgage lead campaign with tracking and metrics will ensure a successful lead campaign. Clients that put leads under the microscope every day of course are looking at lead cost, contact and conversion ratios. But at the end of the day, you have to know what your cost per funded loan is.

EWSFLASH l OCTOBER 2013 l NMP NEWSFLASH l OCTOBER 2013 l NMP NEWS Delinquency Rates for Commercial and Multifamily Mortgages Decline in Q2

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Delinquency rates for commercial and multifamily mortgage loans declined in the second quarter of 2013, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report. During the second quarter of 2013, the 60+ day delinquency rate for commercial and multifamily mortgages held in life company portfolios decreased 0.01 percentage points to 0.08 percent. The 60+ day delinquency rate for multifamily loans held or insured by Freddie Mac decreased 0.07 percentage points to 0.09 percent. The 60+ day delinquency rate for multifamily loans held or insured by Fannie Mae decreased 0.11 percentage points to 0.28 percent. The 90+ day delinquency rate for loans held by FDIC-insured banks and thrifts decreased 0.26 percentage points to 2.16 percent. The 30+ day delinquency rate for loans held in commercial mortgage-backed securities (CMBS) decreased 0.74 percentage points to 7.81 percent. “Commercial and multifamily loan performance continued to improve during the second quarter, with delinquency rates falling for every major investor group,” said Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research. “The quarterly decline in the delinquency rate of loans held in commercial mortgagebacked securities (CMBS) was the largest on record, and delinquency rates for loans held by life companies and the GSEs remain low and fell lower during the quarter.” The second quarter 2013 delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios was 7.45 percentage points lower than the series high (7.53 percent, reached during the second quarter of 1992). The delinquency rate for multifamily loans held by Freddie Mac was 6.72 percentage points lower than the series high (6.81

percent, reached in the fourth quarter of 1992). The delinquency rate for multifamily loans held by Fannie Mae was 3.34 percentage points below the series high (3.62 percent, reached during the fourth quarter of 1991). The rate for commercial and multifamily mortgages held by banks and thrifts was 4.42 percentage points lower than the series high (6.58 percent, reached in the second quarter of 1991). The rate for loans held in CMBS was 1.21 percentage points below the series high (9.02 percent, reached in the second quarter of 2011). Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of ‘commercial real estate’ despite the fact that they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers or other incomeproducing properties. The FDIC delinquency rates for bank and thrift held mortgages reported here do include loans backed by owner-occupied commercial properties.

Independent Mortgage Banks and Subsidiaries Earning Nearly $200 Less Per Loan in Q2 Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $1,528 on each loan they originated in the second quarter of 2013, down from $1,772 per loan in the first quarter, the Mortgage Bankers Association (MBA) reported. “While overall volume remained relatively flat, we are seeing a shift in product mix towards purchase originations,” said MBA Associate Vice President of Industry Analysis Marina Walsh. “Per-loan production costs continue to rise and there are signs of pricing pressure as evidenced by the reduction in secondary marketing income.”

Among the other key findings of MBA’s Quarterly Mortgage Bankers Performance Report are: l In basis points, the average production profit (net production income) was 75 basis points in the second quarter of 2013, compared to 86 basis points in the first quarter. l Average production volume was $439 million per company in the second quarter of 2013, from $442 million per company in the first quarter. The volume by count per company averaged 1,921 loans in the second quarter, from 1,954 in the first quarter. l The purchase share of total originations, by dollar volume, increased to 52 percent in the second quarter of 2013, up from 40 percent in the first quarter. This was the first time the purchase share passed 50 percent since the third quarter of 2011. For the mortgage industry as whole, MBA estimates the purchase share at 36 percent in the second quarter of 2013, up from 26 percent in the first quarter. l Secondary marketing income declined to 263 basis points in the second quarter, compared to 274 basis points in the first quarter. l Total loan production expenses— commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations—increased to $5,818 per loan in the second quarter, from $5,779 in the first quarter. l Personnel expenses averaged $3,808 per loan in the second quarter, up from $3,785 per loan in the first quarter. l The “net cost to originate” was $4,207 in the second quarter, up from $4,182 per loan in the first quarter. The “net cost to originate” includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread.

l The average number of production employees per firm rose to 261 employees in the second quarter, from 251 employees in the first quarter. On a repeater company basis, the average number of production employees per firm rose to 271 employees in the second quarter, from 251 employees in the first quarter. l Productivity was 2.9 loans originated per production employee per month in the second quarter, down from 3.1 in the first quarter. l Ninety-two percent of the firms in the study posted pre-tax net financial profits in the second quarter of 2013, down from 94 percent of the firms in first quarter.

FFIEC Makes HMDA Data Available The Federal Financial Institutions Examination Council (FFIEC) has announced the availability of data on mortgage lending transactions at 7,400 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA). Covered institutions include banks, savings associations, credit unions, and mortgage companies. The HMDA data made available covers 2012 lending activity—applications, originations, purchases and sales of loans, denials, and other actions related to applications. The data includes disclosure statements for each financial institution, aggregate data for each metropolitan statistical area (MSA), nationwide summary statistics regarding lending patterns, and Loan/Application Registers (LARs) for each financial institution (LARs are modified to protect borrower privacy). The FFIEC prepares and distributes this information on behalf of its member agencies. The HMDA data shows the disposition of loan applications and include information on loan amount; loan type (such as conventional, Federal Housing

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Total Mortgage Launches New Guaranteed Purchase Loans Program

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Total Mortgage Services LLC has announced has launched its guaranteed purchase loans program. The program will guarantee a borrower that their purchase mortgage loan will close in 30 days or the company will pay the first month’s mortgage payment. The guarantee is for all borrowers that formally apply for a loan and are preapproved by Total Mortgage. “Industry data confirms it currently takes many lenders more than 45 days to close a purchase loan. This is unacceptable—especially as we transition from a buyer’s to seller’s housing market and turn times become more critical for homebuyers and realtors,” said John Walsh, president of Total Mortgage. “Our Total Guarantee 30 program will close real estate purchase transactions faster and build trust throughout the lending process with borrowers and our referral partners.” “We understand the importance of closing a loan quickly while maintaining a strict attention to detail,” Walsh said. “There’s nothing more frustrating for the buyer, the seller, and the lender than a missed closing date. It costs everyone money and time and in some instances can cause a sale to fall apart. With our program, our customers will no longer have to worry about the possibility of a missed closing date.”

MISMO Announces New Reference Model Versions MISMO is proud to announce the elevation of Reference Model Versions 3.0 and 3.1 to “Recommendation” status. Recommendation status is the highest possible maturity level for a MISMO standard. The MISMO Residential Standards Governance Committee elevated Versions 3.0 and 3.1 to Recommendation status based on evidence of multiple successful industry implementations and the advice of the MISMO Architecture Workgroup. “The MISMO Reference Model and

Logical Data Dictionary are the result of thousands of hours of effort and collaboration from volunteers across the mortgage industry,” said Harry Gardner, chair of the Residential Standards Governance Committee and president of SigniaDocs. “We are grateful for their ongoing efforts and for the generous support of their companies as we continue to significantly expand and enhance the Reference Model in Version 3.3, to provide the mortgage industry with the framework needed to meet the fast-changing regulatory and compliance challenges we face today.” MISMO Version 3, first introduced in March 2009, was a significant shift forward for the MISMO standards. Development of Version 3 required that all Version 2.x standards be reconciled into a single XML Schema-based Reference Model providing common data definitions and data structures across multiple business lines. Version 3.0 was released as a Candidate Recommendation in December 2009 with emphasis on origination and loan delivery. Version 3.1 was released soon thereafter to include the remainder of the lifecycle.

360 Mortgage Gets Aggressive With New Conforming Elite Program 360 Mortgage Group has announced it is entering the top tier mortgage market with an aggressive pricing program named Conforming Elite. This new program was developed because of high demand from the mortgage broker community to further extend their relationship with 360 Mortgage beyond HARP-related products. The Conforming Elite program is part of the company’s ongoing commitment to the wholesale channel and its focus on offering the right mix of products with the most competitive pricing to help mortgage brokers grow their business. “The introduction of our Conforming Elite program now positions 360

Mortgage as the one-stop/go-to wholesale lender for both top tier mortgage products and higher LTV loans such as HARP,” said Mark Greco, president and founder of 360 Mortgage. “Mortgage brokers partner with 360 Mortgage because of our total value approach, which includes easy-to-use and efficient technology, product knowledge and best-in-class service. With the introduction of our Conforming Elite program, mortgage brokers now can benefit from two additional key value propositions, an expanded product portfolio and the most competitive pricing in the wholesale channel, to help clients with top credit scores and low LTV purchase or refinance of a home.”

clients,” said Hudson. “The threat of increasing interest rates stripping away a borrower’s loan approval is removed from the equation. This means less fallout and a greater opportunity to deliver excellent service to our borrowers and referral partners. In addition, loan professionals want to work for a company that offers these types of innovative programs. Prospective employees are drawn to the ability to offer the ‘Lock and Shop’ program.”

PNL Unveils New Program for Retail Originators

Bexil Corporation (BXLC) has announced that its subsidiaries Bexil American Mortgage Inc., through its wholesale division American Mortgage Network, and Castle Mortgage Corporation have officially launched AmnetCastle Express. AmnetCastle Express is designed specifically to provide wholesale mortgage brokers unparalleled access and control over their pipeline. “AmnetCastle Express supports independent brokers wherever they do business, allowing them to access their pipeline and get quick prices from mobile devices, such as tablets and mobile phones and to give each broker’s processor instant, real time access to the broker’s pipeline and dedicated underwriting team in order to close loans quickly,” said George C. Hawkins, III, chief executive officer of Bexil American Mortgage Inc. and Castle Mortgage Corporation. Hawkins noted, “AmnetCastle Express offers wholesale mortgage brokers the latest technology on a single, nationwide platform giving them the ability to price loans on the go, submit and clear conditions, and add notes to the loan file, all from one portal, accessible from any Internet browser, on any outstanding personal service, we expect that this new technology will be very well received device with an Internet connection. Backed up with our leading products and pricing and in today’s competitive environment.”

Premier Nationwide Lending (PNL) has rolled out its “Lock and Shop” program through its retail origination channel. “There is no question mortgage rates are increasing,” said Brad Sullivan, CEO of Premier Nationwide Lending. “With the ‘Lock and Shop’ program, we will credit approve a home buyer and lock in their interest rate before they find the property they want to call ‘Home.’ We created this program with the consumer in mind. The home buying process is stressful. However, we don’t feel it should be. Let us take the stress about rising interest rates away.” With the “Lock and Shop” program from PNL, if rates go up, the borrower is protected. If mortgage rates decrease, the homebuyer will have an option to “float down” to the lower rates. John H.P. Hudson, production manager and vice-president of Regulatory Affairs for PNL, is excited about this new program for homebuyers and the positive impact it will have on the company’s growth. “Our licensed mortgage professionals are thrilled to offer this program to their

Bexil and Castle Launch Pipeline Access Product

CFPB Launches New Online HMDA Tool

MortgageDashboard has released the fifth version of their flagship mortgage software. Version five introduces a brand new user experience that gives order to complexity for lenders originating loans. Functionality begins with design. Version five’s interface now incorporates the full-width of the user screen, using an interface that simplifies graphs, lead pipelines and forms by spacing out each item comfortably using a “display density” allows users to process more information at one time while exerting less effort. “We have spent the summer reimagining how users should experience loan origination software,” said

Specialized Business Software has announced the release of Docunym 2.2, an enhancement to its Webbased document management and workflow solution enabling users to manage and retrieve loan documents faster and more efficiently. Docunym 2.2 allows for easy and secure document sharing with non-Docunym users while keeping existing encryption and audit trails in place. The new system also includes an enhanced document upload feature that

enables users to drag and drop files from their computers into the appropriate Docunym folder. Users are also able to select and work with batches of documents so that updates and workflow actions are performed across all selected records resulting in increased efficiency. “Docunym 2.2 provides the capability to securely communicate across geographic, technological and business lines,” said Steve Wiser, president and founder of Specialized Business Software. “The upgrade was designed specifically to allow data to easily transcend different technology platforms without sacrificing security.” continued on page 18


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

MortgageDashboard Launches Version Five of Its Flagship Product

Specialized Business Software Launches Docunym 2.2

The Consumer Financial Protection Bureau (CFPB) has launched an online tool to provide consumers with easy access to public mortgage information collected under the Home Mortgage Disclosure Act (HMDA). The tool enables greater transparency by helping inform people of trends in their local mortgage markets. “Just as the real estate motto ‘location, location, location’ was true before the recent financial crisis, it was true for the crisis. Every community was affected differently,” said CFPB Director Richard Cordray. “Our tool puts valuable information into the hands of the public in an accessible way, so they can understand what is happening in their local mortgage markets. A more transparent mortgage market will lead to a better marketplace and better outcomes for consumers.” The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred Home Mortgage Disclosure Act (HMDA) rulemaking authority from the Federal Reserve Board to the CFPB on July 21, 2011. While the CFPB has the rulemaking authority, other federal banking regulators and the Department of Housing and Urban Development still share other authorities. Each year, the Federal Financial Institutions Examination Council (FFIEC), comprised of the federal banking regulators, releases the full public HMDA data set to the public. The CFPB tool being released today focuses on the number of mortgage applications and originations, in addition to loan purposes and loan types for 2010 through 2012. It looks specifically at first-lien, owner-occupied, one- to four- family and manufactured homes. Using the tool, the public can see nationwide summaries or they can choose interactive features that allow them to isolate the information for metropolitan areas.

MortgageDashboard CTO Jorge Sauri. “We believe this new interface is conducive to better functionality and a more streamlined workflow. With what we’ve been able to achieve together, we see version five as a new beginning for loan origination software.” Version five also features an impressive color scheme that draws attention to more popular icons, while offering simplistic clarity everywhere else. Incorporating concepts from color psychology, loan officers can now spend less time navigating through bulky loan applications and lead pipelines. The resulting user experience donates the ability to navigate detailed information easily.

Centennial Perspective By Adrienne Ainbinder

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Each month, we look at various valuation issues, best practices, technology developments and so forth, to provide clearer insight into our world. For Veros, and the vantage point of this column, that world is very specifically residential real estate valuations. We discuss the application of analytic tools and valuation workflow technology. We opine on the interrelationship between appraisals, AVMs and BPOs and the regulations that respectively govern them; and we consider how all these strategies and industry developments work together to make mortgage lending and investing safer and more profitable. We do this so, in turn, we can create a safer lending environment for the consumer and ultimately, foster a more stable mortgage economy. This month’s column comes alongside MBA Annual’s centennial year and the launch of a new campaign for Veros, which focuses on the issue of “perspective.” As these two points converge, it seemed appropriate to broaden the ValueNation point of view momentarily to consider the broad stroke of perspective changes that have swept over our industry through this period of market recovery. Sir John Lubbock wrote: “What we see depends mainly on what we look for,” which poses an intriguing point of view in regard to valuations and measures taken toward the return of a healthy mortgage market. In the immediate wake of the market crash, we collectively saw how an overemphasis on consumer credit (at the expense of collateral understanding) placed lenders and investors in far more precarious positions than had been anticipated. We saw appraisers, lenders, technology providers and investors pointing fingers at each other without true loan-level data to audit against. And most certainly, we saw issue after issue that warranted better regulation, reform or at minimum “guidance.” The heroes within our industry though are the ones looking for and implementing solutions to address these and the many other underlying causes of the collapse. Who, instead of looking for cause and effect, saw opportunities to improve the system. This group realized that common among many issues contributing to the collapse was a lack of perspective. As a result of the work of this group, in a few short years, we have seen some amazing industry transformation occur. We’ve seen true opensource data adoption through MISMO. We have also seen appraisal forms vendors, appraisers, lenders and technology providers adopt the Uniform Appraisal Dataset (UAD) which has gained ground not just with its sponsors, Fannie Mae and Freddie Mac, but also with FHA, VA and Ginnie Mae. Undeniably, our perspective has also been changed by the industry-wide collaboration that occurred under the Uniform Collateral Data Portal (UCDP) which has added such transparency to the industry that policies, like the Representation & Warrants model, could be amended based on better availability and quality of electronic appraisal data. These programs have pushed our level of understanding forward in a profound way because for the first time—from origination to securitization—we have a shared perspective on the loan file and a common format through which to gain understanding. Adrienne Ainbinder is vice president of marketing at Veros Real Estate Solutions. For more information, call (714) 415-6310 or visit


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Administration, or Veterans Administration); purpose (home purchase, home improvement, or refinancing); property type (one- to four-family, multifamily, or manufactured housing); property location (MSA, state, county, and census tract); applicant characteristics (race, ethnicity, sex, and income); and pricing-related data. The data also show whether a loan is subject to the Home Ownership and Equity Protection Act (HOEPA) and whether a loan is secured by a first or subordinate lien, or is unsecured. The data as released by the FFIEC include census tract characteristics (minority composition and income). For 2012, the number of reporting institutions of 7,400 fell three percent from the number in 2011, continuing a downward trend since 2006 when HMDA coverage included just over 8,900 lenders. The decline reflects mergers, acquisitions, and the failure of some institutions. The 2012 data include information on 15.3 million home loan applications (of which nearly 9.8 million resulted in loan originations) and 3.2 million loan purchases, for a total of nearly 18.5 million actions. The data also include information on about 477,000 requests for preapprovals related to a home purchase loan. The total number of originated loans of all types and purposes reported increased by about 2.7 million, or 38 percent, from 2011, in part because of a 54 percent increase in the number of refinancings. Home purchase lending also increased, but by a more modest 13 percent.

OCC: Performance of First-Lien Mortgages Show Improvement in Q1 The performance of first-lien mortgages serviced by large national and federal savings banks continued to improve in the first quarter of 2013, according to a report released by the Office of the Comptroller of the Currency (OCC). The OCC Mortgage Metrics Report for the First Quarter of 2013 showed evidence that the strengthening economic conditions, servicing transfers, home retention efforts, and home forfeiture actions have contributed to improving the performance of home mortgages in the first quarter of 2013. The report showed 90.2 percent of mortgages were current and performing at the end of the quarter, compared with 89.4 percent the prior quarter and 88.9 percent a year earlier. Seriously delinquent mortgages—60 or more days past due or held by bankrupt borrowers whose payments are 30 days or more past due— decreased to four percent compared with 4.4 percent at the end of 2012 and 4.5 percent a year ago. The percentage

of mortgages that were seriously delinquent has decreased 10.4 percent from a year earlier. The percentage of early stage delinquencies, mortgages that were 30-59 days past due, was 2.6 percent, down 9.3 percent from the previous quarter but up three percent from a year ago. The number of loans in the process of foreclosure at the end of the first quarter of 2013 decreased by 28.6 percent from a year ago to 907,231. Servicers initiated 178,356 new foreclosures during the quarter—a 13.8 percent increase from the previous quarter but a 37.8 percent decrease from a year ago. The number of completed foreclosures fell to 84,972, a 19.7 percent decrease from the previous quarter and a 30.9 percent decrease from a year ago. Servicers implemented 348,733 home retention actions—including modifications, trial-period plans, and shorter term payment plans—compared with 131,704 home forfeiture actions during the quarter—completed foreclosures, short sales, and deed-inlieu-of-foreclosure actions. The number of home retention actions implemented by servicers decreased by five percent from the previous quarter and 1.2 percent from a year earlier. Nearly 94 percent of modifications in the first quarter of 2013 reduced monthly principal and interest payments; 56.4 percent of modifications reduced payments by 20 percent or more. Modifications reduced payments by $361 per month on average, while modifications made under the Home Affordable Modification Program (HAMP) reduced monthly payments by an average of $547. Servicers have modified 3,021,617 mortgages from the beginning of 2008 through the end of the fourth quarter of 2012. At the end of the first quarter of 2013, 49.5 percent of these modifications were current or paid off. Another 6.4 percent were 30 to 59 days delinquent, and 12.4 percent were seriously delinquent. Another 7.3 percent were in the process of foreclosure, and 7.4 percent had completed the foreclosure process.

Despite Healthy Market, 30 Percent of Americans Unlikely to Qualify for a Mortgage Despite a healing housing and mortgage market, three out of 10 Americans remain unlikely to qualify for a mortgage, according to a Zillow Mortgage Marketplace analysis. The research analyzed 13 million loan quotes and more than 225,000 purchase loan requests on Zillow Mortgage Marketplace in September 2013, and compared it to a continued on page 18


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Federal Regulators Issue Revised QRM Proposal By Laurie Spira On Aug. 28, 2013, the Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), Federal Housing Finance Agency (FHFA), and U.S. Department of Housing & Urban Development (HUD) issued a revised qualified residential mortgage (QRM) proposal. The proposal, which revises a proposal originally published in 2011, implements Section 941 of the Dodd-Frank Act. Section 941 requires sponsors of asset-backed securities to retain not less than five percent of the credit risk of assets that serve as collateral for such securities. Section 941 exempts securitizations that consist exclusively of QRMs from the risk retention requirements, deeming such securitizations secure enough to be exempt from the extra requirements. The revised proposal includes significant modifications of the Agencies’ original proposal. The major changes relating to the QRM exemption include: l A mortgage that meets the requirements for a qualified mortgage as defined by the Consumer Financial Protection Bureau’s Ability-to-Repay rule will meet the QRM definition, as well. l The proposal provides for a total debt-to-income ratio of 43 percent, rather than the front-end and back-end ratio of 28 percent and 36 percent that had been originally proposed. l The proposed downpayment requirement has been eliminated.

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The Agencies are also seeking comment on an alternate approach, a so-called “QM-Plus,” which would add the following standards to the QM criteria: l For purchase money loans, a maximum loan-to-value (LTV) of 70 percent and a requirement that the loan be a first lien, with no other recorded liens. l For refinance loans, maximum combined loan-to-value (CLTV) of 70 percent. l Payment history requirements for all debt obligations, and requirements related to bankruptcy, judgments, repossessions, foreclosure and loss mitigation actions.

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similar study conducted in September 2010. Borrowers with credit scores under 620 who requested purchase loan quotes for 30-year fixed, conventional loans were unlikely to receive even one loan quote in September 2013, unchanged from three years ago, even if they offered a relatively high down payment of 15 to 25 percent. Nearly three out of 10 Americans, or 28.4 percent, have a credit score of 620 or lower, according to data provided by Meanwhile, the bar has risen for borrowers to get the lowest available mortgage rates. The best mortgage rates are typically reserved for those with credit scores of 740 or higher, compared with 720 in 2010. According to, 40.3 percent of Americans currently fall into this category. In 2010, 47 percent of Americans had credit scores over 720 and were able to get the best rates. Borrowers with credit scores above 740 did not receive significantly better mortgage rates. “Despite all-time high levels of affordability in the housing market, tightened lending standards mean that nearly one-third of Americans are unlikely to be able to achieve the American dream of homeownership because they can’t qualify for a mortgage due to a low credit score,” said Erin Lantz, director of mortgages at Zillow. “Your credit score is the single most important factor in determining your mortgage interest rate and

new to market

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.

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In addition, under the proposed QM-Plus definition, loans that qualify as QMs because they are eligible for GSE purchase or fall within small creditor or balloon loan exemptions would not qualify as QRMs. Comments on the revised proposal are due by Wednesday, Oct. 30, 2013.

ReverseVision Releases Appraisal Product Upgrade

Laurie Spira is chief compliance officer with Torrance, Calif.-based DocMagic Inc. She may be reached by phone at (800) 649-1362, ext. 6446 or e-mail

ReverseVision Inc. has released Version 4.0.0 of its flagship ReverseVision product, ReverseAccessVision (RAV), a powerful integrated new module, is included in this release. RAV will provide a full library of services tightly integrated into the core ReverseVision originations system. RAV currently includes Interthinx, a fraud detection service, and the latest release, appraisals via Mortgage Information Services Inc. (MIS). The appraisal service integration through RAV enables a user to order an appraisal by simply clicking a button. The ReverseAccessVision system manages the order, status and delivery of the appraisal. With each appraisal ordered, the system will automatically enter the order date as soon as the request is submitted successfully.


monthly payment. To avoid any surprises when buying a home, check your credit score and report at least six months before you intend to buy to see if there are any costly inaccuracies, pay down high-balance lines of credit and make sure your bills are always paid on time.” In the 2013 study, borrowers with credit scores of 740 or above got an average low annual percentage rate (APR) of 4.42 percent for conventional 30-year fixed mortgages. Borrowers with mid-range credit scores between 620 and 739 received APRs, on average, between 5.09 and 4.47 percent, with the APR rising as the credit score drops. Those with credit scores below 620 received too few loan quotes to calculate the average low APR.

“The new appraisal service is an incredible time saving feature for our clients and will be a major asset in our already streamlined process of creating reverse mortgage loans,” said Jeff Birdsell, ReverseVision product manager. The system will also enter dates like “Appraisal Scheduled,” “Appraisal Date” and “Appraisal Received,” as well as all the detailed information on the appraiser directly into the ReverseVision system— all of this will be done automatically. ReverseVision has also implemented a new “Appraisal Services” screen containing all of existing ReverseVision appraisal fields as well as many new ones. “The combination of our appraisal process with ReverseVision’s technology offers a valuable time-saving advantage to users, allowing them to focus on their core tasks rather than on order submission and tracking through a separate process,” said David Stroop, regional vice president of MIS. continued on page 87


n Connecticut Mortgage Professional Magazine n OCTOBER 2013



N A T I O N A L l


The President’s Corner: October 2013

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As we now are in the days of the 2013 NAMB National Conference, I want to thank all of you for this great opportunity that we are able to bring this year’s attendees. A great deal of extra hard work went into making this Conference better this year than last year, and I think that we have accomplished this today. A great deal of thanks goes to John Stevens and his Conference Committee, along with Vince Valvo, for the outstanding agenda and speakers. You cannot come to this conference and not take at least something home that you have learned that you didn’t know before. The exhibit hall will be crowded with every booth sold and every type of lender and vendor on hand. Please make sure that as you walk through the exhibit hall, you take the time to chat with every one of them and express your gratitude for being there. These are the people who believe in the mortgage broker and are here to prove it. As you are probably aware, I start-

ed a new newsletter that is sent out every Monday, the “Monday Morning Messenger.” This newsletter is designed to keep you up-to-date on what we are doing as a board and what the committees are doing to make your experience as a member of NAMB—The Association of Mortgage Professionals better. Please feel free to drop me a line and tell us what you think and let me know of anything you would like to see addressed in the newsletter. This is in line with making sure you are an informed member of NAMB, and are always getting the information while it is fresh and new. I would also like to thank all of the account executives out there who are doing everything they can to push for membership in NAMB. Our Membership Committee is always looking for ways to have more benefits for you and for all NAMB members. They are the ones who have found Meridian One and all the rest of the benefits of being a member of the association. Be on the lookout for their update that will be coming out in late October with new benefits for the entire membership.

It’s Crunch Time By Richard M. Bettencourt Jr., CRMS, CMHS Well, we’re only a few months away from the implementation of the Qualified Mortgage (QM) Rule and the infamous three percent points and fees cap, and I’ve received numerous calls as to where we stand on this very hot topic! I’ll do the best I can to give the most detailed answer to that very question! Many of you are aware that we have two pieces of legislation roaming the halls of Rayburn, Hart, Cannon and the other House and Senate buildings hoping to raise the eyebrows of those who sit in those offices. HR 1077 and SB 949 are hanging in there. We’ve got a total of 64 co-sponsors, 52 Republicans and 12 Democrats, as of the writing of this article. The real issue here, however, is that we have a total of one co-sponsor for Senate Bill 949. We know going into this that gaining support from the Senate would be difficult, and it’s proven to be just that … difficult. So, what does that mean? Well, it means

that we have to increase our efforts in these last couple of months to gain support from our Senate Democrat friends and constituents. Please reach out to your congressional leaders today, and if you happen to be in a district or state that has a Senate Democrat on the Senate Banking Committee, please reach out to them and explain how this bill will help the consumer with future attempts at obtaining residential financing. On Sept. 11-12, I, along with NAMB President Don Frommeyer, Past Government Affairs Committee Chair John H.P. Hudson and NAMB Lobbyist Roy DeLoach, were in Washington, D.C. for some meetings with Hill staffers and industry regulators. For those reading this who are members of NAMB, you’ve seen my video on how those meetings went, and the positive feedback we got while there. I am sure there are many of you reading this who are not members of NAMB, and before I tell you how the meetings went, I ask the simple question: Why are you not a member of NAMB? Is the industry that slow, that you cannot afford to pay the $50 per year to be


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It is very important that you continue to go to our Web site ( to make sure you are up to date on the latest when it comes from our Government Affairs Committee. Rick Bettencourt and Fred Kreger are constantly updating the information so you have it at your fingertips. Also go to our Facebook Page as John H.P. Hudson will be posting items and updates there for you to see as well. I hope that you all will be attending the Delegate Council Meeting while in Vegas. There are a lot of great items that we will discuss. You can attend the meeting as a guest and sit in the back of the room … you just cannot participate, as participation is for the delegates from your states. However, a meeting like this may excite you to increase involvement in your NAMB state affiliates and that is how you can get on Delegate Council to attend these meetings. The Awards Banquet will be held Sunday night in Las Vegas, and tickets can be purchased through the Web site. This is a year that you will want to go and see who the Mortgage Professional of the Year and the Kathy Love Volunteer of the Year will be. These are the two highest awards that NAMB awards to their membership.

The Awards Committee had a large number of nominees this year for both categories. Come and see which one of your co-members walks away with an award. It will be a night to remember, so make this event a part of your conference trip. I would also like to thank all of you who sent me notes and e-mails about my umpiring in the Big League World Series. Your words are inspiring, and I thank you for your thoughts. I can assure you that this was one big item on my Bucket List, and I won’t come down from this excitement for a long time. It’s hard to believe that I waited so long for this, and that it is now over and done. And last but not least, Kay Cleland and I have another bet going for membership. Please stop by the NAMB Booth in Vegas and see what all of the exhilaration at the booth is all about. If you are not a member, please come prepared. We are shooting for an alltime great time. I look forward to seeing all of you in Vegas! Sincerely,

part of an organization that is fighting for you each and every day in Washington, D.C.? With more than 100,000 NMLS-registered loan originators in the United States, it’s quite sad that so many of this population finds it so unimportant to invest in their industry. Does one need a tangible or touchable form of a benefit before they’ll invest in their industry? That’s a discussion for another time! While we were in D.C., we presented some very compelling data showing the unequivocal benefit the broker model brings to our consumers. Let’s be honest, once the SAFE Act, Mortgage Disclosure Information Act (MDIA) and the Federal Reserve Board’s Loan Originator (LO) Compensation Rules went into effect, it mandated that the broker community provide immediate benefits to the consumer. That’s the data we showed them. They were so impressed by this data that they asked us to reach out to our broker membership for a larger sample set. NAMB and our Government Affairs team is in the process of compiling this data and we are hopeful that we will be able to return to Washington in late October or early November to present our findings. Perhaps this data will be the lit-

tle push needed to get a few minor changes enacted that will level the playing field. The dialogue at each of our meetings was always very positive and uplifting, and it always centered on helping and protecting consumers. Moving forward over the next two months, NAMB is extremely excited to work with those on Capitol Hill and our industry regulators, such as the Consumer Financial Protection Bureau (CFPB), to ensure that the constituents of the United States of America are provided equal and fair access to credit no matter which conduit they so choose to utilize. In closing, and as I do in my Government Affairs videos, I kindly ask each of you who are not members, to join NAMB today. Join the organization that has been around for over 20 years fighting for the consumer and you, the mortgage professional!

Donald J. Frommeyer, CRMS, President NAMB—The Association of Mortgage Professionals

Richard M. Bettencourt Jr., CRMS, CMHS of Danvers, Mass.-based Mortgage Networks is Government Affairs Committee Chair of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (978) 777-7500 or e-mail



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Goals of the NAMB Communication Committee By John H.P. Hudson, CRMS I am honored to accept the position of Communications Committee Chair of NAMB—The Association of Mortgage Professionals. Three areas required for any organization to be successful are leadership, purpose and communication. Without one of these, the organization will have a difficult time succeeding (you don’t see too many two-legged barstools). NAMB’s purpose is simple … promote and protect mortgage professionals and small business in their effort to provide safe and equal housing to all consumers. NAMB’s fearless leader, Don Frommeyer, has done a wonderful job executing NAMB’s purpose and principles. As I sit here writing this, my goal is to lay out some goals (albeit lofty) in order to set a path for a

more effective communication strategy between NAMB, its members, its future members and the general public. First and foremost, whatever you read below this point, know this … I cannot do it alone. Wherever the NAMB Communications Department goes, it will be by committee. Therefore, I am looking for volunteers to help me express and deliver the execution of NAMB’s purpose, as well as helping the recruitment and retention of members. So, who wants to help? I would prefer to have a vice-chair as well as regional co-chairs. When I was the Government Affairs Committee Chair, I would always tell people, “We need your time and your money. Preferably both … but I will settle for either.” If you aren’t able to help, please make a PAC donation at this time. If anyone understands being busy, I think I have a pretty good idea. Not only am I the proud father of a five-month old daughter, I am the vice president of regu-

A Message From The NAMB Bylaws Committee Chair Members of NAMB—The Association of Mortgage Professionals may have recently received an e-mail that included a copy of the association’s current bylaws and proposed changes. We are excited for

the future of NAMB and making a few revisions with how things are structured and defined within our bylaws. Times have certainly changed and we believe some of the proposed revisions will help adapt to these changes, while simplifying and redefining purpose in our association. Some of the highlights include updating professional members and voting

By John Councilman, CMC, CRMS If you have never been to a major convention of NAMB—The Association of Mortgage Professionals, you may not know about the Delegate Council. The Delegate Council is what separates NAMB from every other trade association in the real estate industry. Some trade associations are run by a chief executive. Others select a board that runs the association. NAMB is very different. Rather than being an association run from the top down, NAMB is run from the ground up. The Delegate Council is much like the U.S. Senate … every state affiliate, large

or small is allowed two delegates and gets two votes. Delegate Council is where NAMB members choose who the leaders of NAMB will be. It also sets NAMB policies, NAMB bylaws and NAMB dues. It is a group with amazing power given to the members of NAMB. If you haven’t attended a Delegate Council Meeting, you are in for an interesting time. Every Delegate Council Meeting is open to all NAMB members. Even NAMB Board Meetings are open to NAMB members. It is a tradition at NAMB to have its leadership face its members regularly. After all, they are the people who chose them. This Delegate Council will be voting on important proposed changes to NAMB’s bylaws. The changes include



latory affairs for a $2 billion-a-year mortgage bank, and I manage wholesale, retail and correspondent production. I get it … we are all busy. However, if everything goes as planned, I won’t need more than one hour of your time every other week (and an occasional PAC donation). The crux of my plan for effective communication is simple—consistency. If we can deliver a weekly or biweekly enewsletter which promotes and updates the hard work of other NAMB volunteers, specifically the Government Affairs Committee, then not only will NAMB members be informed of important mortgage-related issues, but also future members, regulators, legislators and the general public. The purpose of the regional cochairs would be to help provide content and distribute the NAMB message. This will be extremely important considering the 2014 midterm elections are coming soon to a precinct near you. A lot of folks often ask, “What does NAMB do for me?” Well, besides working tirelessly to help mortgage professionals, NAMB offers exclusive benefits only NAMB members will receive, such as

important discounts to Lowes, The Bond Exchange, Sprint, Liberty Mutual, FedEx, OfficeMax, EasyMortgageApps, USA Business Lending, Follow Your Customer Inc., Brokers Compliance Group, and more. Wow … that’s already worth the price of admission, but not everybody knows these benefits exist. In addition, NAMB offers mortgage professional certifications to help distinguish yourself from the competition. Yet again, not enough people know about it. So, who is with me? I know everyone is busy, but I do not ask for a major time commitment … just a little help spreading the good word. And if you are unable to contribute as little as two hours each month, please visit and consider helping with NAMB’s efforts on the legislative front.

rights to be defined by those with direct or indirect NMLS numbers, rather than price of membership. In addition, definitions have been updated to accommodate changes in the primary mortgage market and work together with the states to simplify the process to advance membership for both the states and NAMB. Many thanks to Chic Reid from Maryland for all of his hard work on drafting the proposed revisions as a member of the Bylaws Committee. We look forward to discussing the details at the Delegate Council Meeting this year

during NAMB National. For any questions, please feel free to contact me directly at

major revisions to NAMB’s membership categories. It is in the sole power of the Delegate Council to approve these changes or not. If your state does not send a delegate, your voice and vote will not be heard. NAMB is the recognized voice of mortgage professionals across America. Even if you are not a NAMB member, elected officials listen to NAMB as your voice. It is important that the collective voices of the various areas around the United States shape NAMB into a truly reflective voice. Surprisingly, a few states fail to send representatives to Delegate Council. They claim several hundred dollars to come to Las Vegas is beyond their budget. If you come to Las Vegas and your state fails to send a representative, let them know that is one of the reasons why you pay state dues. If your state is too small to have an association, let us know that you are interested in representing your state. If you

are a Platinum NAMB member, you are eligible to be a delegate at Delegate Council. Your NAMB Board, including the president, receives no pay. No board member is reimbursed for their travel expenses. We are all volunteers who care enough about our profession to spend our own money and our own time to make certain we all have the ability to make a living and serve the public. Make certain your state is sending two delegates so your voice is heard. If they aren’t, step up and volunteer to represent your state and your profession. See you in Vegas!

John H.P. Hudson, CRMS is Committee Chair for NAMB—The Association of Mortgage Professionals. John was recently promoted to vice president of regulatory affairs at Premier Nationwide Lending. He may be reached by phone at (817) 2474766 or e-mail

Andy W. Harris, CRMS, president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc., is Bylaws Committee Chair of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail or visit

John Councilman, CMC, CRMS of AMC Mortgage Corporation in Fort Myers, Fla. is vice president of NAMB—The Association of Mortgage Professionals and Delegate Council Chair. He may be reached by phone at (239) 267-2400 or email


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

What is the NAMB Delegate Council?

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By Andy W. Harris, CRMS




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What You Do Not Know Can and Will Hurt You By Linda McCoy, CRMS You can watch the nightly news, listen to any number of pundits on television or radio, or maybe have your neighbor fill you in on what is happening to our industry. All will give their opinion and expertise on the subject of our mortgage industry and its future, but can we depend on their information? In January 2014, changes are coming when it comes to the law and how it affects mortgage industry, we have to know our source of knowledge is sound and valid. Professionals in the mortgage industry have been terrified of the future. We hear so many rumors and opinions. We become confused, frustrated and scared because we think we do not have anyone to help guide us through this maze. Where can we find in all the controversy and confusion a group that has our best interest at heart and will go to Washington, D.C. to sit down for us with

the lawmakers? Will we each have to individually hire professional lobbyists to insure that our voice is heard? Associations let you know what really is happening and make educated suggestions on what we individually can do to help make a difference as a group. All lawmakers and regulators respect strength in numbers. Your association should be well-informed and proactive as your representative. Your association should provide relevant and timely information to its members. NAMB hosts monthly teleconferences, and your association should be deeply involved with any controversial situation that affects your business and how it is operated. NAMB Board members travel to Washington, D.C. any time it is needed. Your association should be concerned about your ability to operate in a free market, and NAMB Board members are at the forefront helping to protect our rights. Your association must be available for your questions and concerns, and NAMB Board members have an open door policy for its members.


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Your association must serve as a body of individuals working together to give you the knowledge you need to build a successful business. The NAMB Board members are individuals working in our industry and want to be just as successful as its members. Does your association give you the opportunity to talk to your congressmen and congresswomen in Washington, D.C.? NAMB provides an opportunity once a year for its members to gather in Washington, D.C. for the members in state groups to sit down with their senators and representatives to discuss industry-related topics. It is something we should all experience. Does your association represent you in a professional and energetic way? NAMB Board members have the respect of all they come in contact with because they are professional businessmen and businesswomen. You must support your association. You have responsibilities when you join an association. NAMB’s annual dues usually cost a little less than a really nice meal. In today’s environment you must get involved in your association. Do not just be a number, be known where it counts. Your peers need you to join and step forward to be counted. You will have

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


In Its Second Year, NAMB+ Continues to Grow and Expand NAMB Member Benefit Opportunities By John G. Stevens, CRMS By now I hope most, if not all of you, are aware of NAMB+ and the array of discounts and other benefits available to NAMB members thanks to the tremendous strategic partners we have forged relationships with. If you have not done so already, I strongly urge you to explore the products and services that each of these strategic partners offer and thank them for their support of NAMB and our industry by purchasing their products, engaging their services and encouraging your friends and colleagues to do the same. For those of you who may not be particularly familiar with NAMB+ yet, we are a wholly-owned for-profit subsidiary of NAMB. Our primary focus is

currently on connecting with other businesses to create and foster strategic relationships that generate residual income for NAMB+ and provide unique discounts and other benefits for NAMB members. Unlike NAMB, NAMB+ is a tax-paying corporation, which gives NAMB+ much greater freedom and flexibility to pursue different revenue generating business opportunities. NAMB+ is governed by its own independent board of directors, chosen annually by the NAMB Board of Directors. The current NAMB+ Board consists of Nathan Pierce (Corporate Secretary) from Utah, George Burkley (Corporate Treasurer) from Indiana, Kelley Hamilton from Colorado, Joel M. Berman from New York, Rocke Andrews from Arizona, Jim Pair from Texas, Linda McCoy from Alabama, and Richard Lovell from New York, as well as myself, John G. Stevens

N A M B +

(Corporate President) from Utah. I want to thank each of these board members for their commitment and service thus far, and I look forward to continuing our work together over the course of the next year. NAMB+ is only just beginning to hit its stride, and we are looking forward to delivering some great new opportunities for NAMB members and for our current and future strategic partners. Over the next several months, you will see additional strategic partners coming on board and offering some of the best product and service discounts in the industry. Additionally, to make it easier for NAMB members to explore and connect with our strategic partners, we are building a new dedicated Web site ( that will feature, among other things, direct links to our strategic partners’ sites,




a voice in helping to shape the future of our industry. Your vote will count. What you get out of it will be determined by how involved you become. The benefits of NAMB membership are tremendous for those who get involved, and networking with your peers is one of the greatest benefits of joining the association. Your peers provide a sounding board for your concerns, accomplishments, problems, successes and goals for the future. Theodore Roosevelt once said, “Every man owes a part of his time and money to the business or industry in which he is engaged. No man has the moral right to withhold his support from an organization that is striving to improve conditions within his sphere.” Help make a difference in your personal and professional life. Join NAMB—The Association of Mortgage Professionals today! Linda McCoy, CRMS of Mortgage Team 1 Inc. in Mobile, Ala. is a member of the Board of Directors of NAMB—The Association of Mortgage Professionals. She may be reached by phone at (251) 650-0805 or e-mail

highlights of various products and services offered by these great companies, and other exciting endeavors being undertaken by NAMB+. If you know of a company that you think would be a strong addition to our current list of strategic partners, please feel free to connect with me or any of the NAMB+ board members at NAMB National or any other time, as we are always looking to expand upon the benefits we can offer to NAMB members. NAMB+ is in existence to increase the benefits of membership in NAMB for each and every mortgage professional, and to help NAMB further its non-profit mission of supporting and strengthening the industry as a whole. If you have any thoughts, ideas, questions or concerns about NAMB+, please do not hesitate to contact us. On behalf of the entire NAMB+ Board of Directors and each of our strategic partners, thank you for your continued support! John G. Stevens, CRMS of Bank of England d/b/a ENG Lending in Draper, Utah is president of NAMB+ Inc. He may be reached by phone at (801) 427-7111 or e-mail



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How Do You Measure Up to NAMB’s Code of Ethics? By Dick Morin The most recent version of NAMB’s Code of Ethics, which was adopted in 2007, point to six “best practices” every business person or company should subscribe to … don’t you think? NAMB was leading the way in promoting and adopting the exact standards that have been codified under the Dodd-Frank Act and adopted through rule-making by the Consumer Financial Protection Bureau (CFPB). As you go about your day-to-day business, how aware or conscious are you of the NAMB Code of Ethics? Does it play a role in your business model

and how you interact with borrowers, lenders and vendors? The mere fact that this association commits these principles of good business to paper and seeks voluntary compliance establishes a benchmark from which all industry professionals are measured. But that is not enough. And it is for that reason, NAMB has also established an Ethics Committee to further reinforce the mandate that members apply and live by the standing Code of Ethics in their business and professional life. Should you discover an NAMB member who you believe to be in violation of these simple tenants of good ethical business behavior, you, as a member of NAMB can refer them to

A Message From the NAMB Treasurer and Finance Committee Chair By Andy W. Harris, CRMS

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the NAMB Ethics Committee for review and possible further action such as a corrective memo, censure or termination of membership. NAMB believes strongly in honesty, compliance, consumer protection and compliance with local, state and federal law. It seems there is little room under the current and developing rules under the CFPB for an ethics charge to be brought, however, that is not the case. These rules primarily deal with consumer-related activity and often neglect the underpinnings of good business—accurate record-keeping, how we interact with other professionals, customers, vendors and associates in and outside of our company. Simply showing up to work each day is not enough. When you unlock the office door and flip on the lights each day, you are making a commitment to provide the best of the best that the industry has to offer. A quick

“no” in this business is of equal importance as a quick “yes.” A returned phone call, an e-mail reply and a timely application letter are of equal consideration to rates and meeting closing timetables. NAMB loan officers set themselves apart from the rest by tending to the little things along with the rest. If you encounter a member who you believe has violated our code, do them a favor by first, bringing it to their attention, and if that fails, allow your association to act as it always has, to maintain the highest in professional standards and practices.

improving its balance sheet over the years, and I see a positive trend for the future. As with any business or organization, we want to make wise financial decisions for the future of our trade association. Strength, liquidity and membership participation will ensure the financial stability of NAMB. Any opportunity to simplify or reduce unnecessary expenses will be exposed and addressed as needed. I look forward to assisting in this area in which I tend to be strategically

conservative. For any questions you may have, please feel free to contact me directly at

Dick Morin of Consumers First Mortgage in Kennebunk, Maine is Ethics and Professional Standards Committee Chair of NAMB—The Association of Mortgage Professionals. He may be reached by phone at (207) 985-2895 or e-mail

Andy W. Harris, CRMS, president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc., is Bylaws Committee Chair of NAMB— The Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431, e-mail or visit


I have recently been appointed as new Treasurer and Finance Committee Chair for NAMB—The

Association of Mortgage Professionals. My goal will be to continue to organize and bring transparency to our financial position, as well as to simplify current and future policies for bill payment and tracking expenses. NAMB has been steadily


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SCHEDULE OF EVENTS (Subject to change)

SATURDAY, OCTOBER 19 NAMB Business Meetings Optional Eight-Hour NMLS Course (separately-ticketed) 8:30 a.m. ..................NAMB PAC Committee Meeting 9:00 a.m. ..................Registration Opens 9:30 a.m. ..................NAMB Membership Committee Meeting 9:00 a.m.-6:00 p.m. ....Complete Eight-Hour NMLS Course Continuing education course provided by Mortgage Educators & Compliance. 9:00 a.m.-1:00 p.m. ....NMLS Morning Session Identity Theft (one hour) and Federal Laws (three hours)

managing director of Lenders Compliance Group and Brokers Compliance Group & sponsored by Plaza Home Mortgage) 1:45 p.m. ..................Exhibit Hall Opens 2:30 p.m.-3:15 p.m. ....Concurrent Hands-on Sessions l Mortgage Success Track: Exposed … Five Steps to Building an Online Mortgage Lead Generating Machine (Mark Madsen, digital engineer at Best Rate Referrals & sponsored by Avantus) l The Next Great Thing Track: Finding Extra Profits With Private Lenders (Presented by Jeffrey Tesch, managing director of Rehab Cash Now & sponsored by Realty Pilot) l Compliance Track: Top Problems in Appraisal Compliance (Presented by Michael Tedesco, president of Appraisal Nation & sponsored by Plaza Home Loan)

3:30 p.m.-4:15 p.m. Keynote Speaker Series: A Wholesale Look at the Future 2:00 p.m.-6:00 p.m. ....NMLS Afternoon Session Panelists Mat Ishbia, CEO of United Wholesale Mortgage; Rey Maninang, senior vice Ethics (two hours), ECOA and Fair Housing (one hour), and FHA’s 203(k) (one hour) president, national sales director at Carrington Mortgage Services; and Scott 10:30 a.m. ................Welcome Remarks & NAMB Outlook From Don Compton, divisional production executive at Plaza Home Mortgage & sponsored by Got Appraisals Frommeyer, NAMB President


4:30 p.m.-6:00 p.m. ....Cocktail Reception in the Exhibit Hall 11:00 a.m.-Noon ........Steal This Idea Round-Table Workshops Sponsored by Rushmore Home Loans NAMB Board members and executive directors of state affiliates share best ideas (programs, outreach, membership recruitment, etc.) 6:30 p.m.-9:30 p.m. ....Mortgage Professional of the Year Awards Gala Among the awards being presented at the dinner are: Mortgage Professional of the Noon-1:30 p.m. ..........Lunch on Own Year, Affiliate Company of the Year, and the Kathy Love Volunteer of the Year (sponsored by CMG Financial & entertainment sponsored by Realty Pilot) 1:30 p.m.-4:30 p.m. ....NAMB Delegate Council Meeting 4:30 p.m.-6:00 p.m. ....Opening Reception & PAC Auction

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9:00 a.m. ..................Attendee Registration & Exhibit Hall Opens Coffee service in Exhibit Hall sponsored by Mortgage Information Services Inc.

9:00 a.m. ..................Registration Opens & Exhibitor Setup Begins 9:00 a.m. ..................NAMB+ Committee Meeting Morning coffee sponsored by U.S. Bank

9:30 a.m.-10:15 a.m. ..Keynote Speaker Series: Inside the Market—An Unvarnished Perspective Presented by Kenneth Harney, award-winning real estate columnist & sponsored by

10:00 a.m.-11:00 a.m. Opening Keynote: What’s Next for the Housing 10:15 a.m.-11:00 a.m. Concurrent Hands-on Sessions Market? Presented by NAR Chief Economist Lawrence Yun and sponsored by Caliber l Mortgage Success Track: Dispelling Common Credit Misconceptions (Presented by CRE Credit Services and James Charlet, head of credit educaHome Loans (coffee break sponsored by tion for NACSO [National Association of Credit Services Organization] & sponsored by Avantus) 11:15 a.m.-Noon ........Concurrent Hands-on Sessions l Mortgage Success Track: Reverse Mortgage 101 (Presented by John Loveless l The Next Great Thing Track: Embracing the Retirement Reality Using Home Equity (Presented by Lorraine Geraci, AVP of reverse mortgage sales training at of Generation Mortgage & sponsored By Avantus) Urban Financial Group & sponsored by Realty Pilot) l The Next Great Thing Track: How to Maximize Your Borrower’s Credit Score for the Best Rate and Terms (Presented by Larry Avery, director of sales for l Compliance Track: Robin is a Superhero Too … or How to be a MiniCorrespondent (Presented by Ginger Bell, national compliance training director Birchwood Credit Services & sponsored by Realty Pilot) & sponsored by Plaza Home Mortgage) l Compliance Track: What’s Next for You Under Dodd-Frank? (Presented by l The Secrets of Fannie/Freddie Underwriting (Presented by Jason Frangoulis, Ginger Bell, national compliance training director; Julie Manson, SVP of risk national wholesale manager and Mary Grabow, credit manager at United management; Bart Shapiro, former senior advisor for the CFPB’s Office of Mortgage Corporation) Community Banks & Credit Unions; and other panelists & sponsored by Plaza Home Mortgage) 11:15 a.m.-Noon ........Keynote Speaker Series: Build Your Sales to $1 Billion Presented by Greg Frost & sponsored by Clear Title America Noon-1:00 p.m. ..........Lunch on Your Own 1:00 p.m.-1:45 p.m. ....Concurrent Hands-on Sessions l Mortgage Success Track: How to Get More Purchase Business From Realtors (Presented by Erik Janeczko of Maximum Acceleration & sponsored by Avantus) l The Next Great Thing Track: Reverse Mortgage Sales and Marketing Opportunities (Presented by Ralph Rosynek, SVP of production for Reverse Mortgage Solutions & sponsored by Realty Pilot) l Compliance Track: Understanding Policies and Procedures for Non-Bank Lenders and Mortgage Brokers (Presented by Jonathan Foxx, president and

Noon-1:30 p.m. ..........Lunch in the Exhibit Hall 1:30 p.m.-1:45 p.m. ....Raffle Prize Announcements & Exhibit Hall 2:00 p.m.-5:30 p.m. ....Action Planner Sessions Planning to Win 2014 (Presented by Maximum Acceleration, featuring Greg Frost, Rene Rodriguez, Erik Janeczko and the coaches from Maximum Acceleration) 5:30 p.m. ..................NAMB National Adjourns


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*According to Inside Mortgage Finance, May 17, 2013. Home Possible is a registered service mark of Freddie Mac. MyCommunityMortgage is a registered service mark of Fannie Mae. The information contained is intended for the sole and exclusive use of the business entities to which it was distributed and is subject to change without notice. Loans are subject to credit review and approval. Fifth Third Mortgage Company, 5001 Kingsley Dr., Cincinnati, OH 45227, an Illinois Residential Mortgage Licensee. Fifth Third Mortgage is the trade name used By Fifth Third Mortgage Company and Fifth Third Mortgage-MI, LLC. Member FDIC. Equal Housing Lender.

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

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heard street ON THE

Our Heard on the Street column is a chronicle of events, changes and passages in the lives of the people and companies shaping the mortgage industry.

REMN Continues Expansion With Nine New Additions

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Real Estate M o r t g a g e Network Inc. (REMN) continues to expand its services nationwide with the addition of nine new associates in key markets nationwide. By providing a diverse array of mortgage products, including a Renovation Concierge Service specifically to handle 203(k) and HomeStyle loans, along with industry leading exemplary customer satisfaction standards, REMN has grown to be one of the largest independent non-bank lenders in the U.S. Recent new associates joining REMN retail branches across the country include: Armando Tautiva in Orlando, Fla.; Brian Allen in Jacksonville, Fla.; Christine Posthumus in Orlando, Fla.; Jean LaRovera in Orlando, Fla.; Karen Lozicki in New Smyrna Beach, Fla.; Nathan Moore in Stockbridge, N.J.; Sally Hepworth in Colorado Springs, Colo.; Steve Fanelli in Rocky Hill, Conn.; and Winford Taylor in San Diego, Calif. “REMN may be headquartered in New Jersey, but our success is due to hiring the best people in every city and town we open an office. REMN’s continued growth is due to our dedication to customer service, something we wouldn’t be able to provide unless we hired the very best in the business,” said Rick Floyd, executive vice president for REMN. “During the last two decades, home buyers, home owners and real estate professionals across the country have come to learn that not only does REMN have the best array of mortgage products, but we also have the best team dedicated to making the process as easy as possible for everyone involved.”

GSF Mortgage Announces New Pennsylvania Branch Opening GSF Mortgage Corporation has announced the opening of a new branch in Allison Park, Pa., which

will be staffed by John Nestor, Branch Manager, Tom Zaimes and Jay Fallon. “The combination of John’s keen managerial skills with the amount of sales skills Tom and Jay bring, will ensure the success of the branch. They are a welcomed addition to our retail department,” said GSF National Sales Director Mike Maida. Nestor graduated from La Roche College with a degree in biology. After college, he went on to pursue a job in advertising, where he supplied vendors and did promotions for the Pittsburgh Steelers. He had an unconventional start in the mortgage industry. With experience in sales, Nestor took an interview on a whim, where the company explained why he needed to work for them. This began his mortgage career in 2002. A year later, he became a loan officer and eventually a trainer. Ten years later, Nestor joined the GSF team. Zaimes and Fallon have been in the mortgage industry since 2000, and have held managerial positions for a number of years. “Although I am the branch manager, all three of us contribute to the team,” said Nestor.

AllRegs to Publish Acopia’s and Lake Michigan Financial’s Lending Libraries Acopia has announced that AllRegs will publish its lending library of retail and wholesale/ correspondent underwriting guides. Acopia will now leverage the AllRegs technology platform and publishing expertise to manage and maintain its underwriting guides. Users will benefit from a variety of productivity tools, including an electronic Table of Contents tree with links to guide-

lines, a robust search engine that features a thesaurus with industry jargon and relative matching results. Internal Acopia staff and business partners will be able to access content online. In addition, the Acopia Lending Libraries feature a Recent Updates section to identify changes to content, as well as email alerts to notify users of changes. “Our proprietary AllRegs publishing system provides a robust resource for delivering content and searching mortgage guidelines,” said Dan Thoms, executive vice president of AllRegs. “We at AllRegs are very excited to help Acopia provide their staff and business partners with a resource that will streamline their business processes and increase productivity.” AllRegs has also announced that it is publishing the library of program details for Lake Michigan Financial Group’s correspondent lending division. Lake Michigan’s program details will now be available through their corporate website for approved correspondents and through AllRegs Market Clarity and AllRegs Investor Library for mortgage lenders. Lake Michigan Financial Group will leverage the AllRegs technology platform and publishing expertise to manage and maintain its library of correspondent mortgage program details. “Lake Michigan Financial Group (LMFG) is proud to add AllRegs as a corporate strategic partner,” said Eric Burgoon, senior vice president Mortgage Lending, Lake Michigan Credit Union. “We have found their full suite of services and technology allows us to provide our clients with immediate and simplified access to our product guidelines and our platform offerings.”

gage origination firm that serves the lending needs of real estate professionals, builders and individual home buyers. “We are thrilled to welcome IFG’s employees to the Equity Loans family,” said Kunjan “KP” Patel, CEO of Equity Loans. “To make this transition as seamless as possible, a team from Equity Loans visited IFG’s headquarters to ensure we have a full understanding of IFG’s clients and partners. The combination of IFG’s experienced staff and strong industry relationships will be an excellent addition to Equity Loans, further expanding our footprint and opportunities for future growth.” In addition to several key staffers, the following IFG leaders will now join Equity Loans, including: Keith Binsfeld, area director; Shawn M. Cohen, director of originations; Steve Fishman, director of operations; Ben Stucker, director of senior lending; Ed Walsh, area director; and Brad Wurtz, vice president of business development. “This transition is a great opportunity for IFG’s employees, as it enables them to join an incredibly solid lending institution that will continue to provide exceptional service for IFG’s clients, as well as provide a positive work environment that emulates IFG’s core values,” said Binsfeld. “Equity Loans is recognized as one of the top mortgage lenders in the nation, so we know this a critical, positive move for IFG. We are looking forward to our employees’ future with the Equity Loans team.”

IFG Mortgage Joins Equity Loans

Guardian Mortgage recently participated in the Texas Mortgage Bankers Political Action Committee’s (TMB PAC) Education Week, entitled “The Race Is On.” The joint effort between the

Equity Loans LLC announced that it will transition top management and key employees from IFG Mortgage Corporation, a mort-

Guardian Mortgage Hosts Fundraisers for Texas PAC

continued on page 30


n Connecticut Mortgage Professional Magazine n OCTOBER 2013



Leadership and the Current State of Mortgage Banking By David Lykken


OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


veryone likes talking about the future. A Google search of the phrase “The Future of,” depending on who you are and where you’re searching from, will yield approximately four billion results. People write about the future of children, food, TV, books, government, ideas, and, of course, the mortgage banking industry. We sure do love to talk about the future. It’s not a bad thing to think about the future; it’s silly not to. But sometimes we focus so much on the future that we neglect to pay attention to the present. We can’t know where we’re going unless we know where we are. In order to have a good idea about the future, we must have an excellent grasp on the present. That’s what this article is about—being better leaders now, in the current mortgage banking environment. Recently, I had the privilege of hosting a conversation on the Lykken on

Lending online radio show with David H. Stevens, current president of the Mortgage Bankers Association (MBA). David not only demonstrates outstanding character in the mortgage banking profession, but he also does so in his personal life. He is an exceptional professional and an all-around stand-up guy. Our discussion focused on the current state of the mortgage industry, and David shared his perspective on a variety of issues from compliance to education. Our conversation, as many things do, got me thinking about leadership. In the current mortgage banking climate, what does it take to be a great leader? What characteristics must a great leader possess to excel in the current environment? On what areas must a great leader focus in order to succeed in the current climate and pave the way for a more prosperous future for the industry? These are the questions I will seek to answer. Here are my ideas … First and foremost, I believe that the most important thing for leaders in the mortgage banking industry to focus on

in the present has nothing to do with mortgage banking; rather, it has to do with personal character and integrity. More than anything, it is important for leaders to develop a sense of balance in their professional and personal lives. The core of leadership is not about the position you hold in your company, the amount of people who work underneath you, or the associations with whom you affiliate. The core of leadership is about who you are. It’s about the company you keep. It’s about what you do when you leave the office. How much time do you spend focusing on your family life? How much commitment do you have to your personal friends? You have more than one job. You have your job selling mortgages, but you also have your jobs being a husband or wife, a mother or father, a sister or brother, and a good friend. Too many of us think that we have to make extreme sacrifices in our personal lives in order to be successful in our professional lives. Reality, however, is quite the contrary. If you don’t have a firm handle on your personal life, the failure will trickle into your professional life and render you an ineffective leader. Great leaders are great leaders in and out of the office. Great leadership never sleeps. The second important criterion for leaders in the mortgage banking industry to excel in the present environment is to be informed on the issues. Being informed means understanding what is going on right now in Washington, D.C., as well as what is going right now on Wall Street—what is happening in the government and what is happening in the marketplace. For example, issues you may want to keep up on right now in Washington include the FHA bill, GSE reform, the final Qualified Mortgage (QM) Rule, the Qualified Residential

Mortgage (QRM) re-proposal, and other various policy changes. In the market, you will want to be aware of what is happening with Fannie Mae and Freddie Mac, as well as the slow but steady decline of the refinancing share of the market. Get the news wherever and whenever you can. Spend time learning in the morning, at lunch, and in the evening. Watch TV, read the newspaper, and follow trade journals and magazines. Read blogs, listen to podcasts, and use social media to get quick updates. If you want to be a great leader, you will make it a point to be among the most informed people in your industry. Information is power. The third thing that will distinguish you as an eminent leader in the present mortgage banking environment has to do with the way you communicate with your employees, your clients, and the general public. In a recent survey, the American Bankers Association (ABA) collected data from 187 different banks, 72 percent of them holding less than a $1 billion in assets. Of the respondents, 7080 percent said that they planned to use a vendor or consultant in implementation. However, 60 percent admitted that they were not receiving enough information on being in compliance from their vendors and consultants. There are many lessons you could draw from this data, but the point I want to make is that you need to be straightforward with people. Rather than presenting vague material to your employees or your customers, you should instead speak with clarity and precision. Be direct. If your employees are unclear about where you stand on an issue, they will perceive you as having poor leadership. If your customers feel like you aren’t being direct with them, they too will doubt your compe-

response. In David’s own words, the MAA is “One big, loud and powerful voice for the industry.” Great leaders see the value in unity and collaboration. Alone, we convey only whispers, but in great numbers, our shouts will move mountains. In the end, there is no consideration of the future of mortgage banking without consideration of the present state of the industry. In order to even have a future, we must develop the necessary leadership skills and values to excel in the present. To recap, great leaders will: l Demonstrate a remarkable sense of balance between personal and professional values;

l Seek out as much information as possible about the happenings in the government, as well as in the market; l Communicate in a direct and sincere manner with our employees, customers and communities; l Place a tremendous value on continuing education; and l Show a willingness to collaborate with other mortgage professionals for the good of the industry. We cannot understand where we are going unless we understand where we are. If we wish to be better leaders in the mortgage banking industry, we will recognize this truth: the future is now. Be sure to tune in to the Lykken on

Lending radio broadcast each Monday at 1:00 p.m. EST by logging on to David Lykken is president of mortgage strategies and managing partner with Mortgage Banking Solutions. He has more than 35 years of industry experience and has garnered a national reputation, and 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. 10, or e-mail or


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tence as a leader. If you deal with the media or get involved in public relations campaigns, withholding information from people will cause them to become suspicious of you. When you’re dealing with people, be straightforward. Great leadership is saying what you mean, and meaning what you say. The fourth area of focus leaders in the mortgage banking industry will want to pay attention to is education. In my discussion with David Stevens, we discussed the future of certifications such as the Certified Mortgage Banker (CMB) certification, a credential that David calls “the Ph.D. program of mortgage finance” and a designation that only 1,000-1,200 people in the country possess. David expressed a pressing need to continue the promotion of education. “Education protects our reputation,” he said, “and blocks out those unable to meet the standards.” I could not agree more. When we stop learning, we stop growing. In conjunction with what I discussed under my second point, we have more information available at our fingertips than has ever been available to people throughout history. But, just because there is an abundance of information available, that doesn’t mean it is all credible or useful. Professional education provides something for the mortgage banking professional that all the blogs, magazines, and TV segments in the world cannot: Trustworthy information that is meaningful to the industry. Great leaders will be unabashed promoters of education. If you want to stay on top of things in the current climate, you will be constantly encouraging your people to challenge themselves professionally by pursuing higher levels of certification. Greater education makes our industry more robust, trustworthy, and effective in serving our customers, community, and world. Greater leaders believe strongly in education and preach its merit without ceasing. The final point I want to make in regards to how leaders in the industry can shine in the present mortgage banking environment is all about collaboration. Greater leaders will recognize the power of unity among other mortgage professionals. More than competing against these other professionals, you are competing against unfair regulation and global economic challenges. Banding together as one to strengthen the voice of the industry will pay dividends to everyone. In our conversation, David talked a bit about what he’s doing with the Mortgage Action Alliance (MAA). According to the MBA, the Alliance is “A voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals.” Although administered by the MBA, you don’t have to be a member of the MBA to join. The MAA is simply an effort to create a network of mortgage professions who can receive information and have conversations about what is going on in Washington so that they can develop a unified

The Most Compliant and Effective Marketing in October

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


The latest and greatest mortgage marketing campaign sweeping the nation the fall of 2013… It’s partially direct mail. Everybody knows direct mail works (if you could only predict your response rates). Then it also adds Internet leads. Everyone has used Internet leads right? And if only we knew when those “leads” were ready to actually move forward. Then let’s go ahead and add telemarketing as well (tough to do with as much as 90 percent of the population on the Do-Not-Call List). Last but not least, we’ll make it work for purchase and refinance! Here is the game changer … Web 3.0 is coming! It is giving us the ability to combine traditional marketing methods like direct mail and telemarketing and add an “opt-in.” This opt-in is the customer going online and requesting more information or “opting in” to being targeted. The opt-in is requested by the consumer and allows them to be marketed to. This now gives us the ability to reach out to them and have a conversation. Then we take it one step further. Once they have opted-in, we will append the information to a data file allowing you to filter your interested prospects to your own unique specifications. Loan type, loan amount, interest rate, credit rating, etc. Going one step further, let’s use a call center to make outbound calls and take inbound calls from direct mail pieces that you have sent them to produce opt-in leads and transfer them through the call center to you live when they have time to talk. Delivering a highly interested customer that is qualified to your specifications, on the phone, and wanting to talk to you. You are now, for first time ever, able to combine all traditional marketing means into one great campaign for yourself. Use a combination of direct mail, Internet leads, telemarketing, pay-per-click advertising, social media, Search Engine Optimization (SEO) and e-mail marketing to generate interest. Once that interest is established, have it verified by a call center, and transfer the call directly to you live. It’s the live transfer of the 21st Century. Medford, Ore.-based TagQuest is a full-service marketing firm created specifically for the ever-changing business world. TagQuest assists companies with their direct marketing, advertising and branding needs, and knows what it takes to generate quality customers and, most importantly, how to retain those customers for years to come. TagQuest brings forth a unique opportunity to utilize our experience and expertise in varying consumer sales and marketing envir

VIEW OUR MOST RECENT WEBINAR ON YOUTUBE Online readers please click on the link below, readers of the print edition, please copy the link and paste it into your browser.


heard on the street

continued from page 26

Real Estate Services LLC (Carrington), CPN was created to complement the resale and relocation services provided by residential brokerage companies with best-in-class institutional real estate services. The rapidly expanding organization empowers brokerages to maximize their business opportunities. “We are very pleased with the incredible growth of the CPN network and with the response this initiative has received from leading brokerages across the country,” said Carrington Real Estate Services President Steve DiUbaldo, who added that the company’s goal is to have a CPN or Carrington Real Estate Services company-owned office in every major U.S. market within one year. “The brokers that make up CPN today represent some of the finest and most successful residential real estate firms in the nation.” Member brokerages have access to Carrington’s institutional real estate services including internet leads, asset management and property preservation as well as REO listings, short sale leads, investor buyers, property management CalPacific and The and BPO fulfillment services. To qualify Touchstone Group Join for membership, firms must be ranked Bay Equity Home Loans among the top five in their market in terms of transactions and sales volume, and have the infrastructure in place to San Francisco-based mortgage lender manage institutional business. Bay Equity Home Loans has announced that CalPacific and The Touchstone LoanLogics Acquires Risk Group have joined forces to expand the Management Firm LoanLogics has Bay Equity brand in Southern California. acquired the Bay Equity President and CEO Brett assets of Parker McGovern said, “We are honored to & Company, a align with Craig Bramlett, Rick Jones provider of risk management solutions and the men and women of CalPacific, CalPacific–The Rafii Group and The in the mortgage industry. “The acquisition is strategic Touchstone Group. They are highly experienced loan professionals who because it enables us to move have provided the people of San Diego LoanDecisions more deeply into the County with exceptional service for secondary market,” said Brian K. Fitzpatrick, president and CEO of more than 20 years.” Bay Equity Chief Operating Officer LoanLogics. “It’s an investment that the capabilities of Casey McGovern said, “They are a per- advances fect fit for our family owned and oper- LoanDecisions to meet changes in the ated company and share our commit- mortgage market. It gives us additionment to customer service. We’re excited al capability in the secondary marketabout the future and honored they ing and risk management side of the business.” chose to become a part of us.” LoanDecisions is an eligibility and loan pricing solution that delivers accuCarrington Property rate, real-time investor pricing and eliNetwork Continues gibility data. Expansion With New In addition, the acquisition of Parker Acquisitions Carrington and Company’s key assets ensures that P r o p e r t y LoanLogics will have the technology N e t w o r k and expertise necessary to support (CPN) has announced that it has clients in a rapidly changing servicing achieved exceptional growth in its environment. Parker, said, “Customers membership, adding 15 of the nation’s and their regulators don’t want black top producing brokerages in less than box answers. They want analytics where three months. Since its November 2012 the results and inputs can be explained launch, CPN has expanded to include 20 and understood. They want powerful companies, 399 offices and 15,643 pictures of risk to gain support for agents across 16 states nationwide. A change.” division of the corporately owned and continued on page 68 operated national brokerage Carrington Dallas-area mortgage lender and TMB PAC, which represents Texas mortgage lenders at the state and federal levels, was created to inform Guardian Mortgage employees about the important work of TMB PAC and offer support through a variety of fundraising efforts. The main fundraising event Guardian Mortgage employees participated in was the “Cutest Pet Contest.” Through participation in the event, Guardian Mortgage raised $1,184.64 for TMB PAC, 18 percent higher than the $1,000 goal they had set for themselves. Fundraising efforts through other events will continue through August. The funds being raised are going toward helping political representatives who can lead mortgage banking through the many challenges currently facing our industry. By working together, TMB PAC and Guardian Mortgage are looking to preserve mortgage bankers’ ability to successfully serve their clients in a changing housing market and regulatory environment.


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

FHA Makes it Easier to Qualify: Big Changes in Derogatory Credit Guides By Jeff Mifsud With Mortgagee Letters 2013-24, 25, & 26, the policy change in several areas of derogatory credit makes it easier for borrowers to qualify for a mortgage. Here’s what you need to know about these changes:

Effective for case numbers assigned on or after Aug. 15, 2013Sept. 30, 2016

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


For Purchase Money Loans Only (excluding the HECM): Borrowers that experienced an Economic Event (a decrease of income by 20 percent or more for at least six months) that resulted in serious derogatory credit such as a short sale, foreclosure, or bankruptcy, may be eligible if: A. The loss of employment or income was due to an extenuating circumstance beyond his or her control and can be documented; B. A Satisfactory credit history has been restored for a period of 12 months; and

C. Housing counseling has been completed.

Effective for case numbers assigned on or after Oct. 15, 2013 Changes below apply to all FHA programs except FHA Non-Credit Qualifying Streamline Refinances and the Home Equity Conversion Mortgage: 1. Judgments must be paid off or the borrower must have a payment arrangement that has at least a three-month payment history prior to the loan application and paid according to terms. 2. On manually underwritten loans with collections totaling less than $2,000, FHA does not require resolution of the accounts. However, the underwriter must document an acceptable reason for approving the loan and the borrower must provide a letter of explanation and supporting documentation if necessary. 3. For loans with Collections or Judgments

that receive a TOTAL Mortgage Scorecard decision of ‘Accept/Approve’ the lender does not have to provide a letter of explanation or documentation from the borrower. If TOTAL generates a ‘Refer’ decision, the loan must be manually underwritten. 4. In all cases, if the total of all collections is equal to or greater than $2,000, the borrower will have to do one of the following: A. Pay off collections in full (funds must be verified). B. Make payment arrangements with the creditors (monthly payment to be included in the ratios). C. If no payment arrangement is made, then 5% of the balance(s) must be included in the ratios (borrower must qualify with this additional payment). 5. For disputed accounts totaling less than $1,000, the loan is not automatically required to be manually underwritten when an

‘Accept/Approve’ is received. Loans with disputed accounts equal to or greater than $1,000 must be manually underwritten. 6. Medical collections and charge offs are excluded from the above guides and DO NOT require resolution. Because each lender has their own guidelines for FHA loans, consult your FHA DE Underwriter for questions. Now is a great opportunity to get out of your office and inform your real estate agent partners about these changes. If you need presentations you can use right away, log on to Go FHA! Jeff Mifsud is founder of Michigan-based Mortgage Seminars LLC, a former FHA underwriter with 15-plus years of experience originating FHA loans, an FHA expert for and creator of The FHA Originator, a monthly FHA newsletter. Jeff may be reached by phone at (248) 4038181 or visit

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

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M A G A Z I N E ’ S

economic commentary


OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


t has been five years since the collapse of the financial markets. Five years ago, the world financial systems were on the brink of collapse. For five years, we have been crawling out of a deep hole. You cannot get very far by crawling, but if one moves forward a little-by-little for five years, how far we have come will look very impressive. Let’s just look at the stock markets. Early in 2009, the Dow Jones Industrial Average bottomed at just under 6,500


in reaction to the crisis. This year, the Dow has topped 15,500 more than once. That is a gain of approximately 140 percent in just under five years. Even more impressively, the gain does not seem to be slowing much as the rally matures. Through the latter part of September, gains had exceeded 15 percent for the year. Every time the markets look like they are in the middle of a correction, they seem to bounce back nicely. This year, the market has been impacted by rising interest rates and the situation in Syria. Each time there is a pull-back, it is brief and then a comeback ensues.

One must ask if there is more room on enough to create enough jobs to the upside after such a run. replace those lost in the recession, The answer boils down to let alone keep pace with poputwo issues. First, will the lation growth. The state“Growth that economy keep recoverment released after the is too strong ing at a decent pace? meeting of the Federal Second, will this might actually turn Reserve Board last recovery cause intermonth echoed that est rates to rise high out to be a recipe to concern. Growth that is enough to slow down too strong might actualslow the stock the train? ly turn out to be a recipe run we have The economic recovto slow the stock run we ery is definitely stronger seen.” have seen. today, paced by a recovered Of course, there was also an auto industry and recovering real estate intervening variable that affected the markets. But it still has not been strong Fed’s decision. The decision by the Fed was made approximately two weeks away from a showdown regarding the decision to raise the debt limit. If Congress does not resolve their disagreements (which they haven’t), the government’s Oct. 1 shut down and the economy’s forward progress will surely be adversely impacted. On the other side of the coin, if economic activity does increase significantly, rates are likely to rise higher more quickly. The resulting higher rates could slow down real estate activity, as well as spook the markets into a real correction more quickly as well. The Fed’s decision temporarily gave the interest rate markets some breathing room towards the end of September as the pause in rate increases also buoyed the stock markets once again. Dave Hershman is a top author in the mortgage industry with seven books published, including The Complete Mortgage Management Kit. Dave is also director of branch support for McLean Mortgage. He may be reached by e-mail at or visit


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Opposing Views for the Role of Government in the Housing Market

By Mike Lewis mericans have been engaged in a great ideological war over the role of government since the founding of the nation, and the latest skirmish regards the future role of the government in housing. Since the election of Bill Clinton in 1992, the warring parties have become increasingly entrenched and unwilling to compromise in the name of ideological purity. As a consequence, the future regulatory and economic environments affecting the housing and mortgage industries, related industries, and citizens is uncertain. The Republican goal is to eliminate any government role in the mortgage market (other than through the direct guarantees provided by the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the U.S. Department of Agriculture’s (USDA) rural housing programs), while the intention of the Democrats is that federal support of the mortgage market be continued to encourage broad homeownership for all citizens. It is around these conflicting aims that the issues revolve.


Two partisan views As a result of the mortgage security meltdown in 2008, significant taxpayer costs, and the subsequent recession that many contend continues today, members of both political parties agree that drastic reform of the mortgage finance industry is needed. However, each party has proposed a different approach based upon its political philosophy.

Democrats The Democrats, reacting first to the mortgage disaster and controlling both houses of the federal government in President Obama’s first two years, passed the Dodd-Frank Wall Street Reform and Consumer Protection Act on July 21, 2010 with less than 10 total Republican votes. The Dodd-Frank Act is considered the most comprehensive reform of the financial markets generally since the 1930s, and introduced new stringent regulations into the issuance of mortgages with its Ability-to-Repay and Qualified Mortgage (QM) standards, as well as new rules on mortgage securitization. Since its passage, key Republicans and conservative think-tanks have regularly attacked the bill, introducing numerous bills in the House to

“As a result of the mortgage security meltdown in 2008, significant taxpayer costs, and the subsequent recession that many contend continues today, members of both political parties agree that drastic reform of the mortgage finance industry is needed.”

weaken its provisions. While reform of the Dodd-Frank Act might occur in the future, it is unlikely to occur until 2015 or later due to other political battles, including a potential budget fight later this year over the Affordable Care Act, immigration reform, and midterm elections.

Republicans Earlier this summer, House Republicans, led by House Financial Services Chairman Jeb Hensarling of Texas, floated a plan—the Protecting American Taxpayers and Homeowners Act (PATH Act) —to eliminate federal guarantees on home loans, effectively privatizing the market and closing Fannie Mae and Freddie Mac. Speaking before the House Financial Services Committee on July 23, Rep. Hensarling

said that the Act “Gets government out of the way, helps increase competition, enhances transparency, and gives consumers more freedom to choose the mortgage that is right for them.” The Act reflects the conservative viewpoint favoring free markets, open competition, minimal regulation, and small government. While many industry representatives have spoken favorably of various provisions in the legislation, only the American Bankers Association (ABA) has indicated support, primarily for the Act’s delay of compliance dates for Dodd-Frank mortgage rules and changes in the points-and-fees definitions. Democrats have charged that the bill would eliminate 30-year fixed-rate mortgages. The bill, if passed in the House, will likely fail in

the Democrat-controlled Senate.

A third pragmatists’ view Recently, President Barack Obama signaled a sea-change in the historic Democratic position regarding Fannie Mae and Freddie Mac. “First, private capital should take a bigger role in the mortgage markets,” Obama said. “I believe that our housing system should operate where there’s a limited government role, and private lending should be the backbone of the housing market.” His statement seems to signal presidential support for the Housing Finance Reform and Taxpayer Protection Act (Corker-Warner Bill), a bipartisan bill sponsored by eight members of the Senate Banking, Housing and Urban Affairs Committee on June 25, 2013. The bill would wind down Fannie Mae, Freddie Mac and the Federal Housing Finance Agency (FHFA), create a new Federal Mortgage Insurance Corporation modeled after the Federal Deposit Insurance Corporation (FDIC), eliminate controversial housing goals of the past, and provide a mechanism where small institutions would have direct access to the secondary markets.


housing guarantees, slight reductions in the industry’s 10 percent equity requirement, and limits on the prices of the homes being financed. Trade-offs could also include some relaxation of the DoddFrank Act’s provisions. Unlike many issues on which the parties are unwilling to compromise, housing finance appears to be one area where agreement can be reached to the benefit of the industry, homebuyers and taxpayers collectively. Mike Lewis is a retired business executive and personal finance columnist. He may be reached by e-mail at

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Supporters of the bill contend that, without such a federal guarantee, the market for mortgage securities would shrink, reducing the availability of mortgage financing, especially the 30year mortgage. At the same time, the bill includes a number of provisions to minimize taxpayer exposure under the guarantee, specifically a requirement that the private sector assume a 10 percent first-loss risk on the mortgage securities, and that the private sector finance the federal fund that could be tapped to cover losses exceeding the 10 percent first-loss guarantee. Phillip Swagel, a former assistant secretary for economic policy at the Treasury Department under President George W. Bush, contends that, had the 10 percent equity requirement been in place prior to 2008, the federal GSEs (Fannie Mae and Freddie Mac) would have easily made it through the crisis.” Mark Zandi, chief economist of Moody’s Analytics, agrees, stating that the requirement would provide a “Fortress financial foundation” and “All but eliminate taxpayers’ exposure to risk.” Industry reaction to the Corker-


Both liberal and conservative politicians expressed early dissatisfaction with the Corker-Warner bill as it presently exists. Liberals feel the bill weakens the country’s commitment to affordable housing programs, while conservatives prefer the complete exit of the federal government from housing finance, thereby eliminating all taxpayer risk.

Warner bill has generally been favor- l Mortgage Bankers Association (MBA) able due to its continued government l American Bankers Association (ABA) support for mortgage securities. l National Association of Realtors American Banker unequivocally stat(NAR) ed: “A government guarantee is essen- l Independent Community Bankers of tial to a well-functioning market.” America (ICBA) Zandi said the bill would “Ensure l National Association of Home that a broad number of American Builders (NAHB) households will have access to safe 30- l American Securitization Forum (ASF) year fixed rate mortgages.” The following entities have also Conclusion expressed their support, while recogniz- While the bipartisan bill does not ing that the bill will be amended as it meet the demands of conservatives goes forward: or liberal policymakers, it offers a reasonable foundation for amendl Milken Institute ment and eventual agreement. The l Co-chairmen of the Bipartisan Policy possible compromises might include Center’s Housing Commission some strengthening of the affordable

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n



n Connecticut Mortgage Professional Magazine n OCTOBER 2013

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MBA Hits Milestone Anniversary

Mortgage Bankers Association celebrates 100 years housing finance guidance By Robert Ottone

What are you waiting for? Call 1-800-848-4904 or visit us at

Through the years With 100 years in existence, the Mortgage Bankers Association (MBA) has seen America through some of its most difficult periods. The MBA has been representing and serving the entire real estate finance industry, championing the causes of those involved in the industry as a whole, while also lobbying to better serve and educate the public on the complexities of the housing finance industry.

Congratulations MBA on 100 Years!

In 1914, when the MBA began operation, President Woodrow Wilson oversaw an America beginning to see its role on the world stage. As the U.S. began to take shape, the MBA and our nation as

© AllRegs 2013

a whole went though a number of trials and periods of growth, decline, joy and sorrow. These were times of great nationalist pride


and times of political outrage. The assassination of Archduke Ferdinand would set the stage for what would become World War

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n

I. The legendary Babe Ruth made his debut with the Boston Red

Congratulations! Cong Con ngr grat gra gr atu tul ulat latio lat tioons! ons on ns! s! Congr gratulatio

Sox. The Cape Cod Canal opened, thus turning Cape Cod into the island we know it as today. With war engulfing





 Mortgage Mortga gage g B Bankers ankers A Association ssociation




the various European exchanges.

on on yyour our 100t 100th th A Annual nnual Convention Convention & Expo! Expo!

Calyx Calyx y Software Soft ftware ssalutes alutes your your monumental achievement. mo numental ac hievement.






from the intensity of war, the Yale Bowl opens, with

The Farmers Mortgage Bankers Association of America organizational banquet (Hotel Astor, New York, May 1914)




game being

Harvard against Ivy League


part Yale. Harvard won, decidedly, 36-0. Henry Ford announced the sale of nearly 250,000 automobiles, which would spur his decision to invest in the first moving assembly line, allowing automobiles to be mass-produced to meet the high consumer demands of a growing U.S. auto industry. The MBA formed in May of 1914, as the Farm Mortgage Bankers Association of America. Forty-five charter member companies,



most emanating from the Midwest, converged upon New York and established a foundation to promote the welfare and influence of those dealing with farm mortgage loans. The association’s original constitution and bylaws specifically excluded brokers and dealers of city mortgages. Later in 1914, the organization held its first annual convention in Chicago, as membership grew to 67 total organizations, and Fred W. Thompson, the president of The Merchants Loan & Trust Company in Chicago, was elected the first-ever asso-

ciation president. Despite its storied past, it’s important to look at the current state of the





number of influential


milestones played

The First Annual Banquet of the Farmers Mortgage Bankers Association of America (Hotel LaSalle, Chicago, October 1914)


and that the

growth of what the MBA


today. One hundred years later,

the MBA is still going strong, representing 3,000 companies that employ 350,000-plus of our nation’s workforce, the association represents underwriters, originators, servicers, compliance personnel and technology specialists, and those in the residential, multi-family and commercial spheres. Now led by David H. Stevens, the MBA maintains a strong presence in the lobbying arena by ensuring the needs of the housing market are addressed congressionally and beyond, upholding the legacy of the association when it was founded in 1914. From the


MBA’s official Web site:

unique access to those who make industry-impacting decisions. We are the most trusted and credible source of insight and analysis that lead the agenda for economic policy and legislative factors impacting real estate finance.” Through a series of interviews with former MBA presidents, staff members and current officials, we were able to get a behind the curtain look at the inner workings of the MBA. Over the first-hand knowledge of what it’s like to testify before Congress, enact programs and legislation, and tackle a crisis head-on. The driving force behind the MBA is a concept that focuses on doing good, while also working to provide that American dream of homeownership to all.

John Robbins: The Industry Vet John Robbins, who served as president of the MBA from 2006-2007, saw the impending housing crisis on the horizon. Having been in the mortgage finance industry since the 1970s, Robbins knows and understands the ins and outs of an economic crisis. He sees mortgage brokers as “America’s gatekeeper,” and sees brokers as the best source for consumers. By placing brokers in such high-standing, Robbins was keen to discuss the three percent rule and what he’d like to see happen in the immediate future. “They [mortgage brokers] have a host of different lenders to deal with and bring the best deal to the table for the consumer,” Robbins said. “I think we can solve this three point rule. They’re a growing segment. I’d like to see them flourish.”

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

course of our time chatting about the association, we gained

“The strength of our large and diverse membership gives us

With his vast experience, Robbins put the “Fundamentally,

1970s economic climate into perspective with

the industry has

the current economic climate.


“In the 42 years I’ve been in mortgage







more over the

changed. Economic cycles come and go.

past four years

Rates rise and fall … that hasn’t changed, but

than any other

mortgage banking and real estate have

time in history.”

always been tied to the economy. Without a

—John Robbins,

healthy real estate market, you cannot have

Past Chair,

a healthy economy.”

Mortgage Bankers

“Fundamentally, the industry has changed


dramatically more over the past four years than any other time in history,” Robbins said.

“Loan officers weren’t licensed back in the late 70s, and there was far less regulation in place. Fannie Mae and the FHA, at that point, were the industry overseers in the mortgage banking world. There was








the host of laws on the







state-to-state oversight, but not much.” “In the 1990s, new

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n




grams were sought and new ways were found to accommodate buyers and help them


the President George W. Bush with First Lady Laura

Bush and MBA Past Chairman John M. Robbins with wife Laura at the RNC's Texas Barbeque (August 16 Robbins said. “The & 17, 2007) American




compliance problems of today are denying thousands of potential homeowners access to the American dream. Some lenders encouraged disparate lending, most specifically, the United States government. Minority-Americans are being denied the right to realize the American dream. The ability to create personal wealth for themselves and that’s the result of the regulatory oversight of an industry that’s gone beyond what is practical or realistic.” It isn’t all doom and gloom for the American

One Hundredth


Not to Robbins, anyway. “The mortgage broker is really the American homebuyer’s best advocate,” Robbins said. “The nature of capitalism is the greatest innovator in the world. If we look back at history,




most powerful eco- MBA Past Chairman John Robbins and Fed Chairman nomic system in the Ben Bernanke testifying before Congress in 2007

President George H.W. Bush and MBA Past Chairman John Robbins at MBA's 2007 CREF & Multifamily Conference President Jimmy Carter with MBA Past Chairman John M. Robbins and wife Laura in 2006

regime we’re looking at today stifles that. How are we supposed to create programs to benefit the consumer when we’re afraid to make a loan? I think the MBA’s future is bright. I think there’s a renewed vigor in the industry and a renewed respect for the MBA in general. I think, through the evolution of the past couple years, under David Stevens, has created a new respect from the White House, all through Congress. Without question, they’re the most powerful voice for the real estate consumer in Washington. It’s important to make sure that they always represent the entirety of the industry and not in favor of only the large mortgage bankers. It’s important to operate with respect to the small broker, as well.”

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

world. All of our industry is dependent on it. I think the regulatory

President William J. Clinton and MBA Past Chairman John Robbins at the MBA's National Convention (October 2006)


David Kittle, The Architect From 2008-2009, David Kittle, another industry

leads to one leading the MBA.”

vet, took command of the MBA. Before his term

As mentioned previously,

came to a close in October of 2009, Kittle testified

Robbins, who served before

before Congress a total of 14 times. At a time

Kittle, monitored the changing

when the industry was facing intense scrutiny,

tides of the mortgage industry.

Kittle’s political mettle was tested in the 365 days

Kittle, however; had to face

he served as chairman.

the crisis head-on. “At that

“I never set out, in my career, to go into mortgage banking. My goal was to be a professional







baseball player, that’s where I thought I was going,” Kittle said, talking about his college years in Kentucky, playing second base. “After

caught in the downturn, as

an injury, I had to give it up so I moved into the mortgage banking

well. We were trying to get a


grasp on the fraud and securi-

A second baseman is typically known for having quick hands and

ty issues, as well as the lack of

feet, otherwise, hot plays on the field can’t be made. Kittle, in his time

quality underwriting issues that

with the MBA, fielded nothing but hot plays while the industry seem-

had overtaken the industry.

ingly fell apart around him. Kittle seemed to be the right guy for the

There’s enough blame to go


around. We testified both for and against the brokers at times. It was

anything,” Kittle said. “At the MBA, you do good work, participate and

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n

particular time, we were going headquarters,

“My personality is not to run out and want to be the president of


give back, that’s the stuff that

David Kittle and his wife Ellen at the Black Tie & Boots Ball in 2004

a time where there was a ton of shots being taken at us and our members, especially by Congress.”

“The MBA does a great job at preparing you

FHA is our next bailout.


to speak before Congress. There’s a tremen-

That’s because of the

and educated

dous amount of training. None of the testi-

unlicensed brokers who

brokers are the

monies I made at the time were minor, but at

continued to do sub-

key to the future

the time, following Kieran Quinn’s term, much to


of the industry,

his credit, he saw that most of the issues were

the FHA.”

as a whole.”

residential. I was in the chairman’s seat for

“The issues continue

—David Kittle,

almost two years, since Quinn kept me around

to be there. We’re liv-



Past Chair,

and kept me testifying,” Kittle said. “Every chair-

ing the pain of Dodd-

Mortgage Bankers

man at the MBA has his or her particular set of

Frank today,” Kittle said.


issues and Fannie and Freddie were mine. My


goal, at the time, was to defend the industry.”

where Chris Dodd is

In the years since Kittle has left office, he feels that the issues faced



today? He’s the presiMotion MBA Board members headed to the Bush

during his term were adequately dealt with by subsequent MBA



Picture Association of Inauguration with their wives in D.C.



“There’s always something new. The way the current administra-

America. Dave Stevens

tion is attacking housing policy, it’s a shame, they’ve done nothing to

is doing a fabulous job

help homeowners. Cramdown is back,” Kittle said. “There’s no vibrant

at the MBA. He really rose to the occasion. He’s the perfect guy for

securities market. Everyone’s afraid to lose money. As we try to wind

the job, in dealing with the issues posed by Dodd-Frank.”

down and/or get rid of the GSEs, we’ll need HUD. I stated in my last

Talking more about the training that Kittle referenced during our

testimony as chairman, alongside Dave Stevens, I said then that the

chat, I was curious how one deals with not taking attacks while testi-


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

fying personally. “You do,” Kittle said. “I think each person is different. The fact that, at times, I took it very personally. You can’t be something that you’re not, so my responses on Capitol Hill on cramdown was to fire back on them. I got the hit and run from Schumer,

Former Vice President Dick Cheney with David Kittle at a TEAM 100 gathering

and there were practically no Republicans

there that day. As long as you have your facts straight, you’re okay. The MBA does an incredible job of providing the facts before testifying.” “I was always prepared for what was thrown at me,” Kittle said. “Most of the time, because it’s a broad brush, they don’t know the details of what they’re asking about, and often, they don’t understand the answer, but we’re always well-prepared to testify.”


Kittle highlighted the notion of legislation and more affecting the mortgage broker’s abilities to operate. “We don’t mind legislation, that’s not the issue, but it needs to be accurate and provide reg-

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n

ulation that supports the broker and the industry as a whole, while defining whatever issue there is in the industry,” Kittle said. “By not providing well-defined legislature, that leads to more problematic oversight.”

David Kittle interviews Tucker Carlson and Paul Begala in 2009 on the mortgage crisis in San Diego at the CREF Conference David Kittle spars with Sen. Dick Durbin in October of 2008 on bankruptcy cramdown issues

David Kittle is sworn in as MBA Vice Chair in 2007

David Kittle with Apollo 13 Astronaut Jim Lovell


The New Penn Difference: “I think, on certain things, we’re being listened to in terms of Treasury, who reports to the President,” Kittle said. “They can pretty much do whatever they want. The cost of people having to be hired, the overhead due to regulation, is unbelievable. There’s also state-wide compliance issues. It’s remarkable how people even go into this industry, there’s far little reward, but with such high costs to remain in compliance.” “Rates are always going to go up,” Kittle said, referring to how the American people are paying for capital requirements issues. “The future of mortgage banking sees a more vibrant chain of origination. There’s more strict compliance, sure, but there are companies who can pursue and cover fraud when it comes to loans. Licensed and educated brokers are the key to the future of the


industry, as a whole.” Kittle would love to see community banks step up even more than they already have. Taking care of the customer is the most important aspect of homeownership, according to Kittle. “The MBA, right now, has never been more needed in the history of its existence. The MBA has continued to grow in terms of advocacy,” Kittle said. “The MBA protects who it advocates for. People listen to us. We’ve got access to the administration. We have access to congressmen and more. If you want an association that’s going to cover your fanny on everything, it’s the MBA.”

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

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Amy Swaney: An Alliance of Action

change I’ve ever had in my career,” Swaney said. “What it does

The Mortgage Action Alliance (MAA) is a volun-

is take an individual in the industry with experience and trains

tary, non-partisan and free lobbying network of

that person to recognize other aspects of the industry, as well.



There’s an application process, of course, and you have to be

Affiliated with the MBA, the MAA is dedicated to

selected. This year, for example, there’s only 35 in the class,

providing those who join with available outreach

nation-wide. It’s a program that spans the entire year and focus-

at the state and federal level. Amy Swaney, who

es on policy and advocacy.”




started in the mortgage industry at the age of 19,

“Everything the MBA offers is taught to the class. David Stevens

is chair of the MAA. She’s also a bubbly, charm-

comes in, affairs people come in, they give a background of poli-

ing and fascinating individual who prides herself

tics, why it’s important, etc.,” Swaney said. “It was this amazing

on the importance of family after a lengthy battle with breast can-

experience in learning how politics really works. The background of

cer. The MBA couldn’t have a better representative for a grass-

how to build a politician, they really get to the full experience of

roots effort than Swaney.

what the MBA does. It really gets into what the PACs are, why one

“The need for the MBA to stimulate growth within the origination

attends an event, what are the committees for, what things are

community is so important. Sometimes people look at the MBA as

being worked on, how to prepare, things like that. Tons of leader-

these stuffy bankers or as a corporate entity and that’s the furthest

ship preparation for both your mortgage career and your associa-

thing from the truth,” Swaney said.

tion with the MBA.”

A product of the Future Leaders Program, as well as the

Swaney speaks passionately about her association with the

MBA’s leadership scholarship program, Swaney not only speaks

MBA. Considered an industry expert, she’s often approached by

to MBA programs, but also to what it is to be a leader with the

various news and media outlets to discuss issues related to the

association. “The scholarship program was the most influential

industry as well as the MBA itself. “The year, Kittle was the MOR-

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


o C l a u n n A h t 0 0 1 s ’ A MB

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Congratulations for reaching this historic milestone

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“There’s a huge push to get independent

PAC chair is the year they asked me to work

on the concept that they’re not only about the big banks or not

on the stateside level, on the MAA,” Swaney

only in line with the big banks. Independent mortgage bankers are


becoming such a huge part of the industry, so, there’s a lot of Future

focus on that. It’s the moms and pops that are employing the

groups involved.

Leaders Program, I wanted to bring some of







masses because they aren’t depository. There’s a huge push to

The MBA is

the knowledge from the MBA back to the

get independent groups involved. The MBA is embracing those


state level,” Swaney said. “I got very active,

groups. Within that, the MAA is just another way to reach those

those groups.”

state-wide once I got back home to Arizona,

individuals and provide free access to make their voice heard.”

—Amy Swaney,

where I became president of the Arizona

“All we ask is that when we call on our members, whether it’s a

Chair, Mortgage

Lenders Association. Not long after, I was

state or nationwide level issue is that you respond quickly,” Swaney

Action Alliance

approached to start working with the MAA

said, regarding the MAA. “And so far, we’ve been successful with

because the MBA could see that they needed

that. It’s difficult to shake people out of apathy, but we’ve been

a grassroots program where they could almost get down to a

making strides with the MAA. We know what it takes to make things

street-level view on issues throughout states. We needed people


within the states to help on a national level and we just didn’t have the database for outreach.”

Swaney talked about using the concept of non-partisan politics to get people off the sidelines. “I like to illustrate my passion to

Swaney talked about the Mortgage Action Alliance taking on a

those who might not be involved in an effort to awaken that pas-

much larger position within the MBA, as well as at the grassroots

sion in them,” Swaney said. “I want people to get so involved that

level. “The mortgage banking business shift has come within the

they want to go out and make change happen. That’s where my

industry,” Swaney said. “The people need a place to feel at home,

passion is. I want to help make our industry something to be proud

so the mortgage banking industry and the MBA have really taken

of again.”


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

E.J. Burke: The Chair-Elect

is that when you sit down with a regulator or

E.J. Burke brings a different perspective to the

“You have to

with a legislator or a staffer, if we’ve got

MBA than a majority of the other people inter-

realize that if

industry practitioners who can talk about the

viewed for this article. With a background in

you’re going to

real-life implications of a rule or law, that leg-

commercial real estate capital, E.J. is a presi-

affect things in

islator or regulator truly appreciates that.”

dent and founding member of the Kansas City-

the industry,

based National Realty Funding, as well as serv-

you need to be

in the MBA is echoed in Burke’s statements.

part of

As an advocacy group, the association is

a trade group.”

only as strong as its supporters. Whether its

—E.J. Burke,

through an organization like the Mortgage

real estate commercial banker and taking the MBA’s correspon-


Action Alliance or through the main arm of

dent course,” Burke said, talking about how he became involved

Mortgage Bankers

the trade association, the MBA, an individual

with the MBA. “I’ve been around mortgage banking for a long time


looking to effect real change on the industry

ing as vice-chair of the MBA, and sitting on the board of directors. “I remember back when I was a very young

as a whole needs to get off the sidelines and

and the MBA has always been a part of that. About 10 years ago, I was asked to join the Board of Governors of the MBA, and

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


The underlying drive for more involvement

get involved.

towards the end of my term, I was approached about moving up

“More people are realizing that the MBA is a facilitator to hav-

the leadership ladder, which involves two years as a vice chair and

ing our voice heard,” Burke said. “We have incredible expertise on

a year as a chair.”

the staff in terms of pure industry knowledge, as well as how law-

Burke is an example of a chairperson who really ascended the

making occurs. Our commercial side is starting to get as strong

ladder within the MBA. While all upper-echelon individuals within

as our residential side in terms of reaching out and mobilizing. I

the MBA have had to work hard and climb the ladder, Burke is

think the future of commercial real estate financing will see a huge

keen to discuss his experience at various appointments. “The role

demand of assets that are well-written and stable. Through that,

that the MBA plays in the industry, as I climbed the ranks, I was

we can increase our numbers in terms of membership and repre-

able to learn more and more about the issues affecting the indus-


try,” Burke said. “Needless to say, since 2007, our industry has

Multifamily is also well-positioned for the future. “The only cloud

been difficult. You have to realize that if you’re going to affect

is the GSEs in terms of multifamily finance. We’re starting to see

things in the industry, you need to be part of a trade group. In my

CMBS bounce back, potentially reaching double the performance

mind, the MBA has been very effective in tackling the issues

of last year,” Burke said. “The only sector that will see new devel-

threatening our industry, so, for me, my time has been well-spent

opment will most likely be multifamily. There’s no question that

here at the MBA, helping tackle the issues head-on.”

commercial real estate and its ability to resolve problem assets is

“I’ve always been around the MBA through education, through

easier. The amount of regulation is drastically different, so that’s

events, that kind of thing. I’ve seen firsthand over the past six

helped quite a bit. The resolution of problem assets on the com-

years the impact the MBA has had on an advocacy level,” Burke

mercial side has been much quicker.”

said. “I would tell you that one of the very powerful things I’ve seen

“I think the future of the MBA is bright. There aren’t many organizations that have been around for a hundred years,” Burke said. “I think we’re an easilyrecognizable name. We’ve got dynamic leadership under Dave Stevens




team. Our membership is growing. I think our focus on bringing value to our members is paying real dividends. I see the MBA bringing value in three broad areas: advocacy, education and networking. Depending on what our members’ needs are, we excel at all three. Certainly, the advocacy side has been sorely needed over the past few years with a flurry of laws and legislation. I think we’ve played an integral part with lawmakers and regulators. Weathering the storm




bodes really well for the future of the MBA.”

Debra Still: The Chairman Debra Still, the president and CEO of Pulte Financial Services also serves as the chairman of the MBA. With three-plus decades

%%%$ !$

of experience in the mortgage industry, Still not only provides sound leadership and decision-making ability, but also serves as a female role model in the industry. Like Amy


Swaney, Still shatters the image of the boardroom full of stuffy old men in suits talking about industry issues.


“When I took my role as president of Pulte Mortgage, I wanted to make sure I

“When I speak at

had a strategic approach to how I was

conferences and

going to lead my company, so at the same

engagements, I

time, I felt that it would be a smart idea to

have so many

be engaged with the MBA,� Still said.

young women

“Pulte had been a member of the MBA

coming up to me

since 1972, so, pretty much for our entire

and thanking me

existence, so, it was a natural fit. I had

for being in a

never been personally involved until I

leadership role.

became president of Pulte. I was asked to

I just want to

join various committees and was later

give back and

asked to head MBA Forward, which is a

put everything I have into it. Not

ment and membership moving forward, as

only for women,

well as how to get people involved in the

but for everyone,

industry. It’s still part of our strategic archi-

I want people to

tecture today.� In terms of being a woman in a position

     ! "    #     $ 51


WeWe areare proud members a great great organization! proud membersofof a organization!

know that I’m representing

of power within the MBA, Still highlights her

lenders in a very

way of thinking as a way in which she


views her stance with the association. “I


don’t think of things so much as a position

—Debra Still, Chair,

at a progressively higher level to give back

Mortgage Bankers

to my industry, so my whole mission has


been to serve,� Still said. “I’ve been involved in a non-female environment for years, with builders and whatnot that I don’t even think about it anymore. When I speak at conferences and engagements, I have so many young women coming up to me and thanking me for being in a leadership role. I just want to give back and put everything I have into it. Not only for women, but for everyone, I want people to know that I’m representing lenders in a very professional way.� Still has been involved in the MBA during one of the more difficult times the industry has ever endured – the modern financial crisis. “One of the things I’m particularly proud of is how the MBA has spoken on how lenders need to lead change in order to get out of the housing crisis and restore the repu-


tation of the industry,� Still said. “We need to self-govern and


demonstrate that we are a deserving player at the table when


it comes to the healthy housing environment we need to return to. This notion of raising the bar and lead resonates with a lot of very good lenders who want to run a good business and move housing forward.� “The notion of owning the whole of the well-being of the entire industry through working collaboratively is an important


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

of power, per se. I absolutely got involved

strategic plan for how we look at recruit-


aspect of what we do,” Still said. “We need to find a way to reach

are good lenders in every business channel who want to do busi-

common ground and represent our industry with one voice.

ness the right way. I think that will be very healthy for us,” Still

Working collaboratively with our policymakers and legislators is

said. “It’s important that professional standards apply to every

important, as well. We have a broad perspective to come up with

channel. Some rules, like QM, should not pick and choose busi-

more objective and relevant feedback in order to get to a great

ness channels, so there is a disparate impact on brokers and

place to work with our representatives in Washington.”

businesses. We’re working through those. The CFPB believes

Still highlights the Mortgage Action Alliance as an important

they’re doing what Congress intended them to do, but my view is

group in bringing the notion of advocacy and state-wide represen-

that good lenders will figure out a way to comply with the rules or

tation as a grassroots outreach. “Different affinity groups and con-

the CFPB will modify the rule to get back to a vibrant and com-

ferences dedicated to different issues, like the Mortgage Action

petitive marketplace. Competition is good for the consumer and

Alliance are great ways to approach individuals within the member-

good for a vibrant marketplace. Having rules that stifle competi-

ship,” Still said. “It gives a broader community a voice on issues

tion are not in the best interest of the consumer.”

that are important to them and the industry as a whole. We try to

There’s an incredible push to draw young blood to the MBA.

advocate for a level playing field where a vibrant marketplace

“We have got to start attracting new talent to the industry,” Still

includes different business models and our advocacy groups are

said. “We have our Future Leaders program which is great for

geared toward finding common ground. While not every issue is

folks who want to build a career in real estate finance. We just

important to our constituency, none of our issues harm any aspect

put together an inclusion and diversity committee which will be a

of our constituency. The Mortgage Action Alliance is an excellent

committee that will inspire younger people to get involved, visi-

example of giving voices to state-level issues where legislators are

ble and inspire career choices. Kids graduating from college,

truly listening.”

with an unhealthy job market, are happy to be offered a career

“I think, at the end of the day, wherever legislation leads us, there

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


through various programs. We have a whole group of college

grads that would love an opportunity to build a career and anything

David H. Stevens, Captain of the Ship

the MBA could do to support that would only bolster the industry

David H. Stevens is the president and CEO of

as a whole.”

the MBA. With over three decades in the

“I think, under Dave Stevens’ leadership, we have had uncanny

industry as an executive in mortgage finance,

access to the folks we need to be working with, whether that’s the

sales acquisition and more, many look to

White House, the Treasury, the CFPB, FHFA, etc. I see that contin-

Stevens as the ultimate leader at a time when

uing certainly into the future. Our research is highly respected and

the industry is attempting to bounce back dur-

kudos to our research and education team,” Still said, talking about

ing a harsh economic climate. Personable and

the future of the MBA. “I expect the MBA to have a very critical

fascinating to talk to, Stevens’ experience

voice, a seat at the table, when it comes to the next round of CFPB and other industry-affecting laws and dialogue. I think we’ve got a

shines through when discussing the industry, as well as the history of the MBA and his hopes for the future.

lot of energy from our membership right now. We’re stronger

“I’ve been active with the MBA for my entire career, sitting on

together and there’s a viable place for all of us in the industry. The

committees and attending conferences,” Stevens said, talking

collaboration and excitement is healthy. You think about the legacy


of the first 100 hundred years, then you think about the opportunity

announced I was leaving HUD, I received a call from the then-

we have to leave a positive legacy for the future. I think it’s an excit-

chairman of the MBA and was offered a position. It was very

ing time. We’ve got a lot of positive, forward momentum and we

quick. My intent, to be quite frank, was to help during the hous-

need to capitalize on the improving housing market. The biggest

ing crisis. Accepting the position with the MBA seemed like a

issue we face is whether financing will be available and we need to

good fit and put me in a position to do just that.”

make sure there is access to credit for first-time homebuyers and immigrant homebuyers.”










In talking about his time with HUD, Stevens discussed how he went about building relationships with other government entities


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

while as the head of the MBA. “It’s an inter-

lending. The President walked in, having read all the information

“People see us

esting dynamic working in Washington. I

and started off the meeting by saying, ‘I’ve read the documenta-

as a unified voice

found it relatively easy. Taking a job in the

tion ... can someone explain what a warehouse line is?’ Everyone

for the mortgage

middle of a fairly significant storm that has

started going through their rote answers, and, these are Ph.D.

industry as

taken over Washington, when there was

guys from the finest universities and the ability to talk about glob-

a whole.

such an emphasis on fixing the housing mar-

al financial systems. When it came to a warehouse line, they did-

At a time when

ket,” Stevens said. “Just weeks before the

n’t really know. Someone looked down to me and said ‘Dave, can

the industry was

election in 2008, both candidates stated we

you explain what a warehouse line is?’”

scattered, we

weren’t in a recession. Home prices were

“I looked up and there’s the President staring intently at me,”


dropping like crazy. That storm we walked

Stevens said. “The important lesson here is that these are

helped America

into had everyone paying attention to hous-

incredibly smart, well-intentioned people in Washington trying to

and helped

ing. I quickly became ‘the mortgage guy’ in

deal with the housing and financial crisis. Knowledge matters to


them. Knowing how a very technical industry operates is impor-

hammer together policy to help

“I’ll tell you a story. Three weeks into

tant and from that moment on, I was thrust into economic meet-


accepting the job with the MBA, I was called

ings regularly, working on every policy issue possible, working

—David H. Stevens,

into a meeting at the White House to meet

with Congress to resolve issues.”

President and CEO,

with the President,” Stevens said. “I walked

Mortgage Bankers






Stevens, years later, cites many of the Washington decision-


makers and people he worked with on resolving housing issues

President’s meeting room and took a seat

with the President as close friends. “We spent so much time

on one of the back couches lining the wall.

together that we became comrades in working together,”

One of the President’s senior aids told me to said ‘No, Dave, sit

Stevens said. “We may not have always agreed, but everyone

at the table,’ so I did and it was there that I realize the topic of

respects one-another. Ultimately, that became very beneficial.

the day would be a subject, very technical, about warehouse

You know people, you know how policymaking works and how



OCTOBER 2013 n Connecticut Mortgage Professional Magazine n



The information contained is intended for the sole and exclusive use of the business entities to which it was distributed and is subject to change without notice. Loans are subject to credit review and approval. Fifth Third Mortgage Company, 5001 Kingsley Dr., Cincinnati, OH 45227, an Illinois Residential Mortgage Licensee. Fifth Third Mortgage is the trade name used By Fifth Third Mortgage Company and Fifth Third Mortgage-MI, LLC. Member FDIC. Equal Housing Lender.

that machinery of Washington works. You know how decisions

president of the MBA as the renewal of enthusiasm for the

get made. That’s proven to be very valuable in my current role.

organization as a whole. “As an organization, as one voice for the

We’ve had some tremendous success on policy as a result.”

industry,” Stevens said. “People used to only think the MBA was

“In my testimony when I was being confirmed for the job, I

beholden to large institutions. I think we’ve done a good deal to

talked about portfolios being at risk,” Stevens said. “That creat-

change that opinion. The mortgage industry, as a whole, views

ed a firestorm in the industry. I had to deal with just management

us different. People see us as a unified voice for the mortgage

issues in dealing with the FHA and making corrections that

industry as a whole. At a time when the industry was scattered,

wouldn’t tip anything past the tipping point. Making the right

we collectively helped America and helped hammer together pol-

steps to put the FHA back on path was an important aspect of

icy to help everyone.”

what I tackled when I started. The policymaking process is one

“The MBA is celebrating its 100th anniversary this year. It’s

of the misunderstandings that people have about Washington.

been built by hard work and commitment from industry leaders

There’s no ‘one mind’ about what Washington wants. Within the

around the country and it has done so for an entire century,”

administration, there are massively different views on solving the

Stevens said. “I think the MBA is on a trajectory of growth. We’re

housing finance crisis. Working with key people in the Treasury

the strongest we’ve been in over a decade. Membership is grow-

Department and other officials was key to working through the

ing. Our voice has never been stronger. Over the course of the

issues and meeting with key members of agencies just to make

next two years, so much is going to be done to impact mortgage

sure nobody got out ahead of their skis and cause any damage

finance. Once the legislation is written, it’s not done, we’re going

and being aware of the issues and processes and conveying in a

to do our part to make sure our voice is heard. We’re going to

rational way the right path to accomplish what we were all trying

continue to be a strong voice in Washington, D.C. We’re going to

to accomplish is an important part of what we do every day at

fight for the industry as a whole.”

the MBA.” Stevens sees his biggest accomplishment thus far as CEO and

We celebrate the work of the Mortgage Bankers Association and look forward to another century of continued success.


n Connecticut Mortgage Professional Magazine n OCTOBER 2013


MBA ... In the news MBA Unveils New Brand Identity The Mortgage Bankers Association (MBA) has revealed a new brand identity, including a new logo, corporate messaging and Web and e-mail domains. MBA’s fresh look reflects a new and improved association identity and is designed to be more streamlined while leveraging the strength and meaning of the association’s acronym—MBA. “This new brand reflects MBA’s forward looking approach, and brings us fully in step with who we are now, and where we will lead our industry into the future,” said MBA’s President and CEO David H. Stevens. “Our message behind the brand is simple: We put our members first. We are constantly evolving to better support and serve our

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members. We pull strength from the broad diversity of our membership by bringing them together—in one voice with one vision—on behalf of a vibrant and sustainable real estate finance system.” As the Mortgage Bankers Association is commonly referred to as MBA, the new logo uses this acronym but with the distinction of a capital “M,” “B” and lower-case “a.” This approach also reinforces the association’s focus on the “Mortgage” “Banking” industry, and our commitment to the firms and individuals that MBA represents and sup-

access to affordable rental properties, office space, community cen-

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n

ports 365 days a year. Without them, homeownership, as well as

most of MBA’s solid reputation as the strongest advocate for all mem-

ters, hospitals and more, would be nothing more than a dream for all Americans. Mortgage Banking is critical not only to our economy, but to the everyday lives of the people it serves. And it’s what our members do best. “Our new brand identity capitalizes on the strength and power of our acronym,” said Debra W. Still, CMB, MBA’s Chairman. “The M-B-A letters define us. Our new logo clearly puts our identity in the spotlight. It allows us to boldly stand out in a complex industry, while making the bers of real estate finance.”

Chief Economist Jay Brinkmann to Leave MBA David H. Stevens, president and CEO of the MBA, has announced that MBA’s Chief Economist Jay Brinkmann, will be retiring in early 2014. Dr. Brinkmann has been with MBA since 2001 and has served as the association’s chief economist since 2008. “Having the opportunity to work for the mortgage industry through all of the changes of the last 13 years, not to mention becoming MBA’s chief economist at the onset of the recession, has been a tremendous but exhausting experience,” said Brinkmann. “My wife Nancy and I own an historic old home in New Orleans and we have decided that the time has come to relocate down there on a more full-time basis to be closer to family, especially our new grandson, and to see if we still remember how properly to boil a pot of crawfish. I am looking forward to seeing what it is like to trade the sturm und drang of daily life in Washington for the luxury of reading the Wall Street Journal on my front porch while the streetcars roll by.” “I want to thank three people who have been my principal deputies for most of the time I have been here, Marina Walsh, Jamie Woodwell

and Mike Fratantoni,” continued Brinkmann. “Each has expertise that is of tremendous value to the industry and their hard work has made my job immensely easier. I also want to say what a great pleasure it has been to work with Dave Stevens since he arrived on the scene. His energy, insights into the mortgage business, and access to the highest levels of government and our member companies have gone a long way to restoring the reputation and effectiveness of the MBA in working on behalf of our members.” Brinkmann began his career as a Capitol Hill press secretary and served as the deputy chief of staff to Louisiana Gov. David Treen. He was in commercial banking in Louisiana and was on the finance faculty of the University of Houston business school before joining the credit pricing and portfolio strategy groups at Fannie Mae. He holds an undergraduate degree from The George Washington University, an MBA from Tulane and a Ph.D. in finance from Purdue University. Along with being MBA’s chief economist, he is the senior vice president for the Research and Education groups, has responsibility for the industry information standards organization MISMO, and is the trustee of MBA’s Research Institute for Housing America. In June, 2013 he was elected to the executive committee of the International Union of Housing Finance.

Genworth and MBA Announce Redesigned CampusMBA Curriculum Genworth U.S. Mortgage Insurance (USMI), a unit


Bankers Association (MBA) have announced that a





CampusMBA’s Certified Residential Underwriter (CRU) Specialist Designation to meet the growing demand for underwriters proficient in evaluating borrowers in the home purchase market. The CRU is the only specialized mortgage industry designation


that signifies mastery of the specific skills needed to underwrite residential mortgages. Participants who complete the courses contributes to reduced error rates, improved risk management, greater productivity and better loan quality for the mortgage industry. In addition, participants who successfully complete the course learn about the latest laws, regulations and issues regarding fraud and regulatory compliance. Each level of the CRU curriculum—Basic, Intermediate and Advanced—represents at least 50 hours of coursework, with each level requiring successful completion of a comprehensive exam. Participants must complete a total of 15 required courses to achieve the CRU Specialist Designation. Every Genworth USMI underwriter has

for Reaching an Impressive Milestone of the

100 10 00

t th

A Annual n n u al C Convention onvention & Expo Expo

completed the three levels of the CampusMBA training course and attained the CRU designation. “Completion of each level of the CRU course denotes a high standard of learning that helps organizations and the mortgage industry reach a higher level of effectiveness, efficiency and competence,” said Jeff Schummer, vice president, research and education at MBA. New and substantially redesigned course content includes information on: The foundations for thorough underwriting; best practices in ww w ww.rid .r .

understanding and analyzing personal and business tax returns; regulatory compliance in loan origination; and detecting mortgage loan fraud, including a focus on current fraud trends, new legislation, and recent court cases.

Member FDIC

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

learn tangible skills to increase accuracy in underwriting, which

of Genworth Financial Inc., and the Mortgage


OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


MBA’s Mortgage Action Alliance

2014 “The L A R G E R the group, the L O U D E R the voice” A Message From MAA Chairwoman Amy Swaney


Amy Swaney, CMB is governmental relations officer and branch manager with Scottsdale, Ariz.-based Citywide Home Loans. Amy is also chair of the Mortgage Action Alliance (MAA), a voluntary, nonpartisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association (MBA). Amy may be reached by phone at (480) 822-6262, ext. 2164, e-mail or visit nAlliance.

Yo Yo u will b e read r ead y, y, t o o .

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

ings with legislators. The key is to have a significant group of dedicated, informed and consistently active individuals become the voice of that organization in the minds of elected officials. Grassroots is all about the numbers. Although affiliated with the MBA, you do not need to be an MBA member to take part in the MAA. MAA enables you to speak directly with your members of Congress, state legislators and federal regulators about the impact of proposed legislation or regulations on your business. With residential, commercial and multifamily issues on the Congressional and state legislative agendas, your political activism is vital. MAA membership is currently over 5,400 members strong. Together, we’ve sent nearly 7,000 communications to Congress in the last nine months. MAA is a pipeline for political advocacy. You are a voter, an employer and a constituent. Your voice matters. But it is critical that you use it. MBA can do its part in Washington, D.C., but Congress needs to hear from us—the mortgage bankers in the hometowns who are their friends, neighbors and constituents. I encourage you to become a member of MAA and join me on the frontline as we speak up to Congress about the many issues that face our industry. Whoever you are, whatever your title, whatever your position in the industry, this is your chance to have a voice. As we look ahead to 2014, the year of implementation, and when Congress will likely make decisions about reforming the GSEs and the FHA, we need you now more than ever. Join us … the larger the group, the louder the voice.

y political advocacy and involvement in our industry first started when I was selected to participate in the Mortgage Bankers Association’s (MBA), “Future Leader Program.” Not long after, I was asked to join the Mortgage Action Alliance (MAA) as way to speak up about issues that impacted me as a mortgage banker. My MAA membership not only allowed me to stay up-to-date on the legislative and regulatory policies facing our industry, but it made it easy for me to contact my members of Congress when it was necessary. I found that it also allowed me to develop a greater understanding of how the decisions made in Washington, D.C. were impacting the business I conducted at home. The awareness of how industry and politics intertwine commanded me to attend the MBA’s National Advocacy Conference in Washington, D.C. where I was able to discuss all facets of our industry with members of Congress, face-to-face, in meaningful conversation. I am able to champion the knowledge needed by key Congressional leaders because I am aware of and current on the challenges that we face. Today, I am the proud chairwoman of the Mortgage Action Alliance Steering Committee and through my involvement with MBA, MAA and the National Advocacy Conference, I have developed strong relationships with members of Congress and their staff and am a vocal advocate for our industry. Established in 2005 by MBA, MAA is the voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals. MAA is dedicated to strengthening the industry’s voice and lobbying power in Washington, D.C. and state capitals across the country. Simply put, a robust grassroots lobbying program, consisting of individuals willing to communicate and build relationships with legislators, is necessary for any group or association wanting to change or affect legislative and regulatory policies. Grassroots communication can take many forms: Letters, phone calls, e-mails and even face-to-face meet-

W We e w ill b e rread ead y. y.

legendsoflending BY DAVID J. COSTER

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


ational Mortgage Professional Magazine is pleased to select American Financial Resources Inc. (AFR) as its “Legend of Lending” for October, 2013. AFR has reached legendary status one family at a time. They are so focused on families that they refer to all loans by the name of the family obtaining the financing. Laura Brandao, director of operations for AFR put it like this: “Instead of referring to a transaction as a loan number or a borrower, we refer to it as the ‘BRANDAO FAMILY,’ for example. This really hits home with our team members to remind everyone that their job is extremely important because there is a family behind every loan and in every file.” Brandao was described as “… the hardest working person I have ever met in my life” by Corey Dubnoff, president of AFR and one of seven equity partners. Dubnoff takes this commitment to families further when he says, “… we have the ability to lend people money that gives them the opportunity to go and get shelter for their family in a community they want to live in, in a house they want to live in, and in the country that they


want to live in … that’s why we do this.” Founded in 1997 as a mortgage brokerage firm, AFR has used that focus on the “why” of what they are doing, and the hard work of dozens of long-serving employees to create a formidable, multichannel mortgage banking operation. Simon Sinek, in his book Start With Why, based on his viral Ted Talk of the same name, puts the importance of focusing on “why” this way: “Very few people or companies can clearly articulate WHY they do WHAT they do. By WHY I mean your purpose, cause or belief—WHY does your company exist? WHY do you get out of bed every morning? And WHY should anyone care? People don’t buy WHAT you do, they buy WHY you do it.” AFR has made the “why” behind their business clear to employees and customers alike. This focus helps explain how a small New Jersey mortgage broker in 1997 has grown to become a major nationwide retail, wholesale and correspondent lender. But a focus on a greater purpose alone is not sufficient to keep AFR moving forward through all the market upheavals and regulatory changes witnessed since its inception. It also takes risktaking, trust and teamwork, and the already mentioned hard work to manage through

the difficulties. AFR features a unique management model that includes seven partners, but for teamwork, the success story that is AFR could not be told. Dubnoff says that it all started with his father—the educated risk-taker and company CEO, who saw an opportunity to build that small brokerage shop into something bigger: “He knows how to trust the people around him to get a job done and be part of a bigger thing. He was always thinking of making it bigger nationally. He is always thinking big picture, as opposed to just somebody who wants a small little business.” But how do seven partners function? Dubnoff explains: “The seven of us—are all in different aspects of the company. You have the CEO and the president—that’s me. I am in charge of wholesale buying, sales and marketing. You have another partner who is in charge of all of ops. You have another partner who is the CFO. You have another partner in charge of all the retail sales. You have another partner who is in charge of all the secondary and funding. And you have another partner who does broker services and risk management.” Dubnoff continues, “We trust in each other’s ability. We know that everybody has a buy-in. It’s something that we have been building for 16-plus

years. We all trust each other immensely. It is of the utmost importance to have that. We don’t have to look behind our shoulder to see if somebody is throwing a dagger. We all make mistakes, but then the seven of us pick each other up and dust each other off. We figure out the good, the bad, and the ugly and discuss ways to improve the company and each other.” Henry Ford, founder of Ford Motor Company and the godfather of U.S. manufacturing, had this to say about facing challenges and adversity: “Life is a series of experiences, each one of which makes us bigger, even though sometimes it is hard to realize this. For the world was built to develop charac-

David J. Coster is senior editor of National Mortgage Professional Magazine. He may be reached by phone at (919) 559-2171 or e-mail


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

gram where we do all of the back-end processing for the originator, which means they tend to reduce their costs by a substantial amount if they don’t require processing costs on a particular loan. We are doing that for free for them. It’s been a tremendous success. What we found is that not only is it a cost savings, but it’s actually a time savings as well. Obviously, many brokers prefer it.” This innovation in the face of adversity is further described by Brandao who states, “I love the fact that we are constantly changing, when the market shifts, we move with it. While other companies are still trying to come up with ideas, we have already implemented the change and are closing loans.” Risk-taking, teamwork, trust and managing through adversity have all contributed to AFR’s earning of its legendary status. But let’s get back to the reason we started with—a focus on improving the lives of the families that work for the firm and with the firm. No aspect of this commitment is reflected more clearly of AFR’s unique characteristic than the sentiment expressed in this quote from Corey Dubnoff: “We will never, ever, ever, close a loan that will put a family in a position that they shouldn’t be in.” He explained further, “We have a commitment to our applicants and their families to have their best interests at heart. It really comes down to that. If they do not have the ability to repay the loan, we do not approve the loan. It’s really of the utmost importance to stick to that. Building and protecting families, while also building a strong and successful mortgage company that reflects positively on the industry as a whole are the reasons WHY American Financial Resources Inc. has been selected as our October 2013 Legend of Lending.

ter, and we must learn that the setbacks and grieves which we endure help us in our marching onward.” Any individual or firm that has remained successful in the mortgage industry since 1997 has faced their share of adversity. AFR has been no exception. Dubnoff recalls the difficult days when he says: “The biggest challenge—it’s managing the ups and downs, and the ebbs and flows of the market changes. It is of the utmost importance to be staffed correctly, to have the proper balance, and to know where your market is. There is always going to be ebbs and flows in this business.” Obviously the greatest challenge in the modern mortgage era was the period between 2007 and mid-2011. Unlike many of its competitors and larger banking organizations, AFR saw opportunity in the midst of great adversity. According to Brandao: “AFR has always been able to predict market changes before our competition. We are continually monitoring the market to see what our clients need and we are not afraid to offer the programs/products that our competition is either afraid to offer, or are not willing to learn. An example of this would be manufactured homes. Back in 2007 when many companies were pulling out of the manufactured arena, we jumped in deeper, and that decision has contributed to much of our growth.” Challenges continue to face lenders to this day. The wholesale space is facing the advent of the three percent cap rule which many have predicted will force brokers to become retail branches, or force them out of the business altogether. But, just like it did in previous periods of challenge, AFR is responding with aggressive options for its broker clients. First, they are offering a mini-correspondent program that will provide warehouse lines of credit for qualified brokers to enable them to capture more income. Second, they have recently launched a program called Wholesale Direct, a program which Dubnoff describes as: “Wholesale Direct is a pro-

Marketing Compliance Corner: Wholesaler Risk By Michael J. Wallace Esq. Wholesale lenders may be held responsible for various actions of their brokers, bankers and correspondents (brokers). The wholesaler, in establishing a relationship with the broker, is responsible for due diligence. For example, the wholesaler may approve title insurance agents, appraisal companies and determine that sound underwriting/processing standards are followed. By underwriting the file or reviewing the underwriting, the wholesaler minimizes its risk. There are costs as well as competitive reasons that prohibit the wholesaler from reviewing every single commercial communication of its brokers. The wholesaler may directly compete via its own retail channel, competition with other wholesalers or lack of resources, any of which can lead to vulnerabilities. Yet some level of due diligence is required of the wholesaler to ensure compliance by its brokers. What steps should a wholesaler take to minimize these risks? We suggest the following to reduce your exposure: 1. Provide compliant marketing pieces, social media posts and commercial communication directly to your brokers.

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


2. Inquire about the compliance management system (CMS) the broker has in place: a. Receive assurance that the broker actually uses the system; b. Obtain a copy of the CMS in place for marketing and lead production, review it, and if necessary, provide comments to the broker; and c. If there is no formal CMS in place, have the broker provide a written narrative as to how it operates regarding marketing and leads. 3. Provide a written policy to the broker regarding your expectations and requirements and have a copy signed by the broker for your files. 4. Establish a consistent review (maybe quarterly) of the processes to ensure that the company does follow its CMS. 5. Determine the following: a. Are the broker’s Web sites approved by state regulators? b. Determine the manner in which the company obtains its business, such as direct mail, telephone, social media, etc. c. Are loan originators allowed to have their own Web sites and social media sites? d. Are policies in place in regards to Web sites and social media sites? e. Are the loan originators or other broker employees allowed to have individual e-mail addresses (such as Gmail or Hotmail) or are they required to use company e-mails only? You can manage risk with your wholesale channel by implementing some or all of the provided suggestions. Please feel free to contact me with any questions or comments at (727) 474-0961 or e-mail Michael J. Wallace Esq. is president of CLIX MG. Marketing Compliance Manager (MCM) is a Web-based compliance management system for marketing and lead programs, including social media. For a 15-minute live demonstration, please visit He may be reached by phone at (727) 474-0961 or e-mail



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What Does an NAPMW Membership Do for You? By Christine M. Pollard hat does a membership in the National Association of Professional Mortgage Women (NAPMW) do for you? This question is asked so many times to our members and I so often hear the same types of responses. Many members say it provides them the opportunity to network with others in the same industry; however, education is more often the top response. Education is provided at local monthly meetings, at regional meetings and at the National Education Conference each May. Additionally, there are several Webinars offered to our members throughout the month, with topics covering mortgage industry compliance and leadership to give our members an added benefit. So many leaders in our association say that being a member of NAPMW has helped them gain confidence and self-assurance. All of these things together make each one of us a better person, both personally and professionally. It has allowed many members to excel in their careers as leaders of the industry. As I sat down to write this article, I wondered what I could say to convince anyone of the value of being a member of NAPMW. Then the opportunity knocked during a communication with a fellow member. I congratulated Central New York member Jiuseppe Esposito, MML on his recent promotion to Underwriter II at NBT Bank NA. Joe is not only a member of Central New York, serving as a director on the Board, but he has been the Regional Technology Chairperson for the past four years and the National Technology Chairperson for the past two years. Joe replied, “I credit NAPMW in large part with developing the skill set that has allowed my confidence to grow. This has been noted by my management team on many occasions, underscoring the importance they place toward NAPMW in my personal and professional development.” That testimony was so timely. I have had the privilege of watching Joe grow and develop into the person he is today and it has been a true pleasure. NAPMW allows members to obtain education on all levels of the mortgage industry, as well as in professional development. This year, NAPMW launched a series of Webinars geared toward leadership. Regulatory updates are also scheduled for future Webinars. As a total volunteer organization, NAPMW works tremendously hard to be the premier provider of mortgage education for our industry. Be sure to check out the NAPMW Web site ( for an education event near you. You are sure to find yourself welcome at any local meeting you attend or any Webinar you may join. Come for the education and stay for the friendship.


Christine M. Pollard, an operations representative with Investors Title Insurance Company from NAPMW’s Central New York Region, is national president-elect of the association. She may be reached by phone at (607) 226-1046 or e-mail

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Misconceptions About USDA Loans By Rich Obermeier There are many misconceptions about USDA loans and few lenders who understand them. This causes many borrowers to think they don’t qualify for a mortgage, when actually they do. The mission of USDA Rural Development Loan Program is to assist rural home buyers to achieve their dream of homeownership with affordable interest rates and achievable loan terms.

Misconception: USDA Loans are just for low-income borrowers. One of the most common misconceptions about USDA loans is the income limit put on the borrower. Many think it is just for low-income borrowers, when in reality, that is not the case. The USDA requires that borrowers cannot exceed 115 percent of the area median income, but also must meet the ability-to-repay requirements typical of any mortgage loan. There are two types of USDA single-family housing programs: Guaranteed Housing Loans and Direct Housing Loans. The USDA Guaranteed Housing Loan Program has loans that are issued by approved lenders throughout the country, and then guaranteed by the USDA. The average USDA Guaranteed borrower has an income of about $46,000 annually. The Direct Housing Loan Program is a subsidized program administered by the USDA itself and is aimed at low-income to very-low-income borrowers. The average income of a USDA Direct borrower is around $27,000 a year.

Misconception: No down payment? There must be a catch.

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Due to the program offering 100 percent financing, many borrowers think there are underlying factors involved. In reality, the USDA program is the only non-veteran loan that offers 100 percent financing. Borrowers do not need to have perfect credit to qualify and USDA takes payment history into account during the underwriting process.

Misconception: I don’t want to live on a farm. When many borrowers hear the word “rural,” they think of farm areas. USDA loans cannot be used on working farms—only for housing. USDA housing loans are restricted to designated eligible rural areas, which generally mean communities with populations of 20,000 or less. USDA is creating loans all across the country, including suburban towns that are anything but rural. In fact, in some states, the vast majority of the state is eligible for USDA loans. Many find this program to be “too good to be true” but it is just a good, wholesome, old-fashioned program designed to help rural homebuyers. To learn more or to see if you are eligible, please visit: With more than 25 years in the mortgage industry, Rich Obermeier, branch manager for GSF Mortgage Corporation, has worked with some of the largest mortgage companies in the county developing retail and wholesale channels. Rich has assisted in developing and implementing operational protocols for sales managers, originators and loan processors. In recent years, Rich has developed the USDA Rural Development Product in multiple states and locations. Rich may be reached by phone at (262) 957-8901 or e-mail


Elder Financial A By Jonathan Foxx

Predator and the victim

abuse is rationalized, believing that the predator stands to inherit assets, and thus feels justified in taking what is thought to be “almost” or “rightfully” due. Then there are the family members who have negative feelings toward siblings or other family members whom they want to prevent from acquiring or inheriting the older person’s assets. Or, friends and family who have had a negative relationship with the older person feel a sense of “entitlement.” And, certainly, there are close relations who have substance abuse, gambling, or financial problems, which tempt them to defraud and financially abuse the elderly family member.2 What happens when an elderly person is financially abused? The devastation is deep, broad, and painful. These are some typical outcomes: loss of trust in others; loss of security; depression; feelings of fear, shame, guilt, anger, self-doubt, remorse, worthlessness; financial destitution; inability to replace lost assets through employment; inability to hire an attorney to pursue legal protections and remedies; becoming reliant on government ‘safety net’ programs; inability to provide for long term care needs; and, loss of the primary residence.3

Why target the elderly? Because older adults often have retirement savings, accumulated home equity or other assets. Combine those factors with a likelihood of eventual physical or mental impairments, a range of cognitive disabilities, emotional decline, isolation, loneliness, health problems, loss of a partner, family, or friend—all contributing to being vulnerable to financial exploitation and scams—and the result is a feeding frenzy to obtain illgotten gains! Financially abused elders, are susceptible to exploitation for numerous reasons. They are often frail, and the predators assume that frail victims will not survive long enough to follow through on legal interventions, or that they will not make convincing witnesses. Severely impaired individuals are also less likely to take action against their abusers, as a result of illness or embarrassment. The elderly are likely to have disabilities that make them dependent on others for help. These “helpers” or new “best friends” may have access to homes and assets, and may exercise significant influence over the older person. Many elderly people are not financially sophisticated or are unfamiliar with modern technology involving money management. Family and friends may prey on the elderly. Statistically, 90 percent of abusers are family members or trusted others! A younger family member might fear that the older family member will get sick and use up savings, depriving the abuser of an inheritance. Or, the

For many years, the Financial Crimes Enforcement Network (FinCEN) has kept track of very specific instances of elder abuse relating, for instance, to mortgage fraud. Importantly, it issues periodic advisories that offer statistics as well as outlines of new scams. My firm monitors FinCEN’s statistics and issuances, and we provide the findings in our newsletters, articles, and compliance alerts, and we place relevant documents and issuances in our Web site library.4 It is important to mention that elder financial abuse includes the Red Flags associated with identity theft. Therefore, the 26 Red Flags offered in the Interagency Guidance, through the Federal Trade Commission (FTC), are a resource.5 The Consumer Financial Protection Bureau (CFPB) uses its Office of Financial Protection for Older Americans to provide information and tools to avoid the financial exploitation of the elderly. Additionally, the agency has been carefully considering regulatory ways and means to curtail such financial abuse. Indeed, it has moved to the forefront in developing strategies to communicate that the Gramm-LeachBliley Act (GLBA) does not prohibit companies from reporting suspected elder financial exploitation, which I will discuss in some detail in the following section.6 In this article, I will outline how the GLBA furthers the protection of the eld-

have written about elder financial abuse, and I will keep writing about it until stops.1 It is unfathomable to me that schemes to defraud the elderly are so pervasive. These seniors are attractive targets for financial exploitation. They are taken advantage of by scam artists, financial advisors, family members, friends, acquaintances, caregivers, home repair contractors, real estate firms, residential mortgage loan originators, credit repair companies, stock brokers, accountants, lawyers, collection agents, appraisers, fiduciaries, guardians, unscrupulous professionals and business people (or those posing as such), pastors, annuity salespersons and doctors. It is not news at this point that financial exploitation is a common form of elder abuse and that only a small fraction of incidents is reported to federal, state, or local enforcement authorities, despite persistent efforts by private companies and government agencies to slow its growth.


Regulatory responses

Abuse: Prevention and Remedies erly from financial abuse. I will also provide an outline of some Red Flags, as well as ways to increase public awareness about elder financial abuse. Understanding the ways and means available to provide consumer financial protection will help to end the plundering of the elderly.

Using the Gramm-LeachBliley Act

502(e) of the GLBA does provide for certain exceptions to this general rule, thereby permitting such disclosure to nonaffiliated third parties without first complying with notice and opt-out requirements. For the purposes of reporting financial abuse of the elderly, NPI may be provided to local, state, or federal agencies where the exceptions are operative.9 The NPI disclosures may be made either at an agency’s request or through the financial institution’s own initiative.

Here are exceptions to the GLBA notice and opt-out requirements that, to the extent applicable, permit NPI sharing with local, state, or federal agencies for the purpose of reporting suspected financial abuse of older adults without the consumer’s authorization and without violating the GLBA: l A financial institution may disclose non-public personal information to continued on page 66


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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

On Sept. 24, 2013, certain federal regulatory agencies issued guidance (Guidance) to clarify that the privacy provisions of the GLBA generally permit financial institutions to report suspected elder financial abuse to appropriate authorities.7 Because the GLBA’s privacy provisions generally require a financial institution to notify consumers and give them an opportunity to opt out before providing nonpublic personal information to a third party, the Guidance seeks to clarify that it is generally acceptable under the law for financial institutions to report suspected elder financial abuse to appropriate local, state or federal agencies. The federal agencies that have collaborated to issue the clarification Guidance, entitled Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults, are the Federal Reserve System (FRB), Commodity Futures Trading Commission (CFTC, issuing as Staff Guidance), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and Securities & Exchange Commission (SEC). The purpose of the issuance is to provide guidance to financial institutions with respect to clarifying the applicability of privacy provisions of the GLBA, specifically regarding the reporting of suspected financial exploitation of older adults. Employees of depository institutions and other financial service providers that constitute “financial institutions” for purposes of the GLBA may observe signs of possible financial exploitation of an older adult. Various federal and state authorities either require or encourage reporting of this type of information to the appropriate agency. The Guidance clarifies that reporting suspected financial abuse of older adults to appropriate local, state, or federal agencies does not, in general, violate the privacy provisions of the GLBA or its implementing regulations.8 Specific privacy provisions of the GLBA, and its implementing regulations, permit the sharing of this type of information under appropriate circumstances without complying with notice and optout requirements.

This clarification is needed because the GLBA has an established general rule that a financial institution may not disclose any nonpublic personal information (known as “NPI”) about a consumer to any non-affiliated third party unless the financial institution first provides the consumer with a notice that describes the disclosure (as well as other aspects of its privacy policies and practices) and a reasonable opportunity to opt out of the disclosure, and the consumer does not opt out. But Section

Technology: It’s Paramount to Managing the Appraisal Process

elder financial abuse

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comply with federal, state, or local laws, rules and other applicable legal requirements, such as state laws that require reporting by financial institutions of suspected abuse.10

By Vladimir Bien-Aimé The appraisal process has become increasingly challenging over the years amid the introduction of new state and federal-based rules and regulations that now govern the mortgage industry. What used to be a much simpler process is now much more intricate, fluid and compliance-intensive than it was before the crash. Prior to the mortgage meltdown, many organizations handled the processing of appraisals manually via spreadsheets and email communication. Now, however, a manual approach simply isn’t an option. It’s inefficient, costly and dangerous. Technology is the answer to effectively handling the entire appraisal process. But in order to be as effective as possible, lenders must utilize an all-in-one platform that automates appraisals from soup-to-nuts, not just certain pieces of the process, which many technology vendors only focus on. You want a “lights out” solution that compliantly automates the full process. A centralized, comprehensive platform will streamline key aspects of the appraisal management process. The platform should handle the core functions required to compliantly complete quality appraisals from start to finish without involving other vendors involved. Using multiple vendors can create breaks in the system of communication and potential hard stops that cost you money and possible deal fallout. Key components of a centralized, all-in-one valuation management software platform should include:

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


l Vendor management: Look for a solution that empowers you to recruit, validate and manage a network of AMCs and appraisers. l Orders: You need to have multiple methods by which to receive orders, as orders are submitted in multiple fashions and you of course want to be able to accept all of them. This can be done through Web portals, loan origination systems, custom integrations and manual entries. l Assignments: The assignment of orders to vendors can become complicated without functionality that handles this task for you. Managing a list of quality appraisers, locating, bidding, providing instructions, and assignments should be handled by technology. l Tracking: An all-in-one appraisal management technology solution enables ease of communication, scheduling, status checks, alert notifications, searching and reporting. l Accounting: Staying on top of accurate accounts payables and receivables for appraisals is obviously important. Look for a solution that includes the handling of invoicing, credit card processing, online statements, payables and receivables. l Delivery: You’ll need a solution capable of handling different kinds of fulfillment delivery methods. As an example, systems-to-system delivery, electronic delivery via PDF or XML, secure attachment or link delivery. l Reviews: The solution should also automatically review appraisals for compliance, guidelines, scoring, and any missing information throughout the workflow. l Sell: Finally, when you are ready to sell, the solution should integrate with the Uniform Collateral Deliver Portal (UCDP) to deliver the appraisal in full compliance and without absent data. If the integration is tight and current, appraisals should never get kicked back. l Mobile applications: Any all-in-one valuation solution will accompany the option to provide appraisers with an app for their smartphones that allows them to connect to your system, communicate with you, and manage appraisals while in the field. A comprehensive and centralized appraisal management technology platform should encompass all of the above. You don’t want to get in a situation where multiple vendors are handling different aspects of the process for you such as reviews, accounting, integrations, UCDP delivery, etc. It just complicates matters in an already complex process. Vladimir Bien-Aimé is president and chief executive officer of Global DMS. Since cofounding Global DMS in 1999, Bien-Aime’ has grown the company to capture a leading share of the appraisal management segment, with a client base of over 20,000 unique users and a 100 percent retention rate among lender clients. He may be reached by phone at (877) 866-2747 or visit


l A financial institution may disclose non-public personal information to respond to a properly authorized civil, criminal or regulatory investigation, or subpoena or summons by federal, state or local authorities or to respond to judicial process or government regulatory authorities having jurisdiction for examination, compliance or other purposes as authorized by law.11 l A financial institution may disclose non-public personal information to protect against or prevent actual or potential fraud, unauthorized transactions, claims or other liability. For example, this exception generally would allow a financial institution to disclose to appropriate authorities non-public personal information in order to report incidents that result in taking an older adult’s funds without actual consent, or report incidents of obtaining an older adult’s consent to sign over assets through misrepresentation of the intent of the transaction.12 l To the extent specifically permitted or required under other provisions of law, and in accordance with the Right to Financial Privacy Act of 1978,13 a financial institution may disclose non-public personal information to law enforcement agencies (including the CFPB, the federal functional regulators, and the FTC), selfregulatory organizations, or for an investigation on a matter related to public safety.14 It is the case that a financial institution may disclose non-public personal information with the consumer’s consent or consent of the consumer’s legal representative.15

The Red Flags of elder financial abuse As I mentioned above, FinCEN publishes an advisory that tracks financial elder abuse as well as mortgage fraud schemes involving such exploitation. The FinCEN advisory that was published in February 2011 provides a set of Red Flags that should be used by financial institutions in order to identify, mitigate, reduce, and eliminate elder financial exploitation.16 One step that has been taken, required by both banks and nonbanks, is the mandate to file Suspicious Activity Reports (SARs) with FinCEN, where there is a suspicion involving money laundering and terrorist financing, as well as activities relating to elder financial abuse and other con-

sumer fraud. The primary purpose of this type of SAR filing is to assist law enforcement in identifying individuals and organizations involved in financial crime.17 On a case by case basis, these signs might require the filing of a Suspicious Activity Report. As described in the foregoing advisory, the possible signs of abuse include, but are not limited to: l Erratic or unusual banking transactions or changes in banking patterns: n Frequent large withdrawals, including daily maximum currency withdrawals from an ATM; n Sudden non-sufficient fund activity; n Uncharacteristic non-payment for services, which may indicate a loss of funds or access to funds; n Debit transactions that are inconsistent for the older adult; n Uncharacteristic attempts to wire large sums of money; or n Closing of CDs or accounts without regard to penalties. l Interactions with older adults or caregivers n A caregiver or other individual shows excessive interest in the older adult’s finances or assets, does not allow the older adult to speak for himself, or is reluctant to leave the older adult’s side during conversations; n The older adult shows an unusual degree of fear or submissiveness toward a caregiver, or expresses a fear of eviction or nursing home placement if money is not given to a caretaker; n The financial institution is unable to speak directly with the older adult, despite repeated attempts to contact him or her; n A new caretaker, relative, or friend suddenly begins conducting financial transactions on behalf of the older adult without proper documentation; n The older adult moves away from existing relationships and toward new associations with other “friends” or strangers; n The older adult’s financial management changes suddenly, such as through a change of power of attorney to a different family member or a new individual; or n The older adult lacks knowledge about his or her financial status, or shows a sudden reluctance to discuss financial matters. FinCEN provides numerous Red Flags, some of which may be extrapolated for use by residential mortgage loan originators.18 The following list contains some of the Red Flags that we have noticed in the course of our Anti-

tion.20 This is an instructor-led training program developed jointly by the FDIC and CFPB.21 The module provides l Insufficient or suspicious infor- awareness for older adults and their mation caregivers on how to prevent elder n A customer uses unusual or sus- financial exploitation and also encourpicious identification documents ages advance planning and informed that cannot be readily verified. financial decision-making. There is a n A customer provides an individ- Money Smart for Older Adults: ual tax identification number Participant/Resource Guide for use by after having previously used a participants, which is available through social security number. the CFPB.22 n A customer uses different tax identification numbers with Jonathan Foxx is president and managvariations of his or her name. ing director of Lenders Compliance n A customer’s home or business Group and Brokers Compliance Group, telephone is disconnected. mortgage risk management firms devotn The customer’s background dif- ed to providing regulatory compliance fers from that which would be advice and counsel to the mortgage expected on the basis of his or industry. He may be contacted at (516) her business or employment 442-3456, by e-mail at jfoxx@lenderactivities., or visit n A customer makes frequent or or large transactions and has no record of past or present business or employment experience Footnotes that may substantiate and 1—See, for instance, Elder Financial Abuse, Foxx, Jonathan, National Mortgage Professional explain the transactions.

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2—For more information, visit National Committee for the Prevention of Elder Abuse (NCPEA), an association established in 1988, consisting of researchers, practitioners, educators, and advocates dedicated to protecting the safety, security, and dignity of America’s most vulnerable citizens. Visit The NCPEA is a partner or participant in the National Center on Elder Abuse, funded by Congress to serve as the nation’s clearinghouse and resource for abuse and neglect. Another leading organization is the National Adult Protective Services Association (NAPSA), formed in 1989. It shares information with, solves problems for, and improves the quality of, services for victims of elder and vulnerable adult mistreatment. Visit


3—Ibid. 4—Op. cit. 1. 5—See 12 CFR, Part 41, Supplement A to Appendix. 6—For some strategies, see Humphrey, Skip, Recognizing Elder Financial Abuse, March 8, 2013, posted at Mr. Humphrey is an Assistant Director at the Consumer Financial Protection Bureau and head of the Office of Older Americans. 7—Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults, Sept. 24, 2013. 8—The Guidance discusses when reporting is allowed under the GLBA, but it does not address any other federal or state laws that may regulate such reporting. Furthermore, the Guidance does not specifically address risk management expectations for financial institutions related to the reporting of elder abuse.

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9—GLBA (15 U.S.C. 6802(e), Section 502(e). 10—15 U.S.C. 6802(e)(8) and implementing regulations at ___.15(a)(7)(i). 11—15 U.S.C. 6802(e)(8) and implementing regulations at ___.15(a)(7)(ii)-(iii). ©2013 Front Pocket Marketing

continued on page 68

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Training and education The training of personnel who have contact with the public, and especially the elderly, must be on-going in an effort to remain educated regarding the most recent scams and techniques of financial exploitation. Certainly, there is no replacement for public awareness about elder financial abuse. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires the CFPB to facilitate the financial literacy of individuals aged 62 or older, on protection from unfair, deceptive, and abusive practices and on current and future financial choices, including through dissemination of materials on such topics.19 To raise public awareness toward preventing, identifying, and responding to elder financial exploitation, consider the program Money Smart for Older Adults, which is a financial resource tool that serves as a helpful source of training and informa-

Your personalized app can be ready in 5 minutes. It’s that easy.

l Funds and asset transfers n Many funds transfers are sent in large, round dollar amounts, without adequate explanation or verifiable sourcing. n Source of funds in asset statements occurs to or from a financial secrecy haven, or to or from a higher-risk geographic location without an apparent business reason, or the activity is inconsistent with the customer’s business or employment history. n Large, incoming funds transfers are received from a foreign entity, with little or no explicit reason or documentable explanation. n Funds transfer activity in asset statements is unexplained, repetitive, or shows unusual patterns. n Payments or receipts are evidenced with no apparent links to legitimate contracts, businesses, employment, goods, or services.

Magazine, August 2012. Visit also our Web site Library at for newsletters, additional articles, and relevant documentation.

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Title Industry Centralization Will Happen, What Will Small Agents Do About It? By Andrew Liput

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


The recent announcement that Fidelity National Title Insurance Company and Lender Processing Services Inc. (LPS) have reached an agreement to develop and implement a managed title and closing services platform should not surprise anyone. Title underwriters have, for years, grappled with the problem of how to manage and reduce the risk they face by allowing independent agents to handle searches, policies and disbursements at residential closings without the type of supervision that would ensure uniform quality and risk management. The inability of underwriters to manage this risk in the last financial crisis led to significant financial losses for them in litigation costs and claims, and resulted in increased fees for the CPL, efforts to find surety coverage for agents, and enhanced supervision. However, the risk remains, and as the market cycle exits the refinance boom stage and enters the more risky purchase business stage, the old fears of significant losses are sure to have re-surfaced. When SSI was launched in July 2012, the reaction by the small agents and their trade associations was largely negative. The move towards independent vetting and risk management was seen as intrusive, unnecessary, costly, redundant, and (to some) a total sham. Having researched and study the risks associated with the closing process, and having met with and studied the title industry, its operations and risk management policies, I saw this reaction as incredibly short sighted. After more than 10 years of studying the issue, I was convinced that independent vetting, uniform standards and best practices across the closing profession, would help level the playing field for small agents so that they could compete against large managed offices and regional escrow and closing firms. Vetting might allow them to demonstrate their commitment to quality service and consumer protection. Unfortunately, some of the trade associations did not agree and instead directed their members not to cooperate with independent vetting firms. Some even went so far as to file complaints with regulators claiming that vetting firms were “abusive consumer practices” and “scams” designed to “make more money for lenders.” A year later vetting is here to stay. The CFPB, HUD, FNMA, OCC, FDIC and others have been very clear that third-party vendor management includes closing professionals, and therefore, lenders must demonstrate a process and procedure to manage closing agent risk. The large underwriters appear poised to offer banks their own solution: Consolidation and centralization. Ultimately, the small agents will suffer and may be pushed out of the industry, not by a vetting firm (only the bad actors lose by vetting), but by the very companies with whom they have agency contracts today. Why … because it makes little sense to face significant financial risk in an arrangement where the management of that risk is both costly and difficult to control. Mortgage lenders learned that the hard way trying to work through “net branch” operations, which regulators no longer permit for good reason. Today, title, escrow and settlement agents are faced with a dilemma and how they address it and respond to the challenge may very well shape the future of the settlement profession. I, for one, am pulling for the little guy. Andrew Liput is president and CEO of Secure Settlements Inc., a company he founded after nearly 10 years studying the problem of escrow and closing fraud and the uninsured risks associated with mortgage closing professionals. He may be reached by e-mail at


elder financial abuse

continued from page 67

12—15 U.S.C. 6802(e)(3)(B) and implementing regulations at ___.15(a)(2)(ii). 13—12 U.S.C. 3401 et seq. 14—15 U.S.C. 6802(e)(5) and implementing regulations at ___.15(a)(4). 15—15 U.S.C. 6802(e)(2) and implementing regulations at ___.15(a)(1). 16—See The SAR Activity Review: Trends Tips & Issues, Issue 23, May 2013, available at 17—See FinCEN, Advisory to Financial Institutions on Filing Suspicious Activity Reports Regarding Elder Financial Exploitation, FIN-2011-A003 (Feb. 22, 2011), available at

heard on the street

18—See Federal Financial Institutions Examination Council (FFIEC), Bank Secrecy Act/Anti-Money Laundering Examination Manual, F–1, Appendix F: Money Laundering and Terrorist Financing “Red Flags,” April 29, 2010. 19—Section 1013(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. 20—Money Smart for Older Adults (June 2013), available at or 21—See Money Smart for Older Adults, Instructors, at 22—Money Smart for Older Adult, Participant/Resource Guide,

continued from page 30

“They need tools to be able to value their mortgage servicing rights and we anticipate significant growth in that area because more firms are in the business and there will be an increase in transactions as a result,” said Fitzpatrick. “As they acquire more servicing, they have more analytical needs relative to MSRs, and LoanHD is a performance analytics platform that will track and measures risk for them.”

Stewart Lender Services Acquires Allonhill Stewart Lender Services (SLS) has announced that it has acquired key assets of Denver, Colo.-based Allonhill LLC, a move designed to solidify Stewart’s focus on providing compliance services for the mortgage market. Sue Allon, new Stewart Lender Services vice chairman, and Jason Nadeau, Stewart Lender Services president and CEO, sealed the deal to solidify Stewart’s intense focus on providing quality and compliance services for the mortgage market. Utilizing the technology and talent from this transaction, Stewart will add due diligence, loan quality reviews, compliance solutions and servicer performance management to its suite of products provided to the mortgage servicer and investment community. In addition, Allonhill’s team of recognized industry experts is joining the Stewart family. “With loan quality and compliance being in the forefront of industry concerns, we couldn’t be more excited to have some of the most well-known and experienced staff in the industry joining our operations, “ said Jason Nadeau, president and CEO of Stewart Lender Services. “Through a combination of the staff, industry-leading technology and Stewart’s resources, this transaction

brings us tremendous strength at a time when this segment of the market is reemerging.” In addition to other key staff members, Sue Allon is joining Stewart Lender Services as vice chairman, dedicated to leading Stewart’s emergence into the capital markets space with due diligence and oversight services. Stewart has also acquired the industry-leading technology developed at Allonhill. This technology includes a due diligence platform tailored to the in-depth assessment of each client’s needs and portfolio characteristics, including configuration that enables easy drill down to specific details of an individual loan, filter on any specific loan characteristic, and offer ad-hoc modifications of review requirements.

GFI Mortgage Bankers Expands With Two New Branches

GFI Mortgage Bankers Inc. has announced the opening of its newest branch office that will further extend the company’s reach into Westchester County, N.Y. The office will be run by Carey Hollander, a seasoned mortgage banking professional who brings 23plus years of experience to the firm. “I am very excited to join GFI Mortgage Bankers,” says Carey Hollander. “We share the same values in that we both put a major emphasis on providing excellent and expedient services. The operations staff consistently goes the extra mile to make the loan process as smooth and as efficient as possible. Having a full spectrum of loan products available to me at GFI provides me with a major competitive edge in the marketplace.” GFI has also announced the opening

Vantage Production LLC has announced that Guild Mortgage Company has rolled out The Mortgage Market Guide (MMG) service to its more than 700 loan officers (LOs). With its three-pronged approach—market guidance, sales preparation and marketing content— MMG gives companies an advantage needed to win more business in any market. “We went with MMG as they consistently deliver exactly what our LOs need to demonstrate their expertise to clients, prospects and referral partners,� said Gemma Currier, national sales marketing manager of Guild Mortgage Company. “The built-in and

NCS and Settleware Secure Services Partner on Income Verification Services NCS (National Credit-reporting System Inc.) and Settleware Secure Services Inc. have announced a partnership to provide NCS’ income verification services to Settleware’s clients and partners. Settleware customers may now upload 4506-T forms direct to NCS for verification with the IRS through a dedicated TRV Services tab within the Settleware platform. “We are excited about Settleware’s decision to provide TRV Services to their clients,� said Curtis R. Knuth, executive vice president of NCS. “Settleware is now uniquely positioned to offer a complete loan solution through its wide

range of mortgage, real estate, and escrow settlement professionals. According to Settleware President & CEO C. Richard Triola, “NCS is now a vital part of our network of industry experts and pioneers dedicated to creating a completely digital, paperless transaction. The 4506-T is one document that had held the industry back, but with the acceptance of electronically signed 4506-Ts by the IRS, and soon by the FHA, Settleware and NCS now offer lenders, real estate agents and their customers a loan process performed entirely online–from origination to closing.�

Agency Division. “We look forward to offering our agent-friendly approach and national resources to agents doing business in Wyoming. We are confident they will find us to be a deep and knowledgeable resource for all aspects of the transaction, including underwriting counsel and compliance.�

Mortgage Professionals to Watch


Vantage Production Aids LOs With Mortgage Market Guide

incredibly easy-to-use Social Media syndication tools will increase our reach and spotlight our expertise putting us head-and-shoulders above the competition.� “We’re thrilled that Guild is up and running with MMG as part of their Vantage Integrated Production deployment,� said Paul Zoukis, CEO, Vantage Production. “MMG is designed for companies like Guild who are ready to catapult their production to a higher level. We’re looking forward to supporting Guild’s business goals for the long term.�

WFG Expands Operations Into Wyoming

l Platinum Data Solutions has hired industry veteran Norm Koenig as the company’s new senior vice president of sales. WFG National Title Insurance Company has grown its geographic coverage, having been approved to issue title insurance in the state of Wyoming. The WFG family of underwriters may now issue title insurance on property in 44 jurisdictions nationwide. WFG National Title is a full-service provider of title insurance and real estate settlement services for commercial and residential transactions nationwide. “In less than three years, WFG National Title has become a truly national title underwriter,� said Joseph Drum Esq., executive vice president,


of its newest branch in West Palm Beach, Fla. The office will be run by Daniel Doherty, a seasoned mortgage banking professional who brings over 30 years of experience to the firm. “I’m excited to become a member of the GFI family and to bring the brand to Florida,� Doherty said. “GFI Mortgage Bankers has proven its dependability as a mortgage lender for more than three decades, and its leadership and institutional knowledge is a complementary match to the way our team likes to do business.�

l Venta Financial Group Inc. has announced that it has hired Mark Ciolfi as executive vice president. l McLean Mortgage Corporation announced that mortgage executive continued on page 85


Markets may be volatile, but there’s one thing you can always count on, the total commitment of our Mor tgage Team. Loyalty, continuity of ser vice and our dedication to protecting the integrity of our relationships are just a few of the things that set us apar t.

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Ridgewood understands the needs of its communities      



Eric Tishaw, CEO HomeTown Lenders


OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


ric Tishaw, CEO of HomeTown Lenders is the October 2013 National Mortgage Professional Magazine Mortgage Professional of the Month. HomeTown Lenders is a 37-branch retail lending organization based in Huntsville, Ala. HomeTown Lenders’ growth, innovative marketing and commitment to improving the conditions of the communities in which their employees live and work, as well as the world at large, makes them worthy of this selection. I recently had the chance to speak with Eric and uncover the passion behind the organization.


I understand that working in the mortgage industry was your goal from your time in college. Tell me about that. They say that nobody intends to go into the mortgage business. I’m actually the exception to that rule. I grew up around the mortgage business, and was always really intrigued by it. I had some great friends growing up who were in the business. I was always really attracted to it. So my intention while in college was to go into the mortgage business when I graduated. What was so appealing about the industry? I think what appealed to me most is the constant challenge—there is

never a dull day in this business! But more importantly, we help people realize their dreams of owning a home. It’s a very rewarding career. How did you first get your start in the business? After college, I went to work as a loan originator. I really liked working with borrowers and educating them so they could make a better informed decision. There is a lot of personal gratification in helping take their nervousness out of the process. I soon made the move to become a branch manager. As a manager, I loved helping my employees mature and watching them sink the winning shot. How did HomeTown Lenders come into being? When the market turned several years ago, our company was forced to reinvent itself to survive. At that time, I began growing the company. We already had branches and a branch support platform in place. Growing our branch network was a natural extension of our abilities and expertise. Today, we have over 325 employees in branches from Florida to Colorado. What is unique about your organization? What makes us unique is how we

approach the business, how we view it and our roles in helping our partners grow. Our main philosophy revolves around three “R’s”: Recruit the best, Retain the best and Remember who got us there. With the first “R”, we are looking to Recruit the best. We are always looking for top-tier caliber people with integrity. We are very selective of who we hire. We don’t just hire anyone in order to get bigger. The second “R” is Retention. We have a strong focus on retaining the best. A lot of companies focus solely on recruiting, but we put a heavy focus on retention. We want to know what the branches’ goals are and to help them get there and help support them as they grow. We put a high priority on support, making sure when people call us that we answer the phone. That is a big part of who we are. Some companies make big promises, yet we frequently hear people say, “They promised me the moon, but after I started, I never heard from them.” HomeTown Lenders has dedicated personnel and processes in place to help our branches and LOs meet their goals. We help them with marketing strategies, and we are partnered up with some of the industries icons like Frank and Brian from the

National Real Estate Post, and Carl White and Scotty Hudspeth from Mortgage Marketing Animals. We do that in an effort to help our people realize their full potential and exceed their goals. The third “R” is to always Remember why we are here … we are a Christian company, and we remember that God is the reason for our success. We have been through some very difficult times that unfortunately a lot of companies didn’t make it through. We give that credit to God. This over-arching philosophy is the primary reason for our success. You have also employed a unique advertising campaign that includes comic strips. What is behind that? It is definitely unique! Frequently, when talking to branches, they would mention, “I was talking to this company, and they promised me the moon. They said they would give me recruiting support and they would answer their phone and give me all these things, but then when I on board and it was, ‘How much are you doing this month?’” I guess we heard it so much that it became comical that other companies were just promising the moon but not delivering. That’s really where the idea came from—just to make light of that fact.

L OF THE MONTH As far as marketing is concerned, we just wanted a campaign that really stood out and was different. We are always getting feedback from people saying they love it. They appreciate that it’s different, and they understand that we are different too. We are maybe a little bit unconventional, but I think the comics are a good window into who we are. We like to have fun, but we are serious about business.

How would you describe the mortgage professionals you are looking to add? We are looking for high quality, top tier talent. We are looking for people that do clean, compliant business. We have always viewed quality as better than quantity, sometimes turning down the large volume branches if we just don’t get a good feeling about them. One of the things I still do today is meet people in person before we hire them. I know that sounds crazy, but the reality is we want to know who we are working with. It needs to be a good fit. They are not just a number. The personal visit weighs very heavily in the branch approval process.

nominated coming in december 2013


We are seeking nominations from our readers for National Mortgage Professional Magazine's "40 Under 40" feature, slated to appear in our December 2013 edition. Anyone who is under the age of 40 and has had a major impact on the industry can qualify for this feature. 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 the nominee, along with a color photo and company contact info to complete the profile. To nominate yourself or someone else, visit

NMP Media Corp. 1220 Wantagh Avenue Wantagh, New York 11793-2202 p 516.409.5555 f 516.409.4600 e w

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

You make a special effort to participate in charitable work. Why is that? We exist for a greater purpose than just closing loans and making money. Our goal is to leave behind a legacy and to leave the world a better place than we found it—to make real, positive, measurable impacts on other How would you make a pitch to a prospective branch manager? people’s lives. We created a company 501c3 There are a bunch of companies out organization called Mission Firefly. It’s there, and everybody offers the same basic platform. You do a mission organization to serve a village in “We have always loans. You have products and programs and Guatemala. We have built 13 houses and viewed quality as prices. It’s really all the same. What sets a great seven clean water syscompany apart in my tems and have really better than humble opinion is its taken the Word to severquantity, people. How willing are al places. We are startthey to help? Do they ing to do that in other sometimes have a genuine desire countries as well. to help? We have great On a local level, there is a local home for boys turning down the people who understand that our branches are where we sponsor large volume our customers and do events and support them with clothing, branches if we whatever it takes to exceed expectations. school supplies and When prospects tutoring. Most impor- just didn’t get a come through our tantly, we spend time good feeling office we often hear, with them. That’s the “Wow, these people are key. Anybody can throw about them.” great. Everybody is so money at a problem, great. They want to but it’s really important for us to develop relationships and help.” That’s not by accident. We have help these young kids grow into an experienced team that enjoys helping. We have been together a long time. responsible adults. Being in business, making money, Everybody is on the same page about closing loans and helping customers wanting to help our partners and help … that’s all great, but we do it to them grow and make sure their quesallow us to serve a greater purpose. tions are answered. The greatest comWe firmly believe our role in leading pliment we commonly hear is: “Man, or participating in programs like this this is night and day. My previous comis critical and it falls in line with our pany wouldn’t even answer the phone. beliefs. Our message is quite simply to They’re too busy.” Our branches have a seat at the show God’s love to others. The needs in the communities are amazing. It’s table. They have a voice. We regularly easy to sit back and say that some- have events where we get together and body else has that covered … they discuss what’s going on. They all have don’t. There are so many opportuni- my cell phone number. If they see ties to be of service, we try to fill as something they don’t like or they want to discuss an idea, the line of communimany as we can. cation is open. Some of our best ideas come from our branch managers. We What are your business goals? One of our primary goals right now is to want that to continue. continue our national expansion. We are actively entering new markets because David J. Coster is senior editor of Mortgage Professional we believe we have a great model, and National are simply expanding that to a wider Magazine. He may be reached by phone (919) 559-2171 or e-mail area. The next goal for us is to double at our current level of production.


are you

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Government Shutdown Arrives … Who in the Housing and Finance Sector Will Feel Its Impact? By Eric C. Peck he midnight hour came and went Sept. 30 as Congress battled back and forth and Americans woke up the next day to many of its previously offered governmental services shut down or severely cut back. Talks resumed the following morning at 9:30 a.m. EST to try to hammer out the issues and come to a Congressional resolution to end the first government shutdown in 17 years. With Obamacare at the heart of the matter, federal employees who are considered essential will continue to work. However, for the 800,000-plus deemed “non-essential,” they will be faced with furloughs, unsure of just when they will be able to work or be paid again. Most were expected to be out of their offices within four hours of the start of business the morning of Oct. 1. “The shutdown isn’t going to help


the U.S. economy continue to grow and interest rates across the board could very well increase, depending on what the bond market does during this time,” said Don Frommeyer, president of NAMB—The Association of Mortgage Professionals. The U.S. Department of Housing & Urban Development (HUD) lists a current staff of 8,709. During the shutdown, only 349 of those employees are deemed “essential,” as 8,360 will be furloughed. In a document issued Sept. 27, HUD indicated that the FHA will be able to endorse single-family loans during the shutdown. However, only a limited number of FHA staff will be available to underwrite and approve new loans so the process will take longer. Most loss mitigation for homeowners facing foreclosure (including FHA loan modifications, FHA-HAMP, etc.) will continue. The FHA will also not approve any lender applications during the shutdown. In advance of the shutdown, HUD issued a

Contingency Plan detailing ways the Department will deal with the shutdown. “The furloughs can disrupt timesensitive mortgage transaction deals by interfering with borrower lock agreements and causing interest rate disparities from the time of closing to the time the loan is securitized,” said David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA). “For these reasons there must be a resolution so that borrowers and lenders are able to return to business as usual.” USDA-Rural Development currently employs 4,730, and only a mere 53 will be kept on during the furlough, leaving a total of 4,677 out in the cold. There are certain limited activities conducted by USDA-Rural Development for the purpose of preserving the government’s property. This property includes Rural Development’s loan portfolio, which currently exceeds $190 billion and serves as collateral for loans and bor-

rowers’ funds paid to Rural Development in escrow for real estate taxes and property insurance. One of the largest government sectors, the U.S. Department of Veterans Affairs (VA) employs 332,025 total. Of that number, only a small portion (14,224) are expected to be furloughed. The reason for so many VA employees being kept on is that most are funded through multi-year and other types of appropriations. Of the U.S. Department of Justice’s 114,486 total workforce, 17,742 are expected to be furloughed, while 96,744 are considered “essential.” The majority of workers at the FBI, ATF, the DEA and other agencies within the Department of Justice would report to work. However, U.S. Attorneys would curtail a good portion of civil litigation and the U.S. Antitrust division would not prepare any new proceedings. “Let us resolve our differences,” said House Speaker John Boehner (ROH). “The House has voted to keep the government open, but we also want

basic fairness for all Americans under Obamacare.” The Financial Crimes Enforcement Network’s (FinCEN) job is to safeguard the financial system from illicit use and combat money laundering, such as mortgage fraud and cyber fraud. Of the Network’s 345 total employees, only 30 will be kept on and the remaining 315 will be furloughed. The Network will continue computer operations to prevent the loss of data and maintaining minimal telecommunications. A total of 8,752 of the workforce at the Internal Revenue Service (IRS) will be kept on. Employing 94,516 total, a whopping 85,764 would fall victim to the furlough. Impacted by this situation are all of the IRS’s audit functions; examination of returns and processing of non-electronic tax returns that do not include remittances; nonautomated collections; legal counsel; taxpayer services, such as responding to taxpayer questions (call sites); information systems functions (except as necessary to prevent loss of data in process); and all planning, research and training and development activities. One office not impacted will be the employees at the offices of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). Its 193 employees will maintain business as usual, continuing oversight for the 2008 Wall Street bailout. SIGTARP is financed by multi-year appropriations and is essentially exempted from a shutdown.

Eric C. Peck is editor-in-chief of National Mortgage Professional Magazine. He may be reached by phone at (516) 4095555, ext. 312 or e-mail


continued from page 8

l Smile and sit up straight: If you are meeting in person, body language is vital. Smile and stay engaged and never use foul language or unprofessional words or jargon. Smiling on the phone can also make a difference. Get up and move around when on the phone also as this helps with listening and thinking. Competition can make you better at what you do. We need the motivation and we need a reason to continue to sharpen skills and experience. Use a competitor as your advantage to stand out and really shine and build those client references. P.S. … I would love to hear from readers! If you have enjoyed The Elite Performer over the years, please send any feedback and future topics you would like to see covered to Andy W. Harris, CRMS is president and owner of Lake Oswego, Ore.-based Vantage Mortgage Group Inc. and 2010-2011 president of the Oregon Association of Mortgage Professionals. He may be reached by phone at (877) 496-0431 or e-mail or visit

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

with any other company they are researching. Find ways to put the focus back on your strengths and their options so that they feel like they are shopping these options with you. l Remain professional at all times: Be relaxed and educate, and focus on the customer’s goals and what is important to them in a new loan. Never get distracted by competition or put the focus back on a competitor. Never act desperate or feel threatened. Calm and cool will help you provide more precise education for the clients benefit. l Take your time when responding to criticism or concerns: Whether a prospect or a business partner, this can be important. Think of things from both perspectives and make sure you’re relaxed when responding in person, by phone or e-mail. l Listen more than you talk: The more you listen, the greater your chances will be that you gain that client over competition. Understand their personality and needs and focus on letting them talk and responding with related solutions. Confirm with them what they have told you and what is important to them.

elite performer

The Social Security Administration’s 62,343-strong workforce will see 18,006 of its employees furloughed. The 44,337 who will continue to work will provide services such as verification of mortgage borrowers’ Social Security Numbers. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) are funded outside of the appropriations process, so these agencies will continue to function. The Consumer Financial Protection Bureau (CFPB) is funded through the annual appropriations process and will not be impacted by the shutdown. And as Congress squares off on these issues, are they really in a big hurry to take action and get these 800,000-plus back into the workforce? It turns out Congressional members are safe from the furlough, as the 533 current members of Congress will continue to be paid, protected by the 27th Amendment which prevents any Congress from changing its own pay. “The idea of putting the American people’s hard-earned progress at risk is the height of irresponsibility, and it doesn’t have to happen,” said President Barack Obama. “Let me repeat this. It does not have to happen.”

“… can a steady housing recovery take place when many people are still nervous about their jobs and the majority of new employment opportunities are part-time?”

What Awaits the Industry? By Phil Hall

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


Abraham Lincoln once remarked, “The best way to predict your future is to create it.” However, today’s mortgage industry is facing a near-term future that often seems beyond its control. From a new wave of regulatory controls that will take effect in January to an economy that somehow never quite found its way back to post-recession recovery, the industry is looking ahead with a great deal of uncertainty and angst.

The greatest impact to the industry, according to many industry experts, is how new federal regulations created by the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB) will change the origination space. And while the industry awaits this new regulatory environment to go into place, there is still confusion regarding the specific nature of the new requirements. “Every day, it seems to change,” said



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Don Frommeyer, senior vice president of Carmel, Ind.-based Amtrust Mortgage Funding Inc. and president of NAMB— The Association of Mortgage Professionals. “When trying to get something solid, you don’t get anything. We are trying to understand what Congress and the regulators are putting into place—we need to get clarity in that.” John Walsh, president of Milford, Conn.-based Total Mortgage Services, notes that many industry professionals are still baffled over what the final qualified mortgage (QM) rule will entail. “When it comes to the QM, we’re not 100 percent on what it is going to look like,” said Walsh. Even worse, there is trepidation that the new changes could create problems instead of solutions. “I see mass confusion and a continuation of government overreach to correct something that is no longer necessary,” said Chris Sorensen, national director of the retail division at PRMG, based in Corona, Calif. “Many people in power are implementing and interpreting the Dodd-Frank rules through a prism of what is in best interest of larger players at the expense of mid-tier lenders and brokers. That translates into less competition and less consumer choice—and this is not good at all.” “The new regulatory environment could lead to short-term credit tightening, which would then lead to the major retail banks focusing almost exclusively on vanilla QM and jumbo loans for their highly qualified, high net worth borrowers,” said Rick Sharga, executive vice president at Irvine, Calif.-based “That will leave a void for other businesses, and could lead to the return of the nonbank lenders. The question, however, is whether there will be enough private capital to support these nonbank lenders in that initiative.” Frommeyer adds that incoming three percent points and fee rule will further disrupt an already shaky scenario. “This rule is still up in the air,” he said. “The only ones being penalized are brokers. If you’re a bank, you get a free ride.” John Robbins, president of the San Diego-based The Robbins Group and

former chairman of the Mortgage Bankers Association (MBA), adds that the uncertainty surrounding the federal regulatory changes has made origination a much more costly endeavor. “The cost of compliance and meeting industry regulations complicates things greatly,” said Robbins. “Just the personnel costs per loans have increased from $2,300 per loan in 2009 to $3,300 in 2012. This rising cost environment, along with the rising interest rate, is putting a chill on the industry.” Further complicating matters is the future of the government-sponsored enterprises (GSEs), which recently observed their fifth anniversary under federal conservatorship. Although a flurry of legislative consideration took place in Congress earlier this year, the matter is still far from resolved. “The elephant in the room is the ultimate role of government in the lending business,” said Sharga. “It is hard to imagine disassembling Fannie and Freddie while they generate billions in profits to a government that is strapped for cash. The eventual unwinding that level of support needs to be done thoughtfully and carefully—or the market will crash again.” However, David H. Stevens, president and CEO of the MBA, believes this long-standing problem will find a conclusion in the near-future. “Bills are being introduced that transfer Fannie and Freddie into a new form of entity,” said Stevens, noting that both sides of the political aisle are eager to solve this matter. “There is the possibility it will happen sooner or later. Early 2014 is the best time for this to happen—at mid-year, many legislators start to shift to campaign dynamics. However, I have a high level of confidence that GSE reform will happen before the president leaves office.” Howard Hoyt, president of Fort Wayne, Ind.-based USA Wholesale Lending, agrees, though he believes that Washington will still have some sort of involvement in the secondary market process. “There will be a secondary market going forward,” Said Hoyt. “It probably won’t look like it does today. The feder-

al government, instead of being the primary backstop, will be a second or third backstop.”

In search of … recovery

A positive byte

ment everything—the full capture of entire loan process—to address anything from a Fannie Mae appraisal rebuttal to a repurchase request. Previously, we’ve had a very difficult time figuring out what really happened and at what point that fraud occurred.” Coester notes that even with these new high-tech changes, the industry is still on a rocky road. “There is a lot to keep up with,” Coester continued. “If you came in new to the industry, I wouldn’t know how you’d begin. I presume a very large percentage of the industry is buried and just trying to keep up. The industry is going through so much change that just catching up is about 80 percent of work.” Phil Hall is senior editor of National Mortgage Professional Magazine. He may be reached by e-mail at


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Fortunately, the near-term future is not a complete case of doom and gloom. Industry experts believe that technology developments offer the best hope for the industry’s continued success. “Technology will change things significantly,” said Mat Ishbia, CEO of Troy, Mich.-based United Wholesale Mortgage (UWM). “Right now, we’re seeing a lot of wholesale brokers embrace the new technology. Having more and more tech-savvy people on the front end will play a huge part in the industry’s future.” “We are going to need technology to offset the challenges from regulations,” said Matt Clarke, chief financial officer at Brentwood, Tenn.-headquartered Churchill Mortgage. “At some point, technology will handle some of the regulatory changes and make the processes more efficient.” The strong potential for high-tech opportunities has already inspired the creation of EasyMortgageApps, which launched earlier this year. Michael Kelleher, co-founder and executive vice president of the Swampscott, Mass.based company, believes that mobile technology is the next great frontier for the industry to explore. “The computer in your hand is more powerful than the computer on your desk,” said Kelleher. “There are new capabilities to be discovered. And the real estate agents will be leading this. The number one complaint real estate agents have with lenders is about com-

munications. A mobile app is the only real-time solution.” Kelleher adds that the industry needs to get up to speed on this technology. “Many leaders in charge of mobile implementation are still in the research phase,” said Kelleher. “There are so few options out there. From our understanding, oftentimes developers building these apps go into think-tanks for scheduled periods of time. But the turnaround there is much longer. What the industry needs are developers who don’t think like developers.” Brian C. Coester, CEO of Rockville, Md.based Coester Valuation Management Services, points to advances in loan origination systems as evidence of technology improving the risk management process. “With the downturn in the market, companies will consider these very seriously,” said Coester. “They will be looking for a seamless process and docu-

Also complicating the near-future is the ongoing question of the health of the housing market. “This is one of the most challenging transitional markets,” said Robbins. “Not just the transition to the purchase market, but one that comes off the lowest interest rate market in modern history. How can the industry embrace the purchase market when it has been 70 percent to 80 percent refinance driven?” “Everyone was excited about the purchase volume this spring, but a majority of the markets found a deep drop in June and July, with no comeback as of yet,” said Brian Koss, executive vice president at Danvers, Mass.-based at Mortgage Network. “There are concerns that the air is coming out of the momentum. At the same time, people are still fearful of buybacks and compliance concerns. This is stopping the non-conforming business, which has taken a huge step backwards. Most Wall Street firms took a bath on interest rate risk and they have since clammed up.” But can a steady housing recovery take place when many people are still nervous about their jobs and the majority of new employment opportunities are part-time? “The biggest problem I see is jobs,” said David G. Kittle, executive vice president and senior director of industry relations at IMARC LLC, headquartered in Santa Ana, Calif., and former MBA chairman. “Because if people don’t have jobs, they cannot buy homes. We have a much bigger unemployment rate than what is being put out. When we have jobs and people have real incomes, we will see real growth and a real return of the housing market.” Amy Swaney, governmental relations officer and branch manager at Citywide Home Loans in Scottsdale, Ariz., and chairwoman of the MBA’s Mortgage Action Alliance, believes that the current tumult within housing has planted potentially toxic seeds in tomorrow’s market. “The credit issue didn’t just happen to one generation,” said Swaney. “Kids now watch their parents go through foreclosure. Once parents lose home, they don’t have the drive for homeownership they had in the past.” Walsh of Total Mortgage Services

believes that the continued challenges facing the housing market will stir a new whirlpool of merger and acquisitions across the industry. “The uptick in interest rates diminishes the amount of business out there,” said Walsh. “A lot of people are looking at the costs and expenses, which may push the envelope for a lot of people. They may feel it isn’t worth it anymore and will make some choices that will lead to some consolidation in the mortgage banking space.” David Zachery, executive vice president at Houston-based Envoy Mortgage, is already aware of the beginning of this shift. “There are a lot of people talking to other people,” Zachery said. “Whether or not this is just peer chitchat or is someone looking for opportunities elsewhere, we’ll soon find out.”

â&#x20AC;&#x153;Brokers will need to contemplate practical factors, such as licensing, alongside more subjective factors, such as the ways in which the new model of the mini-correspondent may fit their current business practices.â&#x20AC;?

Mini-Correspondent ... To Be or Not to Be? By Patti White In response to growing trends and recent changes in regulations, brokers are increasingly considering the mini-correspondent channel. A broker that charges three percent per loan transaction guarantees that those loans will not be eligible for treatment as a Qualified Mortgage (QM), so the regulations create an opportunity for many brokers to make the leap to mortgage lenders as a new kind of correspondent: The mini-

correspondent. The channel provides an ideal mix of independence and support for companies, allowing them to continue to originate and maintain financial control of their loans without implicating the three percent cap on points and fees or the disclosure of the yield spread premium (YSP). Many lenders nationwide have begun to offer this new origination channel. The mini-correspondent channel has


OCTOBER 2013 n Connecticut Mortgage Professional Magazine n

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seen a drastic rise in popularity, and though it is an interesting option, some brokers fail to fully consider the complexity of the process before making the transition. There are advantages and disadvantages each broker must weigh when considering making the transition to a mini-correspondent and consequently, there is no universal right answer. Brokers will need to contemplate practical factors, such as licensing, alongside more subjective factors, such as the ways in which the new model of the mini-correspondent may fit their current business practices. What follows is a look at the angles from which a broker will need to evaluate the move to become a mini-correspondent before making a final decision. In the mortgage market, there is tension between achieving more sophistication through adopting the mini-correspondent channel, but simultaneously taking on increased cost and risk or, alternatively, remaining a broker who may assume less risk but has limited flexibility in pricing. Market pressure to react to increased regulatory burden has swayed many brokersâ&#x20AC;&#x2122; decisions to become mini-correspondents. Many brokers feel they are being unfairly singled out, since only compensation paid to the brokerage is included in the three percent cap, and these brokers find the mini-correspondent channel valuable because it allows them more freedom. From a day-to-day perspective, the change to a mini-correspondent is not as dramatic as one might expect. The process for the mini-correspondent is quite similar to the arrangement it had as a broker, with the exception of the closing. Once the broker obtains its lender license, it will be a mini-correspondent and will henceforth enter into agreements with its investors. Generally, the process is that the mini-correspondent will take the application, but an investor will underwrite the loan. The loan will then close in the name of the mini-correspondent and will fund on the mini-correspondentâ&#x20AC;&#x2122;s warehouse line. Once closed, it will be submitted to the investor for purchase. Given the ease with which brokers will most likely adjust to the new process of a mini-correspon-

dent, logistics are, amongst all the factors a broker must consider before becoming a mini-correspondent, perhaps some of the more straightforward concerns to put to rest. Once a broker acknowledges the logistical shifts from the process of a broker to that of a mini-correspondent, more complex factors become enter the deliberation. Of primary interest are the obstacles and accompanying risks to becoming a mini-correspondent. The broker must improve its compliance, expand its application processing, and broaden its reporting requirements. Additionally, the broker must obtain a lending license in the states in which it is licensed, or consider a correspondent lender license, which, though not available in all states, may have lower net worth requirements than a full lender license. Please note that it is important to be aware of potential issues with captive warehouse lines, or table funding, because if a mini-correspondent is found to lack the bona-fide characteristics of a correspondent lender, any closed loans could lose their qualified status and open the organization to significant liability. It is not entirely clear what test will be used to evaluate the bona fide characteristics required, but it is clear that regulators will look to the substance of a correspondent-investor and correspondent-warehouse line relationship to evaluate whether a loan has been table funded or closed and sold in a secondary market transaction. Though many warehouse line providers cater to broker-to-banker transition clients, there are additional eligibility criteria, operating fees and annual due diligence reviews to consider. In addition, many mortgage brokers may not have the net worth requirements to qualify as lenders or correspondents in some of the states in which they are licensed. There are additional surety or fidelity bond requirements, as well. As a mini-correspondent lender, it is important to know that closed loans now come with a higher level of risk and responsibility. Even though the investor is underwriting the loan, origination issues arising at or before the closing, such as outdated documents, changes in a borrowerâ&#x20AC;&#x2122;s loan qualifications or com-

pliance violations, could render the loan un-sellable. There is always a risk, therefore an investor will not purchase the loan. Furthermore, the newness of the mini-correspondent channel means that risk of repurchase risk is as of yet untested. This risk is somewhat mitigated because generally, mini-correspondent lenders will be closing USDA and conventional loans in its own name and will still need to broker VA and FHA loans. In order to close FHA and VA loans, minicorrespondent will need to be prepared to fulfill the additional requirements set out by the U.S. Department of Housing & Urban Development (HUD) and the U.S. Department of Veterans Affairs (VA) to close those loans as a lender. One final aspect to consider is whether or not the move to the mini-correspondent channel will be profitable enough to be worthwhile. As mentioned earlier, a risk in the mini-correspondent

channel is that an investor may not purchase a loan. Whether or not a purchase ultimately occurs, the fees to maintain a loan until a purchase does occur, as well as a warehousing fee that will be assessed on all loans, may negate the initial financial advantages of the mini-correspondent channel. Personnel and maintenance costs inherent in the lender side of business may further deplete profitability. The move to mini-correspondent is not all risk, and the popularity of the mini-correspondent channel makes clear that the new platform offers certain benefits. First, becoming a lender can provide a company with independence and autonomy with regard to business operations and pricing flexibility. Loan originators will also not need to worry about the three percent cap because compensation paid by a lender to its loan officers is not included. Additionally, lender-paid com-

pensation does not need to be included on Box 1 of the Good Faith Estimate (GFE). Lastly, the mini-correspondent could receive fees from a borrower on a borrower-paid transaction. Factors such as licensing, fees, risk and reward are the more apparent and tangible aspects of the decision to become a mini-correspondent, but they are simply one of the levels brokers must contemplate. What often goes unexplored is whether or not the practice of becoming a mini-correspondent fits with the personality and strengths of an existing company. Broker-owners who enjoy the complexity of managing and operating a small business, who seek further autonomy of their operations, and who are looking to continue to expand and grow, will find that the mini-correspondent channel is ideally suited to their philosophies. On the other hand, broker/owners whose companies’ greatest strengths lie in direct

sales and origination may find that the mini-correspondent channel is not necessarily the best personality fit. Our advice is the old adage “Know Thyself.” The move to become a minicorrespondent should be made for the right reasons, and a broker needs to clearly understand both the risks and rewards inherent in this shift. It is an individual decision to be made by each company and, as mentioned above, should be made with all the considerations on the table. A broker who understands the risks and rewards and decides to become a mini-correspondent, must be sure to partner with an investor who understands its business model and will help it succeed. Patti White is Norcom Mortgage’s vice president of correspondent lending. She may be reached by phone at (860) 8993793 or e-mail 77

n Connecticut Mortgage Professional Magazine n OCTOBER 2013

“Branding is not about getting your potential customers to choose you over the competition. Rather, it’s about getting your prospects to see you as the only choice that provides a solution to their problem.”

Branding in Today’s Purchase World Consider the correspondent or mini-correspondent channels to help brand your business By Scott Compton In today’s competitive market, brokers and bankers are exploring many alternatives to branding themselves as the lender of choice. Whether you are marketing to a potential customer or a partner such as a real estate agent, you must think about how you can brand yourself as the lender that they go to

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


meet their needs. The American Marketing Association (AMA) defines a brand as a “name, term, sign, symbol or design or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.”

The AMA considers a brand more like a set of mental associations held by the consumer that add to the perceived value of a product or service. It is important to distinguish between brand identity (how the organization sees itself) and brand image (how others, most importantly consumers, see the brand or organization). Brand identity answers the question, who are we? Brand image answers the question, who do people think we are? A brand image is etched into the minds of consumers by the experiences consumers have with the products and services a company offers. The experiences a customer or partner has with the mortgage company can also build special meaning into the brand over time. For example, if the term “River Town Mortgage” is viewed as a successful brand, consumers will immediately recognize it and associate certain characteristics with it, allowing them to simplify their decision making process when it comes to selecting a financial institution. Your brand resides within the hearts and minds of your customers and your prospects. It is the total of their experiences and perceptions. Some of these you can influence and some you can’t. Effective branding can lead to strong customer loyalty. A strong brand is invaluable as the battle for customers intensifies day by day in the mortgage world. It’s important to spend time investing in research, defining and building your brand. Your brand is a promise to your consumer and your partner. It is a foundational element in your communication.

Deepen your brand by becoming a correspondent lender How exactly can you deepen your brand? One solution many mortgage brokers are seeking today is to become a correspondent lender. While there are most definitely risks involved in becoming a correspondent lender, as there are in any business, the benefits

may out weigh the risks: l Disclosures: As a correspondent lender, whether it is as a mini-correspondent or a full-correspondent lender, you are responsible for disclosures and able to disclose in your own name. l Appraisals: Correspondent lenders must meet all Appraiser Independence Requirements (AIR). However, as a correspondent you are able to order and deliver the appraisal in your name. l Timing: By being more in control of the process you may now have more control over when your appraisal is ordered, when disclosures are sent out and more importantly, when docs and funding take place.

Mini-correspondent is another option for deepening your brand When considering the option of making the move from mortgage broker to mortgage banker, let’s examine the mini-correspondent channel. This channel is not a new option, but is becoming more prevalent in today’s lending world. Here are the primary differences between the wholesale and the mini-correspondent channel: l Origination: The correspondent loan is originated the same as a wholesale loan. l Early disclosures: The correspondent is in control of timing for early as they are the lender or ‘creditor’ on the transaction. In addition, the correspondent is responsible for all federal and state disclosures and compliance with regulatory requirements as the lender or creditor on the transaction. l GFE disclosure: The disclosure of yield spread premium (YSP) and compensation paid to the correspondent company through the purchase of the loan on the secondary market is not required. A secondary market transaction is when the investor purchases the loan post closing or after settlement. On wholesale transactions, all compensation that is


l l


passed through the settlement agent at the time of closing or settlement from borrower or lender must be disclosed on the HUD-1, which requires the same disclosure on the GFE. AIR requirements: Mini-correspondent clients must follow the AIR policy to comply with industry requirements, which requires the use of their own AMC and process. Submission: The loans are submitted (non-delegated) the same as a wholesale loan. Underwriting: Mini-correspondent loans are underwritten by the investor prior to closing, much like a wholesale loan. Clear to close: Once conditions are met and the loan is clear to close the correspondent will handle the closing and funding of the transaction.

Ordering docs

There really aren’t a lot of differences in terms of file flow between the wholesale and the mini-correspondent

Step one: Set yourself apart

Why should people buy from you instead of another mortgage lender? Your goal is to own a position in the customer’s mind so they think of you differently from the competition. This is actually a core principle of branding: differentiation. The more unique you are, the less competition you will have. As Seth Godin, marketing guru and author of The Purple Cow, says, “The most successful companies today are the ones that are finding a niche and serving it.” That certainly applies to mortgage lending. When it comes to branding, size doesn’t matter: niches do. What niches are you serving? Is it Step two: Know your VA, USDA, jumbo products or purchase target customer business? As a small mortgage compa- Who is your customer, and what is the ny, you can’t be all things to all people. one thing they ultimately want from you? It’s not always about price. But you can identify your niche. Often it’s about making sure you can l Old homes niche: Do you know a get the job done in a timely, profes-

sional and stress-free way.

Step three: Develop your brand personality How will you show your customers and partners what you’re all about? If you promise quick service, what will “quick” mean inside your company? How will you make sure service stays at the level you have established? Your branding strategy doesn’t need to be more than one or two pages long. It may even be simple as a short paragraph.

Make your brand your biggest competitive weapon Becoming a correspondent may be just what you need to work along with your marketing plan to establish and define your brand. It will allow you not only to have more control of the process, but it will also to help build your brand by allowing you to disclose and order appraisals in your own name. Scott Compton has more than 20 years in the mortgage business, and is the regional manager for Plaza Home Mortgage Inc.’s Boston office, leading “Team Boston” in the successful transition to the purchase market. He may be reached by e-mail at or call (781) 246-5505.

We have them! Do you? Because we bond thousands of mortgage companies across the country we use our buying power and leveraged competition among multiple surety companies to offer underwriting parameters and lower rates that other bond agencies only wish they had. Don’t wait for your bond’s expiration. Trade in your overpriced bond for a new bond – And start saving money today!


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

l Funding: The loan is funded through the warehouse line and the loan is charged an interest rate, which may be offset by interest that the mini-correspondent earns on the loan. l Purchase review: Once the loan funds, the mini-correspondent ships the loan to the end investor for purchase review. l Outstanding conditions: If items are outstanding, a STIP sheet or purchase condition sheet will be sent to the mini-correspondent client to fulfill the outstanding items.

Branding and marketing plans work hand in hand Every company—no matter its size—should have a marketing plan. A marketing plan defines your targets and focuses your vision and mission.

neighborhood full of large, beautiful old homes? Become an expert in Energy Efficient Mortgages and partner with local real estate agents to sell those homes fast. Research shows that younger buyers think that energy efficiency is very important in their home purchase decision. l The remodeling niche: Do you know an area with lots of foreclosed properties? Become an expert in 203(k) Streamline loans and help buyers turn those run-down homes into their dream homes. Give a “Lunch & Learn” presentation at realtors’ offices to educate them about the uses and benefits of these loans. l The retirement purchase niche: Live in an area with an older population? Become an expert in reverse mortgages and help retirees buy a home with a reverse mortgage. More than 10,000 people turn 62 every day, so the market opportunity is HUGE.

Once the loan is clear to close, the mini-correspondent orders loan documents from their doc provider. Most mini-correspondent clients will use a fulfillment service that completes this task for them. Many warehouse banks will provide or partner with fulfillment companies to handle this service for the mini-correspondent banker. Some warehouse banks may require a specific fulfillment service. Fulfillment service is a great option for many correspondent clients because it eliminates the need for additional staffing and may reduce liability. In some cases, the Investor may draw closing documents for a mini-correspondent client.

channel. Below illustrates the flow of the mini-correspondent loan.

“As a mortgage broker in today’s economy, I want my referral base to always be thinking of me.”

Bridging the Gap By Amy Goldstein

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In today’s world, the job of a mortgage professional isn’t comparable to those of days gone by. The expectations of a mortgage professional are different; more structured by rules and regulations that are ever-changing, along with an unpredictable financial environment. The days of easy lending are over. A borrower can no longer just walk into the lender’s office and get a mortgage because they have strong equity, assets and credit. The days of one pay stub, one bank statement and the first two pages of the 1040’s are over. Today, when a borrower makes application, they must provide full documentation supporting income, expense and asset accounts. They must have a minimum credit score, and in most cases, be “Approve” or “Eligible” through an automated underwriting engine. The words “automated” and “mortgages” didn’t go hand in hand until the late 1990s when Fannie Mae and Freddie Mac introduced brand new automated underwriting engines. These automated underwriting engines incorporated credit reports and newly designed credit scores into the loan approval process. The automated findings streamlined the

for the mortgage business as more and more loans became delinquent. The massive delinquency caused the federal government to get involved. Federal involvement always takes the form of regulation, and the industry absorbed new regulations regarding appraisal independence, licensing, loan officer compensation, RESPA, TILA, (to name but a few). Fannie Mae and Freddie Mac went from private enterprises to government agencies, and although now on the back burner, are on the chopping block to be further restricted and/or eliminated. A new agency, the Consumer Financial Protection Bureau (CFPB) was created to guaranty fairness and transparency to the consumer. New regulations known as Qualified Mortgages (QMs) have been created and go into effect Jan. 1, 2014. QM may cause lenders to offer fewer loan types. Interest rates have increased from their historic low levels, and the Federal Housing Finance Agency (FHFA), the conservator of both Fannie Mae and Freddie Mac, is considering reducing loan limits in order to reduce the government’s liability on mortgage defaults. Large money center and mortgage banks are jettisoning mortgage loan employees by the thousands to prepare for the new reality of lower loan production.

documentation and approval process, and loan officers and processors would typically “Document to the Findings” and obtain less and less documentation from the borrower. Additionally, by using credit scores, the loan officer and processor didn’t get as in-depth with the borrower’s credit profile as they once did. Finally, by “Documenting to the Findings” the loan officer and processor could easily dispute what they considered to be an underwriter’s unreasonable conditions. The automated framework helped to standardize loan approval, but might have made credit quality more dangerous. When specific new loan programs were introduced, the automated underwriting engines were adjusted to comply with the new program requirements. Want to reduce the programs minimum credit score. Adjust the engine. Want to increase the programs debt ratio. Adjust the engine. As long as the loan got the “Approve” or “Eligible” findings, it was a loan that could close. Loan approvals as a percentage of loan applications taken were on the rise, but credit quality began Where do we to decline. go from here? The year 2008 was a breaking point Mortgage banking is such a bipolar business where the peaks are high and the valleys dip ever so low. What type of consistency do we have while tackling the everchanging interest rates, rules and regulations. The one thing that remains the same, and has remained the same since the mortgage industry began is the public’s desire for homeownership and their need to finance homes. The mass market advertising created by the Internet and other forms of social media is the talk of the town, every type of business uses social media to advertise their products and reach a broader spectrum of clientele. Use it! I’ve been in this business since I was a little girl, as my father is a mortgage professional and has been for more than 40 years. I’ve seen the good, the amazing, the bad, and the horrible, and then back to

the good again. The business I learned was a mesh and a cross between the old and new. I had no other choice nor any desire to learn how to do anything mortgage related without the use of a computer. Social media, such as Facebook and Twitter started out being a college thing, used more for meeting new people in a new place rather than by connecting with others who could become a huge part of your referral business. Connecting with people is our job, and social media allows us to connect to a plethora of contemporaries who may be looking for our services. Technology isn’t something to shy away from. Video blogging, and blogging in general, will send a message to your clientele in a very personal way. I have learned that my clients want to know me, and when they do, they are more likely to trust my opinions regarding mortgage finance. I build that trust through communication, phone calls, e-mails, face to face meetings, Facebook posts, Twitter posts and entries on my personal blog. I want my clients to know me personally because when they do, they will feel more comfortable. When they grow to know me better, my referral base will grow. As a mortgage broker in today’s economy, I want my referral base to always be thinking of me. I want them to discuss my work, and I want them to tell their friends to look me up on the Internet, to read my blog, connect with me and then give me the opportunity to work for them. There is a high demand for homeownership, and it’s our job to be ready to help give our clients the best, state-of-the-art, high-tech service they are going to be shopping for. Amy Goldstein is a long-time mortgage broker whose reputation for excellence supersedes itself. Having worked at BMIC Mortgage Inc. since 2001, Amy quickly grew her client base helping BMIC become one of the best known mortgage companies in the D.C. Metro area. Amy has been recognized in National Mortgage Professional Magazine as one of the “Top 40 Under 40 Most Influential Mortgage Professionals” as well as one of the “Top 25 Most Connected Mortgage Professionals.” She may be reached by phone at (301) 231-5770 or email

“In a nutshell, I am a good person … that is the best advertising you can do.”

more time with your borrower, create a friendship and leads to more referrals.

Bad Robot! By Eric Weinstein

l Do a lot of loans per month because you have to, because you are paid so little per deal. This means you have less time to interact with people and less time to build a personal bond. This equals less referrals and more money spent on advertising to get more deals. In effect, you are recreating the wheel with every deal. l Get paid more per deal, so you don’t have to do so many deals per month. This allows you to spend


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

word: Money. You just make more money per deal being a broker … pure and simple. That means the number of loans you have to do per month is less. That means you can take more time (and care) with each loan. I have been a mortgage broker for Eric Weinstein worked in banking, on more than 20 years now. I have seen the commercial real estate side until all sorts of business plans for marketing, including a telemarketing plan, a mass mailer plan, and worse of all, the spam e-mail plan, just to name a few. I am not saying these are not without merit. Evidently they work to some degree, as companies continue to use them. They just don’t fit my personality. That is, to spend money for something I can get for free. My business plan is simple, inexpensive and fun. I do a good job, people tell their friends, repeat. I get all of my loans by word of mouth. I don’t advertise per se, unless you count the free pen I give out at application. I explain the deal to them in detail, I answer my calls promptly, I joke around with them, and I ask about their kids. I make sure everything goes smoothly. In a nutshell, I am a good person … that is the best advertising you can do. Just, be a decent human being. People like that. So here are the two basic business models as I see them:

Have you noticed that the unemployment rates hover around seven percent no matter how much the economy seems to improve. Let me tell you why … Robots! They are everywhere. When I go to the supermarket, there are 12 checkout lanes. Not too long ago, they were filled with middle-aged women monotonously scanning your beef jerky and canned peas, while some pre-pubescent pimple faced boy bagged them. Now, you are lucky if you find two lanes crewed. The rest are all devoted to self-checkout aisles, manned by, you guessed it, robots. I am so old, I remember when there was someone to pump your gas at no extra charge. Check your oil, Mister? Automated toll booths, automated tellers, automated 411 information … where are all the servants? Unemployed, of course. Well, Eric, that was a nice rant, but “What does this have to do with mortgages?” I don’t know about you, but when I go to the supermarket, I make a bee line to the aisle with a person, not the self-service lane. If given a choice, it is my feeling, and business plan, that people want to deal with another person they can see, hear and touch versus some faceless voice over the phone. I make it a point to personally meet all of my borrowers at the time of application. I pick up papers when needed. I attend the closing. For this, I get terrific referrals and a Five-Star Rating on Yelp! It takes time, but I am paid really well per deal, so don’t worry about it. In my article “Go Dinosaurs” (page 40 of the August 2013 issue of National Mortgage Professional Magazine), I discussed the benefits of being a broker versus a banker. If you missed it, let me sum it up in one

These, of course, are the extremes. Most loan officers create a synthesis of both. My points is that you should be striving for the latter, not the former, as your ultimate career path goal. If you are happy just doing the first of these choices, then congratulations R2-D2, you are officially a robot.

1991, when he fell in love with residential lending. In 1995, he started a small mortgage company in his basement called Carteret Mortgage Corporation, which in 2003, grew to one of the largest mortgage broker companies in the United States. These days, Eric is semi-retired, doing mortgages by referral only. As he likes to put it, “He is either saving people money per month or helping them buy a new home. What a great job!” He may be reached by phone at (703) 505-8692 or e-mail

“Before you call hospice for housing finance entrepreneurism, consider the juxtaposition of public policy and regulatory actions with private enterprise’s response.”

vate enterprise. Modern government leaders are intent on getting the government out of housing finance and pushing private enterprise to take the risk and reward of housing finance fully By Daniel Jacobs into the private sector. During Bill Clinton’s presidency, the Administration Entrepreneurism is a hallmark of vate enterprise’s response. Despite the published a document, “The National American business and industry, a cor- apparent market and regulatory adver- Homeownership Strategy: Partners in nerstone of the American way. So too is sity, there is a renaissance of housing the American Dream,” which stated: homeownership, but is entrepre- finance Entrepreneurism among us. “For many potential homebuyers, the neurism in housing finance on the lack of cash available to accumulate the precipice of its death or on the verge of Government pressure required downpayment and closing costs a renaissance? Before you call hospice for entrepreneurism in is the major impediment to purchasing a for housing finance entrepreneurism, housing finance consider the juxtaposition of public The idea of entrepreneurism in housing home. Other households do not have sufpolicy and regulatory actions with pri- finance is not one pushed only by pri- ficient available income to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership.”

Entrepreneurism in the Mortgage Business

Are we on the precipice of its renaissance or death?

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


But wait, there was bipartisan governmental pressure for the private sector to more fully participate and expand access to housing finance. George W. Bush, in a 2002 speech on housing, said: “There’s a homeownership gap; a gap that we got to work together to close. And by the end of this decade we’ll increase the number of minority homeowners by 5.5 million families. “One of the major obstacles to minority homeownership is financing. Fannie Mae and Freddie Mac have committed to provide more money for lenders … Freddie Mac just began 25 initiatives around the country to dismantle barriers and create better opportunities for homeownership … One of the programs is designed to help families with bad credit histories to qualify for homeownership. “Corporate America has a responsibility to work to make America a compassionate place.” This bipartisan encouragement of the private markets to more fully, creatively and expansively participate the housing finance was bolstered by relaxed government regulations and

cheap, easy access to a robust government-backed secondary market for private enterprise. As we know, this public-private partnership worked well in terms of increasing home loans and homeownership. But, as we are also painfully aware, this very same success led to a cataclysmic meltdown of the U.S. housing market.

Government regulation The grand public-private partnership to spawn innovation and broaden access to housing finance for the masses not only failed, but the government reversed course by proposing and implementing an unprecedented degree of new financial regulations. While few people dispute the need for the housing finance industry to have more sensible controls, even fewer dispute how the degree of new regulations has swung the pendulum in an equally unhealthy manner. Consider the 3,200-page DoddFrank Act and the Federal Reserve’s rule on loan originator (LO) compensation. This landmark legislation not only codified certain business practices but created an entire new agency—the Consumer Financial Protection Bureau (CFPB)—to promulgate regulations and have comprehensive oversight of the entire financial services industry, including housing finance. Just last month, the CFPB released its final rule on LO compensation. The 273-page, single-topic document clarified and refined rules on LO compensation. The Qualified Mortgage (QM) and Qualified Residential Mortgage (QRM) Rules will further serve to regulate and quash innovation, some industry professionals say. Companies will have such draconian risk imposed, they will not invest in the housing market and they will simply invest in higher yielding, lower risk opportunities, many economic analysts have said. Various studies cite skyrocketing costs to produce loans given the expense of compliance implementation. While some of these costs were absorbed by lenders during the last refinance cycle when margins were fat and

The new housing finance regulations

l l l l l l

Due Diligence Quality Assurance/Control Compliance Audits Fraud Detection Risk Management

Service providers to lenders have certainly evolved and adapted, finding the non-regulated space to support the regulated participants in the industry. The question is whether private enterprise will step up to the plate and extend a hand to the GSEs

to take over the lending component of the business in a meaningful manner. Will entrepreneurs and private enterprises remain on the periphery or re-emerge at the core of housing finance? There is some evidence that we are at the precipice of a renaissance for private enterprise to more fully participate in housing finance in the very area the government is both regulating further and extricating itself from direct participation. A handful of well-funded lenders have begun to issue non-agency loan securitizations. recently. The market is not yet robust, but it is emerging slowly and will likely gain traction as Wall Street heals from its past housing finance wounds and once again becomes comfortable with the riskreward value proposition of housing finance investments. Like entrepreneurs, Wall Streeters are Darwinian and adapt to their environment for success. And Wall Street creates a market for entrepreneurs to become middlemen in the housing finance business once again. Closer to the frontlines and consumer, originators have adapted to the complex methods of complying with regulations, including the neutered methods of creating economic incentives to originators promulgated by the Dodd-Frank Act, the Fed and CFPB. Origination firms have continued to grow, multiply and hire sales staff, even as production has slowed in a rising rate environment. While large banks have laid off

large swaths of mortgage staffers who were primarily focused on portfolio retention refinances, small- and midsized private origination firms have been growing their market share, scooping up purchase-money originators and volume. So, between the service providers working to help lenders, the new entrants to private securitizations, the surge of non-bank lenders originating a growing market share of loans, we see Darwinian Entrepreneurs emerge! The thing about Darwin’s Theory of Evolution that is so similar to entrepreneurs in America is that the process of adaptation and reemergence is a never-ending one. In the face of unprecedented industry change, even when government regulation may seem to shorten entrepreneurism to a four letter word, do not be so quick to plan the entrepreneurs’ funeral, as they continue to adapt and dominate the housing finance industry. In fact, we may just be witnessing an entrepreneurial renaissance in housing finance. Daniel Jacobs is co-founder of Pro Mortgage Branching Solutions, a retail branch matchmaking service. Daniel has grown several retail branch organizations to more than $4 billion of annual production, in addition to participating in multiple mergers and acquisitions of mortgage origination platforms, title companies and property and casualty insurance companies. He may be reached by e-mail at or visit


Our mission is to use the power of video to complement the written word and inform, educate, enable and empower mortgage professionals with the most relevant, up-to-date information and advances in the mortgage industry. It is our goal to offer worthwhile information to our viewers, while delivering it with the utmost professionalism.


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

The potency of entrepreneurism amid regulation

are designed to avoid a repeat of the transgressions of the private sector that lead to the last housing crisis. They are designed to protect consumers. There are many industry professionals, however, who feel the ability of private business to operate in the American entrepreneurial spirit has been rendered impotent within the realm of housing finance. However, the evidence suggests otherwise. The expo floor of the MBA Annual Convention in 2008 seemed more like a mausoleum than an industry trade show expo. It was quiet, morose and void of activity—a stark contrast to prior years of hustle and bustle, business deals being struck and chatter about at the evening’s best parties. There were far fewer vendors present, with smaller booths, even empty spots where vendors paid but abandoned their exhibitor space. The last couple of year, MBA’s Annual Expo exhibitors have, and judging from the list of scheduled exhibitors slated for this year’s event, demonstrated how entrepreneurism is alive and well in housing finance. Entrepreneurs are known for finding a problem, a need, and finding a manner to solve it while making a profit. Entrepreneurs are quite Darwinian in nature, always evolving and adapting, with some failing and others—the most relevant, the “fittest”—surviving. That explains the plethora of new companies successfully offering the housing finance industry solutions to navigate, understand and comply with the onslaught of new regulation. A preponderance of exhibitors slated for the 100th Annual MBA Convention and Expo in Washington, D.C. this year are listed in the following categories:

business was plentiful, many companies lenders will ultimately pass these increased compliance costs to the consumer to remain profitable. In 1988, Republican president Ronald Reagan, during his State of the Union speech, literally slammed down an excessively long budget bill, weighing 42 pounds, on the podium and decried, “Congress shouldn’t send another one … and if you do, I will not sign it.” Ten years after Reagan’s primetime visual prop of 42 pounds of congressional excess, Democrat Congressman from Missouri Richard Gephardt used a similar 40-pound bill as a prop when he told his own party leadership, “Ronald Reagan was right. It was a bad way to do business in 1988, and it’s a bad way to do business in 1998.” In neither case was the argument made that the bill being submitted was unnecessary or should be scrapped in its entirety. The point being made was to keep them simple. Canada’s national universal healthcare law—The Canada Health Act of 1984 was 14-pages long (compare that to the 20,000 pages of law and regulation related to the Affordable Healthcare Act in the U.S.). Perhaps we can learn from our northern neighbors how to create simple legislation and regulation. Interestingly, the government wants to now remove itself from direct involvement in funding or guaranteeing housing finance and wants only to regulate it. The grand publicprivate partnership is perceived not only to have failed, but to have been too costly and burdensome to the American taxpayer. With governmentsponsored enterprise (GSE) reform, there is a focus on increased economic risk shifted to private enterprise. In the absence of, or as a precursor to, GSE reform, the QM Rule moves to shift further economic burden and risk on private enterprise for any loan flavor other than vanilla. Given the safe harbor provision within the QM Rule of GSE-backed and governmentbacked loans, significant mixed signals are being sent regarding the government getting out of the housing finance funding business.

“While crisis in the financial markets and an avalanche of new regulation have been felt industry-wide, irrespective of your broker or lender status, there seems to be no question but that it has been more disruptive to the mortgage broker.”

Mortgage Broker or Mortgage Lender? By Chris Jones

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


In mortgage circles, the question of “Mortgage broker or mortgage lender?” is a matter of passionate debate equal to the questions of Keynesian Theory among economists, or the designated hitter among baseball enthusiasts. Perhaps some opinions have been changed due to the disruptions seen in housing finance in recent years. One thing is clear, a dramatically changed mortgage marketplace has been cause for many to reconsider this question. For many years, the path of the mortgage broker had tremendous appeal for many excellent originators. With low barriers to entry with a relatively inexpensive opportunity to build a business, the broker path offered the autonomy to operate a business according to one’s own recipe for success. With limited loan quality risk, the broker could be a dedicated and strong voice for the consumer. With a seemingly endless supply of wholesale lenders and products, the broker could shop for the best price and program to meet the consumer’s need. With so much competition for their business, there was always an outlet to place a borrower’s loan. The mortgage broker needed to worry little, if at all, about warehouse bank relationships, secondary market management, loan quality audits and compliance management. These were distractions that interfered with the higher value-added activities of marketing, brand building, and passionately servicing the customer. While crisis in the financial markets and an avalanche of new regulation have been felt industry-wide, irrespective of your broker or lender status, there seems to be no question but that it has been more disruptive to the mortgage broker. In 2010, RESPA reform clarified by statute the requirement for mortgage brokers to disclose to the borrower the yield

spread premium they received from the wholesale lender. The Loan Originator (LO) Compensation regulation of 2011 mandates that brokers must disclose a minimum of three loan options to the consumer to be in “Safe Harbor,” while also prohibiting the collection of dual compensation from both the consumer and the lender. And, in January of 2014, Qualified Mortgage (QM) regulation will require that the mortgage broker include the compensation they receive from the wholesale lender in the three percent points-and-fees test under the Ability-to-Repay statute. It seems reasonable to assume that QM will have a continuing effect of placing pressures on margins as wholesale lenders reduce broker compensation to meet the points-and-fees test. As a mortgage banker, I won’t pretend to have an unbiased opinion on this matter of broker or lender. I think it is clear that much of the regulatory attention being paid to the industry (both positive and negative in terms of its impact on the consumer) is intended to consolidate the industry, thereby making it easier to monitor and oversee. Rather than deal with the unique impacts of new statute, the complexities of ongoing regulation, and the margin pressures on business economics, many brokers are making the transition to a mortgage lending platform. For those who are mulling this decision, there are a few things to consider that are imperative to a successful transition. Unless you are acquiring a mortgage bank with established investor and warehouse relationships, deep domain expertise in lending compliance, the latest technology, and a growing net worth, your option to being a mortgage lender is limited to joining an existing Independent Mortgage Bank (IMB) with these infrastructures and relationships already

in place. While this choice may eliminate some of the management autonomy that many mortgage brokers value, there are many great IMBs with much to offer a mortgage broker intent on making a change. Finding the right organization to join is the first step. There are many different IMB business models from which to choose. Understanding the choices begins with completing a due diligence on the things most important to you. But, your needs evaluation must also acknowledge the business model additions and changes that are imperative to success in the new mortgage economy. I recommend you consider the following questions as you evaluate your choices: 1. What are the capabilities of the organization, both in the form of financial capital and business development, to support your growth plans and vision? 2. Does the IMB have the compliance management systems and structures that will allow you to successfully navigate an increasingly complex regulatory environment? Can you trust the organization’s compliance competence to protect you? 3. Does the IMB have the training structures and resources to quickly learn new manufacturing workflows, new technologies, new policies and procedures, and new compliance expectations? 4. What kind of on-boarding process and resources will the IMB provide to help transition your existing team in a seamless way? 5. What kind of product and program choice does the IMB offer? Do they have the ability to retain servicing, and create their own products? Does it have a variety of investor relationships as a hedge against the exit of any one investor? And, where it doesn’t have a needed product through correspondent channels, are there wholesale lender options

to complete the product need required by both borrowers and referral partners? 6. If the IMBs business model requires you to manage a P&L, what training, financial tools, and financial analysis support does it provide? Does it provide regular and real-time financial reporting? 7. Is the organization selective in evaluating who it brings on, and do they have a well-defined growth plan? 8. Do the core values of the organization you are considering align with your own? If your core values don’t match their core values, there’s a much higher probability of frustration and failure. Finally, I might share a few best practices once you have made your choice to retire your mortgage broker credentials in favor of a mortgage banking platform. First, be fully invested and committed to the change. Inevitably, there are going to be growing pains and learning curves. Any organization who tells you otherwise is either selling a bill of goods, or doesn’t have much experience in helping mortgage brokers make such a significant transition. Second, be prepared for the fact that while you are likely to give up some of the way you’ve done things as an independent mortgage broker, you are going to gain much in the way of capability, organization access, industry connectivity, domain expertise, and a backroom equipped with new resources committed to your growth and success. Chris Jones is senior vice president of business performance for Primary Residential Mortgage Inc. (PRMI). In his role as senior vice president, Jones oversees the PRMI’s enabling process organizations, including finance, human resources, IT, software development, branch relations, business development and marketing. He may be reached by phone at (801) 596-8707 or e-mail

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Charlie Crowe has joined the company as VP of business development.



l EMC2 Data has appointed Michael Larssen, CMB, as CEO.




l Generation Mortgage Company has announced the addition of Alicia Hahn in the role of regional retail sales manager for the companyâ&#x20AC;&#x2122;s western region.






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: Heard on the Street/Mortgage Professionals to Watch column Phone #: (516) 409-5555 E-mail:


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

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


l Kyle Kelly has joined Mortgage Network Inc. as a loan officer serving the greater Philadelphia area. l The Consumer Financial Protection Bureau (CFPB) has named Steve Antonakes as deputy director of the agency. l Norcom Mortgage has announced the addition of Mary Downing as a wholesale account executive. l 360 Mortgage Group has announced that it has hired Scott Brackett as regional manager for the western region of the U.S. l The Mortgage Bankers Association (MBA), parent corporation of the Mortgage Industry Standards Maintenance Organization (MISMO), has appointed Harry

Gardner to the MISMO board of directors. LenderLive Network Inc. has named Robert Fulton senior vice president of secondary and capital markets for its correspondent lending unit. LenderLive has also announced the appointment of Bob Crittenden as vice president of sales for its GuardianDocs division. CoreLogic has announced the appointment of Olumide Soroye as managing director of CoreLogic Information Solutions. ReverseVision Inc. has announced that it has hired Kelly Kelleher as the firmâ&#x20AC;&#x2122;s marketing manager. The lending division of Carrington Mortgage Services LLC has announced the appointment of Kathy Keller as branch manager of its Springfield, Va. Office. Sierra Pacific Mortgage announced that Sean Browning has joined the company as vice president of retail lending. The StoneHill Group has hired John Freda as manager of compliance and internal audits. V.I.P. Mortgage Inc. has announced they are expanding their team with the addition of Steve Miksta.


Personal & Professional Development

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


By Robert Ottone

me. Learning to deal with rejection is another key aspect. Always up your game. More sales training and psychology courses will help you in the long run. Learn how people think. Take writing courses to improve grammar. Professional development classes that help you learn how to conduct yourself are also key. Professionalism has really dropped off over the past decade or so, so it’s important to get back to the basics of professionalism.

eff Van Note is a leading financial expert in the New York area, with a decadeplus of experience in the mortgage industry. He prides himself on getting to the closing table within 30 days, as well as driving new business opportunities via innovative services. Van Note is also a recognized leader in the realm of customer service. Covering a variety of What are some things that topics, Van Note was keen can measure personal to shed some light on comdevelopment? mon issues that could Van Note: How you feel affect businesses, as well based on rejection, I guess. ways to drive business in a Jeff Van Note You want to be able to comdifficult economy. Despite his youth, Van Note’s experience has bat every obstacle in your way. Through been varied and has made him a top- personal development, know what earner for a good portion of his career guidelines are, and close deals. Learn in the mortgage industry. In this second what it takes to seal the deal. Stay on part, we take a look at Jeff’s take on top of regulations and changes in the personal and personal development, industry, and don’t worry about dollar signs … focus on the industry. Arm and more. yourself with information, as it’s all What are some of the things you do to fresh ammunition. You’ll be unstopovercome personal development pable at that point. You have to have active role modobstacles? Jeff Van Note: Never get complacent. In els in your life that hold you accountevery aspect of my life, I never get able for what you’re doing. Whether complacent. I always look for some- you like what the person has to say thing to improve upon. In sports, I or not, it’s important to listen. always relied on natural ability, but Having someone to answer to that once people started working out and respects you and that you respect can improving, they became better than only help improve you. Criticism can


often be misinterpreted as an attack if you have no confidence. Getting an honest evaluation from a person you respect is important. Most in the industry don’t trust their source of information. The key is getting the right people. How do you find a mentor who doesn’t have a family member in the industry? Van Note: Very hard. Most people are only as good as their last sentence or their last word. Most people in the industry don’t have the time for a mentor-student relationship. You have to look at the reasons why a person wants to mentor you. You want to look at consistency … if they have been successful or not, and look closely at their last decade of business. Why emulate someone who hasn’t been successful over the past few years? Advice and experience do not come cheap. You want to find someone in whatever industry you are in who can teach you the values and morals of the industry you’re in. If I didn’t have my dad and my uncle around, I wouldn’t be anything. I certainly wouldn’t be at the level I have reached at such an early age. I think, more often than not, the right comments and the right insertions at the right times can have a tremendous impact on an individual. It goes a long way. I’ve done that for people, offer some friendly advice and they’ve gone a long way. You

have to be open to advice. Everyone can go online and read about personal development, you know? You can get it for free. When it comes to routines and habits, how do you break bad habits and form new ones? Van Note: You have to work at it, it takes more work than anything else. Most bad habits come from being lazy and unaccountable. You have to want to break the bad habit. No one else can make you do it.” A good habit I have is working six or seven days a week. A bad habit is that I do not always answer my phone. I have too many people who need too many things. It comes down to what’s important for me. Is there anything I can do to help you close within six days? If not, you can wait. Texting is a bad habit. Technology enables my bad habits. When I go to bed, there’s still 400 things that are incomplete. While I may have tackled 2,000 things that day, I lose a little bit every day. Get into the habit of wearing a suit and tie every day. That’s your uniform. You don’t see a football player going out there without a helmet. Robert Ottone is senior editor at National Mortgage Professional Magazine. He may be reached by phone at (516) 409-5555, ext. 314 or e-mail

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Zillow Updates to iOS 7-Friendly Version

Genworth U.S. Mortgage Insurance (USMI) has announced that it will reduce rates and expand its Simply Underwrite guidelines to eliminate nearly all overlays and ensure ease of use for customers that deliver loans using the automated underwriting systems (AUS) of the government-sponsored enterprises (GSEs). The credit policy changes, effective for mortgage insurance (MI) applications received on or after Sept. 16, 2013, closely align

E q u a t o r announced the launch of Loan Management, a comprehensive new compliance and decision tool for delinquent loans. Loan Management works in conjunction with the Equator platform, the most widely adopted default servicing technology and the de facto industry standard. Servicers use Loan Management to control critical decisions and calculations at both a portfolio and loan level, and to enhance compliance through centralization. Loan Management is the entry point for any loan entering the Equator Platform, so servicers can proactively manage compliance on every loan from the instant it enters the continued on page 89

Apartments and units (5+ residential units) • Up to 70% on refinance and purchases • Stated but verified rental income • Loan terms: 1 year, 3 year, 5 year, 7 year and 10 year; fixed IO or fully amortized • Rates from 8.00% to 12.00%, depending on LTV, prepayment and term • Programs with no PP available • Loan costs from1.50% to 4.00% depending on LTV, term and prepayment penalty • We have 2nd position loans available for our commercial products up to 60% CLTV

Commercial (industrial, retail, church, mixed-use, gas station, auto related, manufacturing, etc.) • Up to 55% on refinances • Up to 60%-65% on purchases • Term 1 to 5 years • Loan costs from 2.00% to 4.00% depending on LTV, term and prepayment penalty Land loan (max LTV 35%, refinance, 50% purchase) call for details

877-700-3703 Office 866-318-4471 Direct Fax • e-mail scenarios to: PB Financial Group Corp. NMLS #357614/PB Financial Group Corp DRE01522495

Disclosures: per FDIC Regulations Section 6500 Part 226, Subpart C, 226.24. The amount of each payment that will apply over the term of the loan is based on simple annual interest applied to the unpaid balance. Loans range from 1 day to 60 months, are interest only and include a balloon payment due at term. Finance charges apply. Payments do not include amounts per property taxes or insurance premiums. This is not a commitment to lend. Rates and points are subject to change without notice. NMLS #357614


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Genworth Alters Underwriting Guidelines

Equator Unveils New Compliance Tool, Integrated Into Existing Platform

Residential n/o/o and investment SFR, condo, PUD (1-4 units) properties • Stated and no doc available • Refinances up to 65% LTV, min loan amount 50K to 5 million • Purchases up to 70% min. loan amount 50K to 5 million • Loan term, 1 year, 3 year, 5 year, interest only or fully amortized available • Programs with no PP available • Rates from 8.50% to 12.00% fixed • Loan costs from 1.50% to 4.00% depending on LTV term and prepayment penalty • We have 2nd position loans available for n/o/o and investment properties up to 55%-60% CLTV

Zillow Inc. has announced the launch of a new interface enhanced for iOS 7 and redesigned home shopping features for the Zillow Real Estate Apps for iPhone, iPad and iPod touch. The new Zillow Real Estate Apps bring simplicity to the time-consuming and complex process of finding the right home, taking advantage of iOS 7’s design principles. In August alone, home shoppers spent over nine million hours on Zillow’s mobile applications, viewing more than 320 million homes. The new apps bring essential information, such as photos and basic home facts, to the forefront, so home shoppers can decide instantly whether they want to learn more about that home or move on to the next one. Individually optimized for the smaller iPhone and iPod touch screens and the larger iPad, the new Zillow Real Estate Apps integrate an enhanced photo-driven shopping experience, allowing home shoppers to slide through thumbnail-sized photos of their search results without leaving the map. Additionally, the Zillow App for iPad now features a redesigned, interactive and full-screen home listing page that allows shoppers to swipe through a full gallery of large photos, just like turning the pages of a magazine. “As anyone who has shopped for a home lately knows, it can be an immersive and all-consuming experience, viewing home after home and photo after photo, to find the right match,” said Jeremy Wacksman, vice president of marketing and mobile at Zillow. “iOS 7 empowers a photo-centric consumer experience with magazine-style listing pages, giving home shoppers a faster, more visual and ultimately more fun way to shop for homes.” Zillow operates the most popular suite of real estate apps across all major platforms, with dedicated apps for the full home-shopping cycle: homebuying, selling, renting, financing and remodeling. More than 60 percent of Zillow’s visits now come from a mobile device.

Genworth’s requirements with those for loans approved by Desktop Underwriter or Loan Prospector, the automated underwriting systems of Fannie Mae or Freddie Mac, respectively. As a result, loans up to 97 percent loan-to-value, with Fair Isaac and Company (FICO) credit scores as low as 620 that are approved by the GSE systems also are likely to be approved for mortgage insurance coverage by Genworth USMI. Lenders only have to verify that the borrower contributed a minimum of three percent of the home purchase price from their own funds. “The expanded Simply Underwrite guidelines offer customers our most competitive and flexible rates and guidelines, making it easier for them to close more loans, faster,” said John Clifford, USMI’s senior vice president of commercial operations. “These adjustments allow lenders to offer affordable low downpayment financing to help creditworthy Americans pursue their dreams of homeownership, and position Genworth USMI to pursue prudent growth.” Additionally, Genworth USMI will offer lower rates and guideline flexibility for monthly and single-premium insurance coverage for mortgage insurance applications received on or after Oct. 1, 2013 (subject to state approvals). The latest changes also ensure that credit union and housing finance agency customers continue to have access to rates and guidelines that meet their unique needs. Simply Underwrite guidelines were introduced in February 2013 as part of the Simplify MISM program dedicated to saving lenders time and boosting their business. Simplify MI extends Genworth USMI’s commitment to offer lenders additional value beyond a competitive price.

We ar Califor e Premie nia’s r Private Direct Mon Lender ey

USA Cares Mortgage Heroes: Angela Jett of Equity Missouri By Joann Muncey

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


The “Show Me State” has been home to many exceptional Americans in our history—people who believe in making a difference in the lives of others. This month’s mortgage hero, Angela Jett, is also working to make a difference in the lives of others. Angela, a 2013 Five-Star Realtor, works with Equity Missouri based in St. Louis, and has been in the real estate industry for 13 years. In that time, she has helped hundreds of families achieve the American dream of homeownership, from buying, selling, investment portfolios, leasing, short sales and foreclosures. One thing that stands out about Angela is that she is very Angela Jett passionate about helping our veterans and their families. In her business model, her mission is to provide the utmost care in service for a family’s real estate needs and personal finances. She works with lenders, financial planners and other professionals who have served in the military and those who have programs to educate veterans on homeownership. Her care and concern also translate in her personal life, where she spends a great deal of her personal time as chair of the Missouri/Southern Illinois USA Cares Chapter. This volunteer position allows her to work with military families in the community who are looking for help and guidance, and also gives Angela the opportunity to reach out and educate others about military families and their needs. My personal quote is, “I believe in justice and truth, without which there would be no basis for human hope. This quote inspires me because the truth is what matters in every aspect of life-the nature of truth becomes grounded in the moments of decisions encountered in one’s life— knowing it, being with it, a part of it, and living it. People will love in truth, fight for truth, and die in knowing the truth.” “There is so much that faces our families today at all economic levels. In working with so many families, I have found that making the right decisions for the immediate future and for long-term planning are both extremely important to my clients. Investing in real estate is a huge decision. However, there is a larger picture that we want to get across. Planning how best to protect those investments and having a plan for maximum efficiency of the family’s personal finances can ensure a sound peace of mind and a wealthier future for generations to come.” USA Cares is a 501(c) 3, non-profit organization that provides financial and advocacy support to post 9/11 veterans and their families. USA Cares has four core programs: Combat Injured, Housing Assistance, Emergency Assistance and Jobs Assistance. Nationally, USA Cares has responded to more than 45,000 requests for assistance with approximately $10 million in indirect-support grants. Additionally, USA Cares offers a Certified Military Housing Specialist (CMHS) course to all housing professionals which offers 10 CEUs from the Association of Financial Counseling, Planning and Education. For more information, log on to Joann Muncey is director of housing assistance at USA Cares, where she has worked since 2008. She may be reached by e-mail at USA Cares is a 501(c) 3, nonprofit organization that provides financial and advocacy support to post 9/11 veterans and their families. USA Cares has four core programs:  Combat Injured, Housing Assistance, Emergency Assistance, and Jobs Assistance.  Nationally, USA Cares has responded to over 45,000 requests for assistance with approximately $10 million in direct-support grants.  Additionally, USA Cares offers a Certified Military Housing Specialist Course to all housing professionals which offers 10 CEU’s from the Association of Financial Counseling, Planning and Education.  For more information, log on to


Growing Your Real Estate Agent Relationships, Grow Your Mortgage Business Part IV Consider Forming an MSA With Select Realty Offices By Jean LeBlanc It’s probably easier to build on an existing relationship that is already providing business, but would probably bring in more through a Marketing Services Agreement (MSA). The marketing agreement could help firm up that relationship. Consider this option carefully, though: If you are already receiving volume from this account, why should you start paying for business you are already pulling in? And if your loan originator is good, they should know how to build business from established relationships. Another option is to seek out a high producing real estate office that ideally just lost their primary MSA with a major lender and until now has been virtually impossible to break into. In this case, the MSA provides incremental volume since the historical volume has been zero. It’s also far easier to look back and judge this type of MSA, since all the volume is attributed to the partnership. In the first example, the lender may never know for sure if the MSA provided the business or if they would have gotten the business anyway. Once you chose your potential MSA partner, you’ll need to gauge how supportive the broker will be in allowing access to the office. Before you sign an agreement, the mortgage manager, loan officer and real estate broker must have a meeting to discuss the marketing opportunity. Here is a list of information a mortgage manager should gather from the real estate broker to determine if an MSA is a good idea: l The real estate office’s annual volume l Percentage of listings versus sales (you should be far more interested in an office that mainly works with buyers) l Is volume 100 percent residential? l Do you have multiple offices/locations? l Is the volume trending upward or downward? l How long has the broker been with the company? l Is the broker still actively selling homes?

l Who are the top-producing real estate agents, are they open to new relationships, can I interview them? l Is the firm a training ground for new agents? l Do you have a training program for new agents? l Can my company provide mortgagerelated training? l What percentage of agents are parttime? l Broker, please provide an overview of management style: How active are you in the real estate agent’s business, or are they all independent? l How often do agents use the office to meet with clients? l Do you have other active MSAs? Do these partners have a desk in the office? How much are you paying them? How many transactions do they originate per month from your office? l How often do you have sales meetings? Does everyone attend, including your top agent(s)? l Do you advertise? Can you show me recent ads? l What is your expectation regarding compensation? l What kind of access will we have to your agents? Remember, you’re paying for access, not volume, but you still must somehow evaluate a reasonable payment. Once these questions are answered, then your management team can determine the amount that should be paid based on a capture rate of overall volume and what that is worth in basis points. To learn more about structuring MSAs with realty offices, download our eBook, Creating Win/Win ABAs & MSAs. Jean LeBlanc is director of marketing for Guaranteed Home Mortgage Company. For more marketing tips, download the eBook, 13 Ways to Juice Up Your Marketing in 2013, by going to and clicking on the eBook offer midway down the page. She may be reached by phone at (914) 696-3400.

new to market

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system. They can also use Loan Management’s powerful analytics to determine the optimal outcomes for each loan based on its own unique characteristics. Loan Management is an evolution of Equator’s Loan Segmentation technology, and is built on Equator’s next-generation, flexible enterprise rules engine. Fully configurable, the system integrates compliance requirements and rules from all of Equator’s other default products, as well as any client-configured rules, which combine to provide the most comprehensive verification process available. Loan Management is fully compatible with legacy platforms and comes pre-configured with Equator’s best practice solutions, based on millions of decisions and years of experience. Once a loan is entered in the Equator platform, Loan Management checks it for compliance with a number of guidelines and regulations including those set forth by state and federal government entities, investors and the CFPB. After all compliance requirements are identified and met, Loan Management then analyzes all possible outcomes for the loan, determines the option that will most minimize loss, and recommends that optimal outcome decision to the user. Loan Management also acts as a “control tower,” assigning loans to proper outsourcers, individuals or teams. “As rules and regulations become more and more complicated, servicers are being faced with more and more challenges,” said John Vella, COO. “Our clients have asked for ways to ensure they’re compliant, and we’ve created Loan Management in response to those requests. Loan Management is the soupto-nuts solution that helps servicers stay compliant and profitable. While no two loans are identical, Loan Management provides a configurable framework for comprehensive, accurate evaluation.” “Using Loan Management, servicers can quickly and reliably evaluate loans to alleviate compliance concerns at the beginning of the process,” said Equator CEO Chris Saitta. “Applying the appropriate rules at the beginning of the default process can save time on the backend, and reduce the overall cost to service.”

ing performance to that of their peers, enable sales managers to evaluate branch performance, empower marketing departments to track ROI and allow loan officers to review marketing activities and results in order to make changes to current marketing plans. “The Business Analysis Reports enable lenders’ marketing departments to know precisely where they stand compared to their competitors and how they can optimize their marketing to deliver maximum ROI,” said Jim Blatt, president and CEO of Mortgage Returns. “This tool helps identify the marketing gaps many mortgage lenders are coping with when using incomplete CRM systems by empowering them to deliver measurable results, even as overall production numbers decline.”

Mortgage Returns Launches New Analysis Report on Originations

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:

W Why hy NAP NAPMW? MW? Three Three Simple Reasons Education E duccation d

Advantage Systems Unveils Advanced Reporting Module

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

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n Connecticut Mortgage Professional Magazine n OCTOBER 2013

New to Market column Phone #: (516) 409-5555 E-mail:

Organized purpose pose of providing providing education education to to professionproffe essionOrganized ffor or the pur mortgage tgage industry, industry, NAPMW N NAPMW offers offers educaeducaals in all phases of the mor manyy vvenues enues – seminars and w workshops orkshops held ar around ound the tion via man at its Na tional EEducation ducation C onference held on-line,, and at National Conference ccountry, ountry, on-line May. each M ay.

Advantage Systems has launched its Advanced Reporting Module to enable mortgage lenders to complete the Mortgage Bankers’ Financial Reporting Form (MBFRF) and the Nationwide Mortgage Licensing System (NMLS) Call Reports faster and more efficiently. The Advanced Reporting Module provides lenders with the ability to easily produce the required financial components, such as income statements, balance sheets and statements of cash flow for both reports. Schedules for both reports are pre-built so that users only have to tailor them to their accounts. These templates can be used or easily modified for future use and completed reports can be exported in the XML format, which is allowed by the NMLS. “Our Advanced Reporting Module enables lenders to complete MBFRF and NMLS Call Reports faster and more accurately so that they can focus on more important areas of their businesses, such growth and profitability,” said Brian Lynch, president of Advantage Systems. “The Advanced Reporting Module is a good example of how AMB is uniquely tailored for the mortgage industry.”

Your turn

Mortgage R e t u r n s announced the company has launched its Business Analysis Reports, an in-depth report giving mortgage originators’ marketing departments information on production statistics, marketing ROI, customer retention and loan officer performance that can be used to increase the impact of their marketing efforts. The Business Analysis Reports are designed to compare lenders’ market-





Are you a mortgage origination professional? Are you exceptional? Is your company? Gateway Mortgage Group has immediate opportunities in 16 states. Our origination teams enjoy: • A local branch- and origination-centric model • The perfect balance of corporate support • Competitive compensation plans And best of all, our entire platform is built with one thing in mind— helping local originators take their success to the next level. Visit our careers page on LinkedIn. Follow us. Or call us at 888.360.3773. And we will show you YOUR Gateway to a Great Way of Life™! Gateway Mortgage Group, LLC is an equal opportunity employer. NMLS 7233 HQ: 6910 E. 14th Street, Tulsa, OK 74112


It’s Time…to join one of the Top Mortgage Bankers as Branch Managers or Loan Officer NOW! Why? You Have Our Guarantee!

StreetLinks Lender Solutions (800) 778-4920


The Bond Exchange (501) 224-8895

OCTOBER 2013 n National Mortgage Professional Magazine n

StreetLinks Lender Solutions provides an innovative and comprehensive suite of valuation and service solutions used by lenders, servicers and appraisers nationwide to improve everyday business operations.


StreetLinks industry-leading products include LenderPlus™ full-service appraisal management, LenderX™ lender-executed appraisal management software and SCORe™ appraisal reviews and a series of valuation analysis tools for services. Our commitment to quality and service, embodied by our partnership approach to clients and appraisers, continues to set us apart as the nation’s premier lending solutions partner. For more information, visit

Online surety bond applications, instant underwriting approval, and credit card payments administered through The Bond Exchange NAMB's exclusive partner provider for state license surety bonds. The Bond Exchange is a national surety agency specializing in servicing mortgage license bonds for thousands of mortgage professionals across the country. Low prices and fantastic service. You really can have them both at the same time!

Our Guarantee We will not leave you stranded and alone on an island. Our seasoned operational rollout team will ensure you a smooth transition to our branch platform. Our RHF University will train everyone on your staff. We stand by our reputation of providing ongoing support and communication to every branch , every day. You’re our #1 Priority! We are a Full-Service Banker, a Direct Endorsed FHA and Fannie Lender.  We are a TRUE 48 hours in Underwriting and Closing. We will close your loans on time.  We will give the best service to you and your clients We will give you full access to all marketing and development services from loan origination to hiring to specialty products. We are the Leader in marketing, technology and strategic business partnerships. We assist our Branch Managers in hiring, training and motivating their staff. We will help you build your team. CALL NOW 866-319-4442 or EMAIL or VISIT


United States Appraisals World-Class Service. Nationwide Coverage. Discover Confidence in Your Appraisal Partner! | (866) 562-0123 United States Appraisals combines nationwide coverage with personalized, world-class service. From fast turn-times to rigorous quality assurance and delivery guarantees, we bring much needed confidence to the valuation process. • • • • •

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Fast Turn Times – We guarantee it! Underwriter-Ready reports – the first time! 100% Compliance with all regulations and guidelines Customary and Reasonable Fees and a weekly pay cycle Cutting-Edge Technology provides real time reporting and full integration for a seamless business process Call us at (866) 562-0123 for a free consultation. Or visit to learn more.


We fund your start-up costs Corporate Recruiting Team that puts producers in your branch Direct Connection with the branch managers who are crushing it Proven "Marketing Maps" that will double your business "Next Level Support" to help keep you growing Get a BPS payback from our volume incentive, or build a margin for yourself into your rate! Full capability to control your loan officers' pricing. Create, Customize and Optimize your branch's compensation plan. Full Eagle Lender and In-House Underwriting, Closing and Fundings Currently looking for high-quality producers in: TX, CO, NC, SC, NJ, OH, GA, AL, TN, FL, MS, LA, KY

BROKERS COMPLIANCE GROUP 167 West Hudson Street – Suite 200 Long Beach | NY | 11561 Division of Lenders Compliance Group, BCG is the first and only mortgage risk management firm in the U.S. devoted to supporting the unique compliance needs of residential mortgage brokers. Leveling the Playing Field for Mortgage Brokers Low Cost Monthly Membership Includes: • Free Weekly Hotline • Access to Subject Matter Experts • Policies and Procedures • Webinars *Special Pricing* • Quality Control • Exam Readiness • Licensing • Legal Reviews



Clix Mg 1756 Hanshaw Road • Ithaca, NY 14850 Office: 727.474.1442

Mortgage Seminars 248-403-8181

Clix Mg, provides the mortgage industry with compliant marketing solutions. We assist mortgage companies to balance the competing needs of effective marketing campaigns and compliance. Our management team includes attorneys, software developers and marketers, combining more than 50 years experience in the industry. During the past year Clix Mg has been developing the LCP (“Lender Compliance Portal”). LCP is a web based platform that provides mortgage companies the ability to track, control, oversee and approve every marketing piece, material, campaign or program according to their own guidelines in an easy user friendly and cost effective manner. LCP provides reporting capability for internal as well as State and Federal audits.

Cost: Only $19.95 per month per physical office location Jeff Mifsud, a former FHA Direct Endorsed Underwriter trained by HUD and an FHA Originator for over 15 years, is publisher of The FHA Originator, a monthly marketing newsletter which gives you… • • • •

FHA guideline news to keep you updated FHA Marketing tips and downloads that are easily customized Personal development tips to help you develop your character Full access to all previous FHA marketing downloads!

No contracts so sign up today and give yourself the tools to brand yourself as The FHA Expert in your marketplace. Cost: Only $19.95 per month per physical office location.


Titan List & Mailing Services, Inc. 1020 NW 6th St Suite D, Deerfield Beach, FL. 33442 (800) 544-8060 Titan List and Mailing Services, Inc. is a direct marketing agency that offers a complete range of advertising and design services. The firm specializes in data lists (mail/phone), printing, direct mail, graphic and website design as well as internet and SEO marketing. Starting in 1998, the company has, since then employed highly skilled individuals who have considerable experience regarding marketing trends. The company manages the complete in-house campaign themselves including Design, Data Lists, Printing, Postage, and Mailing.



LENDERS COMPLIANCE GROUP 167 West Hudson Street - Suite 200 Long Beach | NY | 11561 | (516) 442-3456 The first full-service, mortgage risk management firm in the country, specializing exclusively in mortgage compliance. Pioneers in outsourcing solutions for mortgage compliance. Our Compliance Team Will:

You want to close more loans. We can help you do it. Accurate information is the basis of smart lending decisions. Credit Plus, Inc. provides that – and more. We’re the company mortgage professionals trust for intelligent insight, smart information that enables them to mitigate risk and build their business. Our information services line is more than 160 products strong. Our expertise in the mortgage industry enables us to quickly assess current and future needs, and provide new solutions for a rapidly changing environment. We move mortgage professionals forward. 888-695-3239

Mortgage Internet Leads $9.99. Find out why the nation's top lenders partner with MortgageLeads.ORG. Target by: • Refinance • Purchase • HARP • FHA • VA • Reverse. Close more loans today 888-695-3239 or click

AllRegs—Your Source for Fast, Reliable Answers 2600 Eagan Woods Drive, Suite 220 Eagan, MN 55121 (800) 848-4904 AllRegs offers mortgage professionals fast, reliable answers needed to conduct their day-to-day business. From research and reference to business intelligence, from education and training to professional services, we are your definitive source for mortgage industry information. With tools for originators like NMLSapproved CE training, regulatory content libraries for compliance staff, guidelines for underwriters, policy manuals for operations, and business intelligence for business development – we have you covered as the leading information provider for the mortgage industry. If you have a specific need, our professional services team can help with thing like policy, procedure or guideline development, as well  as custom training or publishing resources. Contact us to learn how we can help you – visit today.


Calyx Software 800-362-2599 TagQuest 888-717-8980 TagQuest is a full service marketing firm created specifically for the ever changing mortgage business. We have tested and proven campaigns for FHA -VA - HARP - CONVENTIONAL loan types. TagQuest knows what it takes to generate quality leads whether through direct mail marketing, telemarketing, internet leads, data lists, tracking systems, or any combination thereof. TagQuest will brand your company, prepare targeted marketing campaigns that generate interest in your company, and most importantly, show you how to turn sales leads into repeat customers.

Calyx Software is the #1 provider of affordable mortgage solutions for banks, credit unions, mortgage bankers and brokers. Beginning with customizable websites that offer online mortgage applications with eDisclosures and document request/retrieval, Calyx offers products that enable smooth bi-directional flow of data from start to finish. Our solid yet flexible LOS delivers smart technology with electronic document management, back-end functionality such as underwriting and secondary marketing, strong security, remote access, on-the-go productivity available with optional mobile apps, and a configurable business rules engine needed for workflow and compliance. Convenient interfaces with over 200 vendors providing PPE, closing documents, compliance services and more make endto-end processing and reporting simple & accurate. Lenders can take advantage of our fully integrated automated underwriting and pricing products that determine loan eligibility and pricing against investor or FHA guidelines.

n National Mortgage Professional Magazine n OCTOBER 2013



Leverage your existing employees. Improve your productivity. Collaborate on projects. Make the most of your current technology. Bring innovation to your company. Be a strong cultural fit. Free you to focus on your core competencies. Give you access to world-class expertise. Lower your total operational costs.

Credit Plus, Inc. 31550 Winterplace Parkway, Salisbury, MD 21804 800-258-3488




8520 Macon Rd. Ste 2 Cordova, TN 38018 | 615-477-7118 MCMF developed My Guide, a Premier Credit & Financial Education Magazine that you can customize with your LOGO and Ad Pages to feature your organization as well as provide your borrowers a go-to-guide for credit and financial resources, empowering them to make the most informed financial decisions. This 16 page, full color, quarterly publication, provides financial literacy tools in a concise, unbiased, easy to understand format.

OCTOBER 2013 n National Mortgage Professional Magazine n


Jim Melchior, Vice President of Sales American Financial Resources' Wholesale Division is one of the country's leading wholesale lenders. Recently ranked #1 in total sponsored FHA loans closed, AFR offers a wide variety of products including:

Maaverick Funding Corp. is a direct mortgage lender licensed in 30 states across the country. Haavving obttained FHA, VA A, USDA and Fannie Mae appro ovals, Maaverick is growing and seeking top talent for their expanding nationwide footprint.   


My Guide is offered in traditional magazine print, as well as our newest electronic flipbook version, bringing â&#x20AC;&#x153;flipping through a magazineâ&#x20AC;? experience right to your desktop

Phone: 855.422.5917 ny NJ NJ,, 07054 9 Entin Rd., Parsippany Visit us at www w.Ma .

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Maverick Fundingg Corp. NMLS# 7706

Gets you more referrals, inquiries, and closings!


hatâ&#x20AC;&#x2122;s what mortgage loan                                         

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â&#x20AC;˘ Conventional â&#x20AC;˘ USDA â&#x20AC;˘ Manufactured Housing â&#x20AC;˘ VA â&#x20AC;˘ Freddie Mac Open Access and Fannie Mae DU Refi Plus â&#x20AC;˘ One-Time Close Construction â&#x20AC;˘ FHA â&#x20AC;˘ FHA 203(k) and 203(h) rehab loans Since 1997 we have been expanding to better serve you and our hard work and investment have resulted in faster turn times, quality customer service, and one of the most robust product lines in the industry. American Financial Resources, Inc., 9 Sylvan Way, Parsippany, New Jersey 07054 1-888-664-2101 â&#x20AC;˘ NMLS# 2826 â&#x20AC;˘ Intended for Mortgage Professionals only. Celebrating 15 years of exceptional service to our clients. Please visit for a full range of products, programs, forms and additional information.


Close Jumbo Loans Others Cannot Veros Real Estate Solutions "Innovating Mortgage Technology" | (866) 458.3767 Follow us on Twitter at @verosRES Veros has been an industry leader in real estate collateral valuation management & decision analytics for more than a decade. We offer a wide variety of software solutions and tools to help you manage collateral valuation from the beginning of the mortgage chain and throughout the life of the loan.

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Contact Veros today to learn about: â&#x20AC;˘ Sapphire â&#x20AC;&#x201C; the most comprehensive valuation management platform â&#x20AC;˘ VeroVALUE â&#x20AC;&#x201C; the industryâ&#x20AC;&#x2122;s leading national AVM â&#x20AC;˘ VeroSCORE â&#x20AC;&#x201C; automated appraisal scoring quality control tool â&#x20AC;˘ ComplianceTRACK â&#x20AC;&#x201C; independently designed AVM cascade â&#x20AC;˘ VeroFORECAST - most advanced residential market forecast

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Why should every mortgage broker consider obtaining a warehouse line from Goldome Financial? Go to our website Press â&#x20AC;&#x153;Click Hereâ&#x20AC;? and we will tell you or call us at 469-444-9800

The Direct Path into the Reverse Mortgage Market. Ralph E. Rosynek, Jr. / Senior Vice-President National Production Manager /HECM Direct Endorsement Underwriter E-Mail: / Office: 281.404.7970 / Cell: 708.774.1092 / EFax: 866.543.5420 URL: â&#x20AC;˘ Whether you are an experienced reverse mortgage professional looking to grow faster or a firm wanting to create a new product line, allow RMSâ&#x20AC;&#x2122;s production division RMPath to work with and alongside you to build a strategic path to success. We have: â&#x20AC;˘ Correspondent, Wholesale Lending And Aggregation Partnering â&#x20AC;˘ We Offer Exceptional Customer Service And Market - Leading Pricing â&#x20AC;˘ Powerful, Secure, Scalable Loan Origination Systems â&#x20AC;˘ Proprietary State-Of-The-Art Technology Utilizing The RM COMPASS Technology Platform â&#x20AC;˘ Customizable Production Strategies To Fit Your Needs â&#x20AC;˘ Rapid Execution And Exceptional Customer Service â&#x20AC;˘ Excellent Compliance And Regulatory Controls


Rushmore Home Loans 888.202.0878 Rushmore Home Loans is a wholesale lender dedicated to understanding and answering the needs of our brokers. We provide competitive mortgage loan products with a focus on quality, efficiency and flexibility. Our goal is to deliver an experienced, customer-focused team with access to the most comprehensive technology platform to deliver the highest possible service to our brokers.


United Wholesale Mortgage 800-981-8898 UWM has a full set of mortgage products to meet all of your lending needs with Conventional, FHA, USDA (Rural Development), VA, Jumbo, HARP 2.0 and DU Refi Plus. With UWM’s ELITE program, you will receive the most aggressive conventional rates and pricing in the industry for your elite borrowers! Discover Lending Made Easy with United Wholesale Mortgage!


CBC National Bank 3010 Royal Boulevard South, Ste. 230 Alpharetta, GA 30022 888-486-4304

HomeBridge is a national wholesale lender offering both conventional and government products. We are committed to providing the highest value to our clients through competitive pricing, unique product offerings, superior customer service, and state-of-the-art technology.

CBC National Bank is one of the nation’s fastest growing wholesale lenders offering Conventional, FHA, VA, and USDA. The most important aspect of being a leader in today’s market is the ability to build and maintain a meaningful relationship with each customer. We understand that these meaningful relationships coupled with competitive pricing and efficient technology are the pillars of today’s lending environment. We are hiring Loan officers in the Southeast. GA, FL, AL, TN, NC,SC.

Currently expanding and hiring experienced Wholesale Account Executives nationwide.

Contact Gabe Santiago our Corporate Recruiter at for further details.

Please send your resume to

Big Enough to MATTER…Small Enough to CARE


Real Estate Mortgage Network, Inc. 866-933-6342 REMN has FHA, USDA, 203k, VA and Conventional solutions to fit the needs of your customers. But, at REMN, our most valuable product is our people. The REMN Sales and Operations Teams give you - and your loans - the time and attention that you deserve. Even better, at REMN, same-day approvals are guaranteed.* You can rely on us to get the little, yet vital, things taken care of on time. Interested in joining our Wholesale Division? Send your resume to

mortgage technology providers

directory coming in november 2013 We are seeking the best Mortgage Technology Providers to be featured in our first-ever Mortgage Technology Provider Directory, slated to appear in our November 2013 edition. If your company offers a unique product and is loved by techies and clients alike, you need to be featured in this directory! Visit for more information and to register your company today!

NMP Media Corp. 1220 Wantagh Avenue • Wantagh, New York 11793-2202 p 516.409.5555 • f 516.409.4600 e w

n National Mortgage Professional Magazine n OCTOBER 2013

Building bridges to success, one loan at a time.

HomeBridge 5 Park Plaza, 10th Floor Irvine, CA 92614


Why Do I Need a Compliance Management System? By Joy K. Gilpin

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


I wanted to explore a question that my team frequently gets: Why do I need a Compliance Management System? While there are many strong reasons why you need one, there is probably one critical reason … because the Consumer Financial Protection Bureau (CFPB) says so. For all supervised entities, the expectation is to have a true Compliance Management System in place that is appropriate for the size and scale of your organization. This is emphasized in several documents, including the Supervision and Examination Manual, which gives you guidance on an examination, as well as the recently released 2013 CFPB Dodd-Frank Mortgage Rules Readiness Guide which includes a questionnaire to evaluate your current progress complying with all of the new mortgage rules. The CFPB has come out and stated pretty clearly that in their opinion, weaknesses in a Compliance Management System can really result in violations of law or regulations, each of which are associated with harm to our consumers. So then, what is a Compliance Management System? While there are many components that go into a true Compliance Management System, essentially it is a program designed to ensure that the policies and practices that are implemented in your business operations are in full compliance of federal financial consumer law. That’s the big picture that we are trying to get to. When you think about it, a Compliance Management System, when properly structured, establishes compliance responsibilities. It then communicates those responsibilities to employees and associates. Also, it gives you a vehicle to incorporate policy and procedure into business process. Finally, it creates a responsibility for meeting those requirements through internal policies and creates ownership or accountability by ensuring that those acts, policies, and practices are carried out and that legal requirements are met. This process is validated by regular and scheduled review, and, as needed, implementation of revisions for corrective action. It’s all part of a larger working solution in which each piece supports the overall objective of adherence with consumer financial law and regulation, as well as consumer transparency and advocacy. Ready to get started? The AllRegs Compliance Management System can help. Our comprehensive compliance solution can help you with the following features: l l l l l l

Audit all policies and ensure that you have the correct policies in place Policy authorship as needed Deliver training on policies Archive and track what policies were live at anytime Assess and test staff on the policies after they read them Conduct training for your Board of Directors and all employees as applicable l Provide one system of record for all reports For a personal consultation on your AllRegs Compliance Management System needs, call your dedicated account executive at (800) 848-4904 or visit and click on “Compliance Management System” to request a demo. Or, get more information about AllRegs and the full suite of products and services by visiting today. Joy K. Gilpin is professional services manager with AllRegs. She may be reached by phone at (800) 848-4904.


A Tough Road for the Independents Average Profit Per Loan

Average Production Volume

2Q-2013 $1,528 1Q-2013 $1,772 4Q-2012 $2,256 3Q-2012 $2,465

2Q-2013 $439 million 1Q-2013 $442 million 4Q-2012 $448 million 3Q-2012 $450 million

2Q-2013 $5,818 1Q-2013 $5,779 4Q-2012 $5,603 3Q-2012 $5,163

2Q-2013 $3,808 1Q-2013 $3,785 4Q-2012 $3,570 3Q-2012 $3,320

Total Loan Production Expenses Per Loan By Phil Hall During the past four quarters, independent mortgage banks and the mortgage subsidiaries of chartered banks registered rather disturbing data in regard to their average profit per loan and origination expenses. According to data released by the Mortgage Bankers Association (MBA), independent mortgage banks and the mortgage subsidiaries of chartered banks made an average profit of $1,528 on each loan they originated in the second quarter of 2013, down from $1,772 per loan in the first quarter, and even further down from $2,256 per loan in the fourth quarter of 2012 and $2,465 per loan in the third quarter of 2012. According to the MBA, the average production volume for this section of the industry was $439 million per company in the second quarter of 2013, down from $442 million per company in the first quarter, $448 million in the fourth quarter of 2012 and $450 million in last year’s third quarter. The volume by count per company averaged 1,921 loans in the second quarter, down from 1,954 in the first quarter and 2,132 in the fourth quarter of 2012—up slightly from 2,010 loans in the preceding quarter. The securitization side of the business also witnessed shrinkage. Secondary marketing income declined to 263 basis points in the second quarter, compared to 274 basis points in the first quarter, 279 basis points in the fourth quarter of 2012 and 271 basis points in the third quarter. On the flip side, total loan production expenses—defined by the MBA to include commissions, compensation, occupancy, equipment, and other pro-

Personnel Expenses Per Loan duction expenses and corporate allocations—increased to $5,818 per loan in the second quarter, from $5,779 in the first quarter. During the second half of 2012, total loan production expenses were $5,603 in the fourth quarter, up from $5,163 in the third quarter. Also on the rise were personnel expenses per loan, which averaged $3,808 per loan in the second quarter, up from $3,785 per loan in the first quarter, $3,570 per loan in the fourth quarter of 2012 and $3,320 in the third quarter. For the industry’s independent players, these numbers are reason for concern, if not anguish. If the past four quarters are any indication, mortgage banking has simultaneously become less profitable and more expensive. And in view of the current political and economic environment, one doesn’t need to claim psychic powers to predict there will be no radical turnaround in these depressing trends in the coming quarters.

How will this all shake out? Consolidation has already percolated within the industry, and it would not be difficult to imagine this will boil further if operating expenses become too grand for smaller companies to handle. The fear of the new federal rules and regulations that are set to take root in January has further clouded a difficult situation—what will happen when they actually go into effect remains to be seen, though no one is anticipating a quick boost to new profits. Phil Hall is senior editor of National Mortgage Professional Magazine. He may be reached by e-mail at

calendar of events N A T I O N A L





Friday, November 15

Tuesday-Friday, February 18-21

Thursday, October 17

Monday-Wednesday, November 4-6

2013 Great Northwest Mortgage Expo Spirit Mountain Casino 27100 Salmon River Highway Grand Ronde, Ore. For more information, call (860) 922-3441 or e-mail

Mortgage Bankers Association (MBA) 2014 National Mortgage Servicing Conference & Expo The Peabody Orlando 9801 International Drive Orlando, Fla. For more information, call (800) 793-6222 or visit

IAAMBâ&#x20AC;&#x201D;Mortgage Professionals of Iowa 2013 Convention Stoney Creek Inn 5291 Stoney Creek Court Johnston, Iowa For more information, call (800) 462-0077, e-mail or visit

15th Annual National Reverse Mortgage Lenders Association (NRMLA) Meeting & Expo The Roosevelt New Orleans 123 Baronne Street New Orleans, La. For more information, call (202) 939-1760 or visit

Saturday-Monday, October 19-21 NAMB National 2013 Harrahâ&#x20AC;&#x2122;s Las Vegas 3475 Las Vegas Boulevard South Las Vegas, Nev. For more information, call (972) 758-1151 or visit

Sunday-Wednesday, October 27-30 Mortgage Bankers Association (MBA) 100th Annual Convention & Expo Walter E. Washington Convention Center 801 Mt. Vernon Place Washington, D.C. For more information, call (800) 793-6222 or visit


Thursday, November 7

Wednesday-Friday, December 4-6

Utah Association of Mortgage Professionals 2013 Annual Expo & Conference South Towne Exposition Center 9575 South State Street Sand, Utah For more information, call (801) 597-2122 or visit

Mortgage Bankers Association (MBA) Independent Mortgage Bankers Conference InterContinental Miami 100 Chopin Plaza Miami, Fla. For more information, call (800) 793-6222 or visit

Wednesday, November 13


Mortgage Bankers Association (MBA) Retained Servicing Workshop Westin-Dallas Fort Worth Airport 4545 West John Carpenter Freeway Irving, Texas For more information, call (800) 793-6222 or visit

Sunday-Wednesday, February 2-5 CREF/Multifamily Conference & Expo The Peabody Orlando 9801 International Drive Orlando, Fla. For more information, call (800) 793-6222 or visit

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

MARCH 2014

Sunday-Thursday, March 9-13 2014 Regional Conference of Mortgage Bankers Associations Trump Taj Mahal Casino Resort 1000 Boardwalk Atlantic City, N.J. For more information, call (732) 596-1619 or visit


n Connecticut Mortgage Professional Magazine n OCTOBER 2013

Virginia Association of Mortgage Brokers (VAMB) 25th Annual Convention The Hilton Garden Inn Richmond Innsbrook 4050 Cox Road Glen Allen, Va. For more information, call (804) 285-7557 or e-mail

National Consumer Reporting Association (NCRA) 2013 Annual Conference Embassy Suites Hotel & Spa 1000 Woodward Place NE Albuquerque, N.M. For more information, call (630) 539-1525 or visit

Mortgage Bankers Association (MBA) Accounting and Financial Management Conference 2013 Boca Raton Hotel 501 East Camino Real Boca Raton, Fla. For more information, call (800) 793-6222 or visit

Thursday-Friday, October 24-25

Sunday-Tuesday, November 6-8

Tuesday-Thursday, November 19-21

OCTOBER 2013 n Connecticut Mortgage Professional Magazine n


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Connecticut Mortgage Professional Magazine October 2013